An Introduction to Human Resource Management

CHAPTER ONE
An over view of Human resource management
1.1. Definition and background
HRM may be defined as a set of policies, practices and programmes designed to maximize both
personal and organizational goals.
According to Flippo HRM is the planning, organizing, directing and controlling of the
procurement, development, compensation, maintenance, integration and reproduction of human
resources to the end that individual, organizational and societal objectives are accomplished.
The following are few definitions by different scholars

HRM has been defined as the function or unit in organization that facilitate the most
effective utilization of human resources to achieve the objective of both the organization
and the employee.
HRM is that part of management refers to the polices, practices and systems that
influence employees behavior, attitude and performance.
HRM is the management function that help managers recruit, select, train and develop
members for organization
HRