Human Resource Management
Management text book for learning, reference book for MBA students.
Text book or course book for management students. Annamalai university, India.
Human Resource Management
Management text book for learning, reference book for MBA students.
Text book or course book for management students. Annamalai university, India.
Human Resource Management
Management text book for learning, reference book for MBA students.
Text book or course book for management students. Annamalai university, India.
NATURE AND SCOPE OF HUMAN RESOURCE MANAGEMENT (HRM)
1. MEANING OF HRM Different terms are used to denote personnel management. They are: labour management, labour management relations, employee-employer relations, industrial relations, personnel administration, personnel management, human capital management, human asset management. Though these terms can be differentiated widely, the basic distinction lies in the scope or coverage and evolutionary stage. In simple sense, human resources management means employing people, developing them, utilizing, maintaining and compensating their services in tune with the job and organizational requirements. Personnel Management as defined by the Institute of Personnel Management in U.K. and subsequently adopted by Indian Institute of Personnel Management is as follows: "Personnel Management is a responsibility of all those who manage people as well as being a description of the work of those who are employed as specialists. It is that part of the management which is concerned with people at work and with their relationships within an enterprise. It applies not only to industry and commerce but to all fields of employment". This definition can be summarised as follows: 1. Personnel Management is a responsibility of all the line managers in an organisation viz., general manager, production manager, marketing manager, finance manager etc. and it is a staff function i.e., it is the function of personnel manager who is appointed as a specialist. Thus all managers in the organizations are vitally concerned with personnel management as they must achieve organisational goals through other people's efforts. 2. Personnel management is a part of management. This part is concerned with the people and their relationship within an organisation. 3. This applies to all organisations in the universe i.e. economic, social, political, religious etc. Michael J. Jucius defined Personnel Management as "The field of management which has to do with planning, organizing, directing and controlling the functions of procuring, developing, maintaining and utilizing a labour force, such that the (a) objectives for which the company is established are attained economically and effectively, (b) objectives of all levels of personnel are served to the highest possible degree, (c) objectives of society are duly considered and served". Personnel / Human Resources Management (P/HRM) can be defined as managing (planning, organizing, directing and compensating) human resources resulting in the creation and development of human relations with a view to contribute proportionately (due to them) to the organizational, individual and social goals. Characteristics of Personnel Management The analysis of definitions on personnel management can be summarised as follows: Personnel Management is concerned with employees both as individuals and as groups in attaining goals. It is also concerned with behavioural, emotional and social aspects of personnel. Personnel Management is concerned with the development of the knowledge, capability, skill, and potentialities of human resources, and achieving employee goals, including job satisfaction. Personnel Management covers all levels (lower, middle, and top) and categories (unskilled, skilled, technical, professional, clerical and managerial) of employees. It covers both organised and unorganised employees. Personnel Management applies to the employees in all types of organisations in the world (industry, trade, service, commerce, economic, social, religious, political and government departments). Thus it is common in all types of organisations. Personnel Management is a continuous and never ending process. Personnel Management aims at attaining the goals of organisation, individual and society in an integrated approach. Organisation goals may include survival, growth and development in addition to profitability, innovation, excellence etc. Individual employee goals consist of job satisfaction, job security, high salary, attractive fringe benefits, challenging work, pride, status, recognition, opportunity for development etc. Goals of the society include equal employment opportunity, protecting the disadvantaged sections and physically handicapped, minimization of inequalities in the distribution of income by minimizing wage differentials, developing the society in general by organizing developmental activities etc. Personnel Management is a responsibility of all line managers and a function of staff managers in an organisation. Personnel Management is concerned mostly with managing human resources at work. Human Resources Management is the central sub-system of an organisation and it permeates all types of functional management viz., production management, marketing management and financial management. Personnel Management aims at securing unreserved co-operation from all employees in order to attain predetermined goals. Further the analysis shows that, most of the definitions are oriented towards the functions and objectives of personnel management. As such, the detailed discussion about the functions and objectives of HRM will help us to understand the term HRM clearly and objectively. 2. NATURE AND SCOPE OF HUMAN RESOURCES IN ORGANISATIONS People in any organisation manifest themselves, not only as individuals but also through group interactions. When individuals come to work place, they come with not only technical skills, knowledge etc. but also with their personal feelings, perception, desires, motives, attitude, aptitude, values etc. Therefore, employee management in an organisation does mean management of not only technical skills but also other factors of the human resources. Compl ex Dynami sm: A close observation of employees reveals that they are complex beings i.e. (a) physiological (b) psychological (c) sociological and, (d) ethical beings. The proportions or intensities of these dimensions of the human factor in employment may differ from one situation to another but the fact remains that these are the basic things of the human factor in organisations. Undoubtedly the physical and mental attributes of human resources are highly pertinent to organisational performance and productivity. Further, it is important to note that the employees in any organisations are not to be viewed as static individuals since the quantity as well as quality of human resources are modified by such environmental factors as education, training, development etc. Hence, the handling of human resource is entirely different from that of other resources. If human factor is properly utilised, it may even prove a dynamic motive force for running an organisation. Otherwise, it becomes a passive and destructive force. A Soci al System: Human resources management is relatively new and developed as a part of management (concerned with the management of human resources). In simple terms personnel management is the task of dealing with human relationships, moulding and developing the human behaviour and attitude towards the job and organisational requirements. The personnel manager involves himself in administering a social system. In this process, the manager has to see that there is economic satisfaction for a reasonable livelihood, the social satisfaction of working together as members of a group and individual job satisfaction of a worker are attained. An organisation may be a manufacturing company, a banking undertaking, an insurance corporation, a transportation unit, an educational organisation, a hospital, a court, a club, a religious or a social unit. The nature and significance of personnel management have undergone rapid changes recognising the people not as a cost centre but as a profit centre. Consequently, the modern personnel manager is concerned not only with the organisation to provide able and willing workforce to attain company goals, but also with the employees for fulfillment of economic, social and psychological needs and with general society, which demands contributing to minimization of socio-economic evils and maximization of social and economic welfare of its members particularly the deprived and weaker sections. The role of the personnel manager has also been expanded. In ascertaining and accommodating various needs of the people. A Challengi ng Task: The personnel manager plays a crucial role in understanding the changing needs of the organisation and society. Further, he faces some challenging tasks in attaining the employee, organisational and social objectives with the available resources. In addition to it the growing strength of trade unions, increasing involvement of Government in personnel management increasing educational standards etc, further complicate the role of personnel manager. Hence the modern personnel manager should equip himself with good knowledge of disciplines viz., Economics, Commerce, Management, Anthropology, Political Science, Physiology, Psychology, Sociology, Philosophy, Engineering, Technology and Law. Further, it is said that all these disciplines and Human Resources Management interact mutually with each other. In view of these challenges and change in the scope of personnel Management, there has been a wide change in the terms denoting personnel management. The important phases among them are labour management, personnel management and human resources management. In fact, the meaning of the personnel management has also been undergoing changes. Having discussed the concepts of management, personnel and human resources and the nature human resources, let us concentrate on the objectives of Human Resources Management. 3. OBJECTIVES OF HUMAN RESOURCES MANAGEMENT Objectives are pre-determined goals to which individual or group activity in an organisation is directed. Objectives of personnel management are influenced by organisational objectives and individual and social goals. Institutions are instituted to attain certain specific objectives. The objectives of the economic institutions are mostly to earn profits, and of the educational institutions are mostly to impart education and/or conduct research so on and so forth. However, the fundamental objective of any organisation is survival. Organisations are not just satisfied with this goal. Further, the goal of most of the organisations is growth and/or profits. Institutions procure and manage various resources including human to attain the specified objectives. Therefore, basically the objectives of human resources management are drawn from and to contribute to the accomplishment of the organisational objectives. The other objectives of Human Resource Management are to meet the needs, aspirations, values and dignity of individual employees and having due concern for the socio-economic problems of the community and the country. Please use headphones The objectives of Human Resources Management in general may be stated as follows: i. To create and utilise an able and motivated workforce, to accomplish the basic organisational goals. ii. To establish and maintain sound organisational structure and desirable working relationships among all the members of the organisation by designing jobs and by establishing responsibility, accountability and authority for each job in relation to other jobs. iii. To secure the integration of individual and groups within the organisation by co-ordinating the individual and group goals with those of the organisation. iv. To create facilities and opportunities for individual or group development so as to match it with the growth of the organisation. v. To attain an effective utilization of human resources in the achievement of organisational goals. vi. To identify and satisfy individual and group needs by providing adequate and equitable wages, incentives, employee benefits and social security and measures for challenging work, prestige, recognition, security, status etc. vii. To maintain high employee morale and sound human relations by sustaining and improving the various conditions and facilities. viii. To strengthen and appreciate the human assets continuously by providing training and developmental programmes. ix. To consider and contribute to the minimization of socio-economic evils such as unemployment, under-employment, inequalities in the distribution of income and wealth and to improve the welfare of the society by providing employment opportunities to women and disadvantaged sections of the society etc. x. To provide an opportunity for expression and voice in management. xi. To provide fair, acceptable and efficient leadership. xii. To provide facilities and conditions of work and creation of favourable atmosphere for maintaining stability of employment. Management has to create conducive environment and provide necessary prerequisites for the attainment of the personnel management objectives after formulating them. The following are the prerequisites for attaining the objectives of the personnel management: i. Recruitment of right personnel possessing the required nature and level of human resources. ii. Managements should take a view that "People work with us rather than people work for us". iii. Every employee should be informed of the goals to be achieved and the part of their contribution for the attainment of organisational goals. iv. Maintenance of sound industrial and human relations by creating such congenial atmosphere and by providing monetary and non-monetary benefits which will improve the employee attitude, aptitude and behaviour towards the job and organisational requirements. v. Formulation of sound organisational policies indicating authority, responsibility and accountability. Thus formulation of sound personnel policies, procedures and programmes is primary for attaining the objectives. Please use headphones - End of Chapter - LESSON - 2 PERSONNEL POLICIES: PROCEDURES AND PROGRAMMES After the establishment of objectives of personnel management, personnel policies are to be formulated. Policies are general statements or understandings that guide thinking and action in decision making. DEFINITION OF PERSONNEL POLICY A policy is a plan of action. Brewster and Richbell defined personnel policies as, "a set of proposals and actions that act as a reference point for managers in their dealings with employees. Personnel policies constitute guides to action. They furnish the general standards or bases on which decisions are reached. Their genesis lies in an organisation's values, philosophy, concepts and principles". Personnel policies guide the course of action intended to accomplish personnel objectives. The following example helps us to understand the personnel policy clearly. Example: One of the personnel objectives of Indian Railways is to provide equal employment opportunities to the people of minority sections. Personnel policy of Indian Railways relating to the above objective is to fill 15 percent and 7.5 percent of the vacancies form those candidates belonging to scheduled castes and scheduled tribes respectively. Personnel policy is not enough to understand the method of attaining personal objectives. What is more essential in this regard is personnel procedure. PERSONNEL PROCEDURE Detailed procedure to implement the course of action generally is not given in the policy. Here a procedure gives the detailed course of action to be carried out in carrying out the policy. Policy spells out the broad area whereas the procedure outlines the detailed action. Procedure establishes a desired method of handling activities. They are guides to action rather than thinking. It spells in detail the steps, time, place, rules, employees responsible to implement it and so on. For instance, procedure of the earlier example of Indian Railways policy would be as follows: All zonal railways will fill 15 percent and 7.5 percent of their vacancies in Group C and Group D categories from the candidates belonging to Scheduled Castes and Scheduled Tribes respectively. If suitable candidates are not available from these communities the vacancies in the jobs of loco driver, signaling staff, station master will be filled by the candidates belonging to the other communities. In case of vacancies in other jobs, they should be filled only by the candidates belonging to scheduled castes and scheduled tribes in future. However, North-East Frontier Railway can fill even these vacancies by the candidates belonging to other communities, if the candidates from scheduled communities are not available. In case of jobs in Groups A and B, candidates belonging to scheduled caste and scheduled tribes will be given preference if they are equally qualified and meritorious than those of other communities. Another example of policy and procedure is of Andhra Bank: The Pay Policy is that the bank believes in paying at least the prevailing scale of salary for similar work in comparable organisations. The bank believes in giving consideration to significant changes in the cost of living. The procedure is to fix the pay of clerks, cashiers, typists equal to the lowest pay given by any public sector bank in the country; Fix the pay of officers according to the recommendations of the Pillai Committee. Thus it is clear that a policy is a guide to accomplish an objective, and procedure is a process or a method or a detailed course of action to accomplish the objectives. However, personnel rule and personnel programmes help the procedure regarding specific and detailed action. Personnel rule spells out specific required action or non- action allowing no discretion. For example: Paying bonus of 8.33% of the salary (consisting of pay plus dearness allowance) on March 31, 1987 to all the confirmed employees who had completed minimum one year of continuous service as on March 31, 1987. NEED FOR PERSONNEL POLICIES Every organisation should have personnel policies in order to accomplish the objectives of the personnel as well as the organisation. Further, organisation needs personnel policies in order to: a. Consider extensively the basic needs of the organisations and employees. b. Minimize favouritism and discrimination in treating the employees and to ensure fair and equal treatment of all employees in the organisation. c. Ensure that the action will be continued though the managers in key jobs may change in the position and organisation. d. Have standards of performance. Actual results can be compared with the policy to determine the level and nature of implementation. e. Create and develop employee enthusiasm and loyalty. Please use headphones ADVANTAGES OF PERSONNEL POLICIES Personnel policies have the following advantages: a. All employees would have clear and detail guides of probable action, so that there is no dilemma and over-dependence on superiors. b. They enforce employee sentiments due to fair and equitable treatment. c. They provide advance information and predictable decisions. d. They provide stability in P/HRM practices and in industrial relations. e. They help the growth and expansion on an orderly basis. f. They help the management to anticipate the probable problems their consequences and to find out means to coordinate, control and minimize them. g. They simplify the task of decision and action, and h. Managers, supervisors and members of the work team know clearly the roles they have to play. Though the personnel policies are advantageous to all the parties, their implementation is obstructed by certain factors. OBSTACLES IN ADMINISTRATION OF PERSONNEL POLICIES The factors which obstruct the implementation of personnel policies are: i. Some managers are reluctant to follow the policies as they restrict the scope of action of the managers and policies formulated may not exactly fit into the various situational requirements. ii. Polices create hurdles to the autocratic managers. iii. Sometimes supervisors may take decisions which adversely affect the employees based on the policies and managers may sometimes take protection under the policy for the decisions taken by them. iv. Some companies or some managers strictly adhere to the policies whereas other allow a measure of flexibility depending upon circumstances. v. Personnel policies in most cases are impracticable as union agreements prevail over personnel policies. Personnel policies should be formulated effectively based on qualities of a sound personnel policy owing to these obstacles. QUALITIES OF A SOUND PERSONNEL POLICY A personnel policy to be sound, should be: a. Stated simply and clearly in positive terms, in writing b. Reasonably consistent with certain amount of scope for flexibility c. Originated from organisational policy d. In the interest of majority of personnel of the organisation e. Consistent with the organisational and public policies f. Acceptable to management, employees, trade unions and government g. Reasonable and related to the ongoing situations h. Known to all the parties concerned i. Fair, consistent and uniform for all employees and throughout the organisation j. Based on objectives k. In conformity with long range purposes of industrial relations l. In a position to instill confidence among supervisors that their decisions and actions are in conformity with the policies. Personnel Policies to be sound should also have broad coverage in addition to satisfying the above qualities. Hence, it would be appropriate to discuss the coverage of personnel policies. COVERAGE OF PERSONNEL POLICIES Policies are formulated in such areas which are repetitive in nature. They may cover the areas like a. Organisational policies including general company policies b. External policies having their impact on the organisational functioning c. Internal policies of the organisation which guide the internal relations among different units of the organisation both vertically and horizontally d. Centralized policies which guide the relations among different units of the company located in various geographical areas. The coverage of personnel policies has been classified on the basis of functions of P/HRM by Michael Armstrong, which is outlined hereunder: 1. Social Responsibility a. Equity treating employees fairly and justly by adopting an even-handed approach. b. Consideration considering individual circumstances when decisions affect the employees prospects, seniority or self respect. c. Quality of work life increase the interest in the job and organisation by reducing monotony, increasing variety of responsibilities avoiding stress and strain d. Working conditions provide healthy, safe and conducive working conditions. Please use headphones 2. Employment Policies Provision of equal employment opportunities selecting the candidates based on job requirements encourage the employee on the job and in the organisation. 3. Promotion Policies Promotion Policies would attempt to reconcile the demands of employee for growth and organisation's demands for fresh and much more potential talent. Promotion policy should be fair, and just to all. 4. Development Policies Policies should cover the kind of employees to be trained, time span of training programmes, techniques, rewarding and awarding system, qualifications and experience of the trainer, encouraging the employees for self advancement etc. These policies also cover the areas like career planning and development, performance appraisal, organisational change and organisational development. 5. Relations Policies Relations policies cover the areas of human relations like; policies regarding motivation, morale, communication, leadership styles, grievance procedure, disciplinary procedure, employee counseling etc. These policies also cover the areas of industrial relations like union recognition, union representation, collective bargaining, prevention and settlement of industrial disputes, participate management etc. Personnel policies to be effective should be written on the basis of authentic information available from different sources. SOURCES FOR FORMULATING PERSONNEL POLICIES Policies are formulated on the basis of material collected from different sources like a. Past experience of the organisation b. Existing practices and experiences in other organisations of the same nature or in the same geographical area or in the entire nation. c. Attitudes, philosophies of the management at various levels, employees, trade unions etc. d. The knowledge and experience gained by all line managers and personnel managers in handling personnel issues e. Organisational policies etc. Personnel policies to be effective should be evaluated and controlled continuously. EVALUATION AND CONTROL OF PERSONNEL POLICIES Personnel policies to be effective must be reviewed evaluated and controlled regularly against certain established standards. Evaluation helps to determine changes in the existing policies. All the policies should be reviewed annually and some policies should be reviewed at specific times like collective bargaining, after strike, lock-out etc. Departmental policies may be review through participation of all employees. Outside consultants or experts from other organisations may be engaged to review crucial policies. Adequate care should be taken to review the policies in the following situations: when (a) employees offer suggestions (b) employees express grievances (c) unsatisfactory reports about employee performance and behaviour (d) company plans for change like expansion, diversification, contraction, adoption of new technology, introduction of new methods etc. Personnel policies to be effective should have favourable impact on the objectives and functions of P/HRM and helps the parties concerned. Evaluating the Impact of Personnel Policies The system and methods of P/HRM is mostly based on personnel policies. Hence, appraising the impact of personnel policies is beneficial to the employees, organisation, and society at large. The impact of personnel policies can be measured in terms of cost benefit to employees, organisation and society. P/HRM policies help the organisation in terms of attainment of organisational goals, increasing the efficiency, adaptability and achieving long run results. Further, organisational and human outcomes such as turnover, absenteeism, commitment are the result of human resource policies. Human resource policies help the employees to have awareness and clear idea about the various programmes. P/HRM policies also affect the society. Some P/HRM policies influence commonly the individual, the organisation and the society. These policies relate to health, psychological and physical well being. Various P/HRM policies result in commitment, competence, cost effectiveness and congruence. These human resource outcomes lead to long term consequences like individual well-being, organisational effectiveness and social well- being. Impact of human resource policies can be measured through their outcomes. Employee commitment, in its turn can be evaluated through the length of service of an employee (stability of employment), absenteeism, employee attitude towards the job, organisation etc. Competence of an employee can be appraised through performance appraisal techniques. PERSONNEL vs HUMAN RESOURCES AT DIFFERENT LEVELS The term human resources at the macro level spells the total sum of all the components (like skill, creative ability) possessed by all the people (employed, self employed, unemployed, employers, owners etc), whereas the term personnel even at the macro level is limited to only employees of all organisations. Human resources even at the organisational level includes all the component resources of all employees from rank life to top management level, all the employers like managing director, board of directors, persons who work on honorary basis, experts drawn from various organisations, and those people (particularly family members) influencing the human resources of the former group. In short in includes the resources of all the people who contribute their services to the attainment of organisational goals and others who contribute their services in order to create hurdles in the attainment of organisational goals. Further, human resource includes human values, ethos and the like. Thus the term 'Human Resources' is much broader compared to the term 'Personnel' either at the components level or in coverage (at organisational level) or even at the macro level. As such human resources management at organisational level does mean management of the dynamic components (resources) of all the people (owner or employed or directly or indirectly related) at the levels in the organisational hierarchy round the clock and throughout the year. In view of these changes, in recent years, the Department of Commerce, Schools of Management Studies, Department of Personnel Management in various Universities have begun calling this academic area as Human Resource Management (HRM). Still, this process is in the state of transition. Hence, the terms personnel and human resource are used interchangeably in this book, though the book entitled as Human Resource Management. SIGNIFICANCE OF HRM Industrialists were greatly concerned with finance for the success of their enterprises during the first three quarters of the 20 th century and they never cared about employers. But, with the institution of Human Resources Development Ministry in the Union Government, politicians, public, academicians, governmental agencies, and all others are now interested in HRM. Even the press and other news media have been giving top most important to human resources. A number of courses and research studies are designed in the personnel area in various Universities. Further, institutes have been set up exclusively to impart knowledge in HRM. Further the peculiarities of human resources like inseparability of resource from the employee, perishability of human resource, static nature of supply irrespective of changes in demand for human resources, active, reactive and creative nature of human resources are some of the causes for increasing concern for human resource. Human resources play a crucial role in the development process of modern economics. Arthur Lewis observed "there are great differences in development between countries which seem to have roughly equal resources, so it is necessary to enquire into the difference in human behaviour", availability of physical and financial resources and international aid play prominent roles in the growth of modern economics, none of these factors is more significant than efficient and committed manpower. It is infact, said that all development comes from the human mind. HUMAN RESOURCE IN NATION's WELL-BEING A nation with abundance of physical resources will not benefit itself unless human resources make use of them. In fact human resources are solely responsible for making use of national resources. They are also responsible for the transformation of traditional economies into the modern and industrial economics. Lack of organisation of human resources is largely responsible for the backwardness of the nation. Countries are underdeveloped because their people are underdeveloped. The differences in the quality of human resources in various countries affect their level of economic development. The key element in this proposition is that the values, attitudes, general orientation and quality of the people of a country determine its economic development. The shift from manufacturing to service and the increasing pace of technological change are making human resources the ingredient to the nations well-being and growth. And in a serviceoriented industry like banks, railways and quality, quantity and utilization of human resources become all the more important. MAN VIS-A-VIS MACHINE Most of the problems in organisational settings are human and social rather than physical, technical or economic. No industry can be rendered efficient as long as the basic fact remains unrecognised that it is principally human. It is not mass of machines and technical processes but a body of men. It's body is not an intricate maze of mechanical devices but a magnified nervous system. PERSONNEL MANAGEMENT AND GENERAL MANAGEMENT Management of an organisation in modern economies is not only complex and sophisticated but it also influences the economic growth of a country. Its efficiency determines the property and well being of the people of the nation. "Perhaps today there is no other latest activity which is as important and dynamic as management the oldest of arts and newest of professions". One of the fundamental areas of management is the management of human resources. Thus, "in the management of four 'M's Money, Materials, Machines and Men considering the nature of man, the management of men is not only fundamental but also dynamic and challenging". One of the fundamental tasks of management is to manage human resources. In the management of five 'M's Money, Materials, Machines, Markets and Men the management of men is fundamental, dynamic and challenging. Successful management depends significantly upon the ability to predict and control human behaviour. Among other things, if a company is economically successful, it means, the management has been able to manage human resources effectively. The human resources are "the active force of industrialisation, and strategies for development should concentrate particularly on their enhancement". Management of personnel includes guiding human resources into a dynamic organisation that attains its objectives with a high degree of morale and to the satisfaction of those concerned with it. Earnest Dale views Management as the process of getting things done through people. In fact, it is said that all management is personnel management as it deals with human beings. And, though there is a separate personnel manager all managers have to manage the personnel of their respective functions / departments to get effective results through and with the people. In addition, line managers are responsible for management of personnel of their respective department / units. Thus all executives must unavoidably by personnel managers. In short all managers are personnel managers and all management is essentially personnel management. HUMAN RESOURCES SYSTEM IS A CENTRAL SUB-SYSTEM Human resources in an organisation is not only unique sub-system but a principle and central sub-system and it operates upon and controls all other sub-systems. Thus in the words of Wendell L. French, "Personnel management is a major pervasive sub-system of all organisations". Whatever in the environment affects the organisation like economic, social, cultural, legal, political, historic, competitors, customers etc. as a whole also affects the personnel system. The resources system receives inputs from the organisation in the form of objectives and it results in individual and organisational performance that may be viewed as individual and organisational output. Both the personnel system and the entire organisations operate under the same cultural, economic, social, legal, political and other constraints. Hence, greater the effectiveness and productivity of personnel, the more will be the effective functioning of an organisation. Peter P. Drucker has rightly observed the significance of personnel as, managers are fond of saying our greatest asset is people. They are fond of repeating the truism that the only real difference between one organisation and the other is the performance of people. In essence the survival, development and performance of an organisation although not solely but heavily depend on the quality of personnel. PROBLEMS OF HUMAN RESOURCE MANAGEMENT Management of men is a tough job. It is probably easier to manage finance, marketing and production, as they are not living beings. Predicting human behaviour accurately, completely, and always is impossible, as human behaviour is influenced by a number and variety of factors. Hence, a number of problems crop up in managing human resources. They are: i. Difficulty in identifying the people, use right kind of recruitment techniques and sources. ii. Difficulty in identifying the right kind of selection tests, interviews etc. iii. Difficulty in convincing the employees to accept the ratings of performance appraisal and the purpose & outcome of performance and/or potential appraisal. iv. Difficulty in motivating the employees to undergo training seriously and apply the knowledge / skills acquired on the job. v. Difficulty in changing the behaviour of employees in accordance with the required behaviour of the organisation. vi. Difficulty in formulating a wage / salary policy acceptable to all employees, trade unions and management. vii. Dissatisfaction of employee regarding promotions and transfers. viii. Employee's reluctance to accept disciplinary rules of the company. ix. Employee grievances and inability of management to redress all grievances. HUMAN RESOURCES MANAGEMENT AS A PROFESSION Human Resources Management to be a profession should satisfy the following characteristics: 1. Possess advanced specialised formal education and training 2. Possess consistent exercise of discretion and independent judgment 3. Possess deep and organised body of knowledge and expanding the knowledge through research. 4. Members have common purpose and uphold professional standards 5. Standards of competence in terms of education, training experience and human performance. Human resource management (HRM) possess advanced, special formal education and training at graduate, post graduate, and research levels in various universities and institutes in India and abroad. HRM possess consistent exercise of discretion and independent judgment. HRM consists of specialised, deep and organised body of knowledge in the form of organisational behaviour, human resource development, human relations, industrial relations and the like. The knowledge of HRM has been expanding through research leading to degrees like MPhil and PhD and independent research. There are various professional bodies of HRM in India and abroad like National Institute of Personnel Management, National HRD Network etc. It is also difficult to say that members of HRM profession have common identity and purpose and uphold professional standards. However, members have standards of competence in terms of education, training, experience and human performance. HRM satisfies most of the conditions of a profession. Hence, it can be said that HRM is a profession. - End of Chapter - LESSON 3 FUNCTIONS OF HUMAN RESOURCE MANAGEMENT The functions of Personnel / Human Resource Management can be broadly classified into two categories viz., Managerial functions and Operative functions. MANAGERIAL FUNCTIONS Managerial functions of personnel management involve planning, organising, directing and controlling. All these functions influence the performance of operative functions. I. Planning: It is a pre-determined course of action. Planning is determining of personnel programmes and changes in advance. In other words it involves planning of manpower requirements, recruitment, selection, transfers, promotions, training etc. It also includes forecasting of personnel needs, changing values, attitudes and behaviour of employees and their impact on organisation. II. Organising: An organisation is a means to an end. It is essential to carryout the determined course of action. In the words of J. C. Massie, an organisation is a "structure and a process by which co-operative group of human beings allocates its tasks among its members, identifies relationships and integrates its activities towards common objective". Complex relationships exist between the specialised departments and the general departments as many top managers are seeking the advice of personnel manager. Thus organisation establishes relationships among the employees so that they can collectively contribute to the attainment of company goals. III. Directing: The next logical function after completing planning and organising is the execution of the plan. The basic function of personnel management at any level is motivating, commanding, leading and activating people. The willing and effective co-operation of employees for the attainment of organisational goals is possible through proper direction. Tapping the maximum potentialities of the people is possible through function in building sound industrial and human relations besides securing employee contributions. Coordination deals with the task of blending efforts in order to ensure successful attainment of an objective. The personnel manager has to coordinate various managers at different levels as far as personnel functions are concerned. Personnel management function should also be co-ordinated with other functions of management like management of material, machine and money. IV. Controlling: After planning, organising, directing the various activities of the personnel management. At this point the performance is to be verified in order to know that the personnel functions are performed in conformity with the plans and directions. Controlling involves checking, verifying and comparing of the actuals with the plans, identification of deviations if any and correcting the identified deviations. Thus action and operation are adjusted to pre-determined plans and standards through control. Auditing, training programmes, analysing labour turnover records, directing morale surveys, conducting separation interviews are some of the means for controlling the personnel management function. OPERATIVE FUNCTIONS The operative functions of personnel management are related to specific activities of personnel management viz. employment, development, compensation and relations. All these functions are interacted with managerial functions. These functions are to be performed in conjunction with managerial functions. I. Employment: The first operative function of Human Resources Management (HRM), employment is concerned with securing and employing the people possessing required kind and level of human resources necessary to achieve the organisational objectives. It covers functions such as job analysis, human resource planning, recruitment, selection, placement, induction, and internal mobility. Please use headphones 1. Job Analysis: It is the process of study and collection of information relating to the operations and responsibilities of a specific job. It includes (a) Collection of data, information, facts and ideas relating to various aspects of jobs including men, machines and materials, (b) Preparation of job description, job specification job requirements and employee specification which will help in identifying the nature, levels and quantum of human resources, and (c) Providing the guides, plans and basis for job design and for all operative functions of HRM. 2. Human Resources Planning: It is process of determination and assuring that the organisation will have an adequate number of qualified persons, available at proper times, performing jobs which would meet the needs of the organisation and which would provide satisfaction for the individuals involved. It involves, (a) Estimation of present and future requirements and supply of human resources based on objectives and long range plans of the organisation, (b) Calculation of net human resources requirements based on present inventory of human resources, (c) Taking steps to mould, change, and develop the strength of existing employees in the organisation so as to meet the future human resource requirements, and (d) Preparation of action programmes to get the rest of human resources from outside the organisation and to develop the human resources of existing employee. 3. Recruitment: It is the process of searching for prospective employees and stimulating them to apply for jobs in an organisation. It deals with (a) Identification of existing sources of applicants and developing them, (b) Creation / identification of new sources of applicants, (c) Stimulating the candidates to apply for jobs in the organisation, (d) Striking a balance between internal and external sources. 4. Selection: It is the process of ascertaining the qualifications, experience, skill, knowledge etc., of an applicant with a view to appraising his/her suitability to a job. This function includes (a) Framing and developing application blanks, (b) Creating and developing valid and reliable testing techniques, (c) Formulating interviewing techniques, (d) Checking of references, (e) Setting up medical examination policy and procedure, (f) Line manager's decisions, (g) Sending letters of appointment and rejection, and (h) Employing the selected candidates who report for duty. 5. Placement: It is the process of assigning the selected candidate with the most suitable job. It is matching of employee specifications with job requirements. This function includes (a) Counselling the functional managers regarding placement, (b) Conducting follow-up study, appraising employee performance in order to determine adjustment with the job, and (c) Correcting misplacement, if any. 6. Induction and Orientation: Induction and orientation are the techniques by which a new employee is rehabilitated in the changed surroundings and introduced to the practices, policies, purposes and people etc., of the organisation. It includes (a) Acquainting the employee with the company philosophy objectives, policies, career planning and development, opportunities, product, market share, social and commune standing, company history, culture etc., (b) Introducing the employee to the people with whom he has to work such as peers, superiors and subordinates, and (c) Moulding the employee attitude by orienting him to the new working and social environment. II. Human Resource Development It is the process of improving, moulding and changing the skills, knowledge, creative ability, aptitude, attitude, values, commitment etc based on present and future job and organisational requirements. This function includes: 1. Performance Appraisal: It is the systematic evaluation of individuals with respect to their performance on the job and their potential for development. It includes (a) Developing policies, procedures and techniques, (b) Helping the functional managers, (c) Reviewing and consolidation of reports, and (d) Evaluating the effectiveness of various programmes 2. Training: It is the process of imparting to the employees, the technical and operating skills and knowledge. It includes (a) Identification of training needs of the individuals and the company, (b) Developing suitable training programmes, (c) Helping and advising line management in the conduct of training programmes, (d) Imparting of requisite job skills and knowledge to employees, (e) Evaluation of the effectiveness of training programmes 3. Management Development: It is the process of designing and conducting suitable executive development programmes so as to develop the managerial and human relations skills of employees. It includes (a) Identification of the areas in which management development is needed, (b) Conducting development programmes, (c) Motivating the executives, (d) Designing special development programmes for promotions, (e) Using the services of specialists, and / or utilizing the institutional executive development programmes, and (f) Evaluating the effectiveness of executive development programmes. 4. Career Planning and Development: It is the planning of ones career and implementation of career plans by means of education, training, job search and acquisition of work experiences. It includes internal mobility, and external mobility. III. Internal Mobility It includes vertical and horizontal movement of an employee within an organisation. It consists of: 1. Transfer: Transfer is the process of placing employees in the same level jobs where they can be utilised more effectively in consistence with their potentialities and needs of the employees and the organisation. It also deals with (a) developing transfer policies and procedures, (b) guiding employees and line management on transfers, and (c) evaluating the execution of transfer policies and procedures. 2. Promotion: Promotion is the upward reassignment given to an employee in the organisation to occupy higher position which commands better status and/or pay keeping in view the human resources of the employees and the job requirements. This function covers (a) formulation of equitable, fair and consistent promotion policies and procedures, (b) advising line management and employees on matters relating to promotions, and (c) evaluating the execution of promotion policies and procedures. 3. Demotion: Demotion is the downward reassignment to an employee in the organisation. It includes (a) developing equitable, fair and consistent demotion policies and procedures; (b) advising line managers on matters relating to demotions, and (c) overseeing the implementation of demotion policies and procedures. IV. Organization Development It is a planned process designed to improve organisational effectiveness and health through modifications in individual and group behaviour, culture and systems of the organisation using knowledge and technology of applied behavioural science. V. Compensation It is the process of providing adequate, equitable, and fair remuneration to the employees. It includes job evaluation, wage and salary administration, incentives, bonus, fringe benefits, social security measures etc. 1. Job Evaluation: It is the process of determining relative worth of jobs. (a) Selecting suitable job evaluation techniques, (b) Classifying jobs into various categories, and (c) Determining relative value of jobs in various categories Wage and Salary administration is the process of developing and operating a suitable wage and salary programme. It covers (a) Conducting wage and salary survey, (b) Determination of wage and salary rates based on various factors, (c) Administering wage and salary programmes, and (d) Evaluating its effectiveness. 2. Incentives: It is the process of formulating, administering and reviewing the schemes of financial incentives in addition to regular payment of wages and salary. It includes (a) Formulating incentive payment schemes, (b) Helping functional managers on the operation, and (c) Reviewing them periodically to evaluate effectiveness 3. Bonus: It includes payment of statutory Bonus according to the payment of Bonus Act, 1965, and its latest amendments. 4. Fringe Benefits: Management provides these benefits to motivate the employees and to meet life's contingencies. These benefits include: (a) Disablement benefit (b) Housing facilities (c) Educational facilities to employees and children (d) Canteen facilities (e) Recreational facilities (f) Conveyance facilities (g) Credit facilities (h) Legal clinic (i) Medical, maternity and welfare facilities (j) Company stores VI. Social Security Measures Management provides social security to their employees in addition to the fringe benefits. These measures include: 1. Workmen's compensation to those workers (or their dependents) who involve in accidents 2. Maternity benefits to women employees 3. Sickness benefits and medical benefits 4. Disablement benefits / allowance 5. Dependent benefits 6. Retirement benefits like Provident Fund, Pension, Gratuity etc. Please use headphones VII. Human Relations Practising various personnel / human resources policies, and programmes like employment, development and compensation and interaction among employees creates a sense of relationship between the individual worker and management, among workers and trade unions and management. It is the process of interaction among human beings. Human relations are areas of management practice in integrating people into wok situation in a way that motivates them to work together productivity, co-operatively and with economic, psychological and social satisfaction. It includes a. Understanding and applying the models of perception, personality, learning, intra and inter personal relations, intra and inter group relations b. Motivating the employees c. Boosting employee morale d. Developing the communication skills e. Developing the leadership skills f. Redressing employee grievances properly and in time by means of a well formulated grievance procedure. g. Handling disciplinary cases by means of an established disciplinary procedure. h. Counselling the employees in solving their personal, family and work problems and releasing their stress and tensions. i. Improving quality of work life of employees through participation and other means. EFFECTIVENESS OF HUMAN RESOURCES MANAGEMENT Effectiveness of various personnel programmes and practices can be measured or evaluated by means of organisational health and human resource accounting etc. 1. Organisational Health: Organisational health may be studied through the result of employee's contribution to the organisation and the employee job satisfaction. The result of the employee satisfaction can be understood by labour turnover, absenteeism and commitment. Low rate of absenteeism and specific and high rate of employee commitment most probably indicate employee satisfaction about the job and the organisation. Employee contribution to the organisational goals can be measured through employee productivity of different types. 2. Human Resource Accounting, Audit and Research: Effectiveness of human resources management can also be found out through human resource accounting, audit and research. Human Resources Accounting (HRA): is a measurement of the cost and value of human resources to the organisation. Human resource management is said to be effective if the value and contribution of human resources to the organisation is more than the cost of human resources. Human Resource Audit: Human resource audit refers to an examination and evaluation of policies, procedures and practices measures the effectiveness of personnel programmes and practices and determine what should or should not be done in future. Human Resources Research: It is the process of evaluating the effectiveness of human resources policies and practices and developing more appropriate ones. It includes, (a) Conducting morale, attitude, job satisfaction and behaviour surveys, (b) Collecting data and information regarding wages, cost-benefit analysis of training, benefits, productivity, absenteeism, employee turnover, strike, accidents, operations, working hours, shifts etc., (c) Tabulating, computing and analysing data and information, (d) Report writing and submission to the line managers, (e) Finding out the defects and short comings in the existing policies, practices etc. (f) Developing more appropriate policies, procedure, programmes of personnel. The effectiveness in performing personnel and human resources management functions results in contributing to the attainment of the objectives of the organisation, individual employees and the goals of the society and/or government. The objectives of personnel and human resources management are formulated on the basis of organisational objectives, individual employee goals, social goals and the functional analysis of personnel and human resources management. Further the discussion about the meaning and definition of HRM can be made full-fledged by studying the objectives and policies of HRM. Hence, we now discuss the objectives of Human Resource Management. - End of Chapter - LESSON 4 ORGANISATION OF HRM DEPARTMENT LINE AND STAFF RELATIONSHIPS The relationship with which the managers in an organisation deal with one another is broadly classified into two categories, viz, line and staff. Line and Staff are often used in ways that are loose and unclear. Attempts have been made in some organisations to dispense them. Thus operating managers / departments are frequently substituted for line and auxiliary and service departments are used for staff. Line and staff are characterised by relationships but not by departments. The important category of relationships is line relationship. Line Relationships: The relationship existing between two managers due to delegation of authority and responsibility and giving or receiving instructions or orders is called line relationship. Thus, line relationship generally exists between superior and subordinate. 'Line' refers to those positions of an organisation which have responsibility, authority and are accountable for accomplishment of primary objectives. Managers identified as line are not subject to command by staff position. In case of disagreement between line and staff, line manager has the right to make final operating decisions. Line authority represents uninterrupted series of authority and responsibility delegation down the management hierarchy. In other words Board of Directors delegates authority to the managing director, who in turn delegates a part of his authority to the General Manager. The General Manager in turn delegates authority to the Managing Director, who delegates a part of his authority to different departmental Heads, and through them to the Supervisors. However, the line managers are completely responsible and accountable for the results achieved by the employees of the respective departments and sections. This means, though the authority is delegated, responsibility for action taken by a subordinate still rests with the superior / delegator. The second kind of relationship is staff relationship. Staff Relationships: The staff concept is probably as old as organisation itself. It is virtually impossible for the busy line managers to perform all their functions and concentrate on all activities including management of the people in their respective departments. This gives rise to securing advice and help from specialists. This creates staff relationships. The relationship between two managers is said to be a staff relation, when it is created due to giving and taking advice, guidance, information, help or assistance, counselling etc. in the process of attaining organisational goals. Thus staff managers analyse problems, collect information, develop alternative suggestions, and help the line managers to make right decisions quickly. Staff control is monitoring and reporting, which brings the results of information to the attention of the line managers for action by the line. Thus they reduce the work load of the line managers and allow them to concentrate on their operative issues. Having discussed two concepts it would be appropriate to apply the line and staff relationships to the organisation design. Please use headphones ORGANISATION DESIGN AND LINE AND STAFF RELATIONSHIPS Organisation can also be structured on the basis of line and staff. As discussed earlier line and staff are viewed as relationships but not by departments. Some functional managers have line relations with other managers whilst some other managers have staff relations with other managers in the organisation. But those functional managers having staff relations may have line relations in relation to the subordinates in their departments. Thus organisation structure is designed on the basis of line and staff relationship within departmental structure. It is often regarded that the personnel manager has staff relation with other managers in an organisation. Now we discuss the line and staff relationship and personnel management in an organisation. Personnel Management is a Line Responsibility: It is often said that "Personnel Management is a line manager's responsibility but a staff function". As discussed earlier the responsibility of line managers is to attain effective goals of their respective departments by the proper management of materials, machine, money and men. Thus management of four 'M's, which includes management of personnel in their respective departments is the responsibility of line management. Since management is getting things done through and by the people, responsibility of management of these people rests with line managers. Attaining overall organisation goals is the responsibility of the General Manager through proper management of personnel and with the help of the different heads of the departments. In turn, management of personnel in different departments is the responsibility of the Heads concerned. In the same way, first level superiors are also responsible for managing the men of their respective sections in achieving their goals. Thus Personnel Management is a responsibility of all line managers. It is in this sense that every manager is a personnel manager. Line Needs Assistance in Managing Men: In most of the organisations, Board of Directors delegate operative/technical responsibilities to Managing Directors and through them to the General Managers. Different functional managers are delegated with the technical responsibility by the General Manager. Since all these line managers have to concentrate on discharging technical/operative responsibility, hence they may not find time to discharge their responsibility of managing human resources. For example, the production manager has to concentrate on production activities and thus he may not find time to perform the various functions of personnel management relating to employees of his own department. In such a situation, the line managers require help or advice relating to personnel management of their respective department. Personnel Management is a Staff Function: Since the top management believes that organisational ability depends on sound management of human resources. It provides specialised assistance to line managers through personnel managers. Thus the personnel managers are created for the purpose of providing assistance, advice, information etc. to line managers in order to relieve them from the burden of management of personnel and to allow them to concentrate on their technical operations. Personnel Manager performs the various functions of personnel management viz, employment, training, development, wage and salary administration, motivation, grievance redressal, workers participation in management, collective bargaining etc. Thus personnel managers perform certain staff functions relating to management of personnel like advising, assisting, guiding, suggesting, counselling and providing information to line managers. So personnel management is a staff function. However, responsibility for the management of personnel still rests with line managers. Thus personnel management is a line management responsibility but a staff function. STAFF ROLE OF THE PERSONNEL DEPARTMENT The personnel department in relation to other departments and other managers performs the following roles: - Policy Initiation and Formulation: One of the important functions of the personnel department is formulation of new personnel policy, alteration or modification of the existing personnel policies. The personnel manager has to initiate the modification or formulation of new policies. The personnel manager assists, advises and counsels the managing director regarding implications etc., information and modification of all major or crucial policies. He may be authorised by the Managing Director to formulate or modify the minor policies. - Advice: The major activity of the personnel department/manager if advising, counselling, suggesting all other managers at all levels (Junior, Middle and Top) regarding problems, issues, clarifications concerning policies or people of their department / sections. Advice should be based on thorough thinking, analysis, research regarding pros and cons, implications during and after execution, possible measures to be taken etc. - Service: Personnel Management renders all secretarial and executive services and performs background work in all personnel activities regarding recruitment, receiving and scrutinising applications, conducting tests, interviews, placement, induction, training, compensation management and management of industrial relations. - Monitor and Control: Personnel Department monitors performance and controls the line activities to the extent they are related to personnel issues. It compares the actual performance of the line managers with the established personnel policies, procedures and programmes. Identifies and informs the deviations with possible alternative solutions to the line managers. It also provides the course of corrective action. It suggests to the managing director to modify the policies (if necessary) basing on the experiences in this regard. APPLICATION WITHIN AN ORGANISATION The line relationship of delegated authority and responsibility from Managing Director to first level supervisors through General Manager, heads of the departments is shown by straight line. The relationship between the general manager and Manager Personnel is also shown by a straight line as the General Manager also gives orders to staff specialists. Personnel Manager, being a staff specialist, provides advice and help to various heads of the departments and lower level managers, in addition to General Manager. PERSONNEL DEPARTMENT IN A DIVISIONALISED ORGANISATION STRUCTURE The role of a personnel manager attached to the divisional office/branch office or factory of a decentralised organisation is particularly a difficult one. The Personnel Manager at divisional/branch level is responsible to the local divisional/branch manager in a line sense and subordinate to the Manager - Personnel at head office in a staff sense or functional sense. Personnel Manager at divisional / branch level has to help the divisional / branch manager in developing personnel programmes and in the management of personnel of the division / branch concerned. The Deputy Manager Personnel at the divisional level may contact the Manager Personnel at the head office to gain acceptance of the personnel programmes. In case of rift between Divisional Manager and Deputy Manager - Personnel, they may report their difficulties to their common superior, who in turn consults higher management for correct decision. Similarly, the personnel officer at branch level may contact the Deputy Divisional Manager Personnel at divisional level to gain acceptance of the personnel programme and to get clarifications about personnel issues. In case of rift between the Branch Manager and Branch Personnel Officer, they may report their issues to their superior at divisional level. The Branch Personnel Officer and Branch Manager may get the assistance from the Personnel Manager at the head office, in solving the problems of crucial and strategic nature and of those which cannot be solved at branch / divisional level. PERSONNEL DEPARTMENT IN A MATRIX ORGANISATION STRUCTURE In a matrix organisation structure, employees have two superiors, i.e. they are under dual authority. One chain of command is functional and the other chain of command is project team. Hence matrix structure is referred to as a multi command system (both vertical and horizontal dimension). Thus the team of employees of personnel department has two superiors. i.e. Personnel Manager (vertical dimension) and Project Manager (horizontal dimension). Both dimensions of structure are permanent with power held equally. ROLE OF PERSONNEL DEPARTMENT IN THE ORGANISATION AS A SPECIALIST The personnel department has staff relationship with other department / managers in the total organisation. The personnel department is responsible for advising management - from Managing Director to the lowest line supervisor - on all areas relating to the personnel management and industrial relations. Personnel department also performs various functions of employment, training and development. It represents management in many of the relationships that effect the organisation as a whole. It is also responsible for representing various workers problems to management. Personnel department generally acts in an advisory capacity. It provides information, offers suggestions, counsels and assists all the line managers in the organisation and is not responsible for the end results. The personnel manager must exercise control very tactfully in order to win the confidence and cooperation of all line managers. He has to persuade the line managers to work with staff specialists and not against them. As a Source of Help - In certain situations (when line managers lack skill or knowledge in dealing with employee problems) experienced personnel managers assume line responsibility for personnel matters. But it may be resented by the managers who ought to seek staff assistance in meeting their personnel responsibilities. Personnel managers should earn the reputation and confidence of line managers of being a source of help rather than a source of threat to line managers. Staff assistance is likely to be effective when it is wanted rather than when imposed. As a Chance Agent - Nevertheless it is still true that effective personnel executives advice on policies helps managers in implementing their programmes. Responsibilities within Personnel Department - As the other managers, Personnel Manager is also a line manager in relation to subordinates within the personnel department. Personnel manager is responsible for the success or failure of his department in contributing to the organisational goals. In most of the organisations the personnel manager is responsible for supervising the activities of his subordinates like employment manager, wage and salary manager, manager for training and development, manager industrial relations etc. He is also responsible for the operations of personnel manager at divisional and branch levels. As the chief of the personnel department the personnel manager has to get effective results with the cooperation of all the employees working in the department. The success of the personnel department should be measured in terms of its contributions to the personnel programmes like helping line managers in recruitment, screening and referring suitable candidates for employment, securing cooperation of line managers in formulating personnel policies, providing infrastructure and various facilities for training and development, providing general information regarding the job and organisation in induction and training programmes, maintaining adequate employee records to assist the line managers in making decisions affecting the employees, working with line managers in preparing employee appraisal methods, helping the line managers in developing their behavioural sensitiveness, consulting and advising in formulating the equitable wage policy and employee benefits, participating in grievance procedure and collective bargaining, preparing employees to accept the change like change in technology, change in organisational structure, acting as change agent for the organisational development by contributing to employees effectiveness, evaluating the employee contribution to organisation in relation to staff and cost incurred with the help of human resource accounting techniques, counselling and consulting on various employer problems in order to maintain sound industrial relations. The success of the personnel department can be guaged by the degree of dependence of line managers on personnel department, which in turn depend greatly on the qualifications and qualities of the personnel manager. QUALIFICATIONS AND QUALITIES OF PERSONNEL MANAGER The functions of personnel management vary from organisation to organisation, both in nature and degree. So, the qualifications required of a personnel manager differ from organisation to organisation depending on its nature, size, location etc. However, the qualification and qualities which will be applicable in general can be summarised as follows: 1. Personal Attributes: The personnel manager, as in case of any other manager, must have initiative, resourcefulness, depth of perception, maturity in judgment, and analytical ability. Freedom from bias would enable the personnel manager to take an objective view of both of management and workers. He must thus have intellectual integrity. Moreover, the personnel manager should be thorough with labour laws. An understanding of human behaviour is essential to the personnel manager. The personnel manager must be familiar with human needs, wants, hopes and desires, values, aspirations etc. The Personnel Manager should also possess other personal attributes like: a. Intelligence: This includes skills to communicate, articulate, moderate, understand etc., command over language, mental ability and tact in dealing with people intelligently, and ability to draft agreements, policies etc. b. Educational Skills: Personnel Manager should possess learning and teaching skills as he has to learn and teach employees about the organisational growth, need for and mode of development of individuals etc. c. Discriminating Skills: Personnel Manager should have the ability to discriminate between right and wrong, between the just and unjust, merit and demerit d. Executive Skills: Personnel Manager is expected to execute the management's decisions regarding personnel issues with speed, accuracy and objectivity. He should also be able to streamline the office, set standards of performance, co-ordinate, control etc. Further, the personnel manager is expected to have leadership qualities deep faith in human values, empathy with human problems, foreseeing future needs of employees, organisation, government, trade unions, society etc. 2. Professional Attitudes: Finally, professional attitude is more necessary particularly in Indian context. The personnel manager's job, as in the case of other managers is getting professionalised. He should have patience and understanding, ability to listen before offering advice. As mentioned earlier he should have the knowledge of various disciplines like technology, engineering, management, sociology, psychology, philosophy, human physiology, economics, commerce and law. He must be able to couple social justice with a warm personal interest in people, which must be secured by an uncommon degree of common sense. 3. Qualifications: Qualifications prescribed for the post of Personnel Manager vary from industry to industry and from State to State. These qualifications have been undergoing several changes from time to time. However, the qualifications prescribed in general are: a. Degree of a recognised university b. Post graduate degree / diploma in Social Sciences or Sociology or Social Work or Personnel Management or Industrial Relations or Labour Welfare or Labour Laws etc., MBA with specialisation in Personnel Management and Industrial Relations. c. Degree in Law is taken as an added or desirable qualification. d. Experience in a similar capacity. e. Knowledge of local language. The Indian Context Though it is said and accepted that the personnel manager should possess various skills listed above, the Indian personnel managers do not possess at least some of the important qualities discussed above. This is mostly due to the absence of proper human resource planning at the macro level. The cream of the country's human resources is attracted to the field of medicine, engineering and technology, finance (banking, life insurance) and computer applications. Only the left-overs join the profession of personnel management with an intention to just get a job. This resulted in the absence of professional attitude, interest, intelligence, knowledge, skills etc., among today's personnel managers. As such this function in organisations and profession in general receives inadequate attention among line managers, top management and the planners. The entrance of less qualitative human resources into the profession of personnel management has resulted in ineffectiveness of personnel function. Further, other managers view the personnel manager as a second rate citizen in the organisation and as an unwanted group in the organisation. This type of attitude of various managers towards personnel manager results in conflicts between personnel and other managers. ENVIRONMENTAL SCANNING AND COMPLEXITIES INVOLVED IN HRM Personnel Manager can't perform his job in a vacuum, as a number of environmental factors affect the HRM. In fact, these factors influence the organisation through human resources. The term 'environment of human resources management' has reference to the totality of all factors which influence both the organisation and HRM sub-systems. The environment furnishes the macro context and the organisation is the micro unit. The external environment consists of those factors which affect an organisation's human resources from outside the organisation. Important among them are: economic, social, political, governmental, legal, technological, manpower in the country, tradition and culture, customers, other organisations and their trade unions. Each of these external factors, separately or in combination, can influence the HRM function of any organisation. Further, changes in these factors make the personnel manager's job a challenging one. The internal environment also affects the job of a personnel manager. The internal environmental factors include organisation objectives, policies, organisational structure, the functional areas of the organisation with which the personnel manager works continuously like finance, marketing and production. Impact of internal environmental factors is profound as they frequently and closely interact with HRM function in an organisation. For instance, the objectives of HRM are formulated based on the organisational structure. The personnel manager works closely with other functional (line) managers in solving their personnel problems through counselling, advising, providing information etc. The levels of wage and salary, various allowance incentive, compensation etc. are heavily influenced by the level of finance and success of marketing functions. Most of the personnel problems are linked with the production function of an organisation. Thus the internal environment of an organisation influences heavily the P/HRM. The influence of external environment on HRM is equally important, though the severity is comparatively less. People are essentially self managing. In other words, while other resources are managed by people, personnel are managed by themselves. People themselves decide about the nature, time and place of their employment. And people react to the changing conditions and to the techniques of management unlike money, material and machine. Further in the present day industries, where the principles of democracy influence and management of labour, the relationship between employers and employees is conceived of as a "partnership in a constructive endeavour to promote the satisfaction of the economic needs of the community in the best possible manner". But, the impact of changes in the external environment of an enterprise is profound on the personnel. These changes include technological obsolescence, cultural and social changes, changes in the policies of the government, politics and the like. With the result, the work environment changes affect their productivity level. It is often said these peculiarities and changes complicated the task of personnel management. Modern managers face now, bewildering, and often contradictory ideas and situations. A number of impressive changes have taken place in the level, aspiration, values and position requirement of human resources. These are due to changes in technological innovations, more formal education, demand of the Government, trends in the employee roles, changes in the values of workforce, demands of employers, changes in structure of employment etc. Please use headphones i) Technological Factors: Just as necessity is the mother of invention competition and a host of other reasons are responsible for the rapid technological changes and innovations. In consequence of these changes, technical personnel, skilled workers and machine operators are increasingly required, while the demand for other categories of employees has declined. But it is found that the supply of former category of employees has dwindled in relation to the demand for the same. Hence, procurement of skilled employees and their increase in numbers to match the changing job requirements has become a complicated task. In addition, not only new organisational relationships and different motivational techniques to satisfy the changed relationships but also to retain technically skilled and efficient personnel will be required. ii) Human Resource in the Country: The structure, values and the level of education of human resources in the country influence much the HRM function of any organisation. The influence of manpower in the country can be studied through the changes in structure of employment. a. Change in the Structure of Employment: Structure of employment in an organisation changes with the entrance of workforce with different background (social, economic, region, community, sex, religion, traditions, culture etc). There has been a significant change in the structure of employment with the entry of (a) candidates belonging to scheduled caste, scheduled tribe and backward communities, thanks to government's reservation policy, and with (b) more female employees due to increased career orientation among women, suitability of women for certain jobs, and women becoming more acclimatized to the working climate & higher level commitment. Organisational workforce is composed of people from different regions, mostly due to increased transportation facilities and mobile character to people. Further, technological revolution has brought occupational mobility. These changes in workforce have naturally complicated the task of HRM as the personnel manager has to deal with the employees with different backgrounds. b. Changes in Employee Roles and their Values: It was the opinion of the management that it was the boss who'd make the decisions, and employees have to follow obediently management's decision. But gradually, this relationship has been replaced by the relationship in which employees and management are partners in the organisation. Further, changing structure of the work force has led to the introduction of new values and roles in organisations. Among these are... (a) emphasis on quality of life rather than quantity; (b) equity and justice for the employees over economic efficiency; (c) pluralism and diversity over uniformity and centralism; (d) participation over authority; (e) personal convictions over dogma; (f) the individual over the organisation; (g) alienation from the job; (h) increasing counterproductive behaviour; (i) rising expectations; (j) changing ideas of employees; (k) declining work ethic. Consequently it has become imperative for the management to provide various fringe benefits to improve morale, to introduce negotiating machinery to redress grievance, to encourage employee participation in decision making, and the like, to pave the way for industrial democracy to meet the situations of workforce. Employees prefer flexible working hours to fixed time schedule. Flexible schedules fit not only with new values of modern workforce but also benefits the employer with the enhancement in productivity, reduction in employee tardiness, absenteeism and turnover, improvement in morale and the like. Since, the rights of citizenship are entering the organisations freedom of speech and the rights to privacy are becoming part of work ethic. c. Level of Education: Workers have been entering the organisations with increased level of formal education in recent years. Increased formal education led to the changes in attitude of employees. The well educated employees challenge and question the managements decisions and want a voice in the company's affairs affecting their interest. "As the base of education broadens, management must plan to deal with employees on a higher plane of logical interactions". Thus management of well educated employees is a problem to the organisation though they make valuable contributions. iii) Changing Demands of Employers: Changes always are not on the side of employees. Organisations also undergo changes and consequently their demands on employees also change. The technological revolution and neck to neck marketing competition of most of the organisations demand that the existing employees adopt to the ever changing work situations and learn new skills, knowledge etc., to cope up with the new changes. iv) Local and Governmental Factors: Government had neither time nor interests to spare for the problems pertaining to labour arising in industry till the end of 1940s. But the need for government interference arose out of the belief that government is the custodian of industrial and economic activities. The various reasons, like problems of trade union movement, failure of many employers to deal fairly with workers, and non-fulfillment of plan targets, encouraged the governments to intervene in human resources management and enact various labour legislations. Consequently the government has imposed the complex web of rules and regulations on the employment policy of the organisations by reserving certain number of jobs of all categories to certain sections of the community. Hence, the management cannot manage the human resources unilaterally as it used to do, because it has to abide by legislations, rules and regulations imposed by the government. One of the most important external factors that affects HRM is legal environment, i.e., awareness of legislations enacted by the government at the Centre and the States. The important legislations enacted in India affecting HRM are: Factories Act 1948, Trade Union Act 1926, Payment of Wage Act 1936, Minimum Wages Act 1948, Employees State Insurance Act 1948, Workmens Compensation Act 1923, Payment of Bonus Act 1965, Industrial Employment (Standing Orders) Act 1946, Employment Exchange (Compulsory Notification of Vacancies) Act 1959, Payment of Gratuity Act 1972, Maternity Benefit Act 1961 and Apprentice Act 1961. v) Employees Organisation: Employees organisations have mustered strength as a parallel to the growth of industrialism. At present these organisations constitute one of the power blocks in many countries including India. With the formation and recognition of these organisations, the issues related to employees' interests are no longer determined by the unilateral action of management, and must now be discussed with union representatives. In addition, Unions have shifted their emphasis from economic tactics to the political pressures. Thus "...the unions have turned increasingly to governmental action as a means of achieving their objectives in addition to using the more traditional actions". In consequence the scope of managerial discretion has been narrowed down. vi) Customers: Organisations produce products or render services for the ultimate consumption / use by the customers. In a sense it can be said that organisations depend upon customers for their survival and growth. Customers revolt against employees if services rendered are less qualitative. There were a number of instances of this kind in commercial banks in India. Similarly, customers may develop negative attitude towards the organisations, if it does not follow the social policies of the country. Hence, personnel manager has to take the customer's attitude towards employees in HRM particularly in service oriented industries. vii) Social Factors: Social environment consists of class structure, mobility, social, roles, social values, nature and development of social institutions, caste structure and occupational structure, socially forward and weaker sections, traditions, religions, culture etc. These factors directly influence the human resources management of an organisation viz. its human resources. iii) Economic Factors: A number of economic factors affect human resources management of an organisation by influencing system, national income, per capita income, wage level and structure, distribution of income and wealth etc. These factors mostly influence the wage and salary levels of an organisation. ix) Political Factors: Political stability, political parties and their ideologies and political gimmicks, formations of new political parties, splits in and amalgamation of existing trade unions etc. The changes in trade unions complicate the task of HRM. Human resources and their management interacted with the internal and external environmental factors. Many environmental factors affect the performance of specific tasks of HRM. Changes in the internal and external environmental factors complicate the tasks both of line and personnel managers in the tasks of dealing with human resources. Considering the complexities and the challenges in the HRM now and in near future management has to develop sophisticated techniques and efficient specialists to manage the personnel on sound lines. MODEL QUESTIONS (LESSONS 1, 2, 3 AND 4) 1. Define Personnel Management and describe its objectives. 2. Bring out the importance of Human Resources Management for organisations. 3. Describe the managerial and operative functions of Human Resource Management. 4. Comment on the present position and status of the Personnel Manager in a large industrial undertaking in India. 5. What are the major qualities and qualifications required for Personnel Manager? CASE: BILLY BISCUIT COMPANY* Billy Biscuit Company is a medium scale family-run company located in Eastern India. It employed 140 workers during the last two years. The company has strained industrial relations. When the workers went on strike, the company declared a lockout. Four months later the worker's union and management resumed dialogue. The union agreed to cooperate with management provided the management lifts the lockout and abolishes the personnel department. The management agreed to both the demands. Do you feel that after the personnel department is abolished, personnel functions should still be carried out? Give reasons. If the answer is yes, discuss 'how' it is possible and who will have the responsibility for personnel activities in the organisation. *Source: C. S. Venkataratnam and B. R. Srivastava, Personnel Management and Human Resources, Tata McGraw-Hill, New Delhi, 1991, PP 27 - End of Chapter - LESSON - 5 HUMAN RESOURCE PLANNING MEANING E.W. Vetter viewed human resource planning as "a process by which an organisation should move from its current manpower position to its desired manpower position. Through planning, management strives to have the right number and right kind of people at the right place at the right time, doing things which result in both the organisation and the individual receiving maximum long-run 'benefit' ". Human resources planning may be viewed as foreseeing the human resource requirements of an organisation and the future supply of human resources and (i) making necessary adjustments between these two and organisational plans; and (ii) foreseeing the possibility of developing the supply of human resources in order to match it with requirements by introducing necessary changes in the functions of human resource management. NEED AND IMPORTANCE Human Resource Planning (HRP) anticipates not only the required kind and number of employees but also determines the action plan for all the functions of personnel management. The major payoffs of human resource planning may be catalogued thus: 1. It checks the corporate plan of the organisation. If it is anticipated that the required manpower will not be available, then the HRP suggests the need for modification of corporate plans. 2. It offsets uncertainty and change. Without the HRP, everything regarding requirement of availability of internal moves of human resources would be in liquid state and all the managers will be in a dilemma about securing suitable personnel until they get them. Sometimes the organisation may have machines, material and money but not the means, and consequently the production cannot be started. But the HRP offsets uncertainties and changes to the maximum extent possible and enables the organisation to have right men at right time and in the right place. 3. It provides scope for advancement and development of employees through training. 4. It helps to satisfy the individual needs of the employees for promotion, transfers, salary enhancement, better benefits etc. 5. It helps in anticipating the cost of salary, benefits and all the cost of human resources facilitating the formulation of budgets in an organisation. 6. It tries to foresee redundancy and plan to check it or to provide for alternative employment in consultation with trade unions, other organisations, and governments through remodeling the organisational, industrial and economic plans. 7. It helps in planning for physical facilities, working conditions, the volume of fringe benefits like canteen, schools, hospitals, conveyance, child care centres, living quarters, company stores etc. 8. It gives an idea of type of tests and interview techniques to be used in selection process based on the level of skills, qualifications, intelligence, values etc., required of future human resource. 9. It causes the development of various sources of people to meet the organisational needs. 10. It helps to take steps to improve human resource contributions in the form of increased productivity, sales, turnover etc. 11. It facilitates the control of all the functions, operations, contributions and cost of human resources. Please use headphones OBJECTIVES The important objectives of human resource planning in an organisation are (i) to recruit and retain the human resource of required quantity and quality; (ii) to foresee the employee turnover and make arrangements for minimizing turnover and filling up of consequent vacancies; (iii) to meet the needs of the programmes of expansion, diversification etc; (iv) to foresee the impact of technology on work of existing employees and future human resource requirements; (v) to improve the standards, skills, knowledge, ability, discipline etc. (vi) to assess the surplus or shortage of human resources and take measures accordingly; (vii) to maintain congenial industrial relations by maintaining optimum level and structure of human resources; (viii) to minimize imbalances caused due to non-availability of human resources of right kind, right number, in right time, and at right place; (ix) to make the best use of its human resources; and (x) to estimate the cost of human resources. LEVELS OF HUMAN RESOURCE PLANNING Different institutions make Human Resource Planning at different levels for their own purposes, of which national level, sectoral level, industry level, unit level, department level, and job level are important. 1. National Level: Generally, government at the centre plans for human resources at the national level. It forecasts the demand for and supply of human resources for the entire nation, it takes steps to adjust the demand by altering its economic, industrial and agricultural policies, and adjusts the supply through its population policy, family planning, educational policy etc. It also plans for occupational distribution, sectoral and regional allocation of human resources. HRP at national level helps to plan for educational facilities, hospitals, employment plans, agricultural and industrial development etc. 2. Sectoral Level: Manpower requirements for a particular sector like agricultural sector, industrial sector or tertiary sector are projected based on the government policy, projected output / operations etc. 3. Industry Level: Manpower needs of a particular industry like cement, textile, chemical etc are predicted, taking into account the output / operational level of that particular industry. 4. Unit Level: This covers the estimation of human resource needs of an organisation or a company based on its corporate / business plan 5. Department Level: This covers the manpower needs of a particular department in a company. 6. Job Level: Manpower needs of a particular job family within a department like "Mechanical Engineer" are forecasted at this level. STEPS OF HUMAN RESOURCE PLANNING Human Resource Planning at organisational level consists of the following steps: Step 1 - Analyzing organisational plans Step 2 - Demand forecasting, which means, forecasting the overall human resource requirements in accordance with the organisational plans. Step 3 - Supply forecasting, which means, obtaining the data and information about the present inventory of human resources, and forecast the future changes in present human resource inventory. Step 4 - Estimating the net human resource requirement. Step 5 - In case of future surplus, plan for redeployment, retrenchment, and layoffs. Step 6 - In case of future deficit, forecast the future supply of human resources from all sources with reference to plans of other companies. Step 7 - Plan for recruitment, development, and internal mobility so that in future, supply is more than or equal to net human resource requirements. Step 8 - Plan to modify or adjust the organisational plan, if future supply is likely to be inadequate. The eight steps of HRP are depicted in the order mentioned above. But the same order need not be followed in the actual planning process, as the steps are interdependent and sometimes, the first step and the last step may be processed simultaneously. And the planner sometimes may not explicitly process some steps. However, it is helpful in planning the human resources effectively, without any complications, if the planner has an idea about all steps of HRP. These steps are discussed below in detail: Please use headphones Step 1. ANALYSING THE ORGANISATIONAL PLANS The process of human resource planning should start with analysing the organisational plan into production plan, technological plan, plans for expansion or diversification, marketing plan, sales plan, financial plan etc. Each plan can be further analysed into sub-units. Detailed programmes should be formulated on the basis of unit-wise plans. Practicability of each programme should be ensured. Analysing of organisational plans and programmes helps in forecasting the demand for human resources, as it provides the quantum of future work activity. Step 2. FORECASTING THE OVERALL HUMAN RESOURCE REQUIREMENTS The existing job design and analysis may thoroughly be reviewed keeping in view the future capabilities, knowledge and skills of present employees. Further, the jobs should be redesigned and re-analysed keeping in view the organisational and unit- wise plans and programmes, future work quantum, future activity or task analysis, future skills, values, knowledge and capabilities of present and prospective employees. The job generally should be designed and analysed reflecting the future human resources and based on future organisational plans. Job analysis and forecasts about the future components of human resources facilitate demand forecasting. One of the important aspects of demand forecasting is the forecasting of the quality of human resources (skill, knowledge, values, capabilities etc) in addition to quantity of human resources. Important demand forecasting methods are: (a) Managerial Judgment: Most of the small scale and unorganised industries cannot have systematic data banks for manpower information and job analysis. Such organisations resort to the managerial judgment approach. Under this method, the managers or supervisors who are well-acquainted with the workload, efficiency, and ability of employees, think about their future workload, future capabilities of employees, and decide on the number and type of human resources to be sourced. This is done by the supervisors concerned, who send the proposals to the top officials for approval. Under this bottoms-up approach, the management at the top compares the proposals with the organisational plans, makes necessary adjustments, and finalises the plans. Alternatively, this exercise can also be done by the top management, which in turn, sends the information to the lower levels. Under this top-down approach, the management at the top prepares the organisational plans, departmental plans, and human resource plans. But the best approach is participative approach, where both the management at the top and supervisors at the bottom meet and decide on the human resource needs based on the experience of the supervisors and the plans formulated by the top officials. (b) Statistical Techniques: There are two types of statistical techniques useful for human resource planning viz. i. Ratio Trend Analysis:Under this method, the ratios are calculated for the past data relating to number of employees of each category and production level, sales level, activity level / work load level, and direct employees and indirect employees. Future production level, sales level, activity level / work load are estimated with an allowance for changes in organisation methods and jobs. Future ratios are also estimated when there are changes to come in organisation and human resources. Then future human resource is calculated on the basis of established ratios. The following example gives clear idea. Present level of production on 1-1-90 = 1,500 units Present number of foreman on 1-1-90 = 3 Ratio is 3 : 1500 i.e. 1 : 1500 Estimated production on 1-1-92 = 2,500 units Foreman required as on 1-1-92 = 5 (without giving any provision for changes) Future changes include decline in physical stamina of employees, change in values, increase in extra and social activities. It is estimated that the future ratio would be 1 : 420 Then, the Foremen required as on 1-1-92 = 6 ii. Econometric Models: Econometric models for human resource planning are built up by analysing the past statistical data and by brining the relationship among variable. These variables include those factors which affect manpower requirement directly and indirectly like investment, production, sales, activities / work load etc. The econometric model of formula is used to forecast manpower needs based on movements in various variables. (c) Work study Techniques: These techniques are more suitable where the volume of work is easily measurable. Under this method, total production and activities in terms of clear units are estimated in a year. Manhours required to produce / perform each unit is calculated. Work ability of each employee is estimated in terms of manhours after giving due weightage to absenteeism, rest etc. Then the required number of employees is calculated. The following example gives clear idea. Given that the planned operations during the year 1992 = 1,60,000 units for clerical section of Personnel Department of XYZ Co Ltd Planned operations during the year = 1,60,000 units Standard manhours needed to perform each unit in 1992 = 0.25 hours Planned manhours needed per year in 1992 = 40,000 hours Work ability per employee in 1992 = 2,000 manhours Therefore, the number of employees required in 1992 = 40,000/2,000 = 20 After estimating the overall human resource requirements the present human resource inventory should be obtained. Step 3. SUPPLY FORECASTING The first step of forecasting the future supply of human resource is to obtain the data and information about the present human resource inventory or existing inventory. (a) Existing inventory: The data relating to present human resources inventory in terms of human resources components, numbers, designation- wise and department-wise should be obtained. Principal dimensions of human resources inventory are: i. Head counts - total, department-wise, sex-wise, designation-wise, skill- wise, payroll-wise etc. ii. Job family inventory - It includes number and category of employees of each job family i.e., all jobs related to same category like clerks, cashiers, typists, stenographers etc., each job family, i.e., all jobs having common job characteristics (skill, qualification, similar operations) like production engineer (mechanical) and maintenance engineer (mechanical), and broad job families like general administration, production etc. iii. Age inventory - It includes age-wise number and category of employees. It indicates age-wise imbalances in present inventory which can be correlated in future selections and promotions. Age composition of human resources is also seen. Generally the individuals are dynamic, creative and innovative during their young age. However, they may lack judgment and maturity during that age. Hence a combination of young and old is preferred by organisations. The HRP should give due consideration to it and keep age-wise human resource mixing at the optimum level by renewing the manpower. iv. Competency inventory - Inventory of skill, experience, values, capabilities. v. Qualification inventory - Inventory of qualifications and training including minute qualifications and training received. vi. Salary grades inventory - Inventory of salary grades pay-wise, allowances-wise, and total salary-wise. vii. Gender inventory - Inventory of males and females employed viii. Location inventory - Local and non-local inventory ix. Performance inventory - Inventory of past performances and future potentialities. (b) Potential Losses: The second step of supply forecasting is estimation of future losses of human resources for each department and for the entire organisation. Potential losses to the organisation include voluntary quits, deaths, retirements, dismissals, layoffs, disablement due to ill-health or involvement in accident, loss of values, aptitude etc., change in the attitude of existing employees towards the job, department and organisation. Potential losses to a particular department or sub-unit include factors like promotions- out, transfers-out and demotions-out in addition to the above factors relating to the organisation. The reasons for potential loss can be classified as: i. Permanent Total loss: Permanent total loss is due to labour turnover. Labour turnover is measured by the following formula. Number of employees left during a specified period Labour Turnover Rate = -------------------------------------------------------- ---------- x 100 Average number of employees during the same period Management has to calculate the rate of labour turnover, conduct exit interviews, and interviews regarding dismissal etc. This helps to forecast the rate of potential loss and reasons for loss, and to reduce loss. Management also calculates labour stability index (rate of employees with certain period of experience to total number of employees), survival rate (the proportion of employees engaged within a certain period who remain with the firm after so many months or years of service), which helps the management to encourage stability and minimize undesirable turnover. ii. Permanent Partial loss: Permanent partial loss consists of wastage of skills, capabilities etc due to ill-health and involvement of employees in accidents. Such loss can be estimated on the basis of heath of employees, working conditions, and occupational diseases in organisation, safety measures provided, and past data relating to sickness and accidents rates. Such data helps not only to estimate loss of some components of human resources like physique, ability etc., but also suggests measures to be taken in order to minimize loss of human resources. Conclusions of morale studies or surveys are helpful to forecast the loss of values, aptitude etc of the existing employees. iii. Temporary Total loss: Temporary total loss of human resource is due to absenteeism and deputation-out. Past data about absenteeism, the reasons, and measures already taken or under implementation to minimize absenteeism, help to forecast loss of human resources due to absenteeism. Loss of human resources due to deputations can be anticipated through agreements of one organisation of employees with other organisations. iv. Temporary Partial loss: Temporary partial loss includes consultancy, advisory, and other services offered by the employees to others. Potential additions should also be estimated after forecasting potential loss. (c) Potential Additions: Similar to potential loss, there will also be additions to the present inventory of human resources. Potential additions are of three types viz. i. Permanent Total additions ii. Permanent Partial additions iii. Temporary Total additions iv. Temporary Partial additions Permanent total additions to the organisation consist of new hires. It can be estimated based on workload, interim programme etc. Permanent total additions in case of departments include promotions, demotions and transfers within the organisation. These additions can be estimated based on the acquisition of new skills, knowledge, values, aptitude etc by the existing employees. This addition can be foreseen with the help of morale studies, surveys, organisational programmes, general level of values etc. Consultancy and advisory services needed are estimated, based on the future changes in technology and special programmes or activities to be undertaken. The multiple effects of promotions and transfers on the total moves should be analysed and taken into consideration in forecasting changes in human resource supply of various departments. For example, if one officer in Grade C is promoted to Grade D, three more employees will also get promotions, (clerk to office A, Officer A to Officer B and Office B to Officer C). Thus there are four moves for one promotion. The rate of moves for promotion at higher level is relatively greater than those at lower level. The difference between the potential loss and potential additions is to be added or subtracted as the case may be to the present inventory of human resource in order to forecast the supply of manpower. Future supply of Human Resource = Present Inventory of Human Resources + Difference between Potential Additions and Potential Loss of Human Resources OR Future supply of Human Resource = Present Inventory of Human Resource + Potential Additions - Potential Loss (d) Analysing Sources of Supply: After estimating future supply of human resources, sources of supply should be analysed with a view to ensure the availability. Both internal and external factors affecting manpower supply should be analysed. Internal factors include, training facilities, salary levels, benefits, interpersonal relations, company programmes, scope for self-advancement and growth, promotional opportunities, pride for creative and innovative ideas, providing challenging work etc. The external factors are classified into: i. Local Factors: Like, population density in the area, local unemployment level, availability of employees on part-time, temporary and casual bases, current and future competition for similar categories, output from local educational and training institutes, residential facilities available, local transport and communication facilities, traditional pattern of employment, and availability of manpower with required qualifications and skills, the pattern of migration and immigration, the attractiveness of the areas as a place to live in, local housing, shopping, educational facilities, medical facilities, regulations of local government like reservation for local candidates, candidates belonging to scheduled, backward and minority communities etc. ii. National Factors: These include trends in the growth of working population, training institutes and schemes in the country, output from technical professional, vocational and general educational institutes in the country, migration and immigration patterns, social security measures (like unemployment benefits, lay offs, retirement benefits etc), cultural factors, customs, social norms, national demand for certain categories of manpower like technologists, scientists, management graduates, computer professionals etc., effects of changing educational patterns, impact of national educational policy, impact of government employment regulations such as reservation for candidates belonging to SC, ST and other categories etc. Step 4. ESTIMATING THE NET HUMAN RESOURCE REQUIREMENTS Net human resource requirements in terms of number and quality are to be determined in relation to the overall human resource requirements (demand forecast) for a future date and supply forecast for that date. The difference between overall human resource requirements and future supply of human resources is to be found out. Steps 5-6-7. ACTION PLANS TO COPE WITH SURPLUS OR SHORTAGE If future surplus is estimated, the organisation has to plan for redeployment, redundancy etc. If surplus is estimated in some jobs/departments, employees can be redeployed in other jobs / departments where the deficit of employees is estimated. Organisation should also plan for training or reorientation before redeployment of employees. Redeployment takes place in the form of transfers. If the deficit is not estimated in any job / department and surplus is estimated for the entire organisation, the organisation, in consultation with the trade unions, has to plan for redundancy or retrenchment. Redundancy plan includes type and number of employees to be retrenched, time and place of retrenchment, type of help to be extended to retrenched employees in the form of compensation, help in getting new job, priority in filling future vacancies. If deficit is estimated in any department and in the entire organisation, management has to forecast the future supply of human resources from various sources like internal sources, comparable organisations, educational and training institutes, employment exchange labour market etc. If the forecast relating to future supply of manpower from internal sources of the organisation shows favourable trends, the management may prefer internal candidates and plan for promotions, transfers, training and development measures. The promotion plan includes establishing the ratio of internal promotions to external recruits, basis for promotional channel, reservations in promotions etc. The transfer plan includes transfer channel, company rules regarding organisation initiated transfers and employee initiated transfers. The training and development plan covers areas to be developed, training techniques, training programmes, training time, availability of trainers, in-plant training or institute training, new courses to be offered or changes to be made in the existing courses, cost benefit analysis of training, development of the employees and matching of their improved skills with future job requirement etc. The productivity plan includes maximization of productivity or minimization of labour cost per unit of output through technological changes, improving / streamlining methods, procedures and systems, productivity bargaining, training, financial incentives, developing various schemes, motivation, commitment, organisation development programmes, job enrichment / enlargement, participation etc. Recruitment and selection plan covers the number and type of employees required, when they are required for the job, time necessary for recruitment and selection process, recruitment sources, recruitment techniques to be used, selection procedure to be adopted, selection techniques and tests to be used to select the candidates. It also covers the time factor for induction, preliminary training and placement. Step 8. MODIFY THE ORGANISATIONAL PLAN If future supply of human resources from all the external sources is estimated to be inadequate or less than the requirements (share of the particular firm in labour market), the manpower planner has to suggest the management to alter or modify the organisational plan. For example, if the organisational plan of Indian Railways indicates that computerisation should be completed in all the stations and offices by 1995, and the estimations of future supply of human resources shows that the supply of computer professionals would be less than the human resource requirements from all the sources even by 1995, then the railways have to modify their organisational plan by extending the period of computerisation by some more time when the supply of human resources available to railways will be equal to greater than the requirements of human resources. In view of shortage of certain categories of employees, the organisation has to take care not only of the recruitment but also of retention of existing employees. Though there is the problem of unemployment, organisations experience shortage of some categories of employees. Some organisations experience shortage of some other categories of employees due to employee mobility. Hence the organisations have to plan for retention of the existing employees. LIMITATIONS OF HUMAN RESOURCE PLANNING Though HRP is beneficial to the organisation, employees and trade unions, some problems crop up in the process of HRP. Important ones among them are: 1. Resistance by Employers and Employees: Many employers resist HRP as they think that it increases the cost of manpower, as trade unions demand for employees based on the plan, more facilities, and benefits, including training and development. Further, employers feel that HRP is not necessary as candidates are/will be available as and when required in India due to unemployment situation. Employee's version may be true about unskilled and clerical staff but it is not true in the case of all other categories as there is shortage for certain categories of human resources. Trade unions and employees also resist Human Resource Planning as they view it as increasing the workload of employees and preparing programmes for securing the human resources mostly from outside. The other reason for their resistance is the HRP aims at controlling the employees through productivity maximization etc. 2. Uncertainties: Uncertainties are quite prominent in human resource practices in India due to absenteeism, seasonal employment, labour turnover etc. Further, the uncertainties in industrial scene like technological change, marketing conditions also cause uncertainties in human resource management. The uncertainties make the HRP less reliable. 3. Inadequacies of Information System: Information system regarding human resources has not yet fully developed in Indian industries due to low status given to personnel department and less importance attached to HRP. Further, reliable data and information about the economy, other industries, labour market, trends in human resources, etc., are not easily available. In addition to these, C.B. Mackey identified eight stumbling blocks coming in the way of HRP... Often many managers and human resource specialists do not fully understand the HRP process. Suffering from an identity crisis, they fail to develop a strong sense of purpose and consequently flounder. Sometimes, HRP activities do not enjoy top management support and continued blessings. In the absence of support from the senior executives in the organisation, human resource specialists find it difficult to obtain information on various vital inputs. Many HRP programmes fail because of an overcomplicated initial effort. Successful HRP programmes start slowly and gradually expand as the programme blooms to flourished levels. Achieving co-ordination with other management and human resource functions, sometimes, seems to be impossibility. There is a tendency for HRP specialists to become absorbed in their own world and not interact with others. The question of striking a happy and harmonious balance between quantitative and qualitative approaches to HRP, sometimes, poses several impediments if not looked into seriously initially. Some people view HRP as a numbers game designed to ensure the flow of people and resources, in, out, up, down and across different organisational units. Such an exclusive focus on quantitative routes may force the organisation to discount, the more important, qualitative route emphasizing individual concerns such as individual promotability and career development. In order to succeed, further, HRP requires active participation and coordinated effort on the part of operating managers. However, this is easier said than done where operating managers look at the whole exercise with skepticism and growing mistrust. Finally, HRP people should not try the forceful introduction of certain sophisticated techniques just because many companies have started using them. Such a tendency to adopt one or more of these methods (explained earlier), not for what they can do, but because everyone is using them may not yield fruitful results. - End of Chapter - LESSON - 6 RECRUITMENT Recruitment is defined as "a process to discover the sources of manpower to meet the requirements of the staffing schedule and to employ effective measures for attracting that manpower in adequate numbers to facilitate effective selection of an efficient workforce". Edwin B. Flippo defined recruitment as "the process of searching for prospective employees and stimulating them to apply for jobs in the organisation". These definitions can be analysed by discussing the processes of recruitment through systems approach. Please use headphones FACTORS INFLUENCING RECRUITMENT Performing the function of recruitment i.e., increasing the selection ratio is not as easy as it seems to be. This is because of the hurdles created by the internal and external factors, which influence an organisation. The first activity of recruitment i.e. searching for prospective employees is affected by many factors like - (i) organisational policy regarding filling up of certain percentage of vacancies by internal candidates, (ii) local candidates (sons of soil), (iii) influence of trade unions, (iv) government regulations regarding reservations of certain number of vacancies to candidates based on community, region, caste, sex, and (v) influence or recommendations, nepotism. As such, the management is not free to find out or develop the source of desirable candidates and alternatively it has to divert its energies for developing the sources within the limits of those factors though it cannot find suitable candidates for the jobs. The activity of recruitment is consequently affected by the internal factors such as (i) working conditions (ii) promotional opportunities (iii) salary levels, types and extent of benefits (iv) other personnel policies and practices (v) image of the organisation, and (vi) ability and skill of the management to stimulate the candidates. However, the degree of complexity of recruitment function can be minimized by formulating sound policies. RECRUITMENT POLICY Recruitment Policy of any organisation is derived from the personnel policy of the same organisation. In other words, the former is a part of the latter. However, recruitment policy by itself should take into consideration the government's reservation policy, policy regarding "sons of soil", personnel policies of other organisations regarding merit, internal sources, social responsibility in absorbing minority sections, women etc. Recruitment policy should commit itself to the organisation's personnel policy like enriching the organisation's human resources or serving the community by absorbing the weaker sections and disadvantaged people of the society, motivating the employees through internal promotions, improving the employee loyalty to the organisation by absorbing the retrenched or laid-off employees or casual/temporary employees or dependents of present/former employees etc. The following factors should be taken into consideration in formulating recruitment policy. They are: a. government policies b. personnel policies of other competing organisations c. organisation's personnel policies d. recruitment sources e. selection criteria and preference etc. IMPACT OF PERSONNEL POLICIES ON RECRUITMENT POLICIES Recruitment policies are mostly drawn from personnel policies of the organisation. According to Dale Yoder and Paul D. Standohar general personnel policies provide a variety of guidelines to be spelt out in recruitment policy. Important among them are: a. Abiding the public policy and relevant law on selection b. Providing the employees the security and continuous employment c. Integrating the organisational needs and individual needs d. Providing the freedom and opportunity to employees to utilise their talent, skill and knowledge to the maximum extent e. Treating all the employees fairly and equally in all employment relationships including salary, benefits, promotions and transfers f. Protecting women and minority candidates g. Providing suitable jobs which can be handled easily by physically handicapped, to those employees who are partially disabled due to accidents during the course of duty, and to those who cannot do their present jobs due to health reasons. After formulation of the recruitment policies, the management has to decide whether to centralise or decentralise the recruitment function. PROBLEMS IN RECRUITMENT Personnel managers face a variety of problems in recruiting the candidates. These problems are: i) Some organisation do not possess positive image in the job market. As such the prospective employees are not interested in applying for the jobs. ii) Jobs in some organisations are not attractive in terms of nature of work, salary, benefits, employment conditions etc. iii) Organizational policies like employment policy, wage policy, public relations, etc. and management's attitude towards employees may not be positive iv) Trade unions influence the personnel manager to consider the candidates from within the organisation v) Government influence, policy etc., influence the personnel manager to recruit the candidates of certain communities /regions. ORGANISATION FOR RECRUITMENT Recruitment practices vary from one organisation to another. Some organisations like commercial banks resort to centralised recruitment while some organisations like the Indian Railways (for Group III and Group IV positions) resort to decentralised recruitment practices. Personnel department at the central office performs all the functions of recruitment in case of centralised recruitment, and personnel departments at unit level / zonal level perform all the functions of recruitment concerning the jobs of the respective unit or zone. MERITS OF CENTRALISED RECRUITMENT Average cost of recruitment per candidate/unit would be relatively lesser due to economies of scale. It would have more expertise available to it. It can ensure broad uniformity among human resources of various units / zones in respect of education, skill, knowledge, talent etc. It would generally be above malpractice, abuse of powers, favouritism, bias etc. It would facilitate interchangeability of staff among various units / zones. It enables the line managers of various units and zones to concentrate on their operational activities by relieving them from the recruitment functions. It enables the organisation to have centralised selection procedure, promotional and transfer procedures etc. It ensures the most effective and suitable placement of candidates. It enables centralised training programmes, which further brings uniformity and minimizes average cost of staff. Despite these advantages of centralised recruitment some organisations resort to decentralised recruitment for the following reasons... MERITS OF DECENTRALISED RECRUITMENT The Unit concerned concentrates only on those sources / places where it normally gets the suitable candidates. As such the cost of recruitment would be relatively less. The Unit gets most suitable candidates as it is aware of the requirements of the jobs regarding cultural, traditional, family background aspects, local factors, social factors etc. Units can recruit candidates as and when they are required without any delay. The Units would enjoy freedom in finding out, developing the sources, in selecting and employing the techniques to stimulate the candidates. The Unit would relatively enjoy advantage about the availability of information, control and feedback and various functions / processes of recruitment. The Unit would enjoy better familiarity and control over the employees it recruits rather than on employees selected by the central recruitment agency. Both the systems of recruitment would suffer from their own demerits. Hence, the management has to weigh both the merits and demerits of each system before making a final decision about centralizing or decentralizing the recruitment. Alternatively management may decentralize the recruitment of certain categories of employees, preferably middle and top level managerial personnel, and centralize the recruitment of other categories of employees, preferably lower level positions in view of the nature of positions. Management has to find out and develop the sources of recruitment after deciding about centralizing or decentralizing the recruitment function. Please use headphones - End of Chapter - LESSON - 7 SOURCES OF RECRUITMENT Sources are distinct from techniques: Where are suitable candidates available in required number? How can they be informed about the availability of the jobs and about the organisation? Now we deal with the first question, as the answer to it deals with the sources of recruitment, and answer to the second question deals with the techniques of stimulating the prospective candidates (or techniques of recruitment). Generally, the learners of human resources management may feel that sources and techniques of recruitment are one and the same. But they are different. Sources are those where prospective employees are available like employment exchanges, while techniques are those which stimulate the prospective employees to apply for jobs like nomination by employees, advertising, promotion etc. Sources of recruitment are broadly divided into internal sources and external sources. INTERNAL SOURCES OF RECRUITMENT Internal sources are the sources within the organisation. Internal sources include: Present Permanent Employees: Organisations consider the candidates from this source for higher level jobs because (i) availability of most suitable candidates for jobs is relatively more comfortable or equal to the external source, (ii) the trade union demands this, (iii) the organisation has a policy to motivate the present employees. Present Temporary or Casual Employees: Organisations find this source to fill the vacancies relatively at the lower level owing to the availability of suitable candidates or trade union pressures. Retrenched or Retired employees: Generally a particular organisation retrenches the employees due to lay-off. The organisation takes the candidates for employment from the retrenched employees due to obligation, trade union pressure, etc... Sometimes, the organisations prefer to re-employ their retired employees in recognition of their loyalty to the organisation, or to postpone some interpersonal conflicts for promotion etc. Dependents of deceased, disabled, retired, and present employees: Some organisations, with a view to developing the commitment and loyalty of not only the employee but also his family members and to build up image, provide employment to the dependent(s) of the deceased, disabled and present employees. Such organisations find this source as an effective source of recruitment. WHY DO ORGANISATIONS PREFER INTERNAL SOURCES OF RECRUITMENT Organisations prefer this source to external source to some extent for the following reasons: a. Internal recruitment can be used as a technique of motivation. b. Morale of the employees can be improved. c. Suitability of the internal candidates can be judged better than the external candidates as "known devils are better than unknown angels". d. Loyalty, commitment, a sense of belongingness, and security of the present employees can be enhanced. e. Employee's psychological needs can be met by providing an opportunity for advancement. f. Employees economic needs for promotion, higher income can be satisfied. g. Cost of selection can be minimized. h. Cost of training, induction, orientation, period of adaptability to the organisation can be minimized. i. Trade unions can be satisfied. j. Social responsibility towards employees may be discharged. k. Stability of employment can be ensured. But organisations do not excessively rely on internal sources, as an excessive dependence on this source results in in-breeding, discourages flow of new blood into the organisation, organisation may become dull without innovation and inflow of new ideas, excellence and expertise. Hence organisations depend on internal source to the extent of motivating, and then depend on external sources. EXTERNAL SOURCES OF RECRUITMENT External sources are those sources which are outside the organisation. External sources include - Educational and Training Institutes: Different industries, business firms, service organisations, social or religious organisations can get inexperienced candidates of different types from Colleges and Universities imparting education in Science, Commerce, Arts, Engineering and Technology, Agriculture, Medicine, Management Studies etc., trained candidates in different disciplines like Vocational, Engineering, Medicine from the training institutes like Vocational Training Institutes of State Governments in various trades, National Industrial Training Institute for Engineers etc. Most of the Universities and Institutes imparting technical education in disciplines like Engineering, Technology, Management studies provide facilities for campus recruitment and selection. They maintain the biodata and performance record of the candidates. Organisations seeking to recruit the candidates from this source can directly contact the institutes either in person or by post, and stimulate the candidates to apply for jobs. Most of the organisations using this source, perform the function of selection after completing recruitment in the institute's campus itself with a view to minimizing time lapse and securing the 'cream' candidates before they are attracted by other organisations. Private Employment Agencies / Consultants: Public employment agencies or placement consultants perform the recruitment functions on behalf of a client company by charging a fee. Recruitment function is entrusted to a private agency or consultant, and this way, the line managers are relieved from recruitment functions so that they can concentrate on their operational activities. But due to limitations of high cost, ineffectiveness in performance, and confidential nature of this function, management sometimes does not depend on this source. However, these agencies function effectively in the recruitment of executives. Hence, they are also called 'executive search agencies'. Most of the organisations depend on this source for highly specialized positions and executive positions. Public Employment Exchanges: Government set up public employment exchanges in the country to provide information about vacancies to the candidates and to help the organisations find suitable candidates. The Employment Exchange (Compulsory Notification of Vacancies) Act, 1959 makes it obligatory for public sector and private sector enterprises in India to fill certain types of vacancies through public employment exchanges. These industries have to depend on public employment exchanges for the specified vacancies. Professional Organisations/Associations: Professional Organisations or Associations maintain complete biodata of their members and provide the same to various organisations on requisition. They also act as an exchange between their members and recruiting firms in exchanging information, clarifying doubts etc. Organisations find this source more useful to recruit the experienced and professional employees like executives, managers, engineers. Data Banks: The management can collect biodata of candidates from different sources like Employment Exchanges, Educational Training Institutes, candidates etc., and feed them into a database in the computer, and the company can get the particulars as and when it needs to recruit. Casual Applicants: Depending upon the image of the organisation, its prompt response, participation of the organisation in the local activities, and level of unemployment, candidates apply casually for jobs through mail or handover the applications in companies' Personnel Departments. This would be a suitable source for temporary and lower level jobs. Similar Organisations: Generally, experienced candidates are available in organisations producing similar products or are engaged in similar business. The management can get most suitable candidates from this source. This would be the most effective source for executive positions in newly established organisations or diversified or expanded organisations. Trade Unions: Generally, unemployed or underemployed persons, or employees seeking change in employment put a word to the trade union leaders with a view to getting suitable employment, due to the latter's intimacy with management. As such the trade union leaders are aware of the availability of candidates. In view of this fact and in order to satisfy the trade union leaders, management enquires with the trade unions for available suitable candidates. Management decides about the sources depending upon the type of candidates needed from time to time. WHY DO ORGANISATIONS PREFER EXTERNAL SOURCES OF RECRUITMENT Organisations search for the required candidates from these sources, for the following reasons: a. The suitable candidates with skill, knowledge, talent etc. are generally available. b. Candidates can be selected without any pre-conceived notion or reservations. c. Cost of employees can be minimized because employees selected from this source are generally placed in minimum pay scale. d. Expertise, excellence and experience in other organisations can be easily brought into the organisation. e. Human resource mix can be balanced with different backgrounds, experiences, skills etc. f. Latest knowledge, skill, innovative or creative talent can be brought into the organisation. Please use headphones RECRUITMENT TECHNIQUES Recruitment techniques are the means or media by which management contacts prospective employees, or provides necessary information, or exchanges ideas, or stimulates them to apply for jobs. Management uses different types of techniques to stimulate internal and external candidates. Techniques useful to stimulate internal candidates are: 1. Promotions - Most of the internal candidates would be stimulated to take up higher responsibilities and express their willingness to be engaged in the higher level jobs if management gives them the assurance that they will be promoted to the next higher level. 2. Transfers - Employees will be stimulated to work in the new sections or places if management wishes to transfer them to the places of their choice. Techniques useful to stimulate external candidates are: 1. Recommendations of the Present Employees - Management can contact, persuade the outside candidates to apply for job in the organisation through the recommendations by the present employees, trade union leaders etc. 2. Scouting - Scouting means sending the representatives of the organisation to various sources of recruitment with a view to persuading or stimulating the candidates to apply for jobs. The representatives provide information about the company, exchange ideas, and clarify the doubts of the candidates. 3. Advertising - Advertising is a widely accepted technique of recruitment, though it mostly provides one way communication. It provides the candidates information about the job and company, and stimulates them to apply for jobs. It includes advertising through different media like newspapers, magazines, radio, television etc. The technique of advertising should aim at: (a) attracting attention of the prospective candidates, (b) creating and maintaining interest, (c) stimulating action by the candidates. Management, in order achieve these objectives of advertising, has to analyse job requirements, decide who does what, write the copy, design the advertisement, plan and select the media, and evaluate the response. The management, after selecting the recruitment techniques, has to decide upon the type of appeal in order to make the recruitment efforts effective. RECRUITMENT PRACTICES IN INDIA Findings of the various surveys conducted in foreign countries reveal that various organisations use employee referrals, casual applicants, advertising, local educational institutions, public employment exchanges, and private employment agencies as their sources of recruitment. Industries in India depend on the following sources: i) Internal sources ii) Badli lists, which means a central pool of candidates from which vacancies are filled iii) Public employment exchanges iv) Casual labourers v) Labour contractors vi) Candidates introduced by friends and relatives vii) Private employment agencies / consultants viii) Campus recruitment ix) Sons of the Soil (Recently there has been a move in India that the vacancies at the lower level should be filled by the local people or 'sons of soil'. Some organisations, including public sector organisations, have started providing jobs to the 'sons of soil' on priority basis. The National Committee on Labour, in this connection, recommended for providing employment to the local persons. Further, the Government of India issued directives to public sector enterprises to recruit local candidates on priority basis). x) Specified Communities and Categories According to the Government directives, the organisations, particularly in the public sector, have to recruit candidates to a specified extent (%) from the scheduled castes, scheduled tribes, backward communities, and classes like physically handicapped, ex-servicemen and the like. - End of Chapter - LESSON - 8 SELECTION After identifying the sources of manpower, searching for prospective employees and stimulating them to apply for jobs in an organisation, the management has to perform the function of selecting the right employees at the right time. The obvious guiding policy in selection is the intention to choose the best qualified and suitable candidate for each unfilled post and to avoid selecting those who will not work well. The selection procedure is the system of functions and devices adopted in a given company to ascertain whether the candidate's specifications are matched with the job specifications and requirements. The selection procedure cannot be effective until and unless... i) requirements of the job to be filled have been clearly specified (job analysis, etc.) ii) employee specifications (physical, mental, social, behavioural etc.) have been clearly specified iii) candidates for screening have been attracted ESSENTIALS OF SELECTION PROCEDURE The selection process can be successful if the following preliminary requirements are satisfied: 1. Someone should have the authority to select. This authority comes from the employment requisition, as developed by an analysis of the work-load and work-force. 2. There must be some standard of personnel with which a prospective employee may be compared i.e., there should be available beforehand a comprehensive job description and job specification as developed by a job analysis. 3. There must be sufficient number of applicants from whom the required number of employees may be selected. FACTORS AFFECTING SELECTION DECISION The goal of selection is to sort out or eliminate those judged unqualified to meet the job and organisational requirements, whereas the goal of recruitment is to create a large pool of persons available and willing to work. Thus it is said that recruitment tends to be a positive action while selection tends to be somewhat negative action. A number of factors affect the selection decision of candidates. The important among them are: i) profile matching ii) organisational and social environment iii) successive hurdles iv) multiple correlation i) Profile Matching: Tentative decision regarding the selection of the candidates (who are known) is taken in advance. The scores secured by these known candidates in various tests are taken as a standard to decide the success or failure of other candidates at each stage. Normally the decision about the known candidates is taken at interview stage. Possible care is also taken to match the candidate's bio-data with the job specifications. ii) Organisational and Social Environment: Some candidates who are eminently suitable for the job may fail, as successful employees due to varying organisational and social environment. Hence candidate's specifications must match with not only the job specifications but also with organisational and social environmental requirements. iii) Successive Hurdles: In this method hurdles are created at every stage of selection process. Therefore applicants must successfully pass each and every screening device in case of successive hurdles. iv) Multiple Correlation: Multiple correlation is based on the assumption that a deficiency in one factor can be counterbalanced by an excess amount of another. A candidate is routed through all the selection steps before a decision is made. The composite test score index is taken into account in the selection tests. Hence the borderline cases multiple correlation method is useful and for others successive hurdles method is useful. SELECTION POLICY Every organisation has to follow a systematic selection procedure, since problems with the employee start after his selection and employment. In other words, if an organization selects a wrong person, it has to face a number of problems with him. In addition to the cost of selection, training and other areas will become a recurring expenditure to the company owing to employees leaving the company quickly (increased employee turnover) caused due to improper selection technique. Every organisation is influenced by the social factors, as it is a part and parcel of the society. It has to do justice to all sections of people in providing employment opportunities. Hence organisations should have an objective system of selection that should be impartial and provide equal opportunity to all. Above all, the organisations should also follow the Government rules and regulations regarding filling up of certain number of vacancies by the candidates belonging to specific communities and regions. STEPS IN SELECTION Job Analysis Recruitment Application Form Written Examination Preliminary Interview Group Discussion Tests Final Interview Medical Examination Reference Checks Line Manager's Decision Employment JOB ANALYSIS : Job analysis is the basis for selecting the right candidate. Every organisation should finalise the job description, job specification and employee specifications before proceeding to the next step of selection. RECRUITMENT : Recruitment refers to the process of searching for prospective employees and stimulating them to apply for jobs in an organisation. Recruitment is the basis for the remaining techniques of the selection and the later varies depending upon the former. APPLICATION FORM : Application Form is also known as an Application Blank. The technique of application blank is traditional and widely accepted for securing information from the prospective candidates. It can also be used as a device to screen the candidates at the preliminary level. Many companies formulate their own style of application forms depending upon the requirement of information, based on the size of the company, nature of business activities, type and level of the job etc. They also formulate different application forms for different jobs at different levels so as to solicit the required information for each job. But a few companies in our country do not have prescribed application forms. So, they ask the prospective applicant to apply on white paper giving particulars about him/her, like name, date of birth, mailing address, educational qualification, experience etc. Applications of some of the organisations are brief and general, while those of others are quite elaborate, complex to answer, and require detailed information about the applicant. Some firms ask the candidates to fill up the application forms in their own handwriting so as to draw tentative inferences about their suitability for the employment. This is done particularly for clerical positions. Information is generally required on the following items in the application forms. Personal Background Information: It includes name, present and permanent addresses, sex, date of birth, marital status, health, height and weight, nationality, number of dependents, annual income of applicant's parents etc. This information can be used by the management to know the suitability of the candidate regarding his socio-economic background, neighbourhood, family status and background, sociological outlook, impact of these factors on employee behaviour etc. Educational Attainments: These include list of schools, colleges, institutions attended, period of study, major subjects, class, percentage of marks, rank secured, extra-curricular activities, positions and memberships held during the educational career, hobbies and interests, study either through a regular course or correspondence course or private study etc. This is the major area of information gathered by the organisation through application forms. Work Experience: It covers experience in all previous jobs with greater particulars about the nature and quantum of work handled, period of experience in each job, reasons for leaving the past employers, duties and responsibilities involved, name of the immediate supervisor, salary drawn etc. This information enables the organisation to know the stability of the employee, his aptitude for the nature of work, nature of relationship he maintained with the past employers etc. Salary: Salary drawn in the present employment and salary and benefits expected. Personal items: Association membership, personal likes and dislikes, hobbies etc. References: Organisations ask candidates to send the names and addresses of the persons who can be contacted for reference purposes. Evaluation of Application Forms There are two methods of evaluating an application form, viz., clinical method and weighted method. a. Clinical Method: The clinical method takes help of psychology. Under the clinical method, the application forms are analysed in detail, drawing all possible inferences, projecting the applicant's personality, and forecasting future job success. A properly designed form can provide clues to a person's leadership ability, emotional stability, assertiveness, writing ability, attitude towards his supervisors etc. b. Weighted Method: Under the weighted method, certain points or weights are assigned to the answers given by the applicant in the application form. In developing a weighted application form, it is necessary to identify those items of the personal history of the employee that differentiate between groups of successful and unsuccessful employees. Assigning weights to the responses in an application form gives certain amount of objectivity to this device. But this approach requires a different application blank for each occupation group as it is a statistical technique. c. Biographical Inventories: In some cases, management may wish to select the existing employees for the higher positions. In such a case the employee is asked to submit his up-to-date bio-data which includes name, address, educational qualifications, marital status, habits and attitudes, health, human relations, parental home, childhood, personnel attitudes, present home, spouse and children, self impressions, recreation, hobbies, interests, values, openings and preferences etc. Advantages of a well-designed Application Form i) It is useful in testing the candidate's ability to spell, write legibly and answer factual questions rapidly and accurately. ii) It provides basic information to the interviewer before the interview. iii) It is advantageous for those candidates who find it easier to think out answers by themselves and write them more leisurely than answer the same question orally when asked in interviews. iv) It is useful as a record in employment department. v) It is useful for finding out the aptitude of the candidate for different subjects, and likes & dislikes. vi) It is useful as a preliminary selection device. The above advantages can be derived only when the application is brief, containing standard items. WRITTEN EXAMINATIONS The next stage in the selection process is conducting different tests as given below. The organisations have to conduct a written examination for the qualified candidates after they are screened on the basis of the application blanks, so as to measure the candidate's ability in arithmetical calculations, to know the candidate's attitude towards the job, to measure the candidate's aptitude, reasoning, knowledge in various disciplines, general knowledge and English language. Psychological Tests: i) Aptitude Tests - These tests measure whether an individual has the capacity or latent ability to learn a given job if given adequate training. Aptitudes can be divided into general and mental ability or intelligence and specific aptitudes such as mechanical, clerical, manipulative capacity etc. Intelligence Tests: These tests in general measure intelligence quotient (IQ) of the candidate. In detail these tests measure his capacity for comprehension, reasoning, word fluency, verbal comprehension, numbers, memory and space. Intelligence tests include sample learning, ability and adaptability tests etc. Mechanical Aptitude Tests: These tests measure the candidate's capacities of spatial visualisation, perceptual speed and knowledge of mechanical matter. These tests are useful for selecting apprentices, skilled, mechanical employees, technicians etc. Psychomotor Tests: These tests measure abilities like manual dexterity, motor ability and eye-hand coordination of the candidates. These tests are useful to select semi-skilled workers and workers for repetitive operations like packing, watch assembly etc. Clerical Aptitude Tests: These tests measure specific capacities involved in office work. Items of this test include spelling, computation, comprehension, copying, word processing etc. ii) Achievement Tests - These tests are conducted when applicants claim to know something, as these tests are concerned with what one has accomplished. These tests are more useful to measure the value of specific achievement when an organisation wishes to employ experienced candidates. These tests are classified into: Job Knowledge Test: The candidate is tested in the knowledge of a particular job. For example, if a junior lecturer applies for the job for a senior lecturer in Commerce subject, he may be tested in job knowledge where he is asked questions about accountancy principles, banking law, business management etc. Work Sample Test: Here, a portion of the actual work is given to the candidate as a test and the candidate is asked to do it. If a candidate applies for a post of lecturer of Business Management, he may be asked to deliver a lecture on Management Information System (MIS) as a work sample test. iii) Situational Tests - This test evaluates a candidate in a similar real-life situation. The candidate is asked either to cope with the situation or to solve critical problems on the job. Group Discussion: This test is administered through group discussion approach to solve a problem, under which candidates are observed in the areas of initiating, leading, proposing valuable ideas, conciliating, and skills of oral communication, coordinating, and concluding. In-basket: The candidate is supplied with actual letters, telephone / telegraphic message, reports, requirements by various officers of the organisation, and given adequate information about the job and the organisation. The candidate is asked to take decisions on various items based on the in-basket information regarding requirements in the memoranda. iv) Interest Tests - These tests are inventories of the likes and dislikes of candidates in relation to work, job, occupations, hobbies and recreational activities. The purpose of this test is to find out whether a candidate is interested or disinterested in the job for which he is applying, and to find out the specific area of the job occupation in which the candidate is actually interested. The assumption of this test is that there is a high correlation between the interest of a candidate in a job and job success. Interest inventories are less faked and they may not fluctuate after the age of 30. v) Personality Tests - These tests probe deeply to discover clues to an individuals value system, his emotional reactions and maturity, and characteristic moods. They are expressed in terms of traits like self-confidence, tact, emotional control, optimism, decisiveness, sociability, conformity, objectivity, patience, fear, distrust, initiative, judgment, dominance or submission, impulsiveness, sympathy, integrity, stability, self-confidence etc. Objective tests: Most personality tests are objective tests as they are suitable for group testing and can be scored objectively. Projective Tests: Candidates are asked to project their own interpretation, of certain standard stimulus situations basing on ambiguous pictures, figures etc., under these tests. Personality tests have disadvantages in the sense that they can be faked by candidates and most candidates give socially acceptable answers. Further, personality inventories may not successfully predict job success. Objectives of Psychological Tests: i) to guide and counsel students seeking admission to colleges. ii) to render vocational guidance for help in careers. iii) to select and place the new employees. iv) to appraise employees for promotions, wage fixation etc. Uses of Tests: i) Provide a uniform basis for comparing candidates from diverse background. ii) Reduce labour turnover to a considerable extent by selecting the right candidate for the right job. iii) Increase production through maximization of employee commitment. iv) Minimize time involved in the selection process. Limitations of Tests: i ) Tests are to be used as supplement rather than as a substitute for any other method. ii) Tests predict failure rather than success of an employee on the job. iii) Tests are only a screening device. iv) Test scores are not precise measures because they are samples of behaviour, and v) Test conditions are different from the actual conditions. INTERVIEWS Types of Interviews Various forms of employment interviews are adopted to solicit different kinds of information and to measure the candidate skills, knowledge etc., at different places. Employment interviews can be divided into three categories, viz, preliminary interview, core interview and decision-making interview. 1. Preliminary Interviews It is generally regarded as exchange of basic information between the candidate and the personnel manager about the job and organisation like job nature, salary, working conditions, benefits etc. It is helpful to the organisation to weed out unwanted hands and to the candidate to select or reject the job. Sometimes, it may prove to be unsatisfactory, when the exchange of information between the candidate and the organisation is not true. This interview may generally be informal and unstructured. a. Informal Interview: This is the interview which can be conducted at any place by any person to secure the basic and non-job related information. The interaction between the candidate and the personnel manager when the former meets the latter to enquire about the vacancies or additional particulars in connection with the employment advertisement is an example of informal interview. b. Unstructured Interview: In this interview the candidate is given the freedom to tell about himself by revealing his knowledge on various items/areas, his background, expectations, interests etc. Similarly, the interviewer also provides information on various items required by the candidate. 2. Core Interviews It is normally the interaction between the candidate and the line executive or experts on various areas of job knowledge, skill, talent etc. This interview may take various forms like: a. Background Information Interview: This interview is intended to collect the information which is not available in the application blank, and to ask more about the information provided in the application blank regarding education, place of domicile, family, health, interests, hobbies, likes, dislikes, extracurricular activities of the applicant. b. Job and Probing Interview: This interview aims at testing the candidate's job knowledge about duties, activities, methods of doing the job, critical / problematic areas, methods of handling those areas etc. c. Stress Interview: This interview aims at testing the candidate's job behaviour and level of withstanding during periods of stress and strain. Interviewer tests the candidate by putting him under stress and strain by interrupting the applicant while answering, criticising his options, asking questions pertaining to unrelated areas, keeping silent for unduly long periods after he has finished speaking etc. Stress during the middle portion of the interview gives effective results. Stress interview must be handled with utmost care and skill. This type of interview is often invalid, as the interviewees need for the job, his previous experience in such type of interviews may inhibit his actual behaviour under such situations. d. Formal and Structured Interview: In this type of interview, all the formalities, procedures like fixing the venue time, panel of interviewers, opening and closing, intimating the candidates officially etc. are strictly followed in arranging and conducting the interview. The course of the interview is preplanned and structure, in advance, depending on job requirements. The questions / items for discussion are structured and experts are allotted different areas and questions to be asked. There will be very little room for the interviewers to deviate from the questions prepared in advance in a sequence. e. Group Interview: In this method, all the candidates are brought into one room i.e. interview room and are interviewed one by one. This method helps busy executives (interviewers) to save valuable time and gives a fair account of the objectivity of the interview to the candidates. f. Panel interview: Interviewing of candidates by one person may not be effective as he may not be able to judge the candidates in different areas / skills owing to limited knowledge and competence in multiple disciplines and areas. Hence most organisations invite a panel of interviewers, specialised in different areas/fields/disciplines, to interview candidates. The panel of experts interviews each candidate; each panel member judges his performance individually and prepares a consolidated judgment based on each expert's judgment and weightage of each factor. This type of interview is known as panel interview. This type of interview would be more effective as each candidate is appraised by an expert in relevant areas. Experts should be cautioned against excessive weightage to a particular factor, domination of other experts etc. g. Depth Interview: In this type of interview, the candidates would be examined extensively in core areas of knowledge and skills of the job. Experts in that particular field examine the candidates by posing relevant questions as to extract critical answers from them, initiating discussions regarding critical areas of the job, and by asking the candidates to explain even minute operations of the job performance. Thus the candidate is examined thoroughly in critical / core areas in their interview. Please use headphones The Interview Process Interview is not a single step. It is a process consisting of several steps. The major steps are grouped into four categories: (1) Preparation for the Interview: Advance preparation for interview is essential as it permits focusing its coverage of the vital aspects and it helps the interviewer to remember and absorb many impressions and facts. The following preparations have to be made by the organisation before starting an interview: i. Choosing the appropriate types of interviews based on job requirements and the nature of the interviews discussed earlier. ii. Identifying the knowledge, skill areas to be examined through interviews based on requirements. iii. Determining the type and number of interviewers: - Interviewers should be selected based on personal characteristics, technical competence, initiative, common sense, general smartness, ability to inspire confidence, and capacity to work in a team. - Interviewers may be drawn from personnel specialists, line managers concerned, experts in the discipline concerned, academicians, practitioners and psychologists. - Interviewers may include psychologists. A number of research studies and observations regarding the effectiveness of psychologists conclude that there is a wide variation in the abilities of psychologists as in case of other specialists; Psychologist would be a competent interviewer if he has got knowledge of job requirements and organisational interests; Psychologist's ability as an interviewer is probably higher than non- psychologists, if he is qualified experienced and trained; and Psychologist would act as an additional source of information rather than a deciding factor. - Interviewers may interview the candidates either jointly or separately. A panel interview is preferable to individual interview. The number of interviewers is to be decided on the basis of number and nature of areas to covered by the interview, number of candidates to be interviewed and the time available for interviewing. iv. Reviewing the information collected in advance through other selection methods, finding out the validity of those methods, the scores obtained etc. The information available in the applicable blank should thoroughly checked for accuracy and validity, stability, acquainting about the applicant should be done, the number of positions and length of time held in each of the past jobs should be reviewed, nature of positions in the previous employment should be compared with that of proposed employment, the employee growth should be checked with the organisational progression in the past employment, discharges and unexplained breaks should be asked about. This avoids further evaluation of those areas appraised effectively by other means already. v. Deciding upon the administrative arrangements. vi. Finalising the physical setting including time which would be convenient to interviewees and interviewers. vii. Determining the coverage of the interview. Generally the interview should cover the areas like relevance of qualifications and experience to job requirements, gaps in employment history and causes therefore, reasons for choosing course, school, occupation etc., likes and dislikes, quickness of reaction, ability to recognise thoughts, manner and poise, cultural level etc. (2) Conducting the Interview The next major step in the interview process is conducting the interview. Conducting an interview effectively is difficult and hence most of the line managers avoid this task. The interviewers should take much care in the process of conducting interview, as there is a scope to commit mistakes at various levels. Adequate information from the candidate can be obtained by listening to and observing rather than talking too much. Interviewers very often commit the following mistakes: indulging in discourtesy and rudeness arriving at conclusion before the interview is over asking questions mechanically feeling shy to ask questions failing to observe the behaviour and tap the unexplored areas However such mistakes by interviewers can be avoided by training and developing them, or by selecting competent interviewers. The various sub activities of conducting the interview are: i. Open the interview : The interviewer has to open the interview with a conscious effort and with conducive voice, speech and appearance. This helps the interviewer to establish a rapport with and gain the confidence of the interviewee. ii. Get complete and accurate information : The interviewer should get full information relating to skills, knowledge, aptitude, attitude and traits of the candidate. The best way of getting full information is by structured interview. The interviewer, in order to get complete and accurate information... must be alert for pauses, omission and diversion of discussion, has to use the language which is clear to the interviewee/candidate, has to make even unjustifiably favourable remarks or unfavourable comments about the applicant's motives or actions with a view to obtaining truthful information, has to frame the questions in such a way that the candidate answers elaborately. iii. Record observations and impressions : The interviewer has to record his observations and impressions in the course of the interview with a view to manage the information gathered for evaluating the candidate's suitability at the later stage. iv. Guide the interview : Guiding the interview is essential to have sufficient discussion (not too much, not too less) on a topic, and to lead the applicant tactfully and surely towards the interview goals. Some applicants are talkative, some are intelligent in giving information they know and avoiding others areas. Some candidates are reticent. The interviewer has to guide the interview tactfully without causing much psychological inconvenience to the interviewee while aiming at getting complete and reliable information. v. Check the success of the interview : Success of the interview can be seen with these items... making favourable impression on the candidate, refraining from making judgments at the beginning of the interview, putting the candidate at ease, giving chance for further discussion, asking questions at the right time, asking clearly and in appropriate language, avoiding unnecessary interferences during the interview, avoiding expression of approval or disapproval of any attitude of the candidate, talking to the minimum required level, and listening more, guiding the interview, obtaining relevant and adequate information through questioning, following up leads, taking notes, giving opportunity to the candidates to ask questions, creating and keeping good atmosphere throughout the interview, being fair and just in conducting the interview, closing the interview pleasantly with an indication. (3) Closing the Interview Closing the interview is as important as its commencement and it should end pleasantly, the interviewer may show some signs of the close of the interview at an appropriate time. Interview results should be evaluated after closing the interview. (4) Evaluation of the Interview Results The interviewer / panel of interviewers evaluate(s) the candidate's strengths and weaknesses against the job and organisational requirements. The evaluation is generally based on the observations, impressions and information collected during the course of interview. However, the final decision about the suitability of candidate for the job is made on the basis of the results of all selection techniques. But the interview results influence the selection decision much more than any other technique. The evaluation may be in descriptive form or grading form or rating form. The interviewer has to strike a fine balance between the job requirements and employee values, skills, knowledge etc. In view of the errors in evaluation, the interviewer has to write explanation of rating on each factor which clarifies his thinking and enables discussion among the interviewers. The interviewer should also take into consideration the educational record, physical attributes, attitudes, sociability and social intelligence, flexibility in behaviour, tact, manners, temperament, dependability, self-confidence of the candidate with a view to minimize errors in the evaluation. Guidelines for Effective Interviews Interview techniques can be used effectively through the following means: Selecting the interviewers with higher caliber, skill and knowledge Resorting to right type of interview technique depending upon the requirement Studying the backgrounds information, data, facts about the candidates before the interview Assessing and evaluating the characteristics and traits of the candidate accurately Basing the interview coverage on job and organisational requirements Following time management techniques to collect as much important information as possible within the available time Checking beforehand the reliability and validity of the interview method Respecting interviewee's interest and individuality Clearly informing the interviewee the purpose of the interview Making the interviewee feel at ease throughout the interview Encouraging the interviewee to speak freely Not having personal biases affecting the interview Limitations of Interview Techniques Although interviews have widespread use in the selection process, a host of problems do arise while conducting interviews. Research has indicated the questionable nature of the validity and reliability of interviews. Often the interviewer gets impressed favourably or unfavourably with the job applicant for wrong reasons. For example, a qualified male applicant should not be rejected merely because the interviewer dislikes long hair on males. Interviewers, like all people, have personal biases. They react positively or negatively to fluency of speech, correctness of grammar and punctuation, poise and other characteristics of the candidate. Consequently, there may be several inbred notions held by the interviewer, which would colour selection of a candidate. Another problem with interviewers is that they often consider candidate's nonverbal behaviour patterns as a basis for reaching a decision. That is, how the person looks, sits in the chair, and maintains eye contact may majorly influence the applicant's ratings by the interviewer. Closely related is the problem of the halo-effect which occurs when the interviewer allows a single prominent characteristic to dominate judgment of all other traits. For example, it is easy to discount the candidate's unfavourable characteristics when he has a pleasing personality. They ignore the fact that merely having a pleasant personality does not necessarily ensure that the person would fit in the organisation or job. Sometimes the halo-effect can work in the opposite direction also. An interviewer may assume that a poorly groomed individual is stupid, dishonest etc. There is also the potential problem of making contrast-errors. These errors take place when an interviewer is overly influenced, in favour or against, by the interviews of previous applicants. For instance, if a qualified applicant follows a brilliant applicant, his qualifications tend to pale in comparison. This is unfortunate, since the qualified candidate may be rejected because of the contrasterror. However, these limitations can be minimized by appointing trained and qualified interviewers, as they are likely to make fewer errors because they understand potential errors, have learned how to ask questions effectively, are able to establish a positive relationship with applicants, and have systematically organised the interview. PLACEMENT Once the candidate reports for duty, the organisation has to place him initially in that job for which he has been selected. Immediately the candidate is trained in various related jobs during the period of probation of training or trial. The organisation, generally, decides the final placement after the initial training is over on the basis of candidates aptitude and performance during the training/probation period. Probation period generally ranges between six months and two years. If the performance is not satisfactory, the organisation may extend the probation or ask the candidate to quite the job. If the employee's performance during the probation period is satisfactory, his services are regularised and he is placed permanently on the job. "Placement is the determination of the job to which an accepted candidate is to be assigned and his assignment to that job". It is a matching of what the supervisor thinks as what the job demands (job requirements), of what he imposes (in strain, working conditions), and what he offers in the form of payroll, companionship with others, promotional possibilities etc. It is not easy to match all the factors to the new employee who is still unknown to many. So the new employee is placed as a probationer until the trial period is over. INDUCTION "Induction is the process of receiving and welcoming an employee when he first joins a company and giving him the basic information he needs to settle down quickly and happily and start work". Introducing the new employee designated as a probationer to the job, job location, organisation, organisational surroundings, various employees etc, is the final step of employment process and is called induction. Some of the companies do not lay emphasis on this function as they view that this function will be automatically performed by the colleagues of the new employees. This is more so in educational institutions. This process gains more significance as the rate of turnover is high among new employees compared to that among senior employees. This is mainly because of the problem of adjustment and adaptation to the new surroundings and environment. Further, absence of information, lack of knowledge about the new environment, cultural gap, behavioural variations, different levels of technology, variations in the requirements of the job and the organisation also disturb the new employee. Induction is essential as the new comer may feel insecure, shy and nervous. This situation leads to instability and turnover (employee leaving the job). Hence induction plays a pivotal role in acquainting the new employee to the new environment, company rules and regulations. Generally the new comer may expect opportunities for advancement, social status, prestige, higher responsibility, opportunities to use special aptitudes and educational background, challenges, adventure, opportunity to be creative and original, and lucrative salary. But jobs with low challenge, inadequate feedback, inadequate performance appraisal result in reality shock. Induction is necessary to reduce reality shock. Lecture, handbook, film, group seminar etc. are used to impart the information to new employees about the environment of the job and organisation in order to make the new employee acquaint himself with the new surroundings. Coverage of Induction Induction programme should cover the following information: i. About the Company's history, objectives, policies, procedures, rules and regulations, codes etc. ii. About the department, iii. About the superiors, subordinates peers etc. i. About the Company a. history, growth, organisation and management, products market, customers etc. of the company b. basic conditions of employment hours of work, shift, holidays, retirement benefits c. pay, allowance, deductions d. sickness rules, information on pay during sick leave e. leave rules casual, special, earned leave; holidays, vacation f. work rules: work-load, use of materials, equipment, machine g. disciplinary rules and procedure h. grievance procedure i. career path, promotion channel j. unions, negotiating machinery k. education, training and developmental facilities l. health, safety, medical care arrangements m. canteen and restaurant facilities n. social benefits and welfare measures o. telephone calls and correspondence p. traveling and subsistence expenses q. uniform, clothing Normally it is the personnel / HR manager, who personally explains, clears doubts and queries of the new employee regarding the above aspects. ii. About the Department The departmental head concerned introduces the new employee to the important employees and describes briefly about the department and the job. Then the supervisor concerned introduces the employee to all the employees in the section unit, describes in detail the job or work, material, machine, equipment with which the employee has to work, process of production, his position in the departmental organisation structure, work distribution, assignment, working hours, shift, quality/standard to be maintained, customers, uses of the product / service etc. iii. About subordinates and superiors Various employees, their designations, position in the organisation. Objectives of Induction When the supervisor or manager inducts the new employee, the objective is... o putting the new employee at ease o creating interest in his job and the company o providing basic information about working arrangements o indicating the standards of performance and behaviours expected of him o making the employee feel that his job is meaningful and that he is not just a cog in the wheel o informing him about training facilities o creating the feeling of social security o minimizing the reality shock caused due to incompatibility between the employee expectations and actually what the company provides /offers regarding pay, benefits, status, working conditions, responsibility, opportunity for growth, innovations and creativity etc. Induction Process The following steps may be identified as the stages of induction process from the earlier discussion: 1. The employee reports for duty at a certain place to the department Head concerned. 2. The Head of the department welcomes the new employee. 3. The employee is introduced to the organization / Branch Head by the head of the department. 4. Organisational / Branch Head introduces the employee to other employees and describes the department, and total work of the department etc. 5. The supervisor concerned introduces the employee to his co-workers in that section / unit, and to the work / job, material, machine he'd be working with. 6. The employee is provided with information about the duties, responsibilities, rights, facilities, welfare measures etc. Advantages of Induction a. First impression matters a good deal and results in lesser turnover (employees leaving the job). b. New comer understands the organization, what is expected of him, who and what he is going to work with, and hence adjusts to the work quickly, saving time of the supervisor. c. Employee's reality shock, dissatisfaction, grievances reduce. d. Employee develops a sense of belonging and commitment. MODEL QUESTIONS (Lessons 5 to 8) 1. What is Human Resource Planning? Describe the steps involved in Human Resource Planning? 2. "Human Resource Planning has greater relevance in the present day context of technological revolution than ever before". Substantiate this statement. 3. Differentiate between recruitment and selection. Describe some of the recruitment techniques followed by the Indian organisations. 4. Discuss the importance of interview as a selection technique. Explain the various types of interview. 5. What are the various sources of employment? Critically evaluate them. 6. Write short notes on a. Placement b. Psychological Tests c. Induction Case: Recruitment and Selection Policy in "B" Company Ltd., Pragatipuram (Source: Subratesh Ghosh, Personnel Management, Oxford & IDM, New Delhi, 1990. PP.70-73) "B" Company Ltd., Pragatipuram, was established as a jointstock Company in 1920, with an authorized capital of Rs.1,50,00,000 and paid up capital of Rs.1,25,00,000. The Company manufacturers light metal products of various types. At present it employs 4,950 employees. The company has a systematic recruitment procedure. The Managing Director, subject to the overall control of the Board of Directors, is the ultimate authority for making policy decisions regarding the expansion in the volume of employment and also for creation of new posts. For the existing posts, the General Manager is the authority for making relevant decisions regarding the recruitment policy or changes therein. Usual day to day decisions, however, are taken by the Chief Personnel Manager of the Company. The recruitment policy of the company is implemented by the personnel department, which works under the overall control and guidance of the Chief Personnel Manager. The department has a senior officer to look after the recruitment activities, but he does not deal exclusively with it. In addition to recruitment, he also looks after housing of the workers. Forecasting the recruitment needs "B" Company, however, does not have any recruitment plan to guide its recruitment activities over a period. At the workshop level, the company has no arrangement for manpower planning, although it is reported that at the head office situated at Calcutta, the manpower planning is in use. The company does not have any arrangement for maintaining a systematic manpower inventory. For forecasting the manpower needs in future, the management relies on the work-study made by industrial engineers supported by the opinions of the managers concerned related to their own departments. For estimating the changes in the manpower supply, the company relies on the conventional turnover analysis. It does not use any sophisticated method for forecasting the changes in manpower supply in future. Pattern of preferences "B" Company's recruitment policy is based on a definite pattern of preferences for selection of candidates. Dependents of deceased employees or medically unfit employees are treated as 'priority' cases and 25 percent of the total number of vacancies may be reserved for them. In 15 percent of vacancies, labourers working under contractors in the projects of the company would be given preference. In 20 per cent of vacancies, suitable ex-employees and dependents or relatives of employees may be given preference. Here, the seniority of the service of the employee concerned would be the criterion in the case of several candidates fulfilling the requirements of this condition. Local candidates may be given preference in 40 per cent of the total number of vacancies. Factors affecting the selection of candidates Subject to the pattern of preferences mentioned above, the company selects candidates on the basis of certain factors, among which the most important is the professional and general educational qualifications. The other factors considered in order of importance attached to them are - academic performance (only in the case of graduate trainees), service experience, impression about the candidate's potential ability to work (as revealed in interviews), impression about the personality of the candidate, his record of extra-curricular activities, and local origin. Union and the recruitment policy In "B" Company Ltd., the representative union of workers is consulted when the recruitment policy is formulated or changed to any significant extent. In the existing collective agreement governing the union-management relations and major terms and conditions of work, there are clauses affecting the recruitment policy. Accordingly, the recruitment policy in the company is not made or changed unilaterally by the management. Constraints to the recruitment policy So far as the union views and possible reactions are considered for changes in the recruitment policy, the union policy may be taken, in a certain way, as a constraint affecting the managements power regarding the recruitment policy. Besides this, the management feels the existence of certain other constraints in this respect. Labour laws, government regulations and general policy affecting recruitment appear to circumscribe the companys freedom in the field of recruitment to some extent. Another constraint operating from outside is the political environment of the State in which the factory is situated. Demands for preference to the 'sons of the soil' and the agitations of the "Adivasi" community of the region have been mentioned in this connection by the executives dealing with the recruitment of the company. The technological factor also operates, in this case, as an indigenous factor to constrain the recruitment policy of the management. The company's plans for technological changes and modernization are always to be considered while formulating and implementing the recruitment policy. Senior executives dealing with recruitment have mentioned the growing feeling among the management to prefer greater mechanization, as labour tended to be more and more expensive. However, in view of the constraints of the union pressure and the government policy towards rationalisation and automation, this preference has not been fully reflected in the company's official recruitment policy. Implementation of the policy Actual implementation of the recruitment policy, formulated and approved at different levels, is made by the personnel department. While discharging this responsibility, personnel department, of course, consults and takes the help of the line management and the Head of the department in which the appointment is to be made, but the basic work rests with them. Changes in the recruitment policy Some of the senior executives of "B" Company expect that the company's recruitment policy may change in near future. About the nature of the anticipated change, no clear picture was available. However the Chief Personnel Manager of the company desires to have greater freedom to recruit people from the external labour market according to the needs of the company. But he anticipates difficulty in giving effect to this desire in view of the collective agreement between the union and the management. The Senior Personnel Officer of the company wants a greater degree of preference for the local people and the ex-servicemen in the recruitment policy. He also favours the use of psychological tests in selection of employees. Questions for discussion 1. Discuss the pattern of preferences and the criteria of selection of candidates in the recruitment policy. Is "B" Company Ltd. correct to assign priority to professional and educational qualifications among the criteria of selection? If so, why? If not, why not? 2. Give your views on the desirability of changing the recruitment policy of "B" Co. Ltd. - End of Chapter - LESSON - 9 JOB ANALYSIS MEANING OF JOB AND JOB ANALYSIS Before discussing job analysis in detail, many related terms should be carefully defined. TERMS Task: A distinct work activity which has an identifiable beginning and end. For example, hand sorting of a bag of mail into appropriate boxes. Duty: Several tasks which are related by some sequence of events for example, picking up, sorting and delivering incoming mail. Position: A collection of tasks and duties which are performed by one person. For example, mail room clerk preparing the outgoing mail, sorting the incoming mail, and operating the addressing machine, postage machine, & related equipment. Job: One or more positions within an organisation. For example, three mail clerks having the same job but different payroll positions. Job family: Several jobs of a similar nature which may come into direct contact with each other or may be spread out throughout the organisation performing similar functions. For example, clerical jobs located in different departments. Job analysis: A systematic investigation into the tasks, duties and responsibilities of a job. Job description: A written summary of tasks, duties and responsibilities of a job. Job specification: The minimum skills, education, and experience necessary for an individual to perform a job. Job evaluation: The determination of the monetary worth of a job to an organisation. Job evaluation is usually a combination of an internal equity comparison of jobs with an external job market comparison. Job classification: The grouping or categorising of jobs on some specified basis such as the nature of the work performed or the level of pay. Classification is often utilised as a simplified method of job analysis. PURPOSE OF JOB ANALYSIS Procurement is the first operative function of personnel management, which can be sub-divided into various sub functions like human resource planning, recruitment and selection. Management should determine the kind of personnel required for a job and the number of persons to be employed. The organisation should also find out the right man for the right job in right time. Thorough knowledge of the job is essential to perform these functions. In addition, establishment of a scientific standard in advance is essential to compare the applicant's skills with the job requirements and to select the right candidate. This standard stipulates the minimum acceptable qualifications, skills, and qualities required for adequate job performance. Stipulating the standard requires the knowledge regarding job design, study of the job duties and responsibilities, requirements of the job, human abilities and qualities etc. Job analysis is needed to know all these and to perform various functions of HRM effectively. USES OF JOB ANALYSIS A comprehensive job analysis programme can be used as a foundation and as an essential ingredient for all the functions and areas of personnel management and industrial relations. Brief descriptions of uses of job analysis are given below: 1. Employment: Job analysis is useful as a guide in every phase of employment process like manpower planning, recruitment, selections, placement, orientation, induction, and in performance appraisal, as it gives the information about duties, tasks and responsibilities etc. 2. Organisation audit: Job information obtained by job analysis often reveals instances of poor organisation in terms of the factors affecting job design. The analysis process, therefore, constitutes a kind of organisation audit. 3. Training and development programmes: Description of duties and equipment used is of great help in developing the content of training and development programmes. Needs of training and development are identified with the help of job description. Further, the training programmes are also evaluated with the standards of job analysis. 4. Performance appraisal: Instead of rating an employee on characteristics such as dependability, there is now a tendency toward establishing job goals and appraising the work done toward those goals. In this type of appraisal, a job description is useful in defining the areas in which job should be established. 5. Promotion and transfer: Job information helps in charting the channel of promotion and in showing lateral lines of transfer. 6. Preventing dissatisfaction and settling complaints: Job information can be used as a standard in preventing and settling complaints related to work load, nature of work, work procedure etc. 7. Discipline: Job information can be used as a standard when discipline is being considered for standard performance. 8. Restriction of employment activity for health reasons and early retirement: When employees are unable to maintain the standard job performance due to old age or health hazard, they may opt for early retirement or the organisation may retrench their services. In such cases, job information is helpful to the employees and their supervisors to think objectively. In some other cases, some mutually satisfactory rearrangements of subsidiary duties might make it possible to retain older employees whose intelligence, general experience, and reliability make them valuable assets. Job information becomes a standard in this situation also. 9. Wage and salary administration: Job analysis is the basis for job evaluation. Basically, wage and salary levels are fixed on the basis of job evaluation, which takes into consideration the content of the job in terms of tasks, duties, responsibilities, risks, hazards etc. 10. Health and safety: Job description provides the information about hazards and unhealthy conditions, accident prone areas in the job etc. It helps the management to provide health and safety measures. 11. Induction: Job description is the basis for induction as the employee is provided with the information about the job. 12. Industrial relations: A job description is a standard function to solve industrial disputes and to maintain sound industrial relations. If an employee attempts to add or delete some duties from the ones listed in job description, the standard has been violated. The labour union as well as management is interested in this matter. Controversies often result, and a written record of the standard job description is valuable in resolving such disputes. CONTENTS OF JOB ANALYSIS A job analysis provides the following information: 1. Job identification: Its title, including its code number. 2. Significant characteristics of a job: Its location, physical setting, supervision, jurisdiction, hazards and discomforts. 3. What a typical worker does: This includes collection of information on specific operations and tasks to be performed by the typical worker, including their relative timing and importance, their simplicity, routine or complexity, responsibility towards others etc. 4. Job duties: A detailed list of duties along with the probable frequency of occurrence of each duty. 5. What materials and equipment the worker uses: For example, metals, plastics, grains, yarn or lathes, milling machines, testers, punch presses, micro-meters etc. 6. How a job is performed: Emphasis is on the nature of operations like lifting, handling, cleaning, washing, feeding, removing, drilling, driving, setting up, and the like. 7. Required personal attributes: These include experience, training undergone, apprenticeship, physical strength, dexterity, physical demands, mental capabilities, aptitudes, social skills etc. 8. Job relationship: This includes opportunities for advancement, patterns of promotions, essential cooperation etc. STEPS IN JOB ANALYSIS Jobs can be analysed through a process, which consists of six basic steps: Step 1. Collection of background information : Background information consists of organisation charts, class specifications, and existing job descriptions. Organisation charts show the relation of the job with other jobs in the overall organisation. Class specifications describe the general requirements of the class of job to which this particular job belongs. The existing job description provides a good starting point for job analysis. Step 2. Selection of representative positions to be analysed : It would be highly difficult and time consuming to analyse all the jobs. So, the job analysis has to select some of the representative positions in order to analyse them. Step 3. Collection of job analysis data : This step involves actually analysing a job by collecting data on features of the job, required employee behaviour, and human resource requirements. Step 4. Developing a job description : This step involves describing the contents of the job in terms of functions, duties, responsibilities, operations etc. The incumbent of the job is expected to discharge the duties and responsibilities and perform the functions and operations listed in job description. Step 5. Developing a job specification : This step involves conversion of the job description statements into a job specification. Job specification or job requirements describes the personnel qualities, traits, skills, knowledge and background necessary for getting the job done. Step 6. Developing employee specification : This final step involves conversion of specification of human qualities under job specification into an employee specification. Employee specification describes physical qualifications, educational qualifications, experience requirements etc. which specify that the candidate with these qualities possess the minimum human qualities listed in the job specification. TECHNIQUES OF JOB ANALYSIS There are several techniques that can be used for the purpose of collection of data: The important among them are: (1) interviews (2) direct observations (3) maintenance of records (4) questionnaires and (5) critical incident technique. In practice, these techniques may be used individually or in possible combinations. (1) Interviews: There are two types of interviews that can be used for collection of data for job analysis viz., 'individual interviews' (with groups of employees who do the same job) and 'supervisory interviews' (with one or more supervisors who are thoroughly knowledgeable about the job being analysed) The interviewer has to collect accurate and complete data / information by creating favourable attitudes among employees and supervisors. There are several basic attitudes and techniques that serve to secure maximum accurate and complete information. These attitudes and techniques also help to reduce the natural suspicion of both employee and supervisor toward the interviewer. Important among them are: - The interviewer should introduce himself so that the workers know him, who he is, and why he is there. - The interviewer has to show a sincere interest in the worker and the job being analysed. - The interviewer should not try to tell the worker how to do the job. - The interviewer must try to talk to the employees and supervisors in their own language. - The interviewer should not confuse the work with the worker. - The interviewer has to do a complete job study within the objectives of the programme. - The interviewer must verify the job information obtained by consulting other employees doing the same job. (2) Direct Observation: Direct observation is particularly useful in jobs that consist primarily of observable physical activity, like draftsman, mechanic etc. One approach to this method is - observing the worker on the job during a complete work cycle. In this process, notes are taken regarding all the job activities observed. The next stage is interviewing the worker and getting the additional information from him. The other approach is to observe and interview simultaneously. (3) Maintenance of records: In this technique, the workers are asked to maintain and keep daily records or list of activities they are doing on that day. For every activity be engages in, the employee records the activity in the list given. This technique provides comprehensive job information and it is much useful when it is supplemented with subsequent interviews. (4) Questionnaires: Many companies use job analysis questionnaires to secure information on job requirement relating to typical duties and tasks, tools and equipment used etc. (5) Critical incidence technique: The critical incident technique for job analysis is especially useful for scientific analysis, and selection research. The earlier mentioned techniques are useful for the purpose of gathering data, for making recruitment and selection decisions. In most cases, the utility of the above techniques is unchecked and as such they are not entirely scientific. In this technique, incidents are short examples of successful or unsuccessful job behaviour. After many incidents are collected, they are classified into behavioural categories. These categories describe specific desired job behaviours and can be useful in recruitment and selection decisions. Furthermore, the categories also include a list of the specific behaviors that make the difference between effective and ineffective performance on the job. They, therefore, specify precisely what kinds of performance should be appraised. It is also useful for testing the effectiveness of the job description and job specification. The job analysis information thus collected is useful to the personnel department to prepare the forms detailing as job description, job specifications and job standards. SUB-SYSTEMS IN JOB ANALYSIS There are three important sub-systems in job analysis. They are job description, job specification and employee specification. We will talk about these in subsequent chapters. Please use headphones - End of Chapter - LESSON 10 JOB DESCRIPTION Job description is an important document which is descriptive in nature, and contains a statement of job analysis. It serves to identify a job for consideration by other job analysis. It tells us what should be done, why it should be done, and where it should be performed. Hints for writing job descriptions Earnest Dale developed the following hints for writing the job description. 1. It should indicate the scope and nature of the work including all important relationships. 2. It should be clear regarding the work of the position, duties etc. 3. More specific words should be selected to show (a) the kind of work, (b) the degree of complexity (c) the degree of skill required (d) the extent of which problems are standardised, (e) the extent of the worker's responsibility for each phase of the work, and (f) the degree and type of accountability. Action words such as analyse, gather, plan, confirm, deliver, maintain, supervise and recommend should be used. 4. Supervisory responsibility should be shown to the incumbents. 5. Brief and accurate statements should be used in order to accomplish the purpose. 6. Utility of the description in meeting the basic requirements should be checked from the extent of understanding of the job that a new employee gets by reading the job description. PURPOSE OF JOB DESCRIPTION The purpose of job description is to serve to identify a job for consideration by job analysis. Other purpose is to tell the employee what should be done and why it should be done etc., to provide information to employee about his salary, terms and conditions of work, nature of work, working conditions etc. CONTENTS OF JOB DESCRIPTION A job description normally contains the following information: 1. Job title 2. Organisational location of the job 3. Supervision given and received 4. Materials, tools, machines and equipment worked with 5. Designation of the immediate superiors and subordinates 6. Salary level: Pay, DA (Dearness Allowance), other allowances, bonus, incentive, wage, method of payment, hours of work, shift, break etc. 7. Complete list of duties to be performed, separated into daily, weekly, monthly, and casual, estimated time to be spent on each duty 8. Definitions of unusual terms 9. Conditions of work: Location, time, speed of work, accuracy, health hazards, accident hazards 10. Training and developmental facilities 11. Promotional chances and channels USES OF JOB DESCRIPTION Job description serves as a basis to develop job specification. It clearly tells the employee his duties & responsibilities, it gives information to the employee about his working hours, shift, salary etc., and about the training and development facilities, promotional chances etc. LIMITATIONS OF JOB DESCRIPTION Job description cannot provide complete details of the nature of work, duties and responsibilities of employees. Many times employees experience confrontation between the actual work and work as per job description. Now-a-days employees are expected to play a wider range of roles than those just stated in the job description. Hence, job description is used as a guideline rather than as a detailed account of duties and responsibilities. Please use headphones GUIDELINES FOR WRITING JOB DESCRIPTION The job analyst has to write the job description after consulting the worker and the supervisor. After writing the preliminary draft, the job analyst has to get further comments and criticism from the worker and supervisor before preparing the final draft. The following modes may be used in writing job description: Getting the questionnaire filled by the immediate supervisor of the employee Completing the job description form by observing the actual work being done by the employee Securing all the information pertaining to the job from the employee The job analyst has to finalise the job description and write the final draft by using any one or a combination of two or more of these methods. The job description should be reviewed after the final draft is prepared. Keeping the job description up-to-date: Job requirements have been undergoing continuous changes. The job analyst has to secure the information about the changes as and when reported or when a grievance is vented claiming that a given job should be reclassified into higher group or class carrying higher rate of pay. The job analyst has to check the information received and has to change or update the job description accordingly. JOB SPECIFICATION It is a written statement of qualifications, traits, physical and mental characteristics that an individual must possess to perform the job duties and discharge responsibilities effectively. Job Specification Information: The first step in a programme of job specification is to prepare a list of all jobs in the company and where they are located. The second step is to secure and write up information about each of the jobs in a company. Usually, this information includes: i. Physical Specifications: Like, physical qualifications or physical capacities which vary from job to job. Physical qualifications or capacities are physical features like height, weight, chest, vision, hearing, ability to lift weight, ability to carry weight, health, age, capacity to use or operate machines, tools, equipment etc. ii. Mental specifications: Like, ability to perform arithmetic calculations, ability to interpret data, information blueprints, ability to read electrical circuits, ability to plan, reading abilities, scientific abilities, judgment, ability to concentrate, ability to handle variable factors, general intelligence, memory etc. iii. Emotional and Social Specifications: These are more important for the post of managers, supervisors, foreman, etc. These include emotional stability, flexibility, social adaptability in human relationships, personnel appearance including dress, posture, poise, features and voice required by the job. iv. Behavioural Specifications: These play an important role in selecting the candidates for higher level jobs in the organisational hierarchy. This specification seeks to describe the acts of managers rather than the traits that cause the acts. These specifications include judgment, research, creativity, teaching ability, maturity (capable of accepting responsibility) trial of conciliation, self-reliance (self-starter sticks to own decisions), dominance (giving orders in a personal way) etc. - End of Chapter - LESSON - 11 JOB EVALUATION Job evaluation is the outcome of job analysis. Job analysis provides the information necessary for appraising or evaluating a job like tasks to be performed in a job, skill, knowledge, abilities, aptitude etc., necessary to carry out the tasks, responsibilities, authority and accountability requirements to perform a job successfully. Job description and job specification are three sub-systems of job analysis. Job description provides the information relating to duties and responsibilities of a job, job specification gives the information relating to minimum acceptable human qualities like knowledge and skill necessary to perform a job. Employee specification indicates minimum employee qualifications like physical, educational, behavioral etc., which represent the possession of minimum acceptable human qualities. Thus job analysis provides information necessary to job evaluation. MEANING Job evaluation deals with money and work. It determines the relative worth of money value of jobs. The International Labour Organisation defined job evaluation as, "as attempt to determine and compare demands which the normal performance of a particular job makes or normal workers, without taking into account the individual abilities or performance of the workers concerned". Wendell L. French defined job evaluation as, "as process of determining the relative worth of the various jobs within the organisation, so that deferential wage may be paid to jobs of different worth". Job evaluations is defined as "the overall activity of involving an orderly, systematic method and procedure of ranking, grading and weighing of jobs to determine the value of a specific job in relation to other jobs". British Institute of Management (1970) defined job evaluation as, "the process of analysing and assessing the content of jobs, in order to place them in an acceptable rank order, which can then be used as a basis for remuneration system. Job evaluation, therefore, is simply a technique, designed to assist in development of new pay structure, by defining relativities between jobs on a consistent and systematic basis". Thus job evaluation may be defined as a process of determining the relative worth of jobs, ranking and grading them by comparing the duties, responsibilities, requirements like skill, knowledge of a job with other jobs with a view to fix compensation payable to the concerned job holder. OBJECTIVES OF JOB EVALUATION The following objectives are derived from the analysis of the above mentioned definitions: 1. To generate data and information relating to job description, job specification and employee specifications of various jobs in an organisation. 2. To compare the duties, responsibilities and demands of a job with that of other jobs. 3. To determine the hierarchy and place of various jobs is an organisation. 4. To determine the ranks of grades of various jobs. 5. To ensure fair and equitable wages on the basis of relative worth or value of jobs. In other words equal wages are fixed to the jobs of equal worth or value. 6. To minimize wage discrimination based on sex, age, caste, region, religion etc. PROCEDURE Job evaluation is an aid to measure the contribution of human resources to the job and the organisation. Proper ground should be prepared to measure the contributions of human resources and to appraise relative worth of jobs. It is very difficult for a single man to study, review and evaluate all jobs. Hence appointment of a job evaluation committee consisting of technical and non-technical people is more appropriate. The next step in the preparation of ground work is analysing the jobs which are to be evaluated. Job knowledge can be obtained from the job description and job specification records. Job knowledge can be gathered and collected through interviews, observations, activity sampling, questionnaires, critical incidents, dairies etc. The steps in job analysis, job description and job specification information etc., are discussed. The next step is identification of compensable factors like knowledge in respect of education, experience, skill etc. This ground work is more useful for systematic job evaluation. USES OF JOB EVALUATION Job evaluation has certain advantages over other techniques of pay fixation. They are: 1. It is a logical and to a certain extent an objective method of ranking and grading the jobs. 2. It helps to fit the newly created jobs in the existing structure. 3. Employee grievances, doubts and complaints would be at the lower ebb, as it is a systematic and objective methods of wage fixation. 4. It eliminates some undesirable factors like inequalities in bargaining capacities of employees and employers, fluctuations in market rates etc. 5. It satisfies the principles of fair wage, wage equity, uniformity in wages etc. 6. It helps to redesign the jobs for minimizing wide wage differentials. 7. It ensures employee satisfaction about wage level and wage equity. 8. It also helps to redesign the jobs by reallocating the easy and difficult tasks equally among various jobs. LIMITATIONS OF JOB EVALUATION Though there are certain advantages of job evaluation, it suffers from some problems. They are: 1. Job evaluation is not exactly scientific. 2. 'Modus Operandi' of most of the techniques is difficult to understand even to the supervisors. 3. The factors taken by the programme are not exhaustive 4. There may be wide fluctuations in compensable factors in view of changes in technology, values and aspirations of employee etc. 5. Employees, trade union leaders, management and the programme operators may perceive differently in selecting the compensable factors, in giving weightages or degrees etc. 6. The results of job evaluation may not exactly coincide with social evaluations, which in turn, result in employee dissatisfactions. 7. Job evaluation is only one among several factors in determining wage level. Sometimes other factors like government policy may dominate the job evaluation. 8. It also helps to redesign the jobs by reallocating the easy and difficult tasks equally among various jobs. 9. Job evaluation programme once structured may not be useful for the next time. Despite these limitations or problems, job evaluation is the most appropriate technique for fixing and revising wage, as it is a systematic and objective method of wage fixation. JOB EVALUATION METHODS Ranking Method, Grading Method, Point System, Factor Comparison Method Jobs are evaluated on the basis of various techniques. These techniques are grouped into two classes viz., conventional and non-conventional techniques. Conventional techniques are divided into quantitative and non-quantitative techniques. Non-quantitative techniques include ranking (simple ranking and paired comparison) and job classification and grading method. Quantitative techniques include point rating and factor comparison method. Non-conventional methods consist of (i) time span of discretion theory, (ii) decision banding (iii) direct consensus method (iv) guide chart profile method, (v) problem solving compensable factor, (vi) guide line method, (vii) Urwick Orr profile method and (viii) profile method. I. CONVENTIONAL NON-QUANTITATIVE TECHNIQUES OR METHODS Conventionally, non-quantitative simple and crude techniques were developed. They are ranking and job classification methods. 1. RANKING METHOD a. Simple Ranking: This is the most simplest and administratively the most easiest technique. The evaluator compares one job with other jobs based on duties, responsibilities and demands made by the jobs on the job incumbent and the degree of importance of the job to the organisation and ranks all the jobs from the most important to the least important. The evaluator has to appraise and rank the jobs but not the job incumbents. b. Ranking the key jobs: Ranking all the jobs at a stretch under simple ranking method is difficult. The evaluator, in order to minimize this problem, has to identify the key or representative jobs at the first stage; rank the key jobs at the second stage; identify and rank all other jobs at the third stage. c. Paired Comparison: Another problem of ranking method is that each job cannot be compared with all other jobs for the purpose of ranking. The method of paired comparison can be adopted to minimize this problem. Under this paired comparison method, the evaluator ranks each job in turn against all other jobs to be appraised, so that a series of paired rankings is produced. This method is more comprehensive, logical and reliable, compared to the simple ranking method. d. Single Factor Ranking Method: Another problem in ranking method is difficulty of operation of the method, as ranking has to be done on the basis of number of factors. In view of this, Goldenberg has suggested a single factor ranking scheme. The single factor considered is the discretionary contents present in each job related to other jobs. The single most important task to be performed in a job is identified and compared within the single most important task to be performed in other jobs. Thus pure ranking does not cover these refinements. The jobs are to be priced after they are ranked. In other words, money value should be assigned to each job. Key jobs with known monetary values will be used as the basis to determine the money value of other jobs. Generally there is agreement about the rates of key jobs. Advantages Advantages of this method include: (i) This method is the simplest, quickest and least costly from the view point of time and money (ii) This method is most appropriate in small organisations (iii) It is also appropriate for ranking the top managerial personnel in large organisaitons, and (iv) It is useful as a first and basic step of job evaluation. Disadvantages Despite the above mentioned advantages, this method suffers from the following disadvantages: (i) This method provides no yardstick for measuring the relative worth of one job against the other (ii) Job requirements, job specifications and employee specifications are not considered in evaluation (iii) It does not indicate the extent or degree to which one job is worthy than the other (iv) It is not a comprehensive and systematic technique. 2. JOB CLASSIFICATION AND GRADING METHODS Class and grade are used differently in this method. A grade is a group of different skills to perform. A class if subdivision of a given occupation. For example, Assistant Accountant, Accountant, Senior Accountant and Chief Accountant are the jobs in the occupation of Accountant. The jobs within a class have fairly similar tasks to be performed, whilst the jobs within a grade may be different as far as tasks are concerned. However, classes and grades are designed for the similar jobs and thus receive similar pay. For example, a grade may consist of jobs like Financial Accountants, Cost Accountants and Management Accountants and a class my consist of Assistant Financial Accountant, Financial Account, Senior Financial Accountant and Chief Financial Accountant. Under this method, jobs at different levels in the organisational hierarchy are divided into various grades, with a clear cut definition of each grade. Grades are formulated on the basis of nature of tasks, requirements of skill, knowledge, responsibilities and authority of various jobs. There are several steps in the mechanism of this method. The important among them are: i ) Determine the shape and size of organisational structure i.e tall or flat organisation, geographical or functional organisation etc. ii) Preparation of job descriptions iii) Preparation of grade descriptions based on various components iv) Establishment of a number of job grades and division of the organisation into various grades like Grade I, Grade II. Grade VI. v) Discussion and negotiation with trade union representatives regarding the number of grades, grade descriptions, getting their consent, finalising the number of grades and grade description and recording them. vi) Selection of key jobs and grading them vii) Grading the entire jobs viii) Classifying the jobs of each grade ix) Assigning the money value of the key grades first and then to all other grades. Advantages This method enjoys the following advantages. (i) It is simple and easy to understand and operate. (ii) It provides an opportunity for a systematic organisation structure. (iii) Pay grades are better and appropriate for comparison with those of other organisations (iv) It is more elaborate than ranking method. Limitations In spite of the above mentioned advantages, this method suffers from the following limitations. (i) If sometimes seems to be arbitrary, though it takes the views of the representative of the trade unions, (ii) Writing grade descriptions is not easy in this method. However, classification and gradation represent a link in the historical development of job evaluation between ranking and a points system. II. CONVENTIONAL QUANTITATIVE TECHNIQUE OR METHODS There are two methods under conventional quantitative techniques, viz., points rating and factor comparison system. 1. Points Rating Method: This method was introduced by Merrill R. Lott. This was one of the earliest approaches for evaluating jobs based on quantitative values. This method is analytical in the sense that jobs are broken into components for purposes of comparison. This method is quantitative as each component of the job is assigned a numerical value. Thus, characteristics of factors considered to have a bearing on all jobs in the programme like skill, knowledge, responsibility, working conditions etc., are selected under this method. Each factor is divided into degrees or levels and point value is assigned to each level. The total of point values assigned to each factor gives the total point values for each job which can be compared. This method of job evaluation should be developed systematically and applied methodically in order to avoid the anomalies. The important steps in the process of developing this techniques are: i) Constituting a representative committee of members from various departments for job evaluation. ii) Selecting a sample of jobs and preparing job descriptions, job specifications and employee specifications. iii) Selecting and defining those factors which are related to all jobs and are considered to be most critical in determining the relative degrees of difficulty and responsibility between jobs. Eight to twelve factors are most desirable. The following factors may be considered for this purpose. a. Skill: Education, training, judgement, analysis, mental complexity, mental dexterity, adaptability etc. b. Effort: Physical demand, visual, effort, concentration, mental effort, alertness etc c. Responsibility: For preventing monetary loss, machines, materials, safety policy etc. d. Job Conditions: Working conditions, hazards etc iv) Determining the weight of each factor according to its relative importance. Assigning the percentage value to each factor. The total percentage of all factors is 100 v) Defining each factor, specifying the scope and elements of each factor i. Dividing each factor into levels and defining each level. ii. Determining relative value of each level within factors. Factors can be divided into point values by arithmetic or geometric progression. iii. Testing the mechanism. Get the total points with the help of above discussed method for a new sample jobs and compare them with the results obtained through other methods. Proceed further, if the system produces acceptable results. iv. Appraise all the jobs and arrive at a composite numerical value for each job. v. Price the points in order to arrive at the wage level and establish a wage structure with the help of organisational hierarchy of jobs and salary policy. There are no hard and fast rules regarding factors, sub-factors assigning the weightages, deciding upon degrees and values. This system is only a preliminary step in arriving at an equitable pay structure. There are no scientific techniques to guide in respect of assigning money value to the points. But, various factors like influence of trade unions, pay structure in comparable industries, financial position of the company, living cost affect the pay level. However, points system will help in arriving at an equitable pay structure. The important task in this context is conversion of point scores into monetary values by assigning a standard unit of money to each point. Money value of various scores can be attained by plotting a graph with points ratings on the X-axis and money value on the Y-axis. There are certain alternatives regarding plotting money on the Y-axis. Important one is showing current salary rates on Y-axis against the score of the job concerned on X-axis. Trend line through a scatter of points is seen. In case point score is divided among various grades of jobs in an organisation, the pay level can be related to the grades . The minimum and maximum pay of each grade are shown in the figures. The pay scale of various jobs will be fixed within the minimum and maximum limits of the pay. This method is superior to other methods discussed so far, as this is analytical as well as quantitative. The advantage on this method are: Advantages i ) Almost the same pay scale can be arrived at for the same jobs because agreement among rates on the same is very close. ii) Definitions are written in applicable terms to jobs. iii) Assigning monetary values is very easy iv) Prejudice, bias and error of human judgment are minimized in this technique. v) Point score or monetary values cannot be manipulated very easily. vi) Assignment of point score or money values is consistent and accurate vii) Once the score is assigned to a particular job, it is long standing. viii) Wage differentials would be systematic and according to the content of the job under this method. Despite these merits, this technique also suffers from various disadvantages. Disadvantages i) It is difficult to determine factors levels and assign point values, ii) It would be somewhat difficult to explain the mechanism and operation of this method of employees, supervisors and trade union leaders. iii) Operation of this method involves heavy expenditure, spending of much time and clerical work. However, this technique is superior to the conventional non-quantitative techniques in several respects. Another conventional quantitative technique is the point factor or factor comparison method. THE POINT FACTOR OR FACTOR COMPARISON METHOD This method is based both on the principles of points rating and principle of ranking. This method is analytical as jobs are broken into sub-factors and components. Under this method, first the components or sub-factors are ranked under various factor headings. The next step is assigning the monetary values to the components or sub- factors of each job. Thus each job is ranked a number of times (i.e., number of compensable components or sub-factors). The mechanism or 'modus operandi' of this method involves the following steps: 1. Developing job descriptions, job specifications or job requirements, covering physical requirements, mental requirements, skill requirements, training and experience, responsibility and authority, working conditions etc. 2. Selecting a number of key jobs. This step is more critical and useful from the point of final evaluation as the other jobs are assigned monetary values based on the fixed wage rates arrived for the key jobs on the basis of negotiations. A key job must be clearly divisible into sub-factors and components. This step also involves dividing the job into sub-factors and components. 3. The third step is ranking of key jobs. The sub-factors of each key job must be given relative ranks, based on their individual contribution to the total job. 4. The fourth step involves valuing the sub-factors of each of the key jobs. This step is also known as factor evaluation. Money worth of each sub-factor of the key jobs is ascertained in order to know the total money value (or salary) of each of the key jobs. 5. The fifth step is integrating the monetary value of sub-factors arrived through factors evaluation with those of ranking of factors. It is to find out whether the difference factors as per the ranking and factor evaluation is one and the same or not. Cross checking is provided where the money value of each sub-factor is given in brackets. 6. The sixth step is comparing all the jobs (factor by factor) of the same grade of level with the related key job and establishing monetary value of the sub- factors of various jobs based on the monetary value of sub-factors of key jobs. There are certain advantages to this technique over others. Advantages i) It is analytical and quantitative method. ii) This method is a combination of two techniques i.e., ranking and factor comparison. iii) Since 'modus operandi' of this system is relatively easy to understand, it can be operated and explained to supervisors employee and trade union leaders. iv) This technique is more reliable and valid, compared to other techniques, as each job is compared with all other jobs from two respects, i.e. factor rank order and factor comparison. v) This technique assigns money value more or less fairly and objectively and there is cross-checking of money value with rank order. However, this techniques suffers from certain disadvantages. Disadvantages i) It is costly and somewhat difficult to operate compared to the conventional non quantitative techniques. ii) Factor evaluation in this method is not that such objective as that of point-rating technique. iii) This technique does not consider all the sub-factors as the operation of the system would be difficult if it considers all the factors. Apart from these conventional techniques of job evaluation, there are some developments in job evaluation techniques in recent years. These techniques will be discussed under non-conventional techniques. MARKET PRICING METHOD In different job evaluation methods like job comparison or ranking method, grading or job classification method, point rating method and factor comparison method, points or factors are calculated. After calculating these points, they are to be converted into monetary value i.e. in terms of rupees. Under the market pricing method the points/factors are converted on the basis of market factors like demand and supply. For example, if a particular skills demand is more than the supply. For example if a particular skills demand is more than the supply compared to other skills, that particular skill enjoys higher market price and thus the points of that particular skill is converted at that higher market price compared to other skills whose supply is more than the demand for the same and ultimately are quoted at less price in the market. Thus, the jobs with greater demand are priced at high and consequently higher salaries are fixed for them. And the jobs with lower demand, lower market price are fixed lower salaries. JOB PRICING METHOD As stated earlier, the points or factors arrived through the methods like ranking / job comparison, grading / job classification, point rating and factor comparison are converted into monetary values. These points / factors are converted at the price which is fixed on the basis of mental ability, physique, analytical ability, sharpness, difficulty in carrying out the job etc. Please use headphones ESSENTIALS FOR THE SUCCESS OF JOB EVALUATION Following are the essentials for the success of job evaluation programme: 1. Compensable factors should represent all of the major aspects of job content. Compensable factors selected should: (a) avoid excessive overlapping or duplication. (b) be definable and measurable (c) be easily understood by employees and administrators, (d) not cause excessive installation or administrative cost; and (e) be selected with legal considerations in mind. 2. Operating managers should be convinced about the techniques and programme of job evaluation. They should also be trained in fixing and revising the wages based on job evaluation. 3. All the employees should be provided with complete information about job evaluation techniques and programme. 4. All groups and grades of employees should be covered by the job evaluation programme. 5. The programme of and techniques selected for job evaluation should be easy to understand by all the employees. 6. Trade unions acceptance and support to the programme should be obtained. - End Of Chapter - LESSON - 12 JOB DESIGN One of the most significant concerns of personnel managers in the past several years has been employee productivity and satisfaction. Personnel managers have realised that an important factor influencing these areas is the type of work handled by the employee. Job design answers the questions of how the job is to be performed, who is to perform it, and where it is to be performed. Thus, in a way, job design great the affects how an employee feels about a job, how much authority an employee has over the work, how much decision making the employee has on the job and how many tasks the employee has to complete. Managers realise that job design determines their working relationship with their employees and the relationship among employees themselves. Job design is defined as the process of deciding on the content of a job in terms of its duties and responsibilities: on the methods to be used in carrying out the job, in terms of techniques, systems and procedures and on the relationships that should exist between the job holder and his superiors, subordinates and colleagues. Two important goals of job design are: (i) to meet the organisational requirements such as higher productivity, operational efficiency, quality of product / service etc. and (ii) to satisfy the needs of the individual employees like interests, challenge, achievement or accomplishment, etc. Finally the goal of the job design is to integrate the needs of the individual with the organisational requirements. APPROACHES TO DESIGNING JOBS There are three important approaches to job design viz. 1. Engineering approach 2. Human approach and 3. Job characteristic approach 1. ENGINEERING APPROACH (F.W.TAYLOR, 1911) The most prominent single element in the Engineering approach, envisaged by F.W.Taylor and others, was the task idea. "The work of every workman is fully planned out by the management at least one day in advance and each man receives in most cases complete written instructions, describing in detail the task which be is to accomplish. This task specifies not only what is to be done but how it is to be done and the exact time allowed for doing it". The principles offered by scientific management to job design can be summarised thus: Work should be scientifically studied. Taylor advocated fragmentation and rountinisation of work to reap the advantages of specification. Work should be arranged so that workers can be efficient. Employees selected for work should be matched to the demands of the job. Employees should be trained to perform the job. Monetary compensation should be used to reward successful performance of the job. These principles to job design seem to be quite rational and appealing because they point toward increased organisational performance. Specification and routinisation over a period of time result in job incumbent's becoming experts rather quickly, leading to higher levels of output. Despite the assumed gains in efficiency behavioural scientists have found that some job incumbents dislike specialised and routine jobs. In the course of a study of 180 auto assembly line workers, one worker lamented: 'what I can't get used to is the monotony. I get through with one job and have another one staring me in the face'. More recently a steel worker complained that the problem with narrowly defined jobs is that they required 'arms and hands but no brainwork'. Problems with engineering approach. After listening to several complaints from employees about their highly specialised jobs, Walker and Guest indicated the problems with job specialisation thus: Repetition: Employees performed a few tasks repeatedly. This quickly led the employee to become very bored with the job. There was no challenge to the employee to learn anything new or to improve the job. Mechanical Pacing: Assembly line workers were made to maintain a certain regular pace of work. They could not take a break when they needed to or simply divert their attention to some other aspect of the job or another individual. No end product: Employees found that they were not turning out any identifiable end product, consequently, they had little pride and enthusiasm in their work. Little social interaction: Employees complained that because the assembly line demanded constant attention, there was very little opportunity to interact on a casual basis with other employees and share their work experience, beliefs and sentiments. No input: Employees also complained that they had little chance to choose the methods by which they performed their jobs, the tools which they used, or the work procedures. This, of course, created little interest in the job because there was nothing which they could improve or change. 2.HUMAN APPROACH The humane approach recognised the need to design jobs which are interesting and rewarding. In the past two decades much work has been directed to changing jobs so that job incumbents can satisfy their needs for growth, recognition and responsibility. Herezberg's research popularised the notion of enhancing need satisfaction through what is called job enrichment. One widely published approach to job enrichment uses that is called as the job characteristics model and this has been explained separately in the ensuing section. According to Herzberg there are two types of factors viz. (i) motivators like achievement, recognition, work itself, responsibility, advancement and growth and (ii) hygiene factors (which merely maintain the employee on the job and in the organisation) like working conditions, organisational policies, inter-personal relations, pay and job security. According to Herzberg the employee is dissatisfied with the job if the maintenance factors to the required degree are not introduced into the job. But, employee may not be satisfied even if the required maintenance factors are provided. Herzberg feels that the employee will be satisfied with his job and he will be more productive if motivators are introduced into the job content. As such, he asserts that the job designer has to introduce hygiene factors adequately so as to reduce dissatisfaction and build motivating factors. Thus Herzberg has laid emphasis on the psychological needs of employees in designing job. 3.THE JOB CHARACTERISTICS APPROACH The job Characteristics Theory of Hackman and Oldham states that employees will work hard when they are rewarded for the work they do and when the work gives them satisfaction. Hence they suggest that motivation, satisfaction and performance should be integrated in the job design. According to this approach, and job can be described in terms of five core job dimensions which are defined as follows: i ) Skill Variety: The degree to which a job requires a variety of different activities so that the workers can use a number of different skills and talents. ii) Task Identity: The degree to which the job requires completion of a whole and identifiable piece of work. iii) Task Significance: The degree to which the job has a substantial impact on the lives or work of other people. iv) Autonomy: The degree to which the job provides substantial freedom, independence, and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out. v) Feedback: The degree to which an individual requires direct and clear information about the effectiveness of his or her performance. This approach explains that existence of core job characteristics in a job, gives the psychological satisfaction of meaningful work to the job incumbent. The characteristic of autonomy gives the job incumbent a feeling of personal responsibility for the results and the characteristics of feedback from job leads to psychological state of knowledge about the own performance of job incumbent. The core job dimensions can be combined into a single predictive index called the motivating potential score. Its computation is as follows: Skill variety + Task identity + Task Significance x Autonomy x Feedback __________________________________________________ 3 Jobs that are high on motivating potential must be high at least in one of the three factors that lead to meaningful work and they must be high in both autonomy and feedback and vice versa. High motivating potential score results in positive motivation, performance and satisfaction and vice versa. These three critical psychological states lead to the outcome such as (a) high internal work motivation. (b) high growth satisfaction (c) high quality work performance (d) high general job satisfaction (e) high work effectiveness and (f) low absenteeism and turnover The model says that internal rewards are obtained by an individual when he learns that he has performed well on a task that he cares about. Please use headphones GUIDELINES FOR JOB DESIGNING While designing the jobs the personnel manager should follow certain guidelines. They are: i) Mechanical and technical factors of the job and simplifications of the mechanical factors. ii) Consideration of social factors and providing the scope for satisfaction of social needs of the job incumbent. iii) Providing scope for social interaction, exchange of social problems, views and attitudes with superiors, subordinates and peers. iv) Providing scope for identifying deficiencies of job incumbents and satisfying them. v) Providing scope for identifying psychological needs like esteem, need for challenging work etc., and satisfying them. TECHNIQUES FOR DESIGNING JOBS - JOB ENLARGEMENT, JOB ROTATION AND JOB ENRICHMENT As discussed earlier, scientifically structured job design as suggested in the above model, motivates the employees for higher efficiency productivity and generates job satisfaction that one designed on the basis of traditional engineering system. Specification should be introduced in job design so that the needs of the employees for accomplishment, recognition, psychological growth etc., can be satisfied. Personnel departments use a variety of methods to improve job motivating potential such as job rotation, job enlargement and job enrichment. JOB ROTATION Job rotation refers to the movement of an employee from one job to another. Jobs themselves are not actually changed: only the employees are rotated among various jobs. An employee who works on a routine / repetitive job moves to an another job for some hours / days / months and returns back up to the first job. This measure relieves the employee from boredom and monotony, improves employee's skills regarding various jobs and prepares the competent employees to meet the contingencies. This measure also improve worker's self-image and provides personal growth. However frequent job rotations are not advisable in view of their negative impact on the organisation and the employee. In practice, because job rotation does not change the basic nature of the jobs, it is criticised as nothing more than having an employee perform several boring and monotonous jobs rather than being assigned to the same one. However, job rotation may prove to be useful to managers in that it helps managers to become generalists through exposure to several different operations. JOB ENLARGEMENT When a job is enlarged, the tasks being performed are either enlarged or several short tasks are given to one worker. Thus, the scope of the job is increased because there are many tasks to be performed by the same worker. Although, it actually changes the peace of the work and the operation by reallocating tasks and responsibilities. Job enlargement does not increase the depth of a job. Enlarged jobs require longer training period because there are more tasks to be learned. Worker satisfaction should increase because boredom is reduced as the job scope is expanded. However, job enlargement programmes would be successful only if workers are more satisfied with jobs which have a longer scope. JOB ENRICHMENT Job enrichment, as is currently practiced all over the world, is a direct outgrowth of Herzberg's two factor theory of motivation. It is therefore based on the assumption that in order to motivate workers, the job itself must provide opportunities for achievement, recognition, responsibility, advancement and growth. The basic idea is to restore to jobs the elements of interest that were taken away under intensive different from horizontal loading, referred to earlier. Horizontal loading does not enrich the task. Washing dishes, then silverware, and then pots and pans does no more to satisfy and provide an opportunity to grow than washing only dishes. Under job enrichment there is a conscious effort to build into jobs a higher sense of challenge and achievements. In a job enrichment programme, the worker decides how the job is performed, planned, and controlled, and makes more decisions concerning the entire process. The job enrichment approach to boring jobs is to give the individual employee more autonomy in the job. Employees decide how the job will be performed and receive less direct supervision on the job. Consequently, the employee receives a greater sense of accomplishment as well as more authority and responsibility. TECHNIQUE OF JOB ENRICHMENT 1. Increasing the responsibility of the activity 2. Providing wide scope, more sequence and increased pace of the work 3. Giving a natural unit of work either to an employee or group of employees. 4. Providing the freedom of work by minimizing controls when the employees are clearly accountable for attaining defined goals. 5. Allowing the employees to set their own standards or targets 6. Providing the employees the control information and allow them to monitor their own performance. 7. Encouraging employee participation in planning, innovations and creations 8. Introducing new, difficult, creative tasks to the employees. 9. Assigning the specific projects to the individuals or groups that will enhance their expertise STEPS IN JOB ENRICHMENT 1. Selecting those jobs which permit close relation between motivation and job performance. 2. Introducing on a pilot scheme basis. 3. Starting with the assumption that three jobs can be changed. 4. Brainstorming a list of changes that may enrich the jobs. 5. Concentrating on motivational factors such as achievement, responsibility, self-control etc. 6. Trying to change the content of the job rather than changing the employees from their jobs. 7. Providing adequate training, guidance, encouragement and the help. 8. Introducing with care as job enrichment programmes may be resisted by employees. 9. Preparing the specific programmes for each project and ensure the control information to monitor the performance. DOES JOB ENRICHMENT PAY OFF? There is evidence that job enrichment produces lower absenteeism and reduced turnover costs. Experiments at AT & T in America, Olivetti and Fiat in Italy, Renault in France; Volvo Inc. in Sweden; Daimler Benz and Volks Wagen in Germany yielded fruitful results. However, job enrichment has been attacked in recent years on several counts. It is contended that there are few, if any, genuine cases where job enrichment has been applied successfully to a large, heterogeneous workforce. According to Mitchell Fein, most application of job enrichment have either been common sense job redesign or done with select groups of workers who were well motivated and satisfied anyway. Fein also indicated that the intrinsic nature of the job is secondary to most production workers. Their primary interest is in receiving external rewards (such as money and other pay related benefits) which enable them to lead a comfortable life. Moreover, the prospects of humanising work are constrained by the realities of the work to be done - realities which are beyond the power of planners to control. Labour leaders have been particularly skeptical of job enrichment programmes in recent years. Since most job enrichment programmes result in employees taking on additional responsibilities, determining whether a programme will result in increased job autonomy or simply increased workloads is difficult. It is small wonder, employees in unionised firms look at the whole exercise with distrust. These negative reactions compel managers to go slow and introduce enrichment programmes carefully, by talking stock of the peculiar situational variables that surround an organisation. JOB SIMPLIFICATION The purpose of the job design is to enable the effectiveness of work, speedy disposal of work with creating psychological friction and satisfy the social and psychological needs of the employees. Hence, simplification of job design is suggested. The simplification of the job design is free from right job description and specification. It provides for adaptability to various situations and contingencies. It provides scope in the employees to utilise their different kinds of potentialities in various tasks of the organisation. Job simplification provides for team work, enlargement, enrichment, challenging work, variety of tasks, adaptability, etc. MODEL QUESTIONS 1. What is Job Analysis? What are its uses? 2. What are the potential problems associated with Job Analysis? 3. It is claimed that "Job Analysis is the cornerstone to all Personnel / Human Resource Management activities" Do you agree? Explain 4. Are Job Descriptions same as job specifications? Describe any four methods for analysing jobs. 5. What is Job Evaluation? What is its purpose? 6. Write Short Notes on a. Factor Comparison Method b. Job Enlargement c. Job Design Case 1 A Case on Variation Between the Designation and the Job Responsibilities Pracheenagar is a large and densely populated town in North India. Its municipal affairs are managed by a Municipality which was established in the last lap of the 19 th Century under the British Rule. It works under the Municipal Act of 'X' State, where Pracheenagar is situated. But to great extent its style of administration is bounded by its past tradition, political and factional expediency of the executives as well as political and factional factors. The Municipality has a larger number of trade unions and in every department there are at least 3 or 4 rival unions, which fight with each other as well with the management. In the past there were several strike among municipal employees and in recent years there has been considerable erosion of authority of the administration of the Municipality even in small personnel matters. Like many other old organisations, the personnel management of Pracheenagar Municipality has been largely unaffected by the growth of professional skill and knowledge in personnel matters in this country or abroad. There is no job- description and the employee's designations also often carry very little relations with the works being performed by the people having them. As a large Municipality, it has a fleet of vehicles (e.g. trucks, ambulances, jeeps, cars, road-rollers etc) and also some other types equipment and machinery used for water supply. road construction and other purposes connected with municipal services. These vehicles, equipment and machinery are repaired in a workshop owned by the Municipality. In this Municipal Workshop, there are some workers who carry the designation of "Khalasi" , which is applicable mainly to the unskilled labourers, although they perform some more responsible or skilled jobs. Special complications developed in respect of three of them. One of them, Sri Karam Chand, was asked to work as a telephone operator ten years back and has been doing that work since then, although in designation he still remains a Khalasi. Another person, Sri Dharam Sing, has been performing the work of a clerk for the last 5 years without any change in his designation. Sri Dhan Narayan, for the last 7 years has been working as the gate pass checker in the workshop , although his official designation of "Khalasi" has not been changed in all these years. Karam Chand and Dhan Narayan are members of Pracheenagar Municipal Employees Union. While Dharam Singh is a member of Pracheenagar Municipal Worker's Union. These two Unions put up a strong demand for appointing these three persons in their present jobs and to give them appropriate designations accordingly. It was maintained on their behalf that after so many years, these people would not be able to work any more as "Khalasis". Moreover, so long they were not even given any additional remuneration for their higher responsibilities. So the injustice done to them in the past must be rectified by promoting them to the positions according to the actual jobs they had been doing for so many years. This demand, however, was strongly opposed by another Union, Pracheenagar Karmachari Parishad which demanded that these three persons should be placed back to their scheduled jobs and new appointments should be made according to the recruitment regulations of the Municipality. These Unions received support from two other Unions,all of which had support among the clerical staff and were hopeful that through appropriate pressures they would be able to get their own men appointed to positions vacated by the three 'Khalasis' on their reversal to their original positions. Due to the threats and counter threats from different unions on this issue, the problem because very difficult for the authorities of Pracheenagar Municipality. In fact, they also found it difficult to come to a decision which would be fair to these three employees, but would not violate the regulations of the Municipality or create labour relations problems. QUESTIONS FOR DISCUSSION 1. Discuss what light is thrown by this case on the importance of job description and correspondence between designation and the jobs performed. 2. What would be your approach to solve the problems mentioned here and what further steps would you recommend? - End Of Chapter - LESSON - 13 MEANING OF TRAINING AND DEVELOPMENT After an employee is selected, placed and inducted, he or she must be provided with training. Training is the act of increasing the knowledge and skill of an employee for doing a particular job. Training is a short term educational process and utilizing a systematic and organised procedure by which employees learn technical knowledge and skills for a definite purpose. Dale S.Beach defines training as "the organised procedure by which people learn knowledge and/or skill for a definite purpose". In other words training improves, changes, moulds the employee's knowledge, skill, behaviour, aptitude, and attitude towards the requirements of the job and the organisation. Training refers to the teaching and learning activities carried on for the primary purpose of helping members of an organisation, to acquire and apply the knowledge, skills, abilities and attitudes needed by a particular job and organisation. Training bridges the differences between job requirements and employee specifications. Employee training is distinct from management development or executive development. While the former refers to training given to employees in the areas of operations, technical and allied areas, the latter refers to developing an employee in the areas of principles and techniques of management, administration, organisation and allied areas. EDUCATION - TRAINING Training is concerned with increasing technical knowledge, skills and abilities. But, education is broader in scope. Its purpose is to develop individuals in all areas. It is concerned with increasing technical, managerial and general knowledge and total environment. Education is for the development of individual's understanding of culture, value, ethics, social and other aspects in addition to technical and managerial skills, knowledge and abilities. Thus education is broad in scope. NEED FOR TRAINING Every organisation should provide training to all employees irrespective of their qualification, skill, suitability for the job etc. Training is not something that is done once to new employees; it is used continuously in every well run establishment. Further, technological changes, automation, require updating the skills and knowledge. As such an organisation has to restrain the old employees. Specially, the need for training arises due to the following reasons: 1. To match the employee specifications with the job requirements and organisational needs. An employee's specifications may not exactly suit to the requirements of the job and the organisation irrespective of his past experience, qualifications, skills, knowledge etc. Thus management may find deviations between employee's present specifications and the job requirements and organisational needs. Training is needed to fill these gaps by developing and moulding, the employee's skill, knowledge, attitude, behaviour etc. in tune with job requirements and organisational needs. 2. Organisational viability and the transformation process. The primary goal of most of organisation is their viability and efficiency. But the organisational viability is continuously influenced by environmental pressures. If the organisation does not adapt itself to the changing factors in the environment, it will lost its market share. If the organisation desires to adopt these changes, first it has to train the employees to impart specific skills and knowledge in order to enable them to contribute to the organisational efficiency and to cope with the changing environment. In addition, it provides continuity to the organisation process and development. The productivity of the organisation can be improved by developing the efficiency of transformation process which in turn depends on enhancement of the existing level of skill and knowledge of the employees. The achievement of these objectives mostly depends on the effectiveness of the human resources that the organisation possesses. Employee effectiveness can be secured by proper training. 3. Technological advances. Every organisation, in order to survive and be effective, should adopt the latest technology i.e mechanisation, computerisation and automation. Technology alone does not guarantee success unless it is supported by people possessing requisite skills. So, organisation should train the employees to enrich them in the areas of changing technical skills and knowledge from time to time. 4. Organisational complexity. With the emergence of increased mechanisation and automation, manufacturing of multiple products and by products or dealing in services of diversified lines, extension of operations to various regions of the country or in overseas countries, organisation of most of the companies has become complex. This leads to growth in number and kind of employees and layers in organisational hierarchy. This in turn, creates the problems of coordination and integration of activities at various levels. This situation calls for training in the skills of coordination, integration and adaptability to the requirements of growth, diversification and expansion. Companies constantly search for opportunities to improve organisational effectiveness. Training is responsible for much of the planned change and effectiveness in an organisation as it prepares the people to be the change agents and to implement the programmes of effectiveness. 5. Change in the job assignment. Training is also necessary when the existing employee is promoted to the higher level in the organisation and when there is some new job or occupation due to transfer. Training is also necessary to equip the old employees with the advanced disciplines, techniques or technology. Please use headphones IMPORTANCE Indian economy is opened for the rest of the globe. There would be heavy competition for Indian industries from foreign industries, Indian industries would be forced to maintain total quality and adopt latest technology. Training assumes greater significance in view of these changing conditions. Training is inevitable as it develop the skills and knowledge of employees and enables them to take up challenging jobs. Further new employees cannot be placed on job without training. Training also helps the employees whose performance is below expectations and standards. Training builds up self confidence in the employees. Skills, knowledge and abilities acquired through training develops total human resources of the organisation. OBJECTIVES The Personnel Manager formulates the following training objectives keeping the Companys overall objectives in mind: 1. To prepare the employee both new and old to meet the present as well as the changing requirements of the job and the organisation. 2. To prevent obsolescence. 3. To impart the new entrants the basic knowledge and skill they need for an intelligent performance of a specific job. 4. To prepare employees for higher level tasks. 5. To assist employees to function more effectively in their present positions by exposing them to the latest concepts, information and techniques and developing the skills they will need in their particular fields. 6. To build up a second line of competent officers and prepare them to occupy more responsible positions. 7. To broaden the minds of senior managers by providing them will opportunities for an interchange of experiences within and outside with a view to correcting the narrowness of outlook that may arise from over- specialisation. 8. To develop the potentialities of people for the next level job. 9. To ensure smooth and efficient working of a department. 10. To ensure economical output of required quality. 11. To promote individual and collective morale, a sense of responsibility, cooperative attitudes and good relationships. TYPES Training methods and content may not be the same for different categories of employees. As such management has to offer training to different categories of employees based on job analysis. The methods adopted would, therefore, be different. A brief outline of the various training methods for different categories of employees in given below: 1. Supervisory Training: Supervisors mostly learn to supervise under the guidance of a manager. Here the emphasis is generally on the on-the-job training methods. These methods can be supplemented by various off-the-job training methods. Course contents of training to this category include: production control, organisation methods, work/activity control, method study, time study, job evaluation, company policies and practices, personnel policies, procedures, programmes, training the sub-ordinates, grievance handling, disciplinary procedure, communications, effective instruction, report writing, performance appraisal, personnel records, dealing with absenteeism, labour turn-over, industrial and labour laws, leadership qualities etc. 2. Sales training: On-the-job as well as off-the-job training methods are followed in training the sales personnel. Course content includes job knowledge, organisational knowledge, knowledge about the company products, customers, competitors, sales administration procedures, laws concerning sales, special skills like prospecting, making presentations, handling objections, closing the sales etc. employee attitudes such as loyalty to the company and trust in the company products, understanding and tolerance with regard to potential and existing customers. 3. Clerical Training: Off-the-job training is mostly followed in training the clerical personnel. The training content includes organisation and methods, company policies, procedures and programmes, background knowledge of the Company, forms reports, written communication, clerical aptitude, maintaining ledgers, records etc. - End Of Chapter - LESSON - 14 LEARNING AND TEACHING PROCESS The training programme will not be effective if the trainer is poorly qualified or ill- equipped with the technical aspects of the content or if he lacks aptitude for teaching and teaching skills. Training Principles can be studied through the principles of learning and principles of teaching. LEARNING PRINCIPLES Andrew F. Sikula defined learning as the human process by which skills, knowledge, habits and attitudes are acquired and utilised in such a way that behaviour is modified. Models of human learning are studied in order to find out the reasons for fast and accurate learning. The Principles of learning developed by Sikula are as follows: 1. All human beings can learn 2. An individual must be motivated to learn. 3. Learning is an active process 4. Learners may acquire knowledge more rapidly with guidance. Feedback ensures improvement in speed and accuracy of learning. 5. Appropriate material (like case studies, tools, problems, reading etc) should be provided 6. Time must be provided to practice learning. 7. Learning methods should be varied. Variety of methods should be introduced to off-set fatigue and boredom. 8. The learner must secure satisfaction from learning. Education must fulfill human needs, desires, and expectations. 9. Learners need reinforcement of correct behaviour. 10. Standards of performance should be set for the learner. 11. Different level of learning exist 12. Learning is an adjustment on the part of an individual 13. Individual differences play a large part in effectiveness of the learning process. 14. Learning is a cumulative process. 15. Ego involvement is widely regarded as a major factor in learning. 16. The rate of learning decreases when complex skills are involved. 17. Learning is closely related to attention and perception. 18. Learning involves longterm retention and immediate acquisition of knowledge. 19. Accuracy deserves generally more emphasis than speed. 20. Learning should be relatively based. 21. Learning should be a goal oriented. LEARNING PATTERNS Trainers need some understanding of the patterns in which new skills are learned. The employee is likely to find himself unusually chumpsy during the early stages of learning. This can be called discouraging stage. After the employee adjust himself to the environment, he learns at a fast rate. A 'plateau' develops after the lapse of more training time due to a loss of motivation and lack of break in training schedule and time. The trainer reaches the next stage when he is motivated by the trainer and/or some break or pause in time and training process is given. The trainer at this stage learns at a fast rate. Special repetition of the course leads the trainee to reach the stage of over-learning as shown in the figure. Fig: Learning Curve Thus it is clear that, learning rarely takes place at a constant rate. It varies according to the difficulty of the task, ability of the individual and physical factors. However, the rate of learning varies from one individual to another. CHARACTERISTICS OF LEARNING PROCESS 1. Learning is a continuous process. 2. People learn through their actual personal experience 3. People learn step by step, from known to unknown and simple to complex 4. There is a need for repetition in teaching to improve skill and to learn perfectly. 5. Practice makes a man perfect. Hence, opportunity should be created to use, transfer the skills, knowledge and abilities acquired through learning, it gives satisfaction to be learner. 6. Conflicts in learning. Conflict in learning arises when the trainer knows or has developed some habits which are incorrect in terms of the method being learned. DEVELOPING A DESIRE TO LEARN The learner should have interest and desire to learn to the maximum extent. Further, he is expected to participate sincerely, during the training programme. Training programme will be effective only when the trainee be motivated to commit himself to the programme. When does motivation begin? Motivation beings even before starting the training programme. Motivation should be continued throughout the training programme, and even after training programme is completed. The next question is how to motivate the trainee? Trainees may be motivated through the offers of confirmation to successful probationers, promotions or wage hike or enhanced benefits or some reward or award to successful trainees in case of present employees. Motivation should be based on the needs of the trainee. Who has to motive the trainee and what is the role of instructor in this regard are the other issues. All line managers are expected to motivate the employees of their respective departments/sections. Further personnel manager, training manager also motivate the training programme content of the programme, matching the training programme content to their jobs, use of training in reducing their weaknesses and further strengthening their knowledge, skill, aptitude etc. The instructor plays a crucial role in motivating the trainees during the programme. He has to activate them by identifying and satisfying their needs for recognition, achievement, identification, leadership, work, prestige, responsibility, advancement, growth, status, congenial working conditions during the training programme, using audio- visual aids by making instruction interesting through course content, planning, presentation etc. FAILURE OF MOTIVATION Motivation may not work successfully in all situations. Motivation fails in the following circumstances. 1. If the trainees do not have desire to progress or develop. 2. If there is no tradition of training the employees in the organisation. 3. When the employees resist the training being provided only on traditional lines and when it is not necessary. 4. When the training environment (both physical and psychological) is changed. 5. When the physical labour dislike training due to their limited needs. 6. Lack of ability to learn or grasp on the part of trainees. 7. When the employees have the feeling that they cannot succeed and that they are doomed to fail in everything. 8. When the training programme affects job security and thereby leads to retrenchment of other employees. 9. When the future jobs (for which training is going to be given) demands extra- ordinary physical and mental energy, skills, knowledge etc. THE CLIMATE FOR LEARNING Conducive climate is highly essential for serious participation, attentiveness, creation of interest, and sincerity of learner. Climate for learning consists of working conditions, relationship with other trainees, and trainers/instructors, conditions of relaxation, freedom, scope for social interaction, and formation of social groups. Conducive climate for learning should be provided in view of its significance in training. It consists of ideal physical and psychological environment. Ideal physical environment, consisting of suitable location with space, adequate accommodation, audio-visual aids, air conditioning, ventilation, lighting and other facilities like canteen, facilities for relaxation, should be provided. Ideal psychological environment, consisting of business atmosphere, friendly environment, frequent communication, follow-up regarding performance and progress, enthusiastic, helpful and broad minded trainer etc., should be created and provided. Provision for measuring learner's progress through tests should also be made in order to regulate, correct and followup the training programme. LEARNING PROBLEMS The instructor should have the knowledge of the possible learning problems. He should identify the problems of trainees and take steps to solve them. The possible learning problem are: 1. Lack of knowledge, skill, aptitude, and favourable attitude. 2. Knowledge and skill not being applied. 3. Existence of anti-learning factors: Most operational situations contain a number of elements which will restrict the development of learning regardless of the methods employed. 4. Psychological problems like fear and shyness. 5. Inability to transfer learning to operational situation. 6. Heavy dependence on repetition, demonstration and practice. 7. Unwilling to change. 8. Lack of interest about the knowledge of results. 9. Absence of self-motivation. 10. Negative attitude about involvement and participation. Learning theories and principles can be made use of to solve the learning problems. USING LEARNING THEORY There are four basic approaches in learning theory. They are: 1. Behavioural approach: The basis of learning is by trial and error, repetition being particularly emphasised. 2. Gestalt approach: The basis of learning is seen as in-sight. The total situation is seen as a meaningful pattern which occurs as follows: Stimuli ------------ Response-------------- Reward / Punishment This type of learning is particularly associated with the learning of ideas. 3. Model approach. Learning is achieved by adopting the success and avoiding the failure of others who learned through trial and error approach. 4. Instruction. Learning is dependent on teaching by others, who are more skillful and knowledgeable. AREAS OF LEARNING THEORY Different areas of learning theory are: 1. Motivation 2. Reinforcement (individual must receive reward to punishment) 3. Feedback of knowledge 4. Learning by doing. 5. Spaced repetition (distribution of learning periods/content through time) 6. Appropriate size of scope of the lesson. 7. Providing supportive theory or background. TEACHING PRINCIPLES In addition to learning principles, teaching principles should also be taken care of for effective training. 1. The employee must be taught to practice only the correct method of work. 2. Job analysis and motion study techniques should be used. 3. Job training under actual working conditions should be preferred to class room training. 4. Emphasis should be given more on accuracy then speed. 5. Teaching should be done at different time-intervals. 6. It should be recognised that it is easier to train young workers than old workers due to their decreasing adaptability with the increase in age. - End Of Chapter - LESSON - 15 PRINCIPLES, STEPS AND EVALUATION OF TRAINING PROGRAMMES A number of principles have been evolved over the years which can be followed as guidelines by the trainers. Some of them are stated below: 1. Motivation: As the effectiveness of an employee depends on how well he is motivated by management, the effectiveness of learning also depends on motivation. In other words, the trainee will acquire new skills or knowledge quickly if he or she is highly motivated. Thus the training must be related to the desires of the trainee such as more wages or better job, recognition, status, promotion etc. The trainer should find out novel ways to motivate experienced employees who are already enjoying better facilities. 2. Progressive Information: It has been found by various research studies that there is a relation between learning rapidly and effectively and providing right kind of information. Therefore, the trainer should not bombard the trainee with excessive information or information that can be misinterpreted. The trainee has a desire to learn new skills to remain up-to-date. In order to sustain his interest it is necessary to provide only the right kind of information. 3. Reinforcement: The effectiveness of the trainee is learning new skills or acquiring new knowledge should be reinforced by means of rewards and punishments. Examples of positive reinforcement are promotions, rise in pay, praise etc. Punishments are called as negative reinforcements, e.g. demotions, threats of dismissal, cuts in salary etc. Management can punish the trainees whose behaviour is undesirable. But the negative consequences of such punishments on employees behaviour and performance must be kept in mind. 4. Practice: Practice makes a man perfect so goes the old maxim. A trainee should actively participate in the training programme in order to make the learning programme an effective one. Continuous practice is highly essential for effective learning. Jobs are broken down into elements from which the fundamental, physical, sensory and mental skills are extracted. Training exercises should be provided for each skill. 5. Full vs. Part: Research has not indicated clearly whether it is desirable to teach (employees) the complete job at a stretch or dividing the job into parts and teaching each part at a time. It the job is complex the job separately and then put the parts together into an effective complete job. Generally the training process should start from the known and proceed to the unknown and from the easy to the difficult when parts are taught. However, the trainer has to teach the trainees based on his judgment on their motivation and convenience. 6. Individual Differences: Individual training is costly, and group training is economically viable and advantageous to the organisation. But individuals vary in intelligence and aptitude. So it is necessary to adjust the training programme to individual abilities and aptitude, depending on the financial strength of the organisation. AREAS OF TRAINING Organisations provide training to their employees in the following areas: 1. Company policies and procedures, 2. Specific Skills, 3. Human relations, 4. Problem solving, 5. Managerial and supervisory skills, and 6. Apprentice training. 1. Company Policies and Procedures: This area of training is to be provided with, in order to make the new employee fully conversant with the company rules, practices, procedures, traditions, management, organisation structure, environment, products / services offered by the company etc. Information regarding company rules and policies creates favourable attitudes of confidence in the minds of new employees about the company and its products / services. 2. Training in Specific Skills: Training in specific skills would make the employee more productive and effective on the job. The trainer in this area trains the employee regarding various skills necessary to do the actual job. For example, the clerk in the bank should be trained in the skills of making entries correctly in the ledger, skills of arithmetical calculations, quick comparison of figures, entries and the like. Similarly, technical officers are to be trained in the skills of project appraisal, supervision, follow up the like. 3. Human Relations Training: Human relations training assumes greater significance in organisations as employees have to maintain human relations not only with other employees but also with their customers. Employees are t o be trained in the areas of self-learning, interpersonal competence, group dynamics, perception, leadership styles, motivation, grievance redressal, disciplinary procedure, and the like. This training enables the employees for better team work, which leads to improved efficiency and productivity of the organisation. 4. Problem-solving Training: Most of the organisational problems are common to the employees dealing the same activity at different levels of the organisation. Further some of the problems of different managers may have same root cause. Hence management may call together all managerial personnel to discuss common problems so as to arrive a effective solutions across the table. This not only helps in solving the problems but also serves as a forum of the exchange of ideas and information that could be utilised. The trainer has to organise such meetings, train and encourage the trainees to participate actively in such meetings. 5. Managerial and Supervisory Training: Even the non-managers sometimes perform managerial and supervisory functions like planning, decision-making, organising, maintaining inter-personal relations, directing and controlling. Hence, management has to train the employees in managerial and supervisory skills also. 6. Apprentice Training: The Apprenticeship Act, 1961 requires industrial units of specified industries to provide training in basic skills, and knowledge in specified trades to educated unemployee's / apprentices with a view to improving their employment opportunities or to enable them to start their own industry. This type of training generally ranges between one year to four years. This training is generally used for providing technical knowledge in the areas like trades, crafts etc. Please use headphones STEPS IN TRAINING PROGRAMME One of the better personnel programmes to come out of World War II was the training within the industry (TWI) programme of the War Man-Power Commission. This was basically a supervisory training programme to make up for the shortage of civilian supervisory skills during the war. One of the parts of this programme was the job instruction training course, which was concerned with how to teach. The training procedure discussed below is essentially an adoption of the job instruction training, which has been proved to have a great value. The important steps in training procedure are discussed below: 1. Preparing the instructor: The instructor must know both the job to be taught and how to teach it. The job must be divided into logical parts so that each can be taught at a proper time without the trainee losing perspective of the whole. This becomes a lesson plan. For each part one should have an mind the desired technique of instruction, that is, whether a particular point is best taught by illustration, demonstration or explanation. 2. Preparing the trainee: As in interviewing, the first step in training is to put the trainee at ease. Most people are somewhat nervous when approaching an unfamiliar task. Though the instructor may have executed this training procedure, many times he or she never forgets its newness to the trainee. The quality of empathy is a mark of the good instructor. 3. Getting ready to teach: This stage of the programme is class hour teaching involving the following activities: Planning the programme Preparing the instructor's outline. Do not try to cover too much material. Keep the session moving along logically. Discuss each item in depth. Repeat, but in different words. Take the material from standardised texts when it is available. When the standardised text is not available, develop the programme and course content based on group approach. Group consists of employer, skilled employees, supervisors, trade union leaders and others familiar with job requirements. Group prepares teaching material. Teach about the standards for the trainee like quality, quantity, waste or scrap, ability to work without supervision, knowledge of procedures, safety rule, human relations etc. Remember your standards, before you teach. Take periodical progress of the trainees, and application in to account. 4. Presenting the Operation: There are various alternative ways of presenting the operation viz., explanation, demonstration etc. An instructor mostly uses the method of explanation. In addition one may illustrate various points through the use of pictures, charts, diagrams and other training aids. Demonstration is an excellent device when the job is essentially in nature. The following sequence is a favorites with some instructors. a. Explain the sequence of the entire job. b. Do the job step by step according to the procedure. c. Explain each step that the is performing. d. Have the trainee explain the entire job. 5. Try out the Trainee's Performance: The trainee should now be asked to start the job independently. Some instructors prefer that the trainee explains each step before doing it, particularly if the operation involves any danger. The trainee, through repetitive practice, will acquire more skill. 6. Follow up: The final step in most training procedures is that of follow up. When people are involved in any problem or procedure. it is unwise to assume that things are always constant. Follow-up can be adapted to a variable reinforcement schedule as suggested in the discussion of learning principles. The follow up system should provide feedback on training effectiveness and on total value of training system. ORGANISATION OF TRAINING PROGRAMMES Basically the organisation strength of a training section or department depends on the organisational structure of the Company and/or Personnel Department. Training is a function with inadequate coverage of the Human Resources Department in some companies, while it is a separate department in other organisations. Manager of Human Resources Development section reports to the Chief Personnel Manager of the Personnel Department where training is a function of the Human Resource Development Section. EVALUATION OF TRAINING PROGRAMMES The specification of values, objectives forms a basis for evaluation. The basis of evaluation and the mode of collection of information necessary for evaluation should be determined at the planning stage. The process of training evaluation has been defined as "any attempt to obtain information on the effects of training performance, and to assess the value of training in the light of that information". Evaluation leads to controlling and correcting the training programme. Hamblin suggested five levels at which evaluation of training can take place viz., reactions, learning, job behavior, organisation and ultimate value. 1. Reactions: Training programme is evaluated on the basis of trainee's reactions to the usefulness of coverage of the matter depth of the course content, method of presentation, teaching methods etc. 2. Learning: Training programme, trainer's ability and trainee's ability are evaluated on the basis of quantity of content learned and time in which it is learned and learner's ability to use or apply, the content he learned. 3. Job Behaviour: This evaluation includes the manner and extent to which the trainee has applied his learning to his job. 4. Organisation: The evaluation measures the use of training, learning and change in the job behaviour of the department/organisation in the form of increased productivity, quality, morale, sales turn-over and the like. 5. Ultimate Value: It is the measurement of ultimate result of the contributions of the training programme to the Company goals like survival, growth, profitability etc and to the individual goals like development of personality and social goals like maximizing social benefit. ESSENTIAL INGREDIENTS FOR A SUCCESSFUL EVALUATION There are three essential ingredients in a successful evaluation. They are (i) support throughout the evaluation process. Support items are human resources, time, finance, equipment and availability of data sources, records etc... (ii) Existence of open communication channels among top management, participants and those involved in providing data etc., and (iii) Existence of sound management process. DECISION POINTS IN PLANNING TRAINING EVALUATION John Dopyera and Louise Pitone identified eight points in planning training evaluation. They are: 1. Should an evaluation be done? Who should evaluate? 2. What is the purpose of evaluation?There are mainly two purposes of doing evaluation. They are justification evaluation and determination evaluation. Justification evaluations are undertaken as reactions to mandates. Other purposes include training needs assessment, programme improvements and impact evaluation. 3. What will be measured? The focus of the evaluation will be on training and delivery, programme content, materials, impact of training on individuals through learning, behaviour or performance change. Learning can be measured through pre-test and posttest. Evaluate the effects of training after the trainee returns to the work place using changes in between or the work results as indicators. 4. How comprehensive will be evaluation be? The scope or the duration and comprehensiveness of the evaluation is influenced by available support, communication and evaluation purpose. 5. Who has the authority and responsibility? Who has the authority and responsibility at different stages of evaluation will be determined by the factors like personnel, credibility of internal staff, communication, objectivity of internal staff to do an evaluation regardless of results. 6. What are the sources of data? The most common sources of evaluation data are reactions, opinions and / or test results of the participants, managers, supervisors, production records, quality control, financial records, personnel records, safety records etc. 7. How will the data be collected and complied? Data can be collected before training for needs analysis or pre-testing purpose, during training programme to make improvements along the way and after training for evaluation. Next step is selection of treatment or control groups and determination of nature of samples. Data can be complied either manually or by computers. 8. How will the data be analysis and reported? First reporting issue is concerned with audiences like participants or trainees, training staff, managers, customers etc. Second and third issue are concerned with analysis and results and accuracy, policies and format respectively. The decision points are intended to increase awareness of and interest in the evaluation of training, to improve planning skills and to encourage more systematic evaluation of training. BASES OF EVALUATION Training programme can be evaluated on the basis of various factors like production factor, general observation, human resource factor, performance tests, cost-value relationship etc. Production Factors: In operative training, the prime measure of worth is that of productivity. Productivity rates covering both quantity and quality are good indicators of the values of training. In most business situations these productivity rates will have to be obtained before and after training. In an experimental situation, a control group that does not receive training could be compared with the one that does in order to ascertain the effect of training. Management will generally look first at production and wastage rates to determine the worth of operative training. The other production factors are decrease in unit time and unit cost of production and reduction in space or machine requirements. General Observations: General observation should not be overlooked as a means of training evaluation. The immediate supervisor is often a good judge of the skill level of his sub-ordinates. For on-the-job training programmes, the supervisor is, in effect, the judge of his or her own efforts. If the supervisor is treated as a part of the professional management of the organisation and is properly selected and trained, this self- analysis and appraisal can be quite accurate and objective. The efficient supervisor observes accurately the level of skill and knowledge acquired by the trainee during the training programme. He also observes how effectively the trainees apply the acquired skill and knowledge to the present and future jobs. Human Resource Factors: Training Programme can also be evaluated on the basis of employee satisfaction which in turn can be viewed on the basis of: 1. decrease in employee turn over 2. decrease in absenteeism 3. decrease in number and severity of accidents 4. betterment of employee morale 5. decrease in grievance and disciplinary cases 6. reduction in time to earn piece rates 7. decrease in number of discharges or dismissals. Performance Tests: In the immediate sense, the specific course of training can be evaluated in terms of written and performance tests. The test is supported by a sample of what the trainee knows or can do. Successful accomplishment of the tests would indicate successful training. But the true test is whether or not what has been learned in training is successfully transferred and applied to the job. It is dangerous to rely upon tests alone to demonstrate the true value of training. Performance appraisal on the job before and after training may be supplemented to the tests. Cost-value Relationship: Cost factor in training should be taken into consideration in evaluating the training effectiveness. Cost of various techniques of training and their value in the form of reduced learning time, improved learning and higher performance can be taken into account. Cost of training includes cost of employing trainers and trainees, providing the means to learn, maintenance and running of training centers, wastage, low level of production, opportunity cost of trainers and trainees etc. The value of the training includes increased value of human resources of both the trainee and trainer and their contribution to raise production, reduce wastage, breakage, minimization of time requirement etc. Cost-value relationship of a training programme or a training techniques is helpful in: (a) determining the priorities for training (for present and potential managers age structure of the trainees etc) (b) matching the employee and job through training (c) determining the worth of management sacrifices (like time taken by training program, non availability of staff for production during training period etc) (d) choosing the right training method. Any one or the possible combination of the methods of training evaluation listed can be used by an organisation for evaluation depending upon the need and convenience. The various methods of training evaluation are: 1. Immediate assessment of trainees reaction to the programme. 2. Trainees observation during training programme 3. Knowing trainee's expectations before the training programme and collecting their views regarding the attachment of the expectations after training. 4. Seeking opinion of trainee's superior regarding his/her job performance and behaviour before and after training. 5. Evaluation of trainee's skill level before and after training programme. 6. Measurement of improvement in trainees on the job behavior. 7. Examination of testing system before and after some time of the training programme. 8. Measurement of trainees attitudes after training programme. 9. Cost benefit analysis of the training programme. 10. Seeking opinion of trainee's colleagues regarding his/her job performance and behavior. 11. Measurement of levels in absenteeism, turn-over, wastage/scrap, accidents, breakage of the machinery during pre and postperiod of the training programme. 12. Seeking opinions of trainee's sub-ordinates regarding his/her job performance and behavior. FEEDBACK Training evaluation information should be provided to the trainer and / or instructors, trainees and all other parties concerned for control, correction and improvement of trainees activities. Further the training evaluator should follow it up to ensure implementation of the evaluation report at every stage. Feedback information can be collected on the basis of questionnaire or through interview. CONCEPT OF MANAGEMENT DEVELOPMENT PROGRMMES Management development is a systematic process of growth and development by which managers develop their abilities to manage. It is the result of not only participation in formal courses of instruction but also of actual job experience. It is concerned with improving the performance of the managers by giving them opportunities for growth and development. It is planned effort to improve current or future managerial performance. "The role of the company in management development is t o establish the programme and the developmental opportunities for its present and potential managers". Exposing the employees to lectures, case studies, readings, job rotation, special assignments and the like does not guarantee that they will learn. What is more important is the effort of the individuals. Each individual has to make his own contribution to the development of himself, as others can only create the opportunity. "Executive development is eventually something that the executive has to attain himself. But he will do this much better if he is given encouragement, guidance and opportunity by his company". The role of the company is to provide conditions that accelerate the growth. And these conditions should be part of the organisational climate itself, in order to be away from the unrealistic expectation that we can create and develop managers only in the class room. WHO IS A MANAGER AND WHAT DOES HE DO? The word manager has been used to mean people at different levels of hierarchy. To some, the term means only the top man at the top rank of the ladder. To others a manager is any person who supervises others. All those who perform all or some of the basic functions of management to some degree regularly or occasionally, can be called managers. Needless to say that their actions have significant impact on the performance of the part or whole of the organisation. So a scientist who keeps himself to the laboratory is as much a manager as a foreman who supervises a group of workers. Even a worker may be considered a (potential) manager for the purpose of management development, one of the objectives of which is to create management succession. KNOWLEDGE AND SKILLS OF THE MANANGER Though the composition of the skills is the same for all managers at all levels, their (contents) proportion differs depending on the level at which a manager is and also the nature of the work he does. A foreman requires more of technical skills and human skills. He must be able to teach his men the technical aspects of the products and processes. He must also be good at human relations in order to motivate, co- ordinate and direct his subordinates. Technical skills are less important whereas the conceptual skills are especially important at the top level. Human skills are important at all levels. One should also remember that, at the same level the skills required for a production executive differ from that of a marketing executive. WHOSE RESPONSIBILITY? Though the success of the Management Development depends on the commitment of executives at all levels, its launching should be done by the chief of the organisation, since it is a fundamental policy decision that involves time, various resources and organisation efficiency. Planning and administration of the programme may be handed over to a committee composed of senior executives, while the day to day administration of the same can be performed by the personnel department. EVOLUTION OF MANAGEMENT DEVELOLPMENT In the post efficient and loyal workers were promoted to the supervisory or management positions and it was soon realised that "Superior workers do not necessarily make superior managers". This realisation necessitated the need for planned programmes for the selection, training and development of managerial personnel. Formal management development programme started emerging in the late 1940s and 1950s. Several forces have operated to cause the expansion of management development activities. To name only a few 1. Shift from owner managed to professionally managed enterprises. 2. Management has been recognised as a distinct kind of occupation consisting of acquired skills and a unified body of knowledge. OBJECTIVES OF MANAGEMENT DEVELOPMENT The Management development programmes are organised with a view to achieving specific objectives. They are: 1. To overhaul the management machinery. 2. To improve the performance of the managers. 3. To give the specialists an overall view of the functions of an organisation and equip them to co-ordinate each other's efforts effectively. 4. To identify the persons with the required potential and prepare them for senior positions. 5. To increase the morale of the members of the management group. 6. To increase the versatility of the management group. 7. To keep the executives abreast with the changes and developments in their respective fields. 8. To create the management succession which can take over in case of contingencies. 9. To improve thought process and analytical ability. 10. To broaden the outlook of the executive regarding his role, position and responsibilities. 11. To understand the conceptual issues relating to economic, social and technical areas. 12. To understand the problems of human relations and improve human relation skills. 13. To stimulate creative thinking. ESSENTIAL OF MANAGEMENT DEVELOPMENT PROGRAMMES The essential ingredients of the management development programmes can be explained through the steps of management development process. The important steps or ingredients of a management development programme are: i ) Analysis of developmental needs. ii) Appraisal of present management talent. iii) Inventory of management manpower. iv) Planning of individual development programme. v) Establishment of development programme. vi) Evaluation of the programme. i) Analysis of Organisational Present and Future Developmental Needs: The decision to launch a management development programme having been made, the next thing to do is the critical examination of organisational present and future developmental needs. We should know how many and what type of managers are required to meet the present and future needs. An examination of the organisational structure in the light of the future plans of the organisation should help to know what the organisation requires in terms of functions, departments, and executive positions. Having got the above information, it is easy to prepare the descriptions and specifications for all management positions which in turn, gives us the information as to the kind of education, experience, training, special knowledge, skills and personal traits required for each job. A comparison of the existing talents plus those that can be developed from within, with those required to meet the projected needs will help the top management make a policy decision as to whether it wishes to fill those positions from within the organisation or from outside sources. ii) Appraisal of Present Management Talent: In order to make the above suggested comparison, a qualitative assessment of the existing management talent should be made and an estimate of their potential for development should be added to that. Only when can it be compared with the projected required talent. iii) Inventory of Management Manpower: This is prepared to have a complete information about each executive in each position. For each member of the management team, a card is prepared listing such data as name, age, length of service, education, work experience, training courses completed, health record, psychological test results and performance appraisal data etc. The selection of the individuals for the Management Development Programme is made on the basis of the kind of background they possess. The management may set certain standards in terms of each of the above factors mentioned on the cards to qualify for the management development programme. Such information when analysed discloses the strength as well as the deficiencies of managers in certain functions relative to the future needs of the organisation. (iv) Planning of Industrial Development Programmes: Guided by the results of the performance appraisal which indicate the strengths and weaknesses of each of his subordinates the executive performs this activity of planning for individual development programmes. "Each of us has a unique set of physical, intellectual, emotional characteristics". Therefore, a development plan should be tailor made for each individual. It would be possible to impart knowledge, skills and mould behaviour of human beings, but it would be difficult to change the basic personality and temperament of a person once he reaches adulthood stage. v) Establishment of Development Programmes: It is the duty of the P/HR department to establish the well- conceived development opportunities. The P/HR department has to identify the existing level of skills, knowledge etc., of various executives and compare them with their respective job requirements. Thus it identifies developmental needs and will establish specific development programmes like, Leadership courses, Management games, Sensitivity training. The department may not be in a position to organise development programmes for executives at the top level as could be organised by reputed institutes of management. In such situations, top management deputes certain individuals to the executive development programmes organised by the reputed institutes. Further the P/HR department must go on recommending specific individual and executive development programmes based on the latest changes and developments in management education. vi) Programme Evaluation: Since management development programme involves huge expenditure in the form of money, time and effort, the top management of any organisation, naturally wishes to know whether it has got back worth the amount it has spent. All efforts made in the direction of finding out its worth, together may be called programme evaluation. If the objectives of the programme have been accomplished, the programme can be said to be a success. But it is difficult to measure the changes or effects against objectives. For example, a group of executives may attend a course in human relations, at the end of which their behaviour may be watched. It is difficult to notice the subtle changes changes in their attitudes and behaviour immediately after the programme. The effect of certain programmes can only be noticed in the long run in a more general way while the effect of certain other programmes may be noticed in the short run in a specific way. The results of the programmes are measured against the specific current needs they are established for. Cost reduction, grievance reduction, improvement in report writing are only a few example for the specific needs that the programmes may be established for. - End Of Chapter - LESSON - 16 TECHNIQUES OF TRAINING AND DEVELOPMENT There are mainly two types of techniques by which managers can acquire the knowledge, skills and attitudes and make themselves competent managers. One is through formal training and the other is through on-the-job experiences. On-the-job training is of utmost importance as the real learning takes place only when the learner uses what he has learnt. The saying "An ounce of practice is worth tons of theory" is true whoever said it. But it should also be remembered that class- room training or pedagogical techniques have also got their own importance in gaining new knowledge, new techniques, and broader concepts. Learning is haphazard without theoretical background and learning can never be called learning if it is just theory without practice. When on the job training is properly balanced with the class room training (off-the-job training) the real learning takes place. OFF-THE-JOB TRAINING METHOD 1. Lecture: It is the simplest of all techniques. This is the best technique to present and explain series of facts, concepts and principles. The lecturer organises the material and gives it to a group of trainees in the form of talk. The main uses of lectures in executive development are: i) It is direct and can be used for a larger group of trainees. ii) It presents the overview and scope of the subject clearly. iii) It presents the principles, concepts, policies and experiences in the shortest time. Thus it is a time saving technique. The lectures do not give scope for student participation and may sometimes be boring which in turn hinders learning. Skills can be learnt only by doing and therefore lectures are of no use for technical skills. 2. Conferences and Seminars: A conference seminar is a meeting of several people to discuss the subjects of common interest. Better contribution from members can be expected as each one builds upon ideas of other participants. This method is best suited when a problem has to be analysed and examined from different viewpoints. It helps the members develop their ability to modify their attitudes. Participants enjoy this method of learning as they get an opportunity to express their views. The success of the conference depends on the conference leader. In order to make the conference a success, the conference leader must be able to see that the discussion is through and concentrates on the central problem by encouraging all the participants to develop alternatives and present their viewpoints and by preventing domination by a few participants. 3. Case Studies: Cases are prepared on the basis of actual business situations that happened in various organisation. The trainees are given cases for discussing and deciding upon the case. Then they are asked to identify the apparent and hidden problems for which they have to suggest solutions. The situation is generally described in a comprehensive manner and the trainee has to distinguish the significant facts from the insignificant, analyse the facts, identify the different alternative solutions, select and suggest the best. This whole exercise improves the participants decision-making skills by sharpening their analytical and judging abilities. 4. Role Playing: A problem situation is simulated by asking the participants to assume the role of a particular person in the situation. The participants interact with other participants assuming different roles. Mental set of the role is described but no dialogue is provided. The whole play may be tape-recorded and the trainee may thus be given the opportunity to examine his or her own performance. Role playing gives the participants vicarious experiences which are of much use to understand people better. This method teaches human relations skills through actual practice. Examples of role playing situations are: a grievance discussion, employment interview, a sales presentation etc. 5. Business Games: Under this method, the trainees are divided into groups or different teams. Each has to discuss and arrive at solutions concerning such subjects as production, pricing, research expenditure, advertising etc., assuming itself to be the management of a simulated firm. The other teams assume themselves as competitors and react to the decision. This immediate feedback helps to know the relative performance of each team. The team's cooperative decision promotes greater interaction among participants and gives them the experience in co-operative group processes. All this develops organisational ability, quickness of thinking, leadership and the ability to cope with stress. 6. Programmed Instruction: In recent years, this method has become popular. The subject matter to be learned is presented in a series of carefully planned sequential units. These units are arranged from simple to more complex levels of instruction. The trainee goes through these units by answering questions or filling the blanks. This method is expensive and time consuming. 7. Sensitivity Training: The main objective of sensitivity training is the "development of awareness of and sensitivity to behavioural patterns of one self and others". This development results in the: (i) increased openness with others, (ii) greater concern for others. (iii) increased tolerance for individual differences. (iv) less ethnic prejudice, (v) understanding of group processes, (vi) enhanced listening skills, (vii) increased trust and support. The role played by the trainee here is not a structured one as in role play. It is a laboratory situation where one gets a chance to know more about himself and the impact of his behaviour on others. It develops the managerial sensitivity, trust, and respect for others. One of the limitations of Sensitivity Training is that it extracts a huge emotional cost from the manager. ON-THE-JOB TRAINING DEVELOPMENT METHOD 1. Job Rotation: The transferring of executives from job-to-job and from department to department in a systematic manner is called Job Rotation. When a manager is posted to a new job as part of such a programme, it is not merely an orientation assignment. He has to assume the full responsibility and perform all kinds of duties. The idea behind this is to give him the required diversified skills and a broader outlook, which are very important at the senior management levels. It is up to the management to provide a variety of job experiences for those judged to have the potential for higher ranks before they are promoted. Job rotation increases the interdepartmental cooperation and reduces the monotony of work. It helps the executives to develop general management perspective and does not allow them to confine themselves to their specialised field only. 2. Coaching: In coaching the trainer is placed under a particular supervisor who acts as an instructor and teaches job knowledge and skills to the trainee. He tells him what he wants him to do, how it can be done and follows up while it is being done and correct errors. "Coaching should be distinguished from counselling. Counselling involves a discussion between the boss and his subordinates of areas concerned with the man's hopes, fears, emotions, and aspirations. It reaches into very personal and delicate matters. To be done correctly, counselling demands considerable background and ability on the part of the counselor. If carried out poorly, it may do considerable damage". The act of coaching can be done in several ways. The executive apart from asking them to do the routine work may ask them to tackle some complex problem by giving them chance to participate in decision-making. One of the important limitations of this technique is that the individual cannot develop much beyond the limits of his own boss's abilities. 3. Understudy: "An understudy is a person who is under training, to assume at a future time, the full responsibility of the position currently held by his superior". This method supplies the organisation a person with as much competence as the superior to fill his post which may full vacant because of promotion, retirement or transfer. An understudy may be chosen by the department or its head. He will then be taught what all the job involves and given a feel, for the job. This understudy also learns the decision-making as his superior involves him in the discussion of daily operating problems as well as long term problems. The leadership skills can also be taught by assigning him the task of supervising two or three people of the department. 4. Multiple Management: Multiple Management is a system in which permanent advisory committees of managers study problems of the company and make recommendations t o higher management. It is also called Junior board of executives system. These committees discuss the actual problems and different alternative solutions after which the decisions are taken. The technique of multiple management has certain advantages over the other techniques. They are: i ) members have the opportunity to acquire the knowledge of various aspects of business. ii) it helps to identify the members who have the skills and capabilities of an effective manager. iii) members have the opportunity to participate in the group interaction and thereby gain the practical experience of group decision-making. iv) it is relatively inexpensive method, and v) considerable number of executives can be developed in a short span of time. Please use headphones TRAINING AND DEVELOPMENT IN INDIA The changes in technology, increasing competition, need for rapid industrialism, changing preferences of customers and increasing complexities of human relations necessitates the organisation of training and development in India. At present various industries conduct training and development programmes in addition to the training and development programmes conducted by various institutes. The announcement of economic liberalisation and opening of India economy to the rest of the globe resulted in inflow of advanced technology to India, establishment of various foreign companies in India resulted in heavy competition, need for maintenance of high quality, productivity, adoption of latest technology etc. These changes in external environment and global environment necessitated the conduct of various training courses like Total Quality Productivity Management, Customer Service, Meeting the Competition etc. TRAINING INSTITUTES There are different kinds of institutes providing training programmes. These include: i) In-house Staff Training Centres / Colleges of organisations. ii) Management Associations and Productivity Councils. iii) University Management Departments. iv) Management Consultants and v) Independent Training and Management Development Institutes. PROBLEMS Despite the need for training and its significance, organisation of training programmes faces certain problems. These problems include: i) Duplication in training programmes organised by companies and training institutes; ii) Failure of the institutes in offering the training programmes really based on practice. iii) Relatively little importance is given to the behavioural training programmes. iv) Absence of rapport between the industry and the independent training institutes. v) Inadequate training facilities to train the trainers. vi) Absence of seriousness on the part of trainees. vii)Improper design of the course content and training programmes. viii) Lack of initiative on the part of the superiors to allow the employees to implement the knowledge or skill gained through the training programmes ix)Absence of rewards and awards to the trainers. GOVERNMENT POLICY Government of India instituted a separate Ministry of Human Resource Development in the Union Cabinet with a view to train and develop the human resources of the country. Government policy is favourable towards training and development. Government established various training institutions in addition to encouraging the public sector enterprises to establish and develop their own training institutions. MODEL QUESTIONS 1. Differentiate Training, education and development 2. Describe the steps involved in a training programme 3. Explain the various methods available for evaluating the effectiveness of training programmes. 4. Explain the different principles of learning 5. Analyse the need for Executive Development Programmes. Do you think the systems of executive development programmes now followed in Indian industry are adequate? 6. Write short notes on: a. Identification of Training Needs b. Sensitivity Training c. Programmed Instruction - End Of Chapter - LESSON - 17 TRANSFERS Organisations resort to internal mobility of employees in order to place the right employee in the right job. This type of mobility which is restricted to movement of an employee from one job to another in the same level of organisational hierarchy is termed as transfer. Transfer is defined as "a lateral shift causing movement of individuals from one position to another usually without involving any marked change in duties, responsibilities, skills needed to compensation". In other words transfer is viewed as a change in assignment in which employee moves from one job to another in the same level of hierarchy requiring similar skill involving approximately same level of responsibility, same status and same level of pay. Promotion is upward reassignment of a job, demotion is a downward job reassignment whereas transfer is a lateral or horizontal job reassignment. OBJECTIVES Organisation resort to transfers with a view to attain the following purposes: 1. To meet the organisational requirements: Organisations may have to resort to transfer its employees due to changes in technology, change in volume of production, production schedule, product line, quality of products, change in the job pattern caused by change in organisational structure, fluctuations in the market conditions like demand fluctuations, introduction of new lines and / or dropping of existing lines. All the changes demand the shift in job assignments with a view to place the right man in the right job. 2. To satisfy the employee needs: Employees do need transfer in order to satisfy their desire to work under a friendly superior, in a department / region where opportunities for advancement are bright, in or near their native place or place of interest, doing a job where the work itself is challenging etc. 3. To utilise employee skill, knowledge etc., where they are more suitable or badly needed. 4. To improve employee's professional background by placing him in different jobs of various departments, units, regions etc. This develops the employee and enables him to accept any job without any hesitation. 5. To correct inter-personal conflicts. 6. To adjust the workforce of one section / plant in other section / plan during layoff or closure or adverse business conditions or technological changes. 7. To give relief to the employees who are overburdened or doing complicated or risky work for long period. 8. To punish the employees who violate the disciplinary rules. 9. To help the employees whose working hours or place of work is inconvenient to them. 10. To minimize scope for fraud, bribe etc., which results due to permanent stay and contact of an employee with customers, dealers, suppliers etc. TYPES OF TRANSFERS: Transfers can be classified into the following types: a. Production Transfer : transfers caused due to changes in production b. Replacement transfer : transfers caused due to initiation of replacement of a long-standing employee in the same job. c. Rotation transfer : transfer initiated to increase the versatility of employee d. Shift transfer : transfer of an employee from one shift to another e. Remedial transfer : transfers initiated to correct the wrong placements. f. Penal transfer : transfers initiated as a punishment for in disciplinary action of employees. PROBLEMS OF TRANSFER Despite these benefits some problems are associated with transfers. They are: 1. Adjustment problems to the employee to the new job, place, environment, superior and colleagues. 2. Transfers from one place to another cause much inconvenience and cost relating to housing, education to children etc. to the employee and his family members. 3. Transfer from one place to another result in loss of man-days. 4. Company initiated transfers result in reduction in employee contribution. 5. Discriminatory transfers affect employee morale, job satisfaction, commitment and contribution. However, these problems can be minimized through formulating a systematic transfer policy. Please use headphones TRANSFER POLICY Organisation should clearly specify their policy regarding transfers. Otherwise, superiors may transfer their subordinates arbitrarily when they do not like them. It causes frustration among employees. Similarly subordinates may also request for transfer even for pretty, reasons. Most of the people may ask for transfer to riskless and easy jobs and places. As such organisations may find it difficult to manage the transfers. Hence organisation should formulate a systematic transfer policy. Systematic transfer policy should contain the following items. 1. Specification of circumstances under which an employee will be transferred in the case of company initiated transfer. 2. Specification of a superior who is authorised and responsible to initiate a transfer. 3. Jobs from and to which transfers will be made based on the job specification description and classification etc. 4. The region or unit of the organisation within which transfers will be administered. 5. Reasons which will be considered acceptable for employee - initiated transfers, their order of priority etc. 6. Reasons considered acceptable for mutual transfer of employees. 7. Norms to decide priority when two or more employees request for transfer like priority of reasons, seniority etc. 8. Specifications of basis for transfer like job analysis, merit, length of service etc. 9. Specification of pay, allowances, benefit etc. that are to be allowed to the employee in the new job. 10. Other facilities to be extended to the transferee like special leave during the period of transfer, special allowance for packaging luggage, transportation etc. Generally, line managers administer the transfers and personnel managers assist the line managers in this respect. - End Of Chapter - LESSON 18 PROMOTION When there are vacancies in an organisation, they can be filled up by the internal employees or external candidates. Though the organisation may prefer to fill up the vacancies by the external candidates through the selection procedure, the internal candidates may also apply for the post and may be tested and selected for higher level job in the organisational hierarchy at part with external candidates. Is such upward movement of an employee a promotion? or is it purely selected? It is purely a selection. If the organisation prefers to fill a vacancy only by the internal candidates, it assigns that higher level job to the selected employee from within through promotional tests. Such upward movement can be said as promotion. According to Paul Pigors and Charles A.Myers, "Promotion is advancement of an employee to a better job better in terms of greater responsibility, more prestige or status, greater responsibility, more prestige or status, greater skill and especially increased rate of pay or salary". Arun Monappa and Mirza S.Saiyandian defined promotion as "the upward reassignment of an individual in an organisation's hierarchy, accompanied by increased responsibilities, enhanced status and usually with increased income through not always so". Promotion is the reassignment of a higher level job to an internal employee (which is supposed to be assigned exclusively to internal employee) with delegation of responsibility and authority required to perform that higher level job and normally with higher pay. Thus the main conditions of promotion are: (i) Reassignment of higher level job to an employee than what he is presently performing; (ii) The employee will naturally be delegated with greater responsibility and authority than what he has had earlier; (iii) Promotion normally accompanies higher pay. It means that in some cases the employees perform higher level job and receive the salary related to the lower level job. For example, if a university Professor is promoted to the next higher level of the faculty position i.e. Dean of the faculty, he will not receive may increase in salary. Such promotion is called dry promotion. Promotions may be temporary or permanent depending upon the organisational needs and employee performance. PROMOTION Vs. UPGRADATION Managements can motivate the employees for higher productivity through promotions. But it may not be possible for the management to promote all employees due to limited vacancies at the higher level. Hence management uses another technique to motivate employees i.e., upgradation of the job. Paul Pigors and Charles A.Myers view upgradation an small scale promotion. But upgradation is not promotion of an employee. It is elevating the place of the job in the organisational hierarchy or including the job in higher grade. PURPOSE OF PROMOTION Organisations promote the employees with a view to achieve the following purposes: 1. To utilise the employees skills, knowledge at the appropriate level in the organisational hierarchy resulting in organisational effectiveness and employee satisfaction. 2. To develop competitive spirit and inculcate the zeal in the employees to acquire the skill, knowledge etc. required by higher level jobs. 3. To develop an internal source of an employee's ready to take up jobs at higher levels in the changing environment. 4. To promote employee's self-development and make them await their turn for promotions. It reduces labour turnover. 5. To promote a feeling of contentment with the existing conditions of the company and a sense of belongingness. 6. To promote interest in training, development programmes and in team development areas. 7. To build loyalty and to boost morale. 8. To reward committed and loyal employees. 9. To get rid of the problems created by the leaders of worker's unions by promoting them to the officers levels where they are less effective in creating problems. Having discussed the purposes of promotion, now we study the basis of promotion. CRITERIA FOR PROMOTION / BASIS OF PROMOTION Organisations adopt different criteria for promotion depending upon their nature, size, management etc. Generally they may combine two or more criteria for promotion. The well-established basis of promotions are seniority and merit. The other basis of promotion which is well-practiced in all types of organisations under different shades in favoritisms. Organisations should have the idea of effectiveness of each basis in promotion the right man to the job. Merit as the Basis of Promotion: Merit is taken to denote an individual employee's skill, knowledge, ability, efficiency and aptitude as measured from educational, training and past employment record. The merits of merit system of promotion are: (i) The resources of higher order of an employee can be better utilised at higher level. It results in maximum utilization of human resources in an organisation (ii) Competent employees are motivated to exert all their resources and contribute them to the organisational efficiency and effectiveness (iii) It works as golden hand-cuff to reduce employee turnover. (iv) Further it continuously encourages the employees to acquire new skill, knowledge etc for all around development. Despite these advantages the merit systems suffers from some demerits, they are: 1. Measurement or judging of merit is highly difficult, 2. Many people, particularly trade union leaders, distrust the management's integrity in judging merit. 3. The techniques of merit measurement are subjective. 4. Merit denotes mostly the past achievement, efficiency but not the future success. Hence the purpose of promotion may be served if merit is taken as sole criteria for promotion. Merit should mean future potential but not past performance in case of promotion. Hence it is suggested that organisations should measure the future potentially of the candidate based on the requirements of a job to which he is going to be promoted and take it as merit rather than the past performance. However, past performance can be considered in evaluating and forecasting future success. Some of the demerits of this system can be avoided it the organisation views the merit as future potentiality. Seniority as the Basis of Promotion: Seniority refers to relative length of service in the same job and in the same organisation. The logic behind considering the seniority as a basis of promotion is that there is a positive correlation between the length of service in the same job and the amount of knowledge and the level of skill acquired by an employee in an organisation. This system is also based on the custom that the first in should be given first chance in all benefits and privileges. The advantages of seniority as a basis of promotion are: 1. It is relatively easy to measure the length of service and judge the seniority. 2. There would be full support of the trade unions to this system. 3. Every party trusts the management's action as there is no scope for favouritism and discrimination and judgment. 4. It gives a sense of certainty of getting promotion to every employee and of their turn for promotion. 5. Senior employees will have a sense of satisfaction with this system as the order employees are respected and their inefficiency cannot be pointed out. 6. It minimizes the scope for grievances and conflicts regarding promotion. 7. This system seems to serve the purpose in the sense that employees may learn more with increase in the length of service. In spite of these merits, this system also suffers from certain limitations. They are: 1. The assumption that the employees learn more relative to their length of service is not valid as this assumption has reverse effect. In other words employees learn upto a certain age and beyond that stage the learning ability or the cognitive process diminishes. 2. It demotivates the young and more competent employees and results in employee turnover particularly among the dynamic employees. 3. It kills the zeal and interest to develop, as everybody will be promoted without improvement. 4. Organisational effectiveness may diminish through the deceleration of the human resource effectiveness as the human resource may consist of mostly non-dynamic and old blood. 5. Judging the seniority though it seems to be easy in the theoretical sense, it is highly difficult in practice as the problem like job seniority, company seniority, zonal/regional seniority, service in different organisations, experience as apprentice trainee, researcher, length of service not only by days but by hours and minutes will crop up. Thus the two main basis of promotion enjoy certain advantages and at the same time suffer from certain limitations. Hence a contribution of both of them may be regarded as an effective basis of promotion. Seniority-cum-merit: Managements mostly prefer merit as the basis of promotion as they are interested in enriching organisational effectiveness by enriching its human resources. But trade unions favour seniority as the sole basis for promotion with a view to satisfy the interests of majority of their members. The management, in these days of trade unions regulation and control, cannot go for merit or ability as the sole basis of promotion. Even if the managements go for enriching their human resources, most of the employees may be dissatisfied with the job resulting in instability of employment, lack of commitment loyalty, high rate of absenteeism, increase in grievances and industrial disputes. In addition, if most of the young blood is promoted, the human resource at the higher level may lack maturity, stability of mind and the skill of judgment. A number of benefits are tied to the length of service giving the impression to the employees that the benefit of promotion is also linked to the length of seniority. Though much can be said in favour of seniority, it cannot be taken as the sole basis in view of the effects on organisational effectiveness. Similarly, merit or ability cannot be taken as the sole basis in view of its limitations as discussed above. Hence a combination of both seniority and merit can be considered the basis for promotion satisfying the management for organisational effectiveness and the employees and trade unions for respecting the length of service. In fact satisfying the employees and trade unions will also result in organisational effectiveness through organisational stability, motivation, loyalty and commitment of the employees. A balance between seniority and merit should be struck. There are several ways in striking the balance between these two basis viz. 1.Mininum Length of Service and Merit: Under this method, all those employees who complete the minimum service, say five years, are made eligible for promotion and then merit is taken as the sole criteria for selecting the employee for promotion from the eligible candidates. Most of the commercial banks in India have been following this method for promoting the employees from clerks position to Officer's position. 2.Measurements of Seniority and Merit Through a Common Factor: a) Due weightage is given to seniority and merit (for example 40% for seniority and 60% for merit) b) Length of service is measured by points with the help of assigned weightage (for example one point for every six months of completed service) with a maximum of 40 points. c) Merit is also measured by points with the help of assigned weightage (for example maximum 20 points for academic achievement mostly suitable to the new job, maximum 10 points for past employment performance and maximum 30 points for the suitability of the candidate for future job which can be judged through tests and interview) d) Points assigned to a candidate under both the heads of seniority and merit are added up (for example if a candidate has 10 years of service and is assigned 20 points for seniority and if 15 points are assigned for his second class graduate degree and first class post graduate degree, if 5 points are assigned for his past performance on the job and if 10 points are assigned for his performance in tests and interview, his total merit is determined as 50 points for a maximum of 100 points). e) Merit list is prepared and candidates for promotion are selected on the basis of their ranks (for example, if there are three candidates for one post viz. X, Y, and Z and if their merit points are 50, 75, and 60 respectively, the second candidates i.e. Mr Y is selected for promotion). 3. Minimum Merit and Seniority: In contrast to the earlier methods, minimum score of merit which is necessary for the acceptable performance on the future job is determined and all the candidates who secure minimum score are declared as eligible candidates. Candidates are selected for promotion based on their seniority only from the eligible candidates. Managements promote the employees on any one of these basis depending upon the internal and external environmental factors. Environmental factors include the size and nature of the organisation, nature of job, trade union's influence in addition to political factors or favoritisms and reservations in promotions. Favouritism: Managements give weightage to favoritisms in promoting employees. This basis includes nepotism, friendship, management sponsored trade union leaders and recommendations of political leaders, government officials and other persons to whom the management owes certain obligations and employees who always praise the managers (who take the decisions about promotion), with the sole motive of gaining their favour. Managers may change the norms of either merit or seniority or both in accordance with the qualifications, past performance and experience of those employees whom they wish to favour for promotions. The scope for giving weightage to this basis is relatively more in private sector compared to public sector. But, this basis cannot be preferred widely with the growing strength and regulating power of trade unions. However, there is much scope for operational deviations, though the promotional policy and procedure is clearly and systematically formulated and written. The advantages of this basis are : the management can discharge its obligations towards the political leaders and others and in turn it gets favours from them. But this basis suffers from limitations like: (i) Affecting the morale of employees trade union leaders, (ii) Shift in the employees attitudes and values, in the sense, that the employees aspiring for promotions may resort to the influence, recommendations etc., rather than developing their qualifications or skill. This is in turn affects the organisational health. Reservation in Promotions: Government at the centre issued the orders to government departments to introduce reservations in promotions in addition to selections. Accordingly, these departments have to fill certain percentage of vacancies at the higher level from among the employees belonging to scheduled castes and scheduled tribes. PROBLEMS WITH PROMOTION Though promotion benefits the employee and the organisation, it creates certain problems like disappointment of the candidates resulting from denial of promotions. Promotion disappoints some Employees: Some employees who are not promoted will be disappointed when their colleagues with similar qualifications and experience are promoted either due to favouritism or due to lack of systematic promotion policy. Employees may develop negative attitude and reduce their contributions to the organisation and prevent organisational and individual advancement. Some employees refuse promotion. There is a general tendency that employee accepts promotion. But there are several incidents where employees refuse promotions. These incidents include promotion together with transfer to an unwanted place, promotion to that level where the employee feels that he will be quite incompetent to carry out the job, delegation of unwanted responsibilities, and when trade-union leaders feel that promotion causes damage to their position in trade union. The other problems associated with the promotion are: some superiors will not relieve their subordinates who are promoted because of their indispensability in the present job and inequality in promotional opportunities in different departments, regions and categories of jobs. Promotion problems can be minimized through career counselling by the superiors and by formulating a systematic promotion policy. Please use headphones PROMOTION POLICY Every organisation has to specify clearly its policy regarding promotion based on its corporate policy. The basis characteristics of a systematic promotion policy are: (i) It should be consistent in the sense that the policy should be applied uniformly to all employees irrespective of the background of the persons (ii) It should be fair and impartial. In other words it should not give room for nepotism, favoritisms etc. (iii) Systematic line of promotion channel should be incorporated. (iv) It should provide equal opportunities for promotion in all categories of jobs, departments, and regions of an organisation (v) It should ensure open policy in the sense that every eligible employee should be considered for promotion rather than a closed system which considers only a class of employees. (vi) It should contain clear cut norms and criteria for judging merit, length of service, potentiality etc. (vii) Appropriate authority should be entrusted with the task of making a final decision. (viii) Favouritism should not be a basis for promotion. (ix) It should contain promotional counselling, encouragement, guidance and follow- up regarding promotional opportunities, job requirements and acquiring the required skills, knowledge etc. It should also contain the reinforcing the future chances in the minds of rejected candidates and a provision for challenging the managements decision and action by employee or union within the limits of promotion policy. CONTENTS OF PROMOTION POLICY Promotion policy should contain the following items: 1. The percentage of vacancies to be filled by promotions and by external recruitment in each job family at different levels, in each department, region etc. 2. The basis of promotion i.e. merit, seniority or merit cum seniority. 3. The norms to judge merit, tests to be used to measure merit and potentiality, norms to measure the seniority on the job in the department, in the organisation etc. Clear cut guidelines should also be framed for computing overall seniority: (a) When the employees work in different jobs, departments, organisations or deputation lien (b) when employees avail themselves of the different types of leave facility etc, and when retrenched employees are taken back . Seniority should be clearly specified whether it is job seniority, departmental seniority, zonal seniority or organisational seniority. 4. The weightages to be given for merit and seniority if the basis of merit-cum- seniority is to be followed for promotion. 5. Other criteria to be taken into consideration in case two or more employees are assigned the same rank. 6. The groups of jobs with same job requirements, class of the jobs based on the level of skill requirements. 7. Establishment of clear cut promotional channels from one level to job to another, from one department to another, one unit to another and from one region to another. 8. Necessary qualifications, level of performance on the present job, level of potentialities to be possessed by employees to be considered for promotion. 9. Mode of acquiring the new skills, knowledge and facilities offered by the organisation like guidance by superiors, training facilities, leave facilities for acquiring higher academic qualifications, facilities to attend management development programmes in home or foreign countries etc. 10. Promotion policy should also contain alternatives to promotion when deserving candidates are not promoted due to lack of vacancies at higher level. These alternatives include upgradation, redesignation, sanctioning of higher pay or increments or allowances assigning new and varied responsibilities to the employee by enriching the job or enlarging the job. The other alternative is merit promotion. Under this, all the deserving candidates who could not get promotion due to meager promotional opportunities may be re-designated and sanctioned the pay of a higher level job. This is close to the merit promotion scheme introduced in the Indian Universities and colleges. However, the vertical organisation structure solves the problem of meager promotional opportunities to a certain extent. 11. Provision should be made for immediate relief of the promoted candidates by their present superiors or heads of the departments. An organisation should keep complete personnel data and make it available to the line managers, who make the decisions regarding promotions. Though all the line managers make the decisions, there should be a central agency for coordination. Promotions initially may be for a trial period so as to minimize the mistakes of promotion. Promotion policy once it is formulated, should be communicated to all employees particularly to the trade union leaders. Promotion policy should be reviewed periodically based on the findings of the attitude and morale surveys. - End Of Chapter - LESSON 19 DEMOTION AND DISCIPLINE The remaining type of internal mobility is demotion. It is the opposite of promotion. Demotion is the reassignment of a lower level job to an employee with lesser responsibilities and authority and normally with lower level pay. Organisations use demotions less frequently as it affects employee career prospects and morale. NEED FOR DEMOTIONS Demotions are necessary for the following reasons: 1. Unsuitability of the Employee to Higher Level Jobs: Employees are promoted based on the seniority and past performance. But, some of the employees promoted on those bases may not meet the job requirements of the higher level job. In most cases employees are promoted to the level of their incompetency. Some employees selected for higherlevel jobs may prove to be incompetent in doing that job. Such employees may be demoted to the lower level jobs where their skill, knowledge and aptitude suit to the job requirements. 2. Adverse Business Conditions: Generally adverse business conditions force the organisation to reduce quantity of production, withdrawal of some lines of products, closure of certain departments or plants. In addition, organisations resort to economy drives. Consequently organisations minimize the number of employees. Junior employees will be retrenched and senior employees will be demoted under such conditions. 3. New Technology and New Methods of Operation Demand New and Higher Level Skills: If the existing employees do not develop themselves to meet those new requirements, organisations demote them to the lower level jobs where they suitable. For example, teachers handling 10 th class were demoted to the level of 8 th class teachers when the syllabus was revised and the teachers were found misfit even after training in one school in Andhra Pradesh. 4. Employees are demotion on Disciplinary Grounds: This is one of the extreme steps and as such organisaiton rarely use this measure. Though the demotion seems to be simple it adversely affects the employee morale, job satisfaction etc., as it reduces employee status not only in the organisation but also in the society in addition to deduction in responsibility, authority and pay. Hence there should be a systematic demotion policy. DEMOTION POLICY Organisation should clearly specify the demotion policy. Otherwise the superiors may demote the employees according to their whims and fancies. Systematic demotion policy should contain the following items. 1. Specification of circumstances under which an employee will be demoted, like reduction in operations, indisciplinary cases. 2. Specification of a superior who is authorised and responsible to initiate a demotion. 3. Jobs from and to which, demotions will be made and specifications of lines or ladders of demotion. 4. Specification of basis for demotion like length of service, merit or both. 5. It should contain clear cut norms for judging merit and length of service. 6. It should contain clear cut norms for judging merit and length of service. 7. Specification of provision regarding placing the demoted employees in their original places if the normal conditions are restored. 8. Specification of nature of demotion i.e., whether it is permanent or temporary if it is a disciplinary action. It should also specify the guidelines for determining the seniority of such demand employee. Demotion policy should be consistent, fair and impartial. The Management should prepare the employees gradually to take up demotion when it is inevitable. It may sometimes use the same designations but with less responsibility, status and pay in order to guard the employee's social status when demotions are caused due to adverse economic conditions, technological factors etc. DISCIPLINE Maintenance of harmonious human relations in an organisation depends upon the promotion and maintenance of discipline. No organisation can prosper without discipline. Discipline has been a matter of utmost concern for all organisations. There are some people who believe and state that maintenance of discipline is concerned with only higher echelons of an organisation. But discipline is concerned with employees at all levels. Maintenance of effective discipline in an organisation ensures the most economical and optimum utilization of various resources including human resources. Thus the objective of discipline in an organisation is to increase and maintain business efficiency. Effective discipline is a sign of sound human and industrial relations and organisational health. MEANING Discipline refers to a condition or attitude, prevailing among the employees, with respect to rules regulations of an organisation. Discipline in the broadest sense means orderliness, the opposite of confusion. It does mean a strict and technical observance of rules and regulations. It simply means working, cooperating and behaving in a normal and orderly way, as any responsible employee would do. Discipline is defined as "....a force that prompts individuals or groups to observe the rules, regulations and procedures which are deemed to be necessary for the effective functioning of an organisation." According to Ordway Tead, discipline is ".... the orderly conduct of affairs by the members of an organisation, who adhere to do necessary regulations because they desire to cooperate harmoniously in forwarding the end which the group has in view, and willingly recognise that. To do this their wishes must be brought into a reasonable union with the requirements of group in action." Discipline is said to be good when employees willingly follow company's rules and it is said to be bad when employees follow rules unwillingly or actually disobey regulations. Wester's dictionary gives three basic meanings of the word 'Discipline' viz i) It is training that corrects moulds, strengthens or perfects. ii) It is control gained by enforcing obedience, and iii) It is punishment or chastisement. This definition indicates the aspects of discipline viz. , positive approach and Negative approach. POSITIVE AND NEGATIVE ASPECTS OF DISCIPLINE There are two aspects of discipline viz., Positive and Negative aspects. 1. Positive Aspect: Employees believe in and support discipline and adhere to the rules, regulations and desired standards of behaviour. Discipline takes the form of positive support and reinforcement for approved actions and its aims is to help the individual in moulding his behaviour and developing him in a corrective and supportive manner. This type of approach is called positive approach or constructive discipline or self-discipline. Positive discipline taken place whenever the organisational climate is marked by aspects such as payment of adequate remuneration and incentives, appropriate avenues for career advancement, appreciation of proper performance and reinforcement of approved personnel behaviour or actions etc. all of which motivate employees to adhere to certain rules and regulations or exercise self-control and work to the maximum possible extent. 2. Negative aspect: Employees sometimes do not believe in and support discipline. As such, they do not adhere to rules, regulations and desired standard of behaviour. As such, disciplinary programme forces and constraints the employees to obey orders and function in accordance with set rules and regulations through warnings, penalties and other forms of punishment. This approach to discipline is called negative approach or corrective approach or punitive approach. This approach is also called autocratic approach as the sub-ordinates are given no role in formulating the rules and they are not told why they are punished. Negative or enforced discipline connects that personnel are forced to observe rules and regulations on account of fear or reprimand, fine, demotion, or transfer. But these are helpful in extracting just minimum standard of work from the employees since they work on account of the fear they have got. In fact, punishments, penalties, demotions and transfers provide or establish a climate which de- motivates employees. Hence, such climate is not helpful for the accomplishment of group goals and for enhancing the morale on the part of employees. Therefore, "where the end is not accepted as necessary or desirable, where there is no common aim between the disciplines and disciplined, discipline becomes a mere frustration of human purpose, stunts development of human personality, embitters human relations, for it is then a denial of freedom to the individuals." But, it has been that, "if employment relationship is good in other respects, most employees can be counted on the exercise of a considerable degree of self-discipline. They will respond to positive leadership and need not be threatened or punished". In contrast, if the authority is exercised arbitrarily or if rules of conduct are unreasonable or if employees do not have a sense of adhering to the rules and regulations, discipline is threatened and if it is prolonged, it affects the organisational health. Any programme of discipline will be effective and successful only when it is used to supplement and strengthen self-discipline. CONSTRUCTIVE PROGRAMME OF DISCIPLINE Some of the employees, for various reasons, deviate from the expected standards of behaviour. Hence, it becomes essential to have constructive programme of discipline to deal with these violations. According to Walkins, Dodd, McNaughton and Prasow, a constructive programme of discipline to promote harmonious industrial relations should be developed around the following essential elements. Formulation of a set of clear and reasonable rules, carefully published and administered. Impartial enforcement of these rules by means of announced warnings and penalties, corrective in purpose, proportionate and uniform in their application. Supervisory leadership that is uniformed on disciplinary rules and procedures, but firm in the handling of disciplinary matters. An impartial and uniform procedure for investigation of apparent infractions, whose procedure is subject to review by higher levels of management and includes a system of appeal against disciplinary decisions that are considered unjust. THE RED HOT STOVE RULE Without the continual support and regard to the subordinates, no manager can get the things done. But , disciplinary action against a delinquent employee is painful and generates resentment on his part. Hence, a question arises as to how to impose discipline without generating resentment? This is possible through what Douglas McGregor called the "Red Hot Stove Rules", which draws an analogy between touching a hot stove and undergoing discipline. When one touches a hot stove: a. The burn is immediate. b. He had warning. When the stove was red-hot, he knew what happen if he touched it. c. The effect is consistent. Every time the hot stove is touched it burns. d. The effect is impersonal. A person is burned not because of who he is but because he touched the hot stove. The same thing is true with discipline. The disciplinary procedure should start immediately after an omission is noticed. It should give a clear-cut warning regarding the extent of punishment for an offence. The same punishment should be consistently given for the same type of offence. Irrespective of status, punishment should be same i.e. it should be impersonal. CAUSES OF INDISCIPLINE Indiscipline means disorderliness, insubordination and not following the rules and regulations of an organisation. The symptoms of indiscipline are change in the normal behaviour, absenteeism, apathy, go-slow at work, increase in number and severity of grievances, persistent and continuous demand for overtime allowance, lack of concern for performance etc. The parties responsible for indiscipline in Indian Industries are Trade Unions and Management. Politicalised Trade Union leadership in India encouraged and instigated indiscipline. Intra-Union rivalry and inter-union rivalry are also major causes of indiscipline. Similarly management tactics like deliberate delay in disciplinary procedure, concealed penalties such as transfer to an inconvenient, place at a short notice, maintenance of confidential reports, without holding of pay and the level of sincerity, honesty and commitment of superiors are also responsible for indiscipline in India. DISCIPLINARY PROCEDURE Disciplinary procedure in Indian industries broadly comprises of the following stages: 1. Issuing of Charge sheet to the Employee calling upon him for Explanation: When the management of the establishment comes to the conclusion that an act of misconduct committed by an employee warrants disciplinary action, the concerned employee should be issued a chargesheet. The charge-sheet should indicate the charges of indiscipline or misconduct clearly and precisely. Explanation should also be called from the delinquent employee and for that sufficient time should be given to the employee. Serving of the charge-sheet may be either personally or by post. 2. Consideration of the Explanation: When the delinquent employee admits, unconditional about his misconduct, there is no need for conducting any enquiry further. Besides, when the employer is satisfied with the explanation given by the delinquent employee, there is no need for taking any disciplinary action. On the contrary, when the management is not satisfied with the employees explanation, there is a need for serving a show-cause notice. 3. Show-cause notice: In the show-cause notice, the employer provides another change to the employee to explain his conduct and rebut the charges made against him. Show-cause notice is issued by the manager, who decides to punish the employee. Besides, a notice of enquiry should be sent to the employee and t his should indicate clearly the name of the enquiring officer, time, date and place of enquiry into the misconduct of the employee. 4. Holding of a Full-Fledged Enquiry: The enquiry should be in conformity with the principles of natural justice, that is, the deliquent employee must be given a reasonable opportunity of being heard. The enquiry officer should record his findings in the process of an enquiry. He may also suggest the nature of disciplinary action to be taken. He may also suggest the nature of disciplinary action to be taken. The important steps in domestic enquiry are: preparing and serving the charge sheet, suspension in grave cases, obtaining reply to charge sheet, selecting enquiry officer, conducting enquiry proceedings, holding of enquiry in the free environment, recording findings, submitting enquiry officer's report to the disciplinary authority, decision of the disciplinary authority, communication of the order of punishment. 5. Considering the Enquiry Proceedings and Findings and Making Final Order of Punishment: When the misconduct of an employee is proved, the manager may take disciplinary action against him. While doing so, he may give consideration to the employee's previous record precedents, effects of this action on other employees, consulting other before awarding punishment. No inherent right to appeal has been provided unless the law provides it. In case the employee feels the enquiry is not proper and action unjustified, he must be given a chance to make an appeal. 6. Follow-up: After taking disciplinary action, there should be proper follow- up. The disciplinary action should not make the employee repeat his mistake. Section 11-A of the Industrial Disputes Act, 1947, which was introduced by an amendment in 1971 reads as follows: "Where an industrial dispute relating to the discharge or dismissal of a workman has been referred to a labour court, tribunal or national tribunal, as the case may be, is satisfied that the order of discharge or dismissal was not justified, it may, by its award, set aside the order of discharge or dismissal as the circumstances of the case may require, provided that in any proceedings under the section, the labour court, tribunal or national tribunal, as the case may be, shall rely only on the materials on record and shall not take any fresh ordinance in relation to the matter". INTERVENTION BY A TRIBUNAL Only under the following circumstances can be tribunals exercise the right to consider the case: o When there is a want of good faith o When there is victimisation or unfair labour pratices are used. o When management has been guilty to a basic error or violation of a Principle of natural justice; and o When the findings are baseless and perverse. TYPES OF PUNISHMENT When a delinquent employee is going to be punished, the type of punishment should commensurate with the severity of the omission or misconduct. Different types of punishments resulting from various types of omissions or misconduct are as follows: 1. Oral warning: Whenever an employee commits minor omissions he may be given an oral reprimand by the superior concerned. In such cases, the superior should enlighten the employee as to how to prevent their recurrence. Since repeated warnings may bring down drastically the level of morale of the employee, oral warnings should be used sparingly. 2. Written Warnings: Whenever oral warnings fail to achieve the desired behaviour on the part of an employee, written warnings, which are the first formal state of progressive discipline, may be resorted to . Written warnings are also referred to as pink slips which indicate that certain rights would be withdrawn in case the employee continues his omission or misconduct. 3. Loss of Privileges and Fines: It an employee leaves the work, without taking the permission of the superior, he may not be allowed to select good tools and machine for himself and to move freely in the company. All these might have been the privileges enjoyed hitherto by the employee. Further, if the contract of employment provides for imposition of fines by the employer on the delinquent employee, the employer may resort to them. 4. Punitive Suspension: Under punitive suspension the employer prohibits the employee from performing the tasks assigned to him and the wages are withheld or withdrawn during the period of such prohibition. 5. Withholding of Increments: Under this method, the employer withholds the annual increments of the delinquent employee in a graded scale. 6. Demotion: This is a major punishment under this kind of punishment; an employee is reduced to a lower grade from the grade enjoyed by his earlier. 7. Termination: The employees services can be terminated in the following forms: i) Discharge simpliciter ii) Discharge iii) Dismissal Discharge and Dismissal: When the conduct of an employee is deemed to be incompatible with the faithful discharge of his duties and undesirable or against the interests of the employer to continue him in employment, dismissal will be justified. This is an extreme kind of punishment. But in case of discharge, an employer terminates the employment of delinquent employee either by giving agreed advance notice or by paying money in lieu of such notice. In other words, in discharge, the reciprocal promises and obligations are stated to be discharged. Termination of the service of an employee may not be on account of his misconduct but may be for certain other reasons which do not cast a slur on him. This is referred to as 'discharge simpliciter'. In such a case, if the employee challenges the employer's bona-fides, the employer must prove them. But discharge has acquired a meaning analogue to dismissal and an employee may be punished by way of discharge also. In such case, discharge should not be regarded as 'discharge simpliciter' but discharge in lieu of dismissal. Thus, though both discharge and dismissal culminate in termination of employment, discharge is regarded as some kind of punishment less severe than that of dismissal. Discharge requires either an advance notice or payment of money in lieu thereof, whereas there is no such requirement in case of dismissal. However, dismissal attaches some kind of stigma to the employee concerned or casts a slur on him. Please use headphones Maintaining Discipline: The different approaches to discipline include: (i) Human relations approach, (ii) Human resources approach, (iii) Group discipline approach (iv) The leadership approach, and (v) The judicial approach. The employee is treated as human being and his acts of indiscipline will be dealt from the view point of human values, aspirations, problems, needs, goals, behaviour etc. Under human relations approach, the employee is helped to correct his deviations. The employee is treated as a resource and the acts of indiscipline are dealt by considering the failures in the areas of development, maintenance and utilization of human resources under the human resources approach. The group, as a whole, sets the standards of discipline, and punishments for the deviations. The individual employees are awarded punishments for their violation under the group discipline approach. Every superior administers the rules of discipline and guides, trains and controls the subordinates regarding disciplinary rules under the leadership approach. In Judicial approach, in- disciplinary cases are dealt on the basis of legislation and court decisions. The Industrial Employment (Standing Orders) Act, 1946, to a certain extent, prescribed the correct procedure that should be followed before awarding punishment to an employee in India. No other enactment prescribed any procedure for dealing with disciplinary problems. But over a period of time, a number of principles regarding the basic formalities to be observed in disciplinary procedures emerged, gradually resulting from the awards of several Industrial Tribunals, High Courts and the Supreme Court. PRINCIPLES OF NATURAL JUSTICE The principles indicated by the Supreme Court for proceeding against a delinquent employee are known as the "Principles of Natural Justice". These include: a. The delinquent employee must be indicated in unambiguous terms about the charge levelled against him. b. The delinquent employee must be given opportunity for conducting his defence. i.e. by cross examination of the witnesses. c. The enquiry should be fair and the enquiry officer should be impartial. d. The evidence should be put forward in the presence of the employee charged. e. Punishment should be proportionate to the misconduct committed. - End Of Chapter - LESSON - 20 COMPENSATION One of the most important factors in human resource management is compensation management. The soundness of compensation management depends upon the amount of wage or salary paid to an employee for fair day's work. Despite the conclusions of morale studies, wage or salary is significant to most of the employees as it constitutes a major share of their income. "Pay, in one form or another is certainly one of the main springs of motivation in our society". Salary provides more than a means of satisfying the physical needs - it provides recognition, a sense of accomplishment and determines social status. Hence, formulation and administration of sound remuneration policy to attract and retain right personnel in right position is the prime responsibility of an organisation. Development and administration of sound wage and salary policies are not only important but also complex managerial functions. The complexities stem from the fact that on the one hand a majority of union-management problems and disputes relate to the question of wage payment and on the other, remuneration is often one of the largest components of cost of production. Thus it influences the survival and growth of an organisation to a greatest extent. The influence of remuneration over distribution of income, consumption, savings, employment and prices is also significant. This aspect assumes all the more importance in a developing economy like India where it becomes necessary to take measures for a progressive reduction of the concentration of income and/or to combat inflationary trends. Thus the wage policy of an organisation should not become an evil to the economy. TERMINOLOGY AND CONCEPTS What is wage and salary administration? Wage and Salary administration is essentially the application of a systematic approach to the problem of ensuring that employees are paid in a logical, equitable and fair manner. Wage: Wage and Salary are often discussed in loose sense, as they are used interchangeably. But ILO defined the term wage as "the remuneration paid by the employer for the services of hourly, daily, weekly and fortnightly employees". It also means that remuneration paid to production and maintenance or blue collar employees. Salary: The term salary is defined as the remuneration paid to clerical and managerial personnel employed on monthly or annual basis. This distinction between wage and salary does not seem to be valid in these days of human resources approach where all employees are treated as human resources and are viewed at par. Hence, these two terms can be used interchangeably. As such, the term wage and / or salary can be defined as the direct remuneration paid to an employee compensating his services to an organisation. Salary is also known as basic pay. Earnings: Earnings are the total amount of remuneration received by an employee during a given period. These include salary (pay) dearness allowance, house rent allowance, city compensatory allowance, other allowance, overtime payments etc. Nominal Wage: It is the wage paid or received in monetary terms. It is also known as money wage. Real wage: Real wage is the amount of wage arrived after discounting nominal wage by the living cost. It represents the purchasing power of money wage. Take home salary: It is the amount of salary left to the employee after making authorised deductions like contribution to the provident fund, life insurance premium, income tax and other charges. Minimum Wage: It is the amount of remuneration which could meet the "normal needs of the average employee regarded as a human being living in a civilized society". It is defined as the amount or remuneration, "which may be sufficient to enable a worker to live in reasonable comfort, having regard to all obligations to which an average worker would ordinarily be subjected to". Statutory minimum wage: It is the amount of remuneration fixed according to the provisions of the Minimum Wages Act, 1948. The need based minimum wage: It is the amount of remuneration fixed on the basis of norms accepted at the 15 th session of the Indian Labour Conference held at New Delhi in July, 1957. The conference recommended that minimum wages should ensure the minimum human needs of industrial workers. The norms laid down by it are: (i) In calculating the minimum wage, the standard working class family should be taken to comprise three consumption units for one corner, the earnings of women, children and adolescent being disregarded. (ii) Minimum food requirements should be calculated on the basis of a set intake of calories as recommended by Dr.Aykroyd for an average Indian adult of moderate activity. (iii) Clothing requirements should be estimated on the basis of per capita consumption of 18 yards per annum which would give for the average workers family of four a total of 72 yards. (iv) In respect of housing, the rent corresponding to the minimum area provided for, under Government Industrial Housing Scheme should be taken into consideration in fixing the minimum wage. (v) Fuel, lighting and other miscellaneous, items of expenditure should constitute 20 per cent of the total minimum wage. The living wage: According to the committee on Fair wages, the living wage is the highest amount of remuneration and naturally it would include all amenities which a citizen living in a modern civilized society is entitled to expect, when the economy of the country is sufficiently advanced and the employer is able to meet the expanding aspirations of his workers. The fair wage: Fair wages are equal to that received by workers performing work of equal skill, difficulty or unpleasantness. Incentive wage: This is the amount of remuneration paid to a worker over and above the normal wage as an incentive for employees contribution to the increased production or saving in time or material. Wage rate: It is the amount of remuneration for a unit of time excluding incentives, overtime pay etc. Standard wage rate: It is the amount of wage fixed for a unit of time fixed on the basis of job evaluation standards. NEED FOR SOUND SALARY ADMINISTRATION Management has to formulate and administer the salary policies on sound lines: (i) Most of the employee's satisfaction and work performance are based on pay (ii) Internal inequalities in pay are more serious to certain employees. (iii) Employees compare their pay with that of other (iv) Employees ract only to gross external inequities (v) Employee comparisons of pay are uninfluenced by levels of aspirations and pay history, and (vi) Employees compare the pay of different employees with their skill, knowledge, performance etc. OBJECTIVES OF COMPENSATION FUNCTIONS The objectives of wage and salary administration are numerous and sometimes conflict with each other. The important among them are: 1. To acquire qualified and competent personnel: Candidates decide upon their career in a particular organisation mostly on the basis of the amount of remuneration of organisation offers. Qualified and competent people join the best-paid organisations. As such, the organisations should aim at payment of salaries at that level, where they can attract competent and qualified people. 2. To retain the present employees: If the salary level does not compare favourably with that of other similar organisations, employees quit the present one and join other organisations. The organisation must keep the wage levels at the competitive level, in order to prevent such quit. 3. To secure internal and external equity: Internal equity does mean payment of similar wages for similar jobs within the organisation. External equity implies that payment of similar wages to similar jobs in comparable organisations. 4. To ensure desired behaviour: Good rewards reinforce desired behaviour like performance, loyalty, accepting new responsibilities and changes etc. 5. To keep labour and administrative costs in line with the ability of the organisation to pay. 6. To project in public as progressive employer and to comply with the wage legislations. 7. To pay according to the content and difficulty of the job and in tune with the effort and merit of the employee. 8. To facilitate pay roll administration of budgeting and wage and salary control. 9. To simplify collective bargaining procedures and negotiations. 10. To promote organisation feasibility. SYSTEMS TO ACHIEVE THE OBJECTIVES: The above mentioned objectives are achieved by the use of the following systems: 1. Job evaluation: All jobs will be analysed and graded to establish the pattern of internal relationships. It is the process of determining relative worth of jobs. It includes selecting suitable job evaluation techniques, classifying jobs into various categories and determining relative value of jobs in various categories. 2. Wage and Salary ranges: Overall salary range for all the jobs in an organisation is arranged. Each job grade will be assigned a salary range. The individual salary ranges will be fitted into an overall range. 3. Wage and salary adjustments: Overall salary grades of the organisation may be adjusted based on the data and information collected about the salary levels of similar organisations. Individual salary level may also be adjusted based on the performance of the individual employees. PRINCIPLES: There are several principles of wage and salary plans, policies and practices. The important among them are: 1. Wage, Salary plans and policies should be sufficiently flexible. 2. Job evaluation must be done scientifically. 3. Wage and salary administration plans must always be consistent with over all organisational plans and programmes. 4. Wage and salary administration plans and programmes should be in conformity with the social and economic objectives of the country like attainment of equality in income distribution and controlling inflationary trends. 5. Wage and salary administration plans and programmes should be responsive to the changing local and national conditions. 6. These plans should simplify and expedite other administrative processes. FACTORS INFLUENCING WAGE AND SALARY ADMINISTRATION: Generally a large number of factors influence the salary levels in an organisation. Significant among them are: i. Remuneration in comparable industries, ii. Firm's ability to pay, iii. Cost of living, iv. Productivity, v. Union pressure and strategies and vi. Government legislations. i. Remuneration in comparable industries: Prevailing rates of remuneration in comparable industries constituted an important factor in determining salary levels. The organisation, in the long run, must pay at least equal to the going rate for similar jobs in similar organisations. Further, the salary rate for the similar jobs in the firms located in the same geographical region also influence the wage rate in the organisation. The organisation has to pay the wages equal to that paid for similar jobs in comparable industries in order to secure and retain the competent employees, to follow the directive of courts of law, to meet the trade unions demands, to satisfy the employee need for same social status as that of same categories of employees in comparable organisations. Comparable industries constitute the organisations engaged in the same or similar activities, of the same size, in the similar type of management. i.e., public sector or under the management of same owners, organisations located in the same geographical region etc. ii. Firms ability t o pay: One of the principle considerations that weighs with the management in fixing the salary levels is its ability to pay. But in the short run, the influence of ability to pay may be practically nil. However, in the long run, it is quite an influential factor. In examining the paying capacity of an organisation, apart from profitability, various expenses that the industry has to bear, certain trends in prices of products / services that are to be charged by the industry should also be taken into account. In addition, total cost of employees (salaries, allowance, cost of fringe benefits etc) should be taken into consideration in determining the ability to pay. Trade Unions demand higher wages when the company's financial position is sound. But they may not accept wage reduction when the company's financial position is in doldrums. Hence, the management has to take decisions judiciously. Further, certain incentives are linked to the profitability. Thus, whatever the influence of other factors may be, the organisation cannot pay more than its ability to pay in the long run. iii) Cost of living: The cost of living is another important factor that influences the quantum of salary. The employees expect that their purchasing power be maintained at least at the same level, if not increased by adjusting wages to changes in cost of living. In fact, in recent years, in advanced countries, "a number of labour agreements have 'escalator' clauses, providing for automatic wage and salary increase as cost of living index raises". Dearness Allowance is an allowance granted to the employees with a view to combating on slaughts of soaring prices. Please use headphones iv) Productivity: An interesting development in wage determination has been productivity standard. This is based on the fact that productivity increase is also the result of employee satisfaction and contribution to the organisation. But wage productivity linkage does not appear to be so easy since many problems crop up in respect of the concept and measurement of productivity. But, although the wages are not linked directly to the productivity, in an organisation, changes in productivity have their impact on remuneration. This criteria received consideration of wage boards, "not only because it constituted a factor in the fixation of 'fair wage' but also because it was directly related to such questions as desirability of extending the system of payment of result". v) Union pressure and strategies: The wages are also often influenced by the strength of unions, their bargaining capacity and their strategies. Arthur M. Ross, concluded that "real hourly earnings have advanced more sharply in highly organised industries than in less unionised industries". Unions pressures management through their collective bargaining strategies, political tactics any by organising strikes etc. Trade union's influence may be on the grounds that wages in comparable industries, firm's financial position, rising living cost, government regulations etc. It may be noted here that the unions may have the wage raise particularly in those industries where the wage level is below that of other comparable industries. vi) Government legislations: Government legislations influence wage determination. The two important legislations which affect wage fixation are: the Payment of Wages Act, 1936 and the Minimum Wages Act, 1948. The important provisions of the Payment of Wages Act, 1936 are: ensuring proper payment of wages and avoiding all malpractices like non-payment, under payment, delayed and irregular payment, payment in kind and under measurement of work. The Act covers all employees drawing the wage upto Rs.1,000 per month. The act stipulated that the Organisations with less than hundred workers should pay the wage by seventh and the organisations with more than 100 employees should pay by tenth of next month. The Act also stipulates time for payment of dues to the discharged employees. Under the Act, fines can be levied but after due notice to the employees deductions towards fine are restricted to 1/3 rd of the wage. The important provisions of the Minimum Wage Act, 1948 are: The Act seeks to protect the workers from underpayment of wages for their efforts. It presented the guidelines for the fixation of minimum wage which is just sufficient to meet the basic needs of workers and to keep a man's 'body and soul' together. Statutory minimum wage is the wage determined according to the procedure prescribed by the relevant provisions of the Act. The Act provides for fixing of: (i) Minimum wage in certain employment, (ii) Minimum time rate, (iii) Minimum piece rate, (iv) Guaranteed time rate, (v) Overtime rate, and (vi) Basic pay and D.A. The Act also provides for revision of minimum wage at fixed intervals. WAGE FIXATION INSTITUTIONS IN INDIA Wages are fixed by the following institutions in India. They are: (i) collective bargaining and adjudication. (ii) Wage Boards, and (iii) Pay Commissions. i) Collective bargaining and adjudication: Collective bargaining is a procedure in which compromise is reached through balancing of opposed strengths. It is a means through which employee problems relating to various issues including wages are settled. If these problems are not settled through collective bargaining, they may be settled through voluntary arbitration or adjudication. The awards given or reached by or through the arbitrator or adjudicator or collective bargaining agreements, form the basis for fixing wages in various organisations. ii) Wage Boards: This is one of the important institutions set up by the Government of India for fixation and revision of wages. Separate wage boards are set up for separate industries. Government of India started instituting Wage Boards in accordance with the recommendations of Second Five Year Plan, which reiterated by the Third Five Year / Plan. Wage Board consists of one neutral Chairman, two independent members and two or three representatives of workers and management each. The wage Boards have to study various factors before making its recommendations. The recommendations of the Wage Boards are first referred to the Government for its acceptance. The Government may accept with or without modification or reject the recommendations of the Wage Board. The recommendations accepted by the Government are enforceable by the parties concerned. The Wage Boards take the following factors into consideration for fixing or revising the wages in various industries. 1.Job evaluation 2.Wage rates for similar jobs in comparable industries. 3.Employees productivity 4.Firms ability to pay. 5.Various wage legislations. 6. Existing level of wage differentials and their desirability 7. Government's objectives regarding social justice, social equality, economic justice and economic equality. 8. Place of the industry in the economy and the society of the country and the regional. 9. Need for incentives, improvement in productivity etc. The wage boards fix and revise various components of wages like basic pay, dearness allowance, incentive earnings, overtime pay, house rent allowance and all other allowances. ii) Pay commissions: This is another institution which fixes and revises the wages and allowances to the employees working in government departments. Pay Commissions are separately constituted by Central and State Governments. Central Government so far has appointed four pay Commissions. The First Pay Commission: This Commission was appointed by the Central Government in the year 1946 with Varadachariar as Chairman. This Commission stated that the state must now take some steps to implement the living wage principle. The Commissioner recommended the minimum wage at Rs.30/- for the lowest grade of Class IV employee in the Central Government. The Commission felt that the hardships of the lowest paid employees should be relieved. It allowed 100% neutralisation in cost of living index. The Secondary Pay Commission: The Central Government appointed the Second Pay Commission in August 1957 (Chairman Justice B. Jagannadha Das) with a view to recommending revised pay scales for different classes of employees of Central Government. The Commission revised the pay scales by merging 50% of the dearness allowance with the basic pay and it recommended Rs.80 (Rs.70 as remuneration payable to a Central Government employee. The Third Pay Commission (1970-73): Due to the continuous demand made by the employees of Central Government and their organisations, the Government appointed Third Pay Commission in April 1970 under the Chairmanship of Raghubir Dayal, retired Judge of the Supreme Court of India with a view to examining the principle which would give the structure of remuneration and conditions of service of Central Government employees and to consider and recommend the desirable and feasible changes in the structure of remuneration and conditions of service of Central Government employees. The Commission, in its report (April 1973), observed the tests of 'inclusiveness', 'comprehensibility' and 'adequacy'. Keeping in view various principles recommended for devising the pay structure, the Commission brought down the number of scales to only 80. But the main demand of the employees since 1957 had been for a need based minimum wage according to the norms of the 15 th Indian Labour Conference. After making some modifications to the norms of the conference, the Commission has evolved its own concept of the need based wage which is Vegetarian died and three adult consumption units. Though the cost of need-based wage, according to the Commissions concept came to Rs.196 per mensum, the Commission recommended a minimum remuneration of Rs.185 per month, for a whole time employee at the start of his career. The Commission has also recommended that the system of special pay should be used as sparingly as possible. It has recommended continuance of the existing rates as Special Pay. The Fourth Pay Commission: The Central Government appointed the Fourth Pay Commission in July 1983 in response to the demands made by the trade unions for the revision of pay scales. The Commission submitted its report in June 1986. The Commission was asked to examine the pay structure, conditions of service of Central Government employees, taking into consideration the economic conditions in the country, resources of the Government, pay scales of the Public Sector and State Government employees. The Pay Commission has taken into consideration the following factors: 1. Incidence of poverty in the country 2. Earnings of employees in State Government, Private Sector, Unorganised and Agricultural Sectors. 3. Enforcement of the Minimum Wages Act 4. Plan allocations. 5. Cost of living index 6. Share of Government employees in the National Income. The important recommendations of the Pay Commission are: 1. Reduction of Pay Scales from 156 to 136 2. Minimum Pay to the lowest paid Central Government employee is Rs.750/- 3. Rationalisation and liberalisation of dearness allowance formula. 4. Substantial enhancement of House Rent Allowance. 5. Reimbursement of Medical Expenses. Government has modified these recommendations favourably and accepted them. Some of the trade unions were satisfied with the recommendations. But certain other trade unions criticised the Fourth Pay Commissions recommendations on the following grounds. a. Pay is not just, fair and equal for equal work and responsibilities. b. Pay Commission created feelings to conflict among employees. c. A number of anamolies cropped up with the implementation of pay scales based on the recommendations of the Fourth Pay Commission. EXECUTIVE COMPENSATION PLANS There is a feeling among the trade unions circles that executives get a very high salary including perks. Hence, they view that the level of executive compensation should be contained in view of the objectives of socialistic pattern of society. However, the existing provisions of managerial compensation would provide a clear picture. Section 198 of the Companies Act, 1956 says that the total managerial remuneration payable by a public limited company to its directors, secretaries and treasures and managers in a financial year shall not exceed 11% of the net profits of the company. Sections 198(4) of the Companies Act provides that in the absence or inadequacy of profits, a maximum of Rs.50,000 may be paid to Managing Director and all directors. In exceptional cases, the Government may permit payment of higher salary. Section 309(4) of the Act stipulates certain ceilings on the remuneration payable. The Government issued guidelines in November, 1978. According to these guidelines, the overall salary was restricted to Rs.72,000 per annum and perks were restricted to Rs.62,000 per annum. Managers and organisations were highly critical about these guidelines. They felt that they discourage initiative and hamper the skill of managers. Peter F. Drucker, who was in India during November and December, 1978, thought that such ceilings should cause migration of talent from India. He suggested that Indian managers should not accept lower salaries and they should demand tax free perks as is the custom in Sweden. Ratio between the lowest and highest salary of managers in Sweden is 1:5. But the tax fee benefits are enormously granted to the executives. In view of the criticism, the government announced some liberalisations to the guidelines. Overall ceiling is as it was at Rs.60,000 but it is increased to Rs.62,700 in case of Bombay. Rates of house rent allowance to salary are raised to 45% in case of Bombay, 40% in case of Delhi, 35% in case of Calcutta and 30% in case of other places. An allowance of 10% is allowed for cooking gas, electricity etc. Expenditure on pensionary benefits is increased upto 25% of the salary. Medical expenses allowance equal to three months salary is allowed. However, the Gujarat High Court in May, 1980 and the Delhi High Court in August, 1980 struck down the guidelines of November, 1978 as violative of Section 637-A, of the Companies Act, 1956. The Government in U.K. accepted fair remuneration for executives in public sector with a view to attracting talent whereas the Government in India reduced the managerial compensation in private sector with a view of equalising them with those of public sector. Thus the government wishes to control its burden at the cost of talent and skill. However, recently as part of liberalisation policy, government has released, most of its restrictions on managerial compensation in private sector. BENEFITS AND EMPLOYEE SERVICES The term fringe benefits refer to various extra benefits provided to employees, in addition to the compensation paid in the form of wage of salary. Balcher defines these benefits as, "any wage cost not directly connected with the employee's productive effort, performance, service or sacrifice". Cockmar, defines fringe benefits as, "those benefits which are provided by an employer to or for the benefit of an employee and which are not in the form of wages, salaries and time related payments". Different terms are used to denote fringe benefits. They were welfare measures, social charges, social security measures, supplements, sub-wages, employee benefits etc. The ILO described 'fringe benefits' as : "Wages are often augmented by special cash benefits, by the provision of medical and other services or by payments in kind, that forms part of the wage for expenditure on the goods and services. In addition, workers commonly receive such benefits as holidays with pay, low cost meals, low- rent housing etc. Such additions to the wage proper are sometimes referred to as fringe benefits. Benefits that have no relation t o employment or wages should not be regarded as fringe benefits even-though they may constitute a significant part of the worker's total income". Thus fringe benefits are those monetary and non-monetary benefits given to the employees during and post-employment period which are connected with employment but not to the employees contributions to the organisation. COVERAGE The term 'fringe benefits' covers bonus, social security measures, retirement benefits like Provident Fund, gratuity, pension, workmens compensation, housing, medical, canteen, cooperative credit, consumer stores, educational facilities, recreational facilities, financial advice and so on. Thus fringe benefits cover a number of employee services and facilities provided by an employer to this employee and in some cases in their family members also. Welfare of employee and his family members is an effective advertising and also a method of buying the gratitude and loyalty of employees. But, while some employers provide these services over and above the legal requirements to make effective use of their work force, some restrict themselves to those benefits which are legally required. FRINGE BENEFITS During the World War II certain non-monetary benefits are extended to employees as a means of neutralising the effect of inflationary conditions. These benefits, which include housing, health, education, recreation, credit, canteen etc., have been increased from time to time as a result of the demands and pressures from trade unions. It has been recognised that these benefits help employees in meeting some of their lifes contingencies and to meet the social obligation of employers. Most of the organisations have been extending the fringe benefits to their employees, year after year, for the following reasons: 1. Employee demands: Employees demand a more and varied types of fringebenefits rather than pay hike because of reduction in tax burden on the part of employees and in view of the gallping price index and cost of living 2. Trade union demands: Trade unions complete with each other for getting more and a new variety of fringe benefits to their members such as life insurance, holiday resorts etc. If one union succeeds in getting one benefit, the other union persuades management to provide a new model fringe. Thus, the competition among trade unions within an organisation results in more and varied benefits. 3. Employer's preference: Employers also prefer fringe benefits to pay-hike, asfringe benefits motivate the employees for better contribution to the organisation. It improves morale and works as an effective advertisement. 4. As a social security: Social security is a security that society furnishes through appropriate organisation against certain risks to which its members are exposed. These risks re contingencies of life like accidents and occupational diseases. Employer has to provide various benefits like safety measures, compensation in case of involvement of workers in accidents, medical facilities etc. with a view to provide security to his employees against various contingencies. 5. To improve human relations: Human relations are maintained when the employees are satisfied economically, socially and psychologically. Fringe benefits satisfy the workers economic, social and psychological needs. Consumer stores, Credit facilities, Canteen, recreational facilities, etc. satisfy the workers social needs, whereas retirement benefits satisfy some of the psychological problems about the post-retirement life. However, most of the benefits minimize economic problems of the employee. Thus fringe benefits improve human relations. OBJECTIVES OF FRINGE BENEFITS The important objectives of fringe benefits are: 1. To create and improve sound industrial relations. 2. To boost up employee morale 3. To motivate the employees by identifying and satisfying their unsatisfied needs. 4. To provide qualitative work environment and work life. 5. To provide security to the employees against social risks like old age benefits and maternity benefits. 6. To protect the health of the employees and to provide safety to the employees against accidents. 7. To promote employees welfare by providing welfare measures like recreation facilities. 8. To create a sense of belongingness among employees and to retain them. Hence, fringe benefits are called golden hand-cuffs. 9. To meet requirements of various legislations relating to fringe benefits. COVERAGE OF FRINGE BENEFITS Organisations provide a variety of fringe benefits. Dale Yoder and Paul D. Standohar classified the fringe benefits under four heads as given hereunder: 1. For employment security: Benefits under this head include unemployment insurance, technological adjustment pay, leave travel pay, overtime pay, leave for negotiation, leave for maternity, leave for grievances, holidays, cost of living, bonus, call-back pay, lay-off pay, retiring rooms, jobs to the sons / daughters of the employees and the like. 2. For health protection: Benefits under this head include accident insurance, disability, insurance, health insurance, hospitalisation, life insurance, medical care, stick benefits, sick leave etc. 3. For old age and retirement: Benefits under this category include: deferred income plans, pension, gratuity, provident fund, old age assistance, old age counselling, medical benefits for retired employees, travelling concession to retired employees, jobs to sons / daughters of the decreased employee and the like. 4. For personal identification, participation and stimulation: This category covers the following benefits: anniversary awards, attendance bonus, canteen, cooperative credit societies, cooperative consumer societies, educational facilities, beauty parlour services, housing, income, tax paid, counselling, quality bonus, recreational programmes, stress counselling, safety measures etc. TYPES OF FRINGE BENEFITS Robert H. Hoge classified the fringe benefits as follows: 1. Payment for time not worked: Benefits under this category include: sick leave with pay, vacation pay, paid rest and relief time, paid lunch periods, grievance time, bargaining time, travel time etc. 2. Extra-pay for time worked: This category covers the benefit such as: premium pay, incentive bonus, shift premium, old age insurance, profit sharing, unemployment compensation, Christmas bonus, Deevali or Pooja bonus, food cost subsidy, housing subsidy, recreation etc. The following classification of fringe benefits is adopted for discussion about the fringe benefits in India. 1. PAYMENT FOR TIME NOT WORKED This category includes : (a) Hours of work, (b) Paid holidays (c) Shift premium, (d) Holiday pay, and (e) Paid vacation. a. Hours of work: Section 51 of the Factories Act, 1948 specifies that no adult worker shall be required to work in a factory for more than 48 hours in any week. Section 54 of the Act restricts the working hours to 9 in any day. In some organisations, the number of working hours are less than the legal requirements. b. Paid holidays: According to the Factories Act, 1948, an adult worker shall have a weekly paid holiday, preferably Sunday. When a worker is deprived of weekly holidays, he is eligible for compensatory holidays of the same number in the same month. Some organisations allow the workers to have two days as paid holidays in a week. c. Shift Premium: Companies operating second and third shifts, pay a premium to the workers who are required to work during the odd hours shift. d. Holiday pay: Generally organisations offer double the normal rate of the salary to those workers, who work on paid holidays. e. Paid vacation: Workers in manufacturing, mining and plantations who worked for 240 days during a calendar year are eligible for paid vacation at the rate of one day for every 20 days worked in case of adult workers and at the rate of one day for every 15 days worked in case of child workers. II) EMPLOYEE SECURITY Physical and job security to the employee should also be provided with a view to promoting security to the employee and his family members. The benefits of confirmation of employee on the job creates a sense of job security. Further, a minimum and continuous wage or salary gives a sense of security to the life. The payment of Wages Act, 1936. The Minimum Wages Act, 1948. The Payment of Bonus Act, 1965, provides income security to the employees. a. Retrenchment compensation: The Industrial Disputes Act, 1947 provides for the payment of compensation in case of lay-off and retrenchment. The non-seasonal industrial establishments employing 50 or more workers have to give one months notice or one months wages to all the workers who are retrenched after one years continuous service. The compensation is paid at the rate of 15 days wage for every completed years of service with a maximum of 45 days wage in a year. Workers are eligible for compensation as stated above even in case of closing down of undertakings. b. Layoff compensation: In case of lay off, employees are entitled to lay-off compensation at the rate equal to 50% of the total of the basic wage and dearness allowance for the period of their lay-off except for weekly holidays, Layoff compensation can normally be paid upto 45 days in a year. III) SAFETY AND HEALTH Employees safety and health should be taken care of in order to protect the employee against accidents, unhealthy working conditions, and to protect the workers productive capacity. In India, the Factories Act, 1948, stipulated certain requirements regarding working conditions with a view to provide safe working environment. These provisions relate to cleanliness, disposal of waste and effluents, ventilation and temperature, dust and fume, artificial humidification, over-crowding, lighting, drinking water, latrine, urinals, and spittoons. Provisions relating to safety measures include fencing of machinery, work on or near machinery to motion, employment of young persons on dangerous machines, striking gear and devices for cutting off power, self-acting machines, prohibition of employment of women and children near cotton openers, hoists and lifts, lifting machines, chains, ropes and lifting tackles, revolving machinery, pressure plant, floors, excessive weights, protection of eyes, precautions against dangerous fumes, explosive or inflammable dust, gas, etc. Precautions in case of fire, power to require specifications of defective parts or test of stability, safety of buildings and machinery etc. Workmens compensation: In addition to safety and health measures, provision for the payment of compensation has also been made under Workmens Compensation Act, 1923. The Act is intended to meet the contingency of invalidity and death of a worker due to an employment injury or an occupational disease, specified under the Act at the sole responsibility of the employer. The Act covers the employees whose wages are less than Rs.500 per month. Amount of compensation depends on the nature of injury and monthly wages of the employee . Dependents of the employee are eligible for compensation in case of death of the employee. HEALTH BENEFITS Today various medical services like hospital, clinical and dispensary facilities are provided by organisations not only to employees but also to their family members. Employees State Insurance Act, 1948 deals comprehensively about the health benefits to be provided. This Act is applicable to all factories, establishments running with power and employing 20 or more workers. Employees in these concerns and whose wages do not exceed Rs.1,000 per month are eligible for benefits under the Act. Benefits under this Act Include: a. Sickness benefit: Insured employees are entitled to get cash benefit for a maximum of 56 days in a year under this benefit. b. Maternity benefit: Insured women employees are entitled to maternity leave for12 weeks (six weeks before the delivery and six weeks after the delivery) in addition to cash benefit of 75 paise per day or twice of sickness benefit, whichever is higher. c. Disablement benefit: Insured employees, who are disabled temporarily or permanently (partial or total) due to employment injury add / or occupational diseases are entitled to get the cash benefit under this head. d. Dependent's benefit: If an insured person dies as a result of an employment injury sustained as an employee, his dependents who are entitled to compensation under the Act, shall be entitled to periodical payments referred to as dependent benefit. e. Medical benefit: This benefit shall be provided to an insured employee or to a member of his family where the benefit is extended to his family. This benefit is provided in the following forms: Outpatient treatment, or attendance in a hospital, dispensary, clinic or other institutions; or by visits to the home of the insured person; or treatment as in-patient in a hospital or other institutions. An insured person shall be entitled to medical benefits during any week for which contributions are payable, or in which he / she is eligible to claim sickness or maternity benefit or eligible for disablement benefit. FRINGE BENEFITS IN INDIA Industrial life generally breaks joint family system. The saving capacity of the employees is very low due to lower wages, high living cost and increasing aspirations of the employees and his family members. As such, employers provide some benefits to the employees, after retirement and during old age, with a view to create a feeling of security about the old age. These benefits are called old age and retirement benefits. These benefits include (a) provident fund, (b) pension, (c) deposit linked insurance, (d) gratuity, and (e) medical benefit. a. Provident Fund: This benefit is meant for economic welfare of the employees. The Employees Provident Fund, Family Pension Fund and Deposit Linked Insurance Act, 1952 provides for the institution of Provident Fund for employees in factories and establishments. Provident Fund Scheme of the act provides for monetary assistance to the employees and / or their dependents during post-retirement life. Thus, this facility provides security against social risks and this benefit enables the industrial worker to have better retired life. Employees in all factories under Factories Act, 1948 are covered by the Act. Both the employee and the employer contribute to the fund. The employees on attaining 15 years of membership are eligible for 100% of the contributions with interest. Generally the organisations pay the Provident Fund amount with interest to the employee on retirement or to the dependents of the employee, in case of death. b. Pension: The Government of India introduced a scheme of Employees Pension Scheme for the purpose of providing Family Pension and Life Insurance benefits to the employees of various establishments to which the Act is applicable. The Act was amended in 1971 when Family Pension Fund was introduced in the Act. Both the employer and the employee contribute to this fund. Contributions to this fund are from the employee contributions to the Provident Fund to the tune of 11/2% of employee wage. Employee's Family Pension Scheme 1971 provides for Family Pension to the family of a deceased employee as per the following rates: This scheme also provides for the payment of a lumpsum amount of Rs.4,000 to an employee on his retirement as retirement benefit and a lumpsum amount of Rs.2,000 in the event of death of an employee as life insurance benefit. ___________________________________________________________________________ __ Pay for Months Rate ___________________________________________________________________________ ___ Rs.800 or more 12% of the basic subject to a maximum of Rs.150 as monthly pension. More than Rs.200 15% of the basic subject to maximum of but less than Rs.800 Rs.96 and aminimum of Rs.60 as monthly pension. Rs.200 or less 30% of the basic subjects to a minimum of Rs.60 as monthly pension ___________________________________________________________________________ _______ c. Deposit linked insurance: Employees Deposit Linked Insurance Scheme was introduced in 1976 under the P.F.Act, 1952. Under this scheme, if a member of the employees Provident Fund dites while in service, his dependents will be paid an additional amount equal to the average balance during the last three years in his account. (The amount should not be less than Rs.1,000 at any point of time). Under the Employees Deposit Linked Insurance Scheme, 1976, the maximum amount of benefit payable under the deposit linked insurance is Rs. 10,000. d. Gratuity: This is another type of retirement benefit to be provided to an employee either on retirement or at the time of physical disability and to the dependents of the deceased employee. Gratuity is a reward to an employee for his long service with his present employer. The payment of Gratuity Act, 1972 is applicable to the establishments in the entire country. The Act provides for a scheme of compulsory payment of gratuity by the management of factories, plantations, mines, oil fields, railways, shops and other establishments employing 10 or more persons to their employees, drawing the monthly wages upto Rs.1,600 per month. Gratuity is payable to all the employees who render a minimum continuous service of five years with the present employers. It is payable to an employee on his superannuation or on his retirement or on his death or disablement due to accident or disease. The gratuity payable to an employee shall be at the rate of 15 days wage for every completed year of service or part thereof in excess of six months. Here the wage means the average of the basic pay last drawn by the employee. The maximum amount of gratuity payable to employee shall not exceed 20 months wage. e. Medical benefit: Some of the large organisations provide medical benefits to their retired employees and their family members. This benefit creates a feeling of permanent attachment with the organisation to the employees even while they are in service. EMPLOYEE SERVICES However, most of the large organisations provide health services over and above the legal requirements to their employees free of cost by setting up hospitals, clinics, dispensaries and homeopathic dispensaries. Companys elaborate health service programmes include: a. Providing health maintenance service, emergency care, on the job treatment care for minor complaints, health counselling, medical supervision in rehabilitation, accident and sickness prevention, health education programme, treatment in employee colonies etc. b. Medical benefits are extended to employee family members and to the retired employees and their family members. c. Small organisations which cannot set up hospitals or large organisations (in those places where hospitals cannot be set up because of various reasons) provide the medical services through local hospitals and doctors. Sometimes they provide the facility of reimbursement of medical expenses borne by the employees. WELFARE AND RECREATIONAL FACILITIES Welfare and recreational benefits include: (a ) canteens, (b) consumer societies, (c) credit societies (d) housing, (e) legal aid, (f) employee counselling, (g) welfare organisations , (h) holiday homes, (i) educational facilities, (j) transportation (k) parties and picnics, and (I) miscellaneous. a. Canteens: Perhaps no employee benefit has received as much attention in recent years as that of canteens. Some organisations have statutory obligation to provide such facilities as Section 46 of the Factories Act, 1948 imposes a statutory obligation to employers to provide canteens in factories employing more than 250 workers. Others have provided such facilities voluntarily. Food stuffs are supplied at subsidised prices in these canteens. Some companies provide lunch rooms when canteen facilities are not available. b. Consumer stores: Most of the large organisations located far from the townsand which provide housing facilities near the organisation set up the consumer stores in the employees colonies and supply all the necessary goods at fair prices. c. Credit Societies: The objective of setting up of these societies is to encourage thrift and provide loan facilities at reasonable terms and conditions, primarily to employees. Some organisations encourage employees to form cooperative credit societies with a view to fostering self-help rather than depending upon money lenders, whereas some organisations provide loans to employees directly. d. Housing: Of all the requirements of the workers, decent and cheap housing accommodation is of great significance. The problem of housing is one of the main causes for fatigue and worry among employees and this comes in their way of discharging their duties effectively. Most of the organisations are located very far from towns where housing facilities are not available. Hence most of the organisations built quarters nearer to factory and provided cheap and decent housing facilities to their employees, whilst a few organisations provide and / or arrange for housing loans to employees and encourage them to construct houses. e. Legal aid: Organisations also provide assistance or aid regarding legal matters to employees as and when necessary through company lawyers or other lawyers. f. Employee counselling: Organisations provide counselling service to the employee regarding their personal problems through professional counselors. Employee counselling reduces absenteeism, turnover tardiness etc. g. Welfare organisations welfare officers: some large organisations set up welfare organisations with a view to provide all types of welfare facilities at one centre and appoint welfare officers to provide the welfare benefits continuously and effectively to all employee family. h. Holiday homes: As a measure of staff welfare and in pursuance of governments policy, a few large organisations established holiday homes at a number of hills stations, health resort and other centres with low charges of accommodation, so as to encourage employees use this facility for rest and recuperation in pleasant environment. i. Educational facilities: Organisations provide educational facilities not only to the employees but also to their family members. Educational facilities include reimbursement of fee, setting up of schools, colleges, hostels, providing grants in aid to the other schools where a considerable number of students are from the children of employees. Further, the organisations provide reading rooms and libraries for the benefit of employees. j. Transportation: Companies provide conveyance facilities to their employees from the place of their residence to the place of work as most of the industries are located outside town and all employees may not get quarter facility. k. Parties and picnics: Companies provide these facilities with a view to inculcating a sense of association, belongingness, openness, and freedom among employees. These activities help employees to understand other better. MISCELLANEOUS Organisations provide other benefits like organising games, sports, with awards, setting up of clubs, community service activities, Christmas gifts, Deewali, Pongal and Pooja and Pooja gifts, birthday gifts, leave travel concession, annual awards, productivity / performance awards etc. MODEL QUESTIONS 1. Critically evaluate the various criterion for Promotion decisions in organisations. 2. Transfer, Promotion and separation are effective methods to adjust the size of the work-force of an enterprise to changing situations to be accomplished with the advice and assistance of staff specialists. Elucidate. 3. Describe the various factors which influence wage and salary structure in Indian Industry. 4.What are "fringe benefits"? List the various types of fringe benefits offered by Indian Industrial organisations to their employed. 5. What are the essentials of a good disciplinary system? 6. Write short notes on: a) "Hot stove Rule" b) "Principles of Natural Justice" c) Causes of Indiscipline. CASE I A Case Criteria of Promotion* "XYZ' Port is one of the port commissioned several years after Independence of India. It is a modern port in which cargo handling in most of the berths and jetties is mechanised. It has a fairly large Engineering Division, which is responsible for the repair and maintenance of all plants, equipments, machinery, vehicles and vessels owned by the Port Authority. The Division also manages the mechanised cargo handling operations in the Coal Berth, Iron Ore Berth and the Phosphates cum Fertilizer Berth. The Division is headed by a Manager (Engineering) assisted, by two Deputy Managers, one Assistant Manager and 7 Junior Assistant Manager (J.A.M.). There are several other ranks of engineers executives below them, viz., Senior Plant Engineers, Plant Engineers, Engineers (Design), Assistant Plant Engineers. These non-managerial engineer-executives have been largely drawn from an older and larger point in the neighbourhood, mainly on the basis of their working experience and record of service. This helped the new port to solve the initial operational and maintenance problems as it had difficulty in getting adequate number of qualified engineers with experience in port engineering and management. All the Senior Plant Engineers and most of the Plant Engineers and Assistant Plant Engineers of the Port are holders of Engineering Diplomas with fairly long periods of service experience. However, the few posts of the managerial rank in the Engineering Division have been all earmarked for graduate engineers with some experience in Port administration. About 5 years after the commissioning of the port, there was considerable increase of cargo handling at the Coal Berth. In other sections and Berths of the Port also activities were increasing, as a result of which there were more break downs and the workload of the Division, both in terms of operations and maintenance, increased a good deal. To handle the extra traffic, the Coal Berth and some other Berths switched on to 3 shifts from the earlier 2 shifts operation. There was only a skeleton increase in the manpower of the Division to handle the extra work load, which was mainly handled on the basis of overtime, additional effort and improved productivity per manhour. Fortunately in all these matters the two recognised unions did cooperate and there was not much difficult in terms of labour relations, excepting problems of individual grievances and adjustment of labour to the higher tempo of working. In managing this transition to a higher level of activity the engineering executives played a heroic role. There was practically no increase in the number of engineers at any level. But they managed the heavier workload with tremendous efforts and commitment on their part. Most of them had to overstay at work on a regular basis. leave was a forgotten word for them and they had to rush from their homes at off- hours to tackle sudden operational problems or emergency breakdowns. Particularly the Senior Plant Engineers, who were the officers-in-charge at the Berths or the Plants and the Plant Engineers, who were shifts in charge, had to bear the brunt of all these challenges. They expected that the top management would reward them mainly by creating new opportunities for promotion, as rewards in terms of higher monetary remuneration could not be expected in a port, because the remuneration policy was decided at the all India level only by the Union Ministry of Shipping. The top management of XYZ Port also recognised the contributions made by the non-managerial engineer executives, most of whom were Diploma-holders. They also felt the latters urge for promotion and felt that something was to be done particularly for the Senior Plants Engineers and the Plant Engineers. But the main problem in this respect was the restriction posed by the minimum educational criterion for promotion to the Junior Assistant Mangers rank and above. The Senior Plant Engineers, in spite of their experience and good performance were debarred from promotion to the post of the Junior Assistant Manager because of being diploma holders. As the number of posts of Senior Plant Engineers was limited to 4 and the number of Plant Engineers was about three times of that none of them could be promoted unless some of the Senior Plant Engineers were agitated. Although in terms of experience they were superior to Junior Assistant Managers who were mostly graduate Engineers of only 2 to 4 years experience and although they were on the same pay scale, the Junior Assistant Managers, being managerial cadre by rank, were supposed to give orders to the Senior Plant Engineers, who in turn were expected to report to them. This was resented by the latter and taking advantage of the increased workload and urgency of operations and maintenance problems during this period, many Senior Plant Engineers dealt directly with the Deputy Mangers without going through the Junior Assistant Managers. The Deputy Managers also had to accommodate them without bothering about the formal channel, because being the people directly operating at the site, the Senior Plant Engineers always had the best first hand knowledge of the site problems. This also naturally created an organisational problem and the top management had difficulty in sorting it out. About the promotion issue of the Senior Plant Engineers to top management had a real dilemma. On the one hand, they realised that considering their merit and experience, they had a strong case for being promoted to the managerial positions. On the other hand, they also understood that this would require a lowering of the minimum educational qualification below the level of degree in engineering. QUESTIONS FOR DISCUSSION 1. What may be the best way of rewarding the Senior Plant Engineers in this particular case for their hard work and commitment? 2. What should be the most appropriate criterion for selection as a Junior Assistant Manager in XYZ port promotion or recruitment? 3. What may be the plus and minus points for lowering the minimum educational qualifications for selection to the post of the Junior Assistant Manager in this case? CASE II Grass Cutter v. Gas Cutter* In one public sector undertaking with a chequered past, a line manager was appointed as the Chief of Personnel. Within a year taking up the assignment, he had to sign a wage agreement with the workers union. The union at that time was dominated by non-technical staff. The Unions charter of demands favoured the interests of in dominant member groups. It asked for a significant revision in gardeners pay, but was not equally vocal in pressing for the increase it the pay scales of workers in certain technical grades. The management conceded these demands because the union cooperated with them in keeping the burden of the pay revision well within in the guidelines of the Bureau of Public Enterprises (BPE). Once the agreement was signed and communicated to employees / members by the management and the union respective , there was commotion among the technical staff. They walked out of the union, formed a separate technical staff union and marched round the company premises holding placards which read. "Here grass cutters get more than the gas cutters". In the engineering assembly unit, till the pay revision occurred, welding was a highly rated job. But not any longer. Now gardeners get more than welders. _____________ *Source: C.S.Venkataraman and B.K. Srivastava, Personnel Management and Human Resources, Tata Mc-Graw Hill, New Delhi, 1991, PP 200-201 *Source: Ghash,subratesh, Personnel Management, Oxford IBH, New Delhi, 1990 PL 88-90 QUESTIONS 1. What happens if grass-cutters get more than gas-cutters? 2. Evaluate the pros and cons of the approach of both the management and union in this incident? 3. List the lessons learnt. Suggest a way out of the problem on hand. CASE III Two-Tier Pay Structure* In 1976, the Indian subsidiary of a multinational refinery became a Government of India company. The government company had announced an ambititious expansion programme which meant doubling the work force in less than four years. In 1977 at the time of wage revision, the union and management agreed to a two tier pay structure. Those already employed will be eligible for a higher grade and those who are (to be) recruited afresh will get a lower grade though jobs are similar in skill, responsibility and effort. Both the union and the management justified that this is an innovative practice widely followed in deregulated companies abroad, particularly the airlines in North America. 1. Is it a fair agreement? 2. Would it contravene with the concept of equal pay for equal work? ________ *Source: C.S.Venkataraman and B.K. Srivastava, Personnel Management and Human Resources, Tata Mc-Graw Hill, New Delhi, 1991, PP 200-201 - End Of Chapter - LESSON - 21 PERFORMANCE APPRAISAL Performance Appraisal Appraising the performance of individuals, groups and organisations is a common practice of all societies. While in some instances these appraisal processes structured and formally sanctioned, in other instances they are an informal and integral part of daily activities. Thus teachers evaluate the performance of students, bankers evaluate the performance of creditors, parents evaluate the behaviour of their children, and all of us, consciously or unconsciously evaluate our own actions from time to time. In social interactions, performance evaluation is done in a haphazard and often unsystematic way. But in organisations formal programmes of evaluating employee and managerial performance conducted in a systematic and planned manner have achieved widespread popularity in recent years. During and after World War I, the systematic performance appraisal was quite prominent. Credit goes to Walter Dill Scott for systematic performance appraisal technique of man-to-man rating system (or merit rating).It was used for evaluating military officers. Industrial concerns also used this system during 1920s and 1940s for evaluating hourly paid workers. However, with the increase in training and management development programmes from 1950s, managements started adopting performance appraisal for evaluating technical, skilled, professional and managerial personnel as a part of training and executive development programmes. With this evolutionary process, the term merit-rating had been changed into employee appraisal or performance appraisal. This is not a mere change in the name but a change in the scope of the activity as the emphasis of merit-rating was limited to personal traits, whereas performance appraisal covers results, accomplishments and performance. MEANING Performance appraisal is a method of evaluating the behaviour of employees in the work-spot, normally, including both the quantitative and qualitative aspects of job performance. Performance here refers to the degree of accomplishment of the tasks that make up an individuals job. It indicates how well an individual is fulfilling the job demands. Often the term is confused with effort, which means energy expanded, and used in a wrong sense. Performance is always measured in terms of results. A student, for example, may exert a great deal of effort while preparing for the examination but may manage to get a poor grade. In this case the effort expanded is high but performance is low. In order to find out whether an employee is worthy of continued employment or not, and if so, whether he should receive a bonus, a pay rise or a promotion, his performance needs to be evaluated from time to time. When properly conducted performance appraisals not only let the employee know how well he is performing but should also influence the employees future level of effort, activities, results and task direction. Under performance appraisal we evaluate not only the performance of a worker but also his potential for development. Some of the important features of performance appraisal may be captured thus: o Performance appraisal is the systematic description of an employee's job relevant strengths and weaknesses. o The basic purpose is to find out how well the employee is performing the job and establish a plan of improvement. o Appraisal process is always systematic in the sense that it tries to evaluate performance in the same manner using the same approach. o Appraisals are arranged periodically according to a definite plan. o Performance appraisal is not job evaluation. Performance appraisal refers to how well someone is doing an assigned job. Job evaluation determines how such a job is worth to the organisation and, therefore, what range of pay should be assigned to the job. o Performance appraisal is a continuous process. Historically performance appraisal has generally been employed for administrative purposes, such as promotion and salary increases as well as individual development and motivation. A study by Schuster and Kind all way back in 1974 confirmed this. Of the 403 companies responding to the survey of Fortune's 500 largest industrial corporations, 316 (78 per cent) reported the use of some type of formal performance appraisal plan meant for administrative and developmental motivational purposes. In a more recent survey 50 per cent of those who responded to the survey conducted by Fombrun and Laud used the appraisal process in areas related to compensation (merit pay increases). Communication (feedback), human resources planning (performance potential, succession planning), career planning and internal employee. NEED AND IMPORTANCE Performance appraisal is needed in order to: 1.Provide information about the performance ranks basing on which decisions regarding salary fixation, confirmation, promotion, transfer and demotion are taken. 2.Provide feedback information about the level of achievement and behaviour of subordinate. This information helps to review the performance of the subordinate, rectifying performance deficiencies and to set new standards of work, if necessary. 3. Provide information which helps to counsel the subordinate. 4. Provide information to diagnose deficiency in employee regarding skill, knowledge, determine training and developmental needs and to prescribe the means of employee growth. 5. Provides information for correcting placement. 6.To prevent grievances and indiscipline. OBJECTIVES Performance appraisal aims at attaining different purposes. They are: 1. To create and maintain a satisfactory level of performance 2. To contribute to the employee growth and development through training development programmes. 3. To help the superiors to have a proper understanding about their subordinates. 4. To guide job changes with the help of continuous ranking. 5. To facilitate fair and equitable compensation based on performance. 6. To facilitate validating of selection tests, interview techniques through comparing their scores with performance appraisal ranks. 7. To provide information for making decisions regarding lay off retrenchment etc. 8. To ensure organisational effectiveness through correcting employees for standard and improved performance, and suggesting the change in employee behaviour. PROBLEMS IN PERFORMANCE APPRAISAL The major problems in performance appraisal are: 1. Rating biases: The problem with subjective measure (is that rating which is not verifiable by others) has the opportunity for bias. The rater biases include (a) halo effect, (b) the error of central tendency (c) the leniency and strictness biases, (d) personal prejudice and (e) the recency effect. a)Halo effect: It is the tendency of the raters to depend excessively on the rating of one trait or behavioural consideration in rating all other traits or behavioural considerations. One way of minimizing the halo effect is appraising all the employees by one trait before to rate on the basis of another trait. Please use headphones b) The error of central tendency: Some raters follow play safe policy in rating by rating all the employees around the middle point of the rating scale and they avoid rating the people at both the extremes of the scale. They follow play safe policy because of answerability to management or lack of knowledge about the job and person is rating or least interest in his job. c) The leniency and strictness: The leniency bias crops up when some rates have a tendency to be liberal in their rating by assigning higher rates consistently. Such ratings do not serve any purpose. Equally damaging one is assigning consistently low rates. d) Personal prejudice: If the rater dislikes any employee or any group, he may rate them at the lower end, which may distort the rating purpose and affect the career of these employees. e) The recency effect: It is also known as recent behaviour bias. Here the rates generally remember the recent actions of the employee at the time of rating and rate on the basis of these recent action favourable or unfavourable rather than on the whole activities. 2. Failure of the superiors in conducting performance appraisal and post- performance appraisal interviews. 3. Most part of the appraisal is based on subjectivity. 4. Less reliability and validity of some of the performance appraisal techniques. 5. Negative ratings affect interpersonal relations and industrial relations. 6. Influence of external environmental factors and uncontrollable internal factors. 7. Feedback and post appraisal interview may have a setback on production. 8. Management emphasizes on punishment rather than development of an employee in performance appraisal. 9. Some ratings particularly about the potential appraisal are purely based on guess work. The other problems of performance appraisal reported by various studies are: 10. Relationship between appraisal rates and performance after promotions was not significant. 11. Some superiors completed appraisal reports within a few minutes. 12. Absence of inter-rater reliability. 13. The situation was unpleasant in feedback interview. 14. Superiors lack the tact of offering the suggestions constructively to subordinates. 15. Supervisors were often confused due to too many objectives of performance appraisal. FACTORS INFLUENCING PERFORMANCE APPRAISAL Performance appraisal system should be effective as a number of crucial decisions are made on the basis of the score or rating given by the appraiser, which in turn, is heavily based on the appraisal system. Appraisal system to be effective, should possess the following essential characteristics: 1. Reliability and validity: Appraisal system should provide consistent, reliable and valid information and data, which can be used to defend the organisation even in legal challengers. If two appraises are equally qualified and competent to appraise an employee with the help of same appraisal technique, their ratings should agree with each other. Then the technique satisfies the conditions of inter-rater reliability. Appraisals must also satisfy the condition of validity by measuring what they are supposed to measure. For example, if appraisal is made for potential of an employee for promotion, it should supply the information and data relating to potentialities of the employee to take up higher responsibilities and carry on activities at higher level. 2. Job relatedness: The appraisal technique should measure the performance and provide information in job related activities / areas. 3. Standardisation: Appraisal forms, procedures, administration of techniques, ratings, etc., should be standardised as appraisal decisions affect all employees of the group. 4. Practical viability: The techniques should be practically viable to administer, possible to implement and economical regarding cost aspect. 5. Legal sanction: It should have compliance with the legal provisions concerned of the country. 6. Training appraisers: Because appraisal is important and sometimes difficult, it would be useful to provide training to appraisers viz. some insights and ideas on rating, documenting appraisals, and conducting appraisal interviews. Familiarity with rating errors can improve rater performance and this may inject the needed confidence in appraisers to look into performance ratings more objectively. 7. Open communication: Most employees want to know how well they are performing on the job. A good appraisal system provides the needed feedback on a continuing basis. The appraisal interviews should permit both parties to learn about the gaps and prepare themselves for future. To this end, managers should clearly explain their performance expectations to their subordinates in advance of the appraisal period. Once this is known it becomes easy for employees to learn about the yardsticks and if possible, try to improve their performance in future. 8. Employee's access to results: Employees should know the rules of the game. They should receive adequate feedback on their performance. If performance appraisals are meant for improving employee performance, then withholding appraisal results would not serve any purpose. Employees simply could not perform better without having access to this information. Permitting employees to review the results of their appraisal allows them to detect any errors that may have been made. If they disagree with the evaluation, they can even challenge the same through formal channels. 9. Due process: It follows then that formal procedures should be developed to enable employees who disagree with appraisal results (which are considered to be inaccurate or unfair). They must have the means for pursuing their grievances and having them redressed objectively. Performance appraisal should be used primarily to develop employees as valuable resources. Only then it would show promising results. When management uses it as a whip or fails to understand its limitations, it fails. RESPONSIBILITY FOR APPRAISAL The appraiser may be any person who has a thorough knowledge about the job content, contents to be appraised, standards of contents, and who observes the employee while performing a job. The appraiser should be capable to determining what is more important and what is relatively less important. He should prepare reports and make judgments without bias. Typical appraisers are: Supervisors, peers, subordinates, employees themselves, users of service and consultants. Supervisors: Supervisors include superiors of the employee, other superiors having knowledge about the work of the employee and department head or manager. General practice is that immediate superiors appraise the performance which in turn is reviewed by the departmental head / manager. This is because supervisors are responsible for managing their subordinates and they have the opportunity to observe, direct and control the subordinate continuously. Moreover, they are accountable for the successful performance of their subordinates. Sometimes other supervisors, who have close contact with employee work also appraise with a view to provide additional information. On the negative side, immediate supervisors may emphasize certain aspects of employee performance to the neglect of others. Also, managers have been known to manipulate evaluations to justify their decisions on pay increases and promotions. However, the immediate supervisor will continue to evaluate employee performance till a better alternative is available. Organisations, no doubt, will seek alternatives because of the weaknesses mentioned above and s a desire to broaden the perspective of the appraisal. Peers: Peer appraisal may be reliable if the work group is stable over a reasonably long period of time and performs tasks that require interaction. However, little research has been conducted to determine how peers establish standards for evaluating others or the overall effect of peer appraisal on the groups attitude. Whatever research was done on this topic was mostly done on military personnel at the management or pre-management level (officers or officer candidates) rather than on employees in business organisations. More often than not in business organisations if employees were to be evaluated by their peers, the whole exercise may degenerate into a popularity contest, having the way for the impairment of work relationship. Subordinates: The concept of having superiors rated by subordinates is being used in most organisations today, especially in developed countries. For instance in most U.S. universities students evaluate a professors performance in the class room. Such a method can be useful in other organisational settings too provided the relationships between superiors and subordinates are cordial. Subordinates ratings in such cases can be quite useful in identifying competent superiors. The rating of leaders by combat soldiers is an example. However, the fear of appraisal often compels a subordinate to be dishonest in his ratings. Though useful in universities and research institutions, this approach may not gain acceptance in traditional organisations where subordinates do not have much discretion. Self-appraisal: If individuals understand the objectives they are expected to achieve and the standards by which they are to be evaluated, they are to a great extent in the best position to appraise their own performance. Also, since employee development means self-development , employees who appraise their own performance may become highly motivated. Exhibit 1 provides a self appraisal form which might be useful in work settings. Users services: Employee performance in service organisations relating to behaviours, promptness, speed in doing the job, and accuracy, can be better judged by the customers or users of services. For example, teachers performance is better judged by students and the performance of a conductor in passenger road transport is better judged by passengers. EXHIBIT 1. Self-Appraisal Form A Model Name: Department: Designation: Employee Code No: Qualification: Scales of pay and total salary: Category Group: 1. Name and Designation of the immediate superior 2. Specify the nature of supervision received from the supervisor 3. Indicate your relationship with your superior 4. Number of subordinates 5. Indicate the nature of duties of your subordinates 6. Specify the nature of follower-ships of your subordinates. 7. Indicate the level of cooperation received from your subordinates. 8. How many times your subordinate refused your orders. 9. Does your subordinate appreciate your style of leadership? 10. Do you maintain sound human relations with your sub-ordinates? 11. Do you attend to your work punctually? 12. Specify the level of your self-expression both written and oral. 13. Indicate your level of work with others. 14. Do you prefer team management? 15. Specify the nature and level of your initiative. 16. To what extent you know about your job and the organisation. 17. Specify the level of our technical and other skills. 18. Indicate your ability to understand new things. 19. Comment about your originality and resourcefulness. 20. Identify the areas of work to which you are best suited. 21. Comment about your level and nature of judgment skills. 22. Do you have skills of integrity? 23. Do you accept responsibility? 24. List out your achievements during the present year. 25. Would like to develop yourself? If yes, specify the areas of technical, managerial and human relation areas. 26. Are you interested in specialised jobs or generalised jobs? 27. Indicate the improvements in your work performance. 28. To what extent you availed the leave facility? 29. Specify your participation in extra-curricular activities. 30. Provide any other related information. Signature of the Employee. Date Comments of Immediate Superior Signature ____________________________________________________ _________________ Consultants: Sometimes consultants may be engaged for appraisal when employees or employers do not trust supervisory appraisal and management does not trust the self-appraisal or peer appraisal or subordinate appraisal. In this situation, consultants are trained and they observe the employee at work for sufficiently long time for the purpose of appraisal. In view of the limitations associated with each and every method discussed above, several organisations follow a multiple rating system wherein several superiors separately fill out rating forms on the same subordinate. The results are then tabulated. WHEN TO APPRAISE? Informal appraisals are conducted whenever the supervisor or personnel manager feels it necessary. However, systematic appraisals are conducted on a regular basis, say for example every six months or annually. One study of 244 firms found that appraisals were most often conducted once a year, usually near the employees anniversary date. Recent research suggests, however, that more frequent feedback correlates positively with improved performance. Research has also indicated that appraisals for developmental purposes should be separated from those for salary administration. APPRAISAL PROCESS Performance appraisal is a nine step process. At the first stage, performance standards are established based on job description and job specification. The standards should be clear, objective and incorporate all the factors. The second stage is to inform these standards to all the employees including appraisers. The third stage is following the instructions given for appraisal measurement of employee performance by the appraisers through observation, interview, records and reports. Fourth stage is finding out the influence of various internal and external factors on actual performance. The influence of these factors may be either inducing or hindering the employee performance. The measured performance may be adjusted according to the influence of external and internal factors. The performance derived at this stage may be taken as actual performance. Fifth stage is comparing the actual performance with that of other employees and previous performance of the employees and others. This gives an idea where the employee stands. If performance of all the employees is ranked either too high or too low, there may be something wrong with the standards and job analysis. Sixth stage is comparing the actual performance with the standards and finding out the deviations. Deviations may be positive or negative. If employees performance is more than the standards, it is positive deviation and vice versa is negative deviations. Seventh stage is communicating, the actual performance of the employee and other employees doing the same job, and discuss with him about the reasons for positive or negative deviations from the pre-set standards as the case may be. Eighth stage is suggesting necessary change in standards, job analysis, internal and external environment. Ninth stage is follow up performance appraisal report. This stage includes guiding, counselling, coaching and directing the employee or making arrangements for training and development of the employee in order to improve performance. If the actual performance is very poor and beyond the scope of improvement, it may be necessary to take steps for demotion or retrenchment or any other suitable measure. - End Of Chapter - LESSON 22 TECHNIQUES OF PERFORMANCE APPRAISAL With the evolution and development of appraisal system, a number of techniques or methods of performance appraisal have been developed. TRADITIONAL TECHNIQUES The important traditional techniques or methods of performance appraisal include: i) Straight Ranking Method ii) Paired Comparison Method (Man-to-Man comparison Method) iii) Grading Method iv) Linear Rating Method v) Forced Distribution Method vi) Free Easy Method vii) Critical Incident Method viii) Group Appraisal Method ix) Field Review Method STRAIGHT RANKING METHOD Under this method the employees are ranked from best to worst on some characteristics. The rater first finds the employee with the highest performance and the employee with the lowest performance in that particular job category and rates the former as the best and the latter as the poorest. Then the rater selects the next highest and next lowest and so on until the rates all the employees in that group. Consider all of your employees in terms of their total performance. Then select the one you would consider as having best total performance. Put his name in Column 1 below, on the first line, numbered 1. Next pick out the person having the worst total performance. Put his name at the bottom of Column II, on the line numbered 20. Now from the remaining names, select the one having the best total performance. Put his name in the first column on line 2. Keep up this process until all names have been placed in the scale. Column I (best) Column II (Worst) 1..................................... 11........................................... 2..................................... 12........................................... 3...................................... 13........................................... 4....................................... 14........................................... 5....................................... 15............................................. 6........................................ 16............................................. 7........................................ 17.............................................. 8......................................... 18.............................................. 9.......................................... 19.............................................. 10......................................... 20............................................... Fig. Ranking Scale Ranking can be relatively easy and inexpensive, but its reliability and validity may be open to doubt. It may be affected by rater bias or varying performance standards. Ranking also means that somebody would always be in the backbench. It is possible that the low ranked individual in one group may turn-out to be a superstar in another group. One important limitation of the ranking method is that the size of the difference between individuals is not well defined. For instance, there may be little difference in performance between individuals ranked second and third, but a big difference between those ranked third and fourth. PAIRED COMPARISON METHOD MAN TO MAN COMPARISON METHOD This method is relatively simple. Under this method, the appraiser ranks the employees by comparing one employee with all other employees in the group, one at a time. As illustrated in Fig. (below) this method results in each employee being given a positive comparison total and a certain percentage of the total positive evaluation. This percentage of positive comparisons gives the paired comparison method an advantage over other comparative methods (ranking and forced distribution) Example A B C D E A - A A A A B - - C D E C - - - C E D - - - - E E - - - - - To compute Employees : Positive evaluations: Number of positive evaluations: x100 = Employeess % Superior evaluation ___________________________ Total number of evaluations Employee A Employee B Employee C Employee D Employee E 4/4x 100 =100% 0/4x100=0% 2/4x100 = 50% 1/4x100=25% 3/4x100=75% Fig. Paired Comparison of Employees. Paired comparison does not force distribution of employees in each department. For instance, if a department has two outstanding employees and six average employees and paired comparison is correctly utilised, then those two employees will get a much higher percentage of positive comparison than the other six. Paired comparison method could be employed fairly easily where the number of employed is less. The number of comparisons required equals N (N-1) /2. This means that where the number is fairly large (for instance for 20 employees 190 comparisons would be necessary) the technique may be time consuming. Another limitation of this technique is that employee are simply compared to each other on total performance rather than specific job criteria. GRADING METHOD Under this system the appraiser appraises the employee on the basis of selected features. These features include analytical ability, cooperativeness, dependability, self-expression, job knoweldge, judgment, leadership, organising skills etc. The employees would be classified as Group A (outstanding). Group B (very good), Group C (average), Group D (fair), Group E (poor). The actual performance of employees is compared with the group specifications, and the group is allotted to the employee to which he best suits. LINEAR RATING METHOD Graphic rating scales compare individual performance to an absolute standard. In this method, judgments about performance are recorded on a scale. This is the oldest and widely used technique. This method is also known as linear rating scale or simple rating scale. The appraisers are supplied with printed forms, one for each employee. These forms contain a number of objectives, behaviour and traits based qualities and characters to be rated like quality and volume of work, job knowledge, dependability, initiative, attitude etc., in the case of workers and analytical ability, creative ability, initiative, leadership qualities, emotional stability in the case of managerial personnel. These forms contain rating scales. Rating scales are of two types, viz., continuous rating scale and discontinuous rating scales. In continuous order like 0, 1, 2, 3, 4 and 5 and in discontinuous scale the appraiser assigns the points to each degree. Performance regarding each character is known by the points given by the rater. The points given by the rater to each character is known by the points given by the rater. The points given by the rater to each character are added up to find out the overall performance. Employees are ranked on the basis of total points assigned to each one of them. One reason for the popularity of the rating scales is its simplicity, which permits many employees to be quickly evaluated. Such scales have relatively low design cost and effective of administration. They can easily pinpoint significant dimensions of the job. The major drawback of these scales is their subjectivity and low reliability. Another limitation is that the descriptive words often used in such scales may have different meanings to different raters. FORCED DISTRIBUTION METHOD The rater may rate his employees at the higher or at the lower and of the scale under the earlier methods. Forced distribution method is developed to prevent the raters from rating too high or too low. Under this method, the rater after assigning the points relating to the performance of each employee has to distribute his ratings in a pattern to conform to normal frequency distribution as shows below. Thus, similar to the ranking technique, forced distribution requires the raters (supervisors) to spread their employee evaluation in a predetermined distribution. Like ranking , this method eliminates central tendency and leniency biases. However, in this method employees are placed in certain ranked categories but no ranked within the categories. Quite often work groups do not reflect a normal distribution of individual performance. This method is based on the rather questionable assumption that all groups of employees will have the same distribution of excellent, average and poor performance. If one department has all outstanding employees, the supervisor would find it extremely difficult to decide who should be placed in the lower categories. Difficulties can also arise when the rater must explain to the employee why he was placed in one grouping and others were placed in higher groupings. Please use headphones Force Choice Method: This method was developed at the close of World War II. Under this method, a large number of statements in groups are prepared. Each group consists of four descriptive statements (tetra) concerning employee behaviour. Two statements are most descriptive (Favourable) and two least descriptive (unfavourable) of each tetra (Fig) Sometimes there may be five statements in each group out of which one would be neutral. The actual weightages of the statements are kept secret. The appraiser is asked to select one statement that mostly described employee's behaviour out of the two favourable statements and one statement from the two unfavourable statements. The items are usually a mixture of positive and negative statements. The intent is to eliminate or greatly reduce the raters personal bias, specifically the tendency to assign all high or low ratings. The items are designed to discriminate effective from ineffective workers as well as reflect valuable personal qualities. Fig. Forced Choice Method It is difficult to construct and validate the statements under the forced choice method, especially for relatively small organisations. For raters who are not properly trained, it may be difficult to choose among statements that are equally desirable or equally undesirable. Since they, most often, do not know which of the statements in a given group have the discriminative power to draw the certain between good and poor workers, they may fail to live up in the expectations and provide an objective evaluation. Further, it may be time consuming to prepare statements that suit the demands of a particular job or company. Finally, it may be unpalatable for the raters to believe that they cannot make an objective evaluation and hence their freedom curtailed to size. FREE ESSAY METHOD This method requires the manager to write a short essay describing each employee's performance during the rating period. This format emphasizes evaluation of overall performance, based on strengths/weakness of employee performance, rather than specific job dimensions. By asking supervisors to enumerate specific examples of employee behaviour, the essay technique minimizes supervisory bias and halo effect. The time involved in writing separate essays about each employee can be formidable. Essays are not amendable for evaluation and analysis: fifty essays describing different employees performance cannot be tied to merit increases and promotion possibilities because there is no common standard. Another inherent limitation of this method is that the evaluators may have unequal skills in writing the essays. A skillful writer can present a more dramatic case about an employee than an awkward writer or supervisor. Thus the quality of the ratings depends, not actually on employee performance, but on the writing ability of the rater. CRITICAL INCIDENT METHOD Employees are rated discontinuously i.e., once in a year or six months under the earlier methods. The performance rated may not reflect real and overall performance as the rater would be serious about appraisal just two or three weeks before the appraisal. Hence a continuous appraisal method i.e., critical incident method has been developed. Under this method, the supervisor continuously records the critical incidents of the employee performance or behaviour relating to al characteristics (both positive and negative) in a specially designed note book (Fig.). The supervisor rates the performance of his subordinates on the basis of notes taken by him. Since the critical incident method does not necessarily have to be a separate rating system, it can be fruitfully employed as documentation of the reasons why an employee was rated in a certain way. Fig: Model of Recording Critical Incidents for a Bank Officer The critical incident method has the advantage of being objective because the rater considers the records of performance rather than the subjective points of opinion, for example, mood, emotional balance, relationship between superior and subordinate. This certainly help in reducing bias in the evaluation. However, the system is not without drawbacks. First what constitutes a critical incident is not defined in the same manner by all raters. The question of discounting precious time of the executive is also involved here. Because of the time required to write complete profiles of critical incidents, managers can be asked instead to record sketchy notes of their observations noting the date and some other reminder of the event. Later these could be transformed into detailed descriptions for completing a rating scale of some kind. Associated with this method is the problem of recency of events. The recency or severity of events, sometimes may influence the opinion of raters. More often than not, the employee might have done something 'critically good and excellent' but the supervisor concerned may not have been present and hence the event not recorded. Further, the method can result in employees becoming concerned about what the superior writes about them. Employees may begin to fear the manager's "blank book". GROUP APPRAISAL METHOD Under this method, an employee is appraised by a group of appraisers. This group consists of the immediate supervisor of the employer, other supervisors who have close contact with the employees work, manager or head of the department and consultants. The head of the department or manager may be the Chairman of the group and the immediate supervisor may act as the Coordinator for the group activities. This group uses any one or multiple techniques discussed earlier. The immediate supervisor enlightens other members about the job characters, demands, standards of performance etc. Then the group appraises the performance of the employee , compare the actual performance with standards, finds out the deviations, discusses the reasons therefore, suggests ways for improvement of performance, prepares action plan, studies the need for change in the job analysis and standards and recommends change, if necessary. This method is widely used for purposes of promotion, demotion and retrenchment. FIELD REVIEW METHOD A trained employee from the personnel department interviews the line managers/ supervisors with a view to appraise the performance of the subordinates of the line manager/supervisors. The trained employee collects the opinions of the line manager about the progress of his subordinates. Level of performance, their strengths and weaknesses, outstanding ability, promotability, possible plans of action. Interviews are conducted through oral communication. The appraiser takes the detailed notes and gets the approval of the line manager and places it in the employee file. - End Of Chapter - LESSON - 23 MODERN TECHNIQUES OF PERFORMANCE APPRAISAL The traditional techniques of performance appraisal emphasize either on the task or the worker's personality. Modern techniques bring a balance between these two. Modern techniques of Performance Appraisal include: i) Appraisal by Management by Objectives (MBO) ii) Assessment Centre Method iii) Human Resource Accounting Method iv) Behaviourably Anchored Rating Scales APPRAISAL BY MBO Although the concept of management by objectives was advocated by Peter F. Drucker way back in 1954, it was described only recently as the larger rage in performance appraisal. Refinements brought out by George Odiorne, Valentine, Humble and others have enriched the concept and made it more acceptable all over the globe as an appraisal technique. During the last decade about 50 organisations have adopted MBO in their work settings. Some of the companies which implemented MBO reported excellent results, others disappointments, and many in- decision. Stated briefly, MBO is a process whereby the superior and subordinate managers of an organisation jointly identify its common goals, define each individual's major areas of responsibility in terms of results expected of him, and use these measures as guides for operating the unit and assessing the contribution of its members. Thus MBO focuses attention on participative set goals that are tangible, verifiable and measurable. The emphasis is on what must be accomplished rather than how it is to be accomplished. Generally, the MBO process if undertaken along the following lines: o The subordinate and superior jointly determine goals to be accomplished during the appraisal period and what level of performance is necessary for the subordinate to satisfactorily achieve special goals. o During the appraisal period the superior and subordinate update and after goals as necessary due to changes in the business environment. o Both superior and subordinate decide if goals were met by the employee and discuss, if not, why not. Take into consideration the reason(s) for deviation from expected performance such as a strike, lock-out, market change, or labour dispute. o News goals and performance objectives are determined by the superior and employee for the next period based on performance levels. In traditional approaches to performance evaluation, personal traits of employees are often employed as criteria for appraising performance. The evaluators generally assume the role of judges drawing distinctions between good and bad performance. With MBO the focus of the appraisal process shifts from the employees personal attributes to job performance. The supervisor now plays a supportive role. He tries, on a day to day basis, to help the employee reach the agreed upon goals. He counsels and coaches. Also, the employees role evolves from that of a by stander to that of active participant. He plays a key role in setting the standards and determining the measurement scheme. Individuals establish goals with their superiors jointly and then jointly establish goals with their superiors and then are given some latitude in the means used to achieve their objectives. At the end of the appraisal period, the employee and supervisor meet for an appraisal interview. They review first the extent to which the goals have been accomplished and second, the actions needed to solve remaining problems. Since the supervisor keeps communication channels open throughout the appraisal period, the employee gets an opportunity to work in a give-and-take atmosphere. The problem solving discussion that takes place during the appraisal interview is primarily designed to help the employee in progressing according to the plan, to learn from mistakes and develop. One of the unique features of MBO is that goals are determined before the appraisal period begins. Previously discussed methods of appraisal focus attention on performance direction before the appraisal period begins. Thus, the MBO process is developmental in that it directs employees to move in desired directions and reach the expected level of achievement. Quite often, while assessing MBO as an appraisal tool, people comment that, 'MBO is okay in theory but no good in practice'. There is an element of truth in this statement. In practice all leadership styles may not be compatible with the participative culture advocated by MBO. The reward punishment psychology differentiates between star performers and poor performers constantly forcing employees to improve their performance day in day out. All jobs do not fit in with the philosophy advocated by MBO. An assembly-line worker, for instance, usually has so little job flexibility that performance standards and objectives are already determined. Finally it is no easy to make a comparative assessment of multiple personnel working in an organisation. In traditional appraisal techniques, all personnel are rated on common factors. In MBO, each person will have different sets of goals of non-comparable complexity and degree of accomplishment. ASSESSMENT CENTRE METHOD This method of appraising was first applied in German Army in 1930. Later business and industrial houses started using this method. This is not a technique of performance appraisal by itself. In fact, it is a system or organisation, where assessment of several individual is done by various experts by using various techniques. These techniques include the methods discussed in this chapter in addition to in-basket, role playing, case studies, stimulation exercises, structured insight, transactional analysis etc. In this approach individuals from various departments are brought together to spend two or three days working on an individual or group assignment similar to the ones they would be handling when promoted. Observers rank the performance of each and every participant in order of merit. Since assessment centres are basically meant for evaluating the potential of candidates to be considered for promotion, training or development, they offer an excellent means for conducting evaluation processes in an objective way. All assesses get an equal opportunity to show their talents and capabilities and secure promotion based on merit. Since evaluators know the position requirements intimately and are trained to perform the evaluation process in an objective manner, the performance ratings may find favour with majority of the employees. A considerable amount of research evidence is available to support the contention that people chosen by this method prove better than those chosen by other methods. The centre enables individuals working in low status departments to compete with people from well-known departments and enlarge their promotion chances. Such opportunities, when created on a regular basis, will go a long way in improving the morale of promising candidates working in less-important positions. HUMAN ASSETS ACCOUNTING METHOD Human Resources Accounting deals with cost of and contribution of human resources to the organisation. Cost of the employee includes cost of manpower planning, recruitment, selection, induction, placement, training, development, wages and benefits etc. Employee contribution is the money value of employee service which can be measured by labour productivity or value added by human resources. Cost of human resources may be taken as standard. Employee performance can be measured in terms of employee contribution to the organisation. Employee performance can be taken as positive when contribution is more than the cost and performance can be viewed as negative if cost is more than contribution. Positive performance can be measured in terms of percentage of excess of employee contribution over the cost of employee. Similarly negative performance can be calculated in terms to the cost of employee. These percentage can be ranked to 'Zero Level'. Rank Rating Percentage of Surplus / Deficit of contribution to cost of Employee 1. Extremely good performance Over 200 2. Good performance 150 200 3. Slightly good performance 100 150 4. Neither poor nor good 0 100 5. Slightly poor performance 0 6. Poor performance 0 (-50) 7. Extremely poor performance (50) (-100) This technique has been fully developed and still it is in the transition stage. BEHAVIOURLY ANCHORED RATING SCALES The Behaviourally Anchored Rating Scales (BARS) method combines elements of the traditional rating scales and critical incidents methods. Using BARD major component, job behaviour are described more objectively as being effective and ineffective. The method employs individuals who are familiar with a particular job to identify its major components. They then rank and validate specific behaviours for each of the components. How to construct BARS? Developing a BARS follows a general format which combines techniques employed in the critical incident method and weighted checklist rating scales. Emphasis is on pooling the thinking of people who will use the scales as both evaluators and evaluates. Step I: Collect Critical Incidents: People with knowledge of the job to be probed, such as job holders and supervisors, describe specific examples of effective and ineffective behaviour related to job performance. Step II: Identify Performance Dimensions: The people assigned the task of developing the instrument cluster the incidents into a small set of key performance dimensions. Generally between five and ten dimensions account for most of the performance. Examples of performance dimensions include technical competence, relationships with customers, handling of paper work, and meeting day-to-day deadlines. While developing varying levels of performance for each dimension (anchors), specific examples of behaviour should be used, which would later be scaled in terms of good, average or below average performance. Step III: Reclassification of Incidents: Another group of participants who are knowledgeable about the job is instructed to retranslate or reclassify the critical incidents generated (in step II) previously. They are given the definition of job dimension and told to assign each critical incident to the dimension that it best describes. At this stage incidents for which there is less than 75 per cent agreement are discarded as being too subjective. Step IV: Assigning scale values to the incidents: Each incident is then rated on a one to seven or one to nine scale with respect to how well it represents ineffective performance; the top scale value indicates very effective performance. The second group of participants usually assigns the scale values. Means and standard deviations are then calculated for the scale values assigned to each incident. Typically incidents that have standard deviations of 1.50 or less (on a 7 point scale) are retained. Step V: Producing the final instrument: About six or seven incidents for each performance dimension all having met both the retranslation and standard deviation criteria will be used as behavioural anchors. The final BARS instrument consists of a series of vertical scales (one for each dimension) anchored (or measured) by the final incidents. Each incident is positioned on the scale according to its mean value. Because the above process typically requires considerable employee participation, its acceptance by both supervisors and their subordinates may be greater. Proponents of BARS also claim that such a system differentiates among behaviour, performance, and results and consequently is able to provide a basis for setting developmental goals for the employee. Because, it is job specific and identifies observable and measurable behaviour, it is more reliable and valid method for performance appraisal. Researchers, after surveying several studies on BARS, concluded that "despite the intuitive appeal of BARS, findings from research have not been encouraging". It has not proved to be superior to other methods in overcoming rater errors or in achieving psychometric soundness. A specific deficiency is that the behaviours used are activity oriented rather than results oriented. This creates a potential problem for supervisors doing the evaluation, who may be forced to deal with employees who are performing the activity but not accomplishing the desired goals. Further, it is time consuming and extensive to create BARS. They also demand several appraisal forms to accommodate different types of jobs in an organisation. In a college, lecturers, office clerks, library staff, technical staff and gathering staff all have different jobs separate BARS forms would need to be developed traditional techniques such as graphic rating scales. Decotis concluded that: "It may be time to quilt hedging about the efficacy of behavioural scaling strategies and conclude that they offer no clear-cut advantages over more traditional and easily developed methods of performance evaluation". The following example helps to understand this technique. The critical incidents relating to cashier in a Bank are: A - can expect to identify the different denominations of Indian currency Notes) B - can expect the cashier to know the difference between currency issued by Reserve Bank of India and others. C - can expect the cashier to identify torn notes which can not be accepted. D - can expect to know various deposit schemes of the bank. E - can expect to know the names of Board of Directors of Reserve Bank of India. F - can expect to have the skill of arranging notes for building G - can expect to know the names of foreign currencies. H - can expect to identify various foreign currencies. I - can expect to know the exchange rates. J - can expect to know the denominations of various foreign currencies. Incidents A, B, and C can be formed into a subset, incidents G, H, I and J can be formed into another subset. These two subsets can be forced into a cluster, which can be used as behavioural anchors. This cluster can be titled as job knowledge. Behaviourally Anchored Rating Scale for the dimensions of job knowledge for bank cashier is shown in the Figure below. Please use headphones -End Of Chapter - LESSON 24 QUALITY OF WORKING LIFE Employees at the grass root level experience a sense of frustration because of low level of wages, poor working conditions, unfavourable terms of employment, inhuman treatment by their superiors and the like, whereas managerial personnel feet frustrated because of alternation over their conditions of employment, interpersonal conflicts, role conflicts, job pressures, lack of freedom in work, absence of challenging work etc. Certain values were attributed to work in the past. Years ago work was worship and people had sincerity and commitment to work. But todays employee will not believe in such values of work. He works for his salary, he works hard if the conditions of work are conducive and congenial and terms of employment are favourable to him. As such, the work homes have been changing from time to time. Work norms in modern industrial society indicate that: (i) Employees role in industry is different from his role in the family (ii) Superior knows the best and he has the right to impose on the subordinates (iii) Rules are for employees and they have to follow them and (iv) Employer has the right to layoff the worker due to marketing and technological factors. Contemporary problems of managerial personnel: Due to these work norms, the managerial personnel at the middle and higher levels in the organisation hierarchy face a variety of problems. They are dissatisfied with the strict economic functions of the job and with the social relationships in the organisation consequent to the mechanisation and automation of the industry. Further, disregard by others and less and less utilization of capabilities and skills also caused frustration among the managerial personnel. Employees also experience alienation which may result from poor design of socio- technical systems. Alienation is a feeling of powerlessness, lack of meaning, loneliness, boredom, lack of involvement and lack of attachment to job. The workers at the lower level are not happy with their work due to tight schedule of work, speed of machine, close watch and supervision and less social interaction. Even the ministerial staff complains that they are un happy with the job due to routine nature of work and fixation of schedules and standards. Thus, job discontent is due to the limited scope of the job, short cycle of operations, and lack of opportunity to exercise discretion, initiative, and existence of bureaucratic controls, oppressive supervision, low wages, poor working conditions etc. Job discontent and job pressures have their substantial effect on employee's health in the form of reduction in general happiness, increases in smoking, drinking, putting on excess body weight etc. Frustration would further cause heart disease, joint pains, etc. Frustration might also be due to absence of recognition, tedious work, unsound relations with co-workers, poor working conditions, low self-esteem, occupational stress, work overload, monotony, fatigue time pressures, lack of stability, security etc. In view of the contemporary managerial problems, the present day employees are much concerned about high wages, better benefits, challenging job etc. MEANING There has been much concern today about providing employees decent wages, convenient working hours, conducive working conditions etc. The term 'Quality of Worklife' has appeared in Research Journals and the press in USA only in 1970s. There is no generally accepted definition about this term. However, some attempts were made to describe the term quality of worklife (QWL). It refers to the favourableness or unfavourableness of a job environment for people. QWL means different things to different people. J.Richard and J.Lloy define QWL as the degree to which members of a work organisation are able to satisfy important personal needs through their experience in the organisation. Quality of worklife improvements are defined as any activity which takes place at every level of an organisation, which seeks greater organisational effectiveness through the enhancement of human dignity and growth.... a process through which the stakeholders in the organisation management, unions and employees learn how to work together better.... to determine for themselves what actions, changes and improvements are desirable and workable, in order to achieve the twin and simultaneous goals of an improved quality of life at work for all members of the organisation and grater effectiveness for both the company and the unions. Please use headphones ISSUES IN QUALITY OF WORKING LIFE Trade unions claim that they are responsible for the improvement in various facilities to workers, whereas management takes credit for improved salaries, benefits and facilities. However, P/HR manager has (identified) specific issues in QEL, besides normal wages, salaries, fringe benefits etc and takes lead in providing them so as to maintain higher order QWL, Klott, Mundick and Schuster suggested 11 major QWL issues. They are: 1. Pay and stability of employment: Good pay still dominates most of the other factor in employee satisfaction. Various alternative means for providing wages should be developed in view of increase in the cost of living index, increase in levels and rates of income tax and professional tax. Stability of employment is guaranteed to a certain extent in India. However, stability to a greater extent can be provided by enhancing the facilities for human resources development. 2. Occupational stress: Stress is a condition of strain on ones emotions, thought process and physical condition. Stress is determined by the nature of work, working conditions, working hours, pause in the work schedule, workers abilities and nature should match with the job requirements. Stress is caused due to irritability hyperexcitation or depression, unstable behaviour, fatigue, stuttering, treambling, psychosomatic pains, heavy smoking and drug abuse. Stress adversely affects employee productivity. The P/HR manager, in order to minimize the stress, has to identify, prevent and tackle the problem. He may arrange for the treatment of the problem with the health unit of the company. 3. Organisational health programmes: Organisational health programmes aim at educating employees about health problems, means of maintaining and improving health etc. These programmes cover drinking and smoking cessation, hypertension control, others forms of cardiovascular risk reduction, family planning etc. Effective implementation of these programmes results in reduction in absenteesism, hospitalisation, disability, excessive job turnover and permature death. This programme should also cover relaxation, physical exercise, diet control etc. 4. Alternative work schedules: Alternative work schedules including work at home,flexible working hours, staggered hours, reduced work week, part-time employment, may be introduced for the convenience and comfort of the workers, as the work schedule which offers the individual the leisure time, flexible hours of work is preferred. 5. Participative management and control of work: Trade Unions and workers believe that workers participation in management and decision making improves QWL. Workers also feel that they have control over their work, use their skills and make a real contribution to the job if they are allowed to participate in creative and decision making process. 6. Recognition: Recognising the employee as a human being rather than as a labour increases the QWL. Participative management, awarding and rewarding systems, congratulating the employees for their achievement, job enrichment, offering prestigious designations to the jobs, providing well furnished and decent work places, offering membership in clubs or associations, providing vehicles, offering vacation trips are some means to recognise the employees. 7. Congenial worker supervisor relations: Harmonious supervisor worker relations gives the worker relations gives the worker a sense of social association, belongingness, achievement of work results etc. This, in turn, leads to better QWL. 8. Grievance procedure: Workers have a sense of fair treatment when the company gives them the opportunity to ventilate their grievances and represent their case succinctly rather than settling the problems arbitrarily. 9. Adequacy of resources: Resources should match with stated objectives: Otherwise, employees will not be able to attain the objectives and this results in employee dissatisfaction and lower QWL. 10. Seniority and merit in promotion: Seniority is generally taken as the basis for promotion in case of operating employees; merit is considered as the basis for advancement for managerial people, whereas seniority - cum merit is preferred for promotion of ministerial employees. The promotional policies and activities should be fair and just in order to ensure higher QWL. 11. Employment on permanent basis: Employment of workers on casual, temporary probationary basis gives them a sense of insecurity. On the other hand, employment on permanent basis gives them security and leads to higher order QWL. QWL AND FRINGE BENEFITS P/HR manager has to build and maintain QWL by providing a wide range of fringe benefits as discussed earlier. These benefits results in improvement in productivity, reduction in absenteeism, turnover, sick leave, alternation etc. These benefits or maintenance activities include medical and health benefits, safety measures, legal and financial services, consumer services, retirement benefits, conveyance, canteen facilities, recreational services, career counselling, employee information reports etc. QWL AND PRODUCTIVITY The general perception is that improvement in QWL costs much to the organisation. But it is not so improvement over the existing salary, working conditions and benefits will not cost much. However, the rate of interest in productivity is higher than that of cost of QWL. Thus, increase in QWL results in increase in productivity. But continual increase in QWL eventually leads to reduction in productivity due to increase in cost of output. This is because the workers output does not increase proportionately after a certain level, even though QWL increases. Improved QWL leads to improved performance. Performance means not only physical output but also the behaviour of the worker in helping his colleagues n solving job related problems accepting orders with enthusiasm promoting team spirit and accepting temporary unfavourable work conditions without complaint. QUALITY OF WORK LIFE AND PERSONNEL / HUMAN RESOURCE MANAGEMENT Quality of worklife is broader than motivation though these two terms seem to be similar. All personal related activities affect quality of work life, some examples are. Quality of worklife, some examples are: 1. Adequate and fair compensation: There are different opinions about adequate compensations. The Committee on Fair Wages defined fair wage as "....the wage which is above the minimum wage but below the living age" 2. Safe and healthy working conditions: Most of the organisations provide safe and healthy working conditions due to humanitarian requirements and / or legal requirements. In fact, these conditions are a matter of enlightened self-interest. 3. Opportunity to use and develop human capacities: Contrary to the traditional assumptions, QWL is improved ".... to the extent that the worker can exercise more control over his or her work, and the degree to which the job embraces an entire meaningful task" but not a part of it. Further, QWL provides opportunities like autonomy in work and participation in planning in order to use human capabilities. 4. Opportunity for career growth: Opportunities for promotions and limited in case of all categories of employees either due to educational barriers or due to limited openings at the higher level. QWL provides future opportunity for continued growth and security by expanding one's capabilities, knowledge and qualifications. 5. Social integration in the work force: Social integration in the work force can be established by creating freedom from prejudice, supporting primary work groups, a sense of community and interpersonal openness, egalitarianism and upward mobility. 6. Constitutional protections on the work organisation: QWL provides constitutional protection to the employees only to the level of desirability as it hampers worker's satisfaction of doing the job beyond that level. It happens because the management's action is challenged in every action and bureaucratic procedures need to be followed at that level. Constitutional protection is provided to employees on such matters as privacy, free speech, equity and due process. 7. Work and quality of life; QWL provides for the balanced relationship among work, non-work and family aspects of life. In other words, family life and social life should not be strained by working hours including, overtime work, work during inconvenient hours, business travel, transfers, vacations etc. 8. Social relevance of work. QWL is concerned about the establishment of socially beneficial manner. The workers self-esteem would be high if his work is useful to the society. Quality of work life suffers from barriers, like any other new scheme. Management, employees and unions fear the effect of unknown change. All these parties feel that the benefits of this concept are few, though they are convinced about its effect on personnel management as a whole and on the individual parties separately. Management should develop strategies to improve quality of work life in view of the barriers. STRATEGIES FOR IMPROVEMENT IN QWL The Strategies for improvement in quality of work life include self-managed work teams, job redesign and enrichment, effective leadership and supervisory behaviour, career development, alternative work schedules, job security, administrative or organisational justice and participate management. 1. Self-managed work teams: These are also called autonomous work groups or integrated work teams. These work teams are formed 10 to 20 employees who plan, coordinate and control the activities of the team with the help or a team leader, who is one among them. Each team performs all activities including selecting their people. Each item has authority to make decisions and regulate the activities. Group, as a whole, is accountable for the success or failure. Salaries are fixed both on the basis of individual and group achievement. 2. Job redesign and enrichment: Narrow jobs can be combined into larger units of accomplishment. Jobs are redesigned with a view to enriching them to satisfy higher order human needs. 3. Effective leadership and supervisory behaviour: For effective leadership and supervisory behaviour "9-9" style of managerial grid is suitable. 4. Career development: Provision for career planning, communicating and counselling the employees about the career opportunities, career path, education and development and for second careers should be made. 5. Alternative work schedule: Provision for flexible working hours part time employment, job sharing and reduced work week should be made. 6. Job security: This tops the employee's list of priorities. It should be adequately taken care of. 7. Administrative or organisational justice: The principles of natural justice, should be taken care of in conducting disciplinary procedure and grievance procedures, similarly fair play and equity should guide decisions relating to promotions, transfers, demotions, work assignment, leave etc. QUALITY CIRCLE Both employees and management are jointly involved in decision making process on matters of mutual interest in participate management. The objective of participate management is to produce better solutions to the problems which will benefit all concerned. The two parties aim at achieving common objectives in participative management. Participative managers consult with their followers, involve them in decisionmaking so that their group will act as a social unit in work performance. Participate managers are not autocratic or free-rein managers and they responsible and accountable ultimately for the success or failure of their departments. Participate management satisfies economic, psychological and social needs of employees. It gives a sense of significance, pride and accomplishment, freedom and opportunity for expression, a feeling of belongingness to the place of work and a sense of creativeness to the employees. Participate management aims at (i) improving organisational efficiency, (ii) developing social education for effective solidarity among workers. (iii) attaining industrial peace, (iv) treating the workers are human beings, and (v) developing self-management teams in industry. The result of participate management is that management would be effective if it is in the form of voluntary group. GROUP INTERACTION - AN - ESSENTIAL STTRUCTURE OF QUALITY CIRCLE A group is defined as two or more individuals, interacting with and interdependent on each other, who come together to achieve particular objectives: Groups may be formal or informal. Formal groups are defined and formed by organisation structure with clear-cut assignment, responsibility, accountability, rules and norms. Informal groups are the natural formations in the work environment and form in response to the need for social contact. Thus these groups are not structured and determined by the organisation. These groups satisfy the social needs of their members. The important aspects of group interaction are group goals, participation, leadership norms and cohesiveness. Goals: Groups generally have who types of goals viz., task goal and maintaining the group itself. Task goal is related to the main function for which the group is formed. The second goal is related to dealing with inter-personal conflict resolving it and maintaining inter-personal relations. Group members trusting behaviour will contribute to increased originality, greater emotional stability, less defensive and improved self-control. Type of Participation in Group: Participation in a group may be voluntary, invited or assigned. If the group activity is effective, members voluntarily join the group in significant numbers. Some people like experts and specialists are invited, to join the groups as members of advisors. Group as whole and other members of the group are benefited by the interaction of those special members. Some people like experts and specialists are invited, to join the groups as members of advisors. Group as a whole and other members of the group are benefited by the interaction of those special members. For example, University Professors invited to the special members on various committees of Government, economic bodies, political and social organisations. These institutions are benefitted by the rich theoretical base of the professors. Participation in group is also assigned. The management forms various groups and assigns the membership including the tasks and responsibilities to various individuals. For example, the managerial personnel may form a group with three assistant personnel managers to suggest measures to minimize absenteeism. He assigns three different aspects of the problem like absenteeism among unskilled workers,technical personnel and managerial personnel to the three assistant personnel managers of the group. Leader : The leader of the group is a must to co-ordinate and control the members as well as activities whether it is a formal group or an informal group. Group may have to types of leaders viz., takes leader and unofficial social leader, as they have two basic objectives i.e. performing the main task and satisfying members social needs. Norms : Groups norm is expected behaviour of group members. These norms are normally unwritten in the case of informal groups. The norm of quality circles is openness which helps to solve the problems better. Cohesiveness: is the degree attraction that the group has for its members. This attraction may be in the form of loyalty, sense of belongingness, friendliness, feeling of responsibility for group tasks. Group cohesion can be increased through stability of membership, similar values of members, providing free communication opportunities, physical isolation from the formal control, small size. With this background about the participative management and group interaction, we now discuss the history of quality circles, one of the sophisticated technique of participative management. HISTORY OF QUALITY CIRCLES Though the quality circles had been in operation with different names in India, the credit for developing this concept has gone to the Union of Japanese Scientists and Engineers along with Kaoru Ishikawa of Tokyo University. In fact R.S.Dwivedi, rightly felt that, historically 'Gun Mandal' (Quality Circles) have been used in different social, religious, and political settings since the dawn of Indian Civilization to enhance 'satvic qualities' (i.e., Urge for excellence and knowledge, concern for others interest, trust and confidence, self-actualization etc) minimize rajasic (urge for economic resources, authority and power, concern for personal interest, restlessness and tension, craze for ego inflation etc.) and tamasic qualities (i.e. prone to err, indolence and wickedness, urge to exploit and damage others, distrust, loss of self-identity etc). Non-application of the science of Bhagavatgita and Vedas to industrial and business organisations is one of the reasons for dependence of Indian Organisation on the techniques developed in foreign countries. The concept of quality circles is not an exception to it. DEFINITION OF QUALITY CIRCLE (QC) A quality circle has been defined as a self-governing group of workers with or without their supervisors who voluntarily need regularly to identify, analyse and solve problems of their work field. But there is misconception that quality circle and task force are one and the same and quality circle is not a task force and former is broader than the latter. A task force is a group of most skilled employees selected and appointed by management, engaged in various functions, with an orientation to problem-solving. The QC is a voluntary association of workers engaged in similar work with a orientation of human relations, QCs are formed to attain specific objectives. OBJECTIVES The important objectives of quality circles are: 1. To develop, enhance and utilise human resources effectively 2. To improve quality of products / services, productivity and reduce cost of production per unit of output. 3. To satisfy the workers psychological needs for self-urge, participation, recognition etc. with a view to motivate them. Accomplishment of this objective will ensure enhancement of employee morale and commitment. 4. To improve various supervisory skills like leadership, problem solving, inter personal and conflict resolution. 5. To utilize individuals imaginative, creative and innovative skills through participation, creating and developing work interest, inculcating problem solving techniques etc. Achievement of these objectives effectively requires the use of certain techniques. TECHNIQUES Mainly three techniques are used in discussing about various problems in quality circles. They are (1) Brain Storming processes, (2) Cause and effect or fishbone diagrams and (2) Sampling and Charting methods. 1. Brain storming processes: Under this techniques, complete free environment is created with a view to stimulate creativity. In this free environment, employee's ideas are free from criticism. Hence, employees voice all their worthy as well as stupid ideas. All these ideas are recorded seriously. This technique is useful to generate as many ideas as possible. Later, the plus and minus points of each idea are discussed, before taking a final decision. 2. Cause and Effect: Members are asked to find out the causes for the identified problem. In this process, members identify one important effect of this cause on the problem. Then they identify other causes and their effects. Charting out of those causes and effects resembles fish bone diagram. Hence this technique is also called "fishbone diagram". 3. Sampling and charting methods: Members of the quality control observe the events and their consequences in the form of positive of negative results. They chart out all their observation either in sequence or in some other relationship, which gives clear idea of the problem. ORGANISATIONAL STRUCTURE OF QC Organisational structure of QC generally consists of four levels, viz., QC members , QC leader, facilitator and Steering Committee. (Figure shown below). 1.Steering Committee: It consists of representatives of management from different departments at top level and top level representative of recognised unions / federations of employees. The important functions of this committee are: a) Sponsoring QC programme in the entire organisation by defining overall objectives and operating guidelines relating to the identification of the department where the circles are to be formed, provision of training to leaders and members of QCs, identification of the problem to be discussed, receiving, discussing and finalising the suggestions, action plans, budget etc. b) Selecting and training the facilitators, c) Providing the resources and moral support to the facilitators. 2. Facilitator: Facilitator is an important person between the quality circle and the steering committee. Facilitator would (a) act as a consultant and guide to the QC leaders (b) initiate the setting up of QCs leaders and members (c) provide feedback to the steering committee about the proceedings and results of the QCs. (d) act as an evaluator and reviewer of QC operations and programmes. The facilitator has to maintain sound inter-personal relations in order to function as a social leader. He should prove himself successful in acting as a Co-ordinator, Coach, Promoter, Teacher and Innovator. He is expected to be an excellent resource person for training the managers at higher level. 3.QC Leader: Activities of each circle are co-ordinated and streamlined by its leader. Generally, he is an elected member of the circle. Manager / Supervisor of that particular department / section, where the QC is set up, may act as the leader. The activities of a QC Leader include: a) Conducting meetings, initiating of the discussion and motivate the members of participate actively, (b) acting as a link between the members and facilitator, and (c) training the members in problem identification, discussion and problem solving techniques. The leader must have skills in discussion, initiation and promotion of active participation. He should be a trained one in group dynamics, human behaviour, and participative leadership styles. 4.QC Members: Members of a single work group form into a quality circle. They join voluntarily or on invitation. They are also free to withdraw from membership. Members activities include: attending meetings, participating actively in problem identification, contributing ideas in developing solutions to the identified problems and the like. In addition to the sound organisational structure. QCs should follow systematic process in order to attain the objectives effectively. QC PROCESS Size of each QC should be moderate so as to enable fruitful discussion. Size may vary between 6 and 12. The members and leader are given instructions regarding problem-solving techniques. Initially, the QC members should acquaint themselves about the objectives and role of QCs. Each working session of a QC may be for one hour. There may be at least one working session in every week, preferably during working hours and in the company premises. If the working session is conducted after the working hours, the members may be paid honorarium for attending the meeting. The members of QC select the problem from the operational problems suggested by management or by the members of the QC. After selecting the problem, the members analyse it by using the various problem-solving techniques discussed earlier. Sometimes the QC leader invites various experts to analyse the problem and their effects. Then the members develop alternative solutions, their effect and consequences on organisation and members, cost benefit analysis and merits and demerits of each solution. The next stage is that members select the best solution from among the alternative solutions. Some of the members then present the selected solution to the management. Management reviews the solution and may or may not accept the solution offered by the QC members. But managers, in most cases, accept the solution. If the solution is accepted, the members either by themselves and / or with the help of others implement the solution. Management has to provide all types of support, including finance, to implement such solutions. Thus, the support of management at the help is essential for effective functioning of QCs. HOW TO MAKE QUALITY CIRCLES EFFECTIVE? The members and leader of the QC should recognise and practice the following concepts to make the QC process effective. a. Acceptance by all, particularly the leader, that there is more than one way to solve a problem successfully. b. Encouragement of all members to clarify and build on each others ideas. c. Periodic summarising of the activities by the leader, or a member to ensure common understanding. d. Avoidance of heated arguments in favour of one particular position. Vigorous eloquence should not be a substitute for clarity and logic. e. Avoidance of such techniques as majority vote and conflicting to obtain group agreement. f. Promotion of constructive disagreements in place of dodging arguments in search of an artificial state of harmony. Being suspicious of agreements that come too quickly and easily. A circle leader, who is also the supervisor must constantly be aware of the influence of the supervisory position. However, there are certain problems in QCs regarding fitting of QC is existing cultural environment in the industry, rewarding awarding and motivating the QC members, leaders, and facilitators. These problems can be solved if top management takes proper care and interest. This participate scheme will contribute to the organisational effectiveness and to enhance job satisfaction, sound human relations in an organisation and quality of work life of employees. Employees participating in management contributes to the effective functioning of an industrial organisation because of his ideas, commitment and concern for the employees in the organisation. There is another organisation in the industry i.e., trade union (or employees organisation) which should also be made effective. Participative management will prove successful even in correcting the functioning and making the trade union successful. Here participative management does mean exactly opposite to the employee participation in management i.e., participation of management representatives in employees organisation. MODEL QUESTIONS 1. What is Performance Appraisal?Differentiate it from Job Evaluation what are the varied objectives of Performance Appraisal? 2. What are some of the Problems encountered in Performance Appraisal? How can they be overcome? 3. Describe and evaluate any four modern techniques of Performance Appraisal? 4. What is Quality of Work Life (QWL)? Discuss same of the key issues relating to QWL. 5. Write short notes on a. Quality circles b. BARS c. MBO CASE 1 A Case on Performance Evaluation in South Indian Plantations Co Ltd* South Indian Plantation Co. Ltd., produces different types of plantation products. The company has several tea, coffee and rubber estates. Each estate is administered by a Manager, assisted by 1 to 3 Assistant Managers, under the overall control of the General Manager (Operations) who reports directly to the Managing Director. The Assistant Managers are directly recruited as Assistants and are on probation for two years. During the period of probation, they work directly under the control and guidance of the Managers of the particular estates to which they are assigned. They learn the job while doing it and the Manager concerned assigns them different responsibilities to make them acquainted with different aspects of operations of the estate, including office management. The Manager concerned is also responsible for their performance evaluation, mainly on the basis of Annual Performance Reports, which are reviewed by the G.M. (Operations). When an Assistant, on completion of two years of service, is confirmed on the basis of his annual performance reports he is posted in the same estate or in another as an Assistant Manager in the appropriate scale. As Assistant Manager also his performance is evaluated on the same format, by the Manager of the estate in which he is posted, subject to the review of the G.M. (Operations). In recent years, there has been some discontent among the Assistant Managers against the existing system of performance evaluation. There were some feeling that the Assistant Managers should not be left entirely to the whims of the Managers concerned, some of whom as Assistant Managers, because the company never had a systematic training and job-rotation scheme. As such they had insufficient experience and background in certain other operations to assess the Assistant Managers, who were specializing in those operations and in which some of them had formal technical qualifications as well. The General Manager (Operations) also partly shared these feelings. Moreover, he also wanted to improve the quality of the evaluation of Assistant Managers, as he could not fully trust the conventional reporting formal, based on the assessment of typical performance characteristics of the assesses with qualitative statements like 'Very Good', 'Poor'. Needs improvement etc., made by the managers concerned without any specific ________ *Source : Subrates Ghosh, Personnel Department, Oxford IBM New Delhi, 1990 P.P 148-150 guidelines for evaluation and arrangement of scoring the degrees of performance characteristics. As a provisional measure, he issued a circular that from the next year, there would be an Annual Examination to be held in each estate for assessing the knowledge of the operational matters and the intellectual capacity of the Assistant Managers, in addition to the Annual Performance Reports of the Managers on their performance. The question papers for these annual examination for the assistant managers in each estate would be set by the estate manager concerned and he himself would examine the answer-scripts. The overall performance of each assessee would be judged by these two instruments. viz., The Annual Performance Reports and Annual Examination Results and both would enjoy equal weightage. The circular created a stir in the company. The managers were almost equally divided for and against the proposed examination, while most of the Assistant Managers felt uncomfortable about the idea of holding written, examinations for performance evaluation. They appreciated the G.M's anxiety to improve the equality of the evaluation system, by adding a supplementary dimension to the conventional annual reports, but criticized the written examination as essentially theoretical. Some other assistant managers, however, welcomed the new proposal, as a better method of testing the operational knowledge in estate management on a more objective basis. However, they felt that the proposed examination systems should be changed in certain respects. Particularly they were not happy about the proposed paper setting and script evaluation arrangements. They suggested that the papers be set at the Head Office and examined by persons other than particular estate manager under whom the assistant managers concerned were working. QUESTIONS FOR DISCUSSION 1. Critically examine the existing system of performance evaluation of assistant managers of the company. Does it require any change? Give reasons for your opinion. 2. Examine the proposed annual examination as a supplementary instrument of performance evaluation of assistant managers. What improvements, if any, would you recommend for the proposal system? 3. If you are appointed as a special officer of the company to review its performance evaluation, system, what would be your recommendations to the authorities. Printed by: MANO PRINTERS, Ph: 65492374, Chennai 87. - End Of Chapter -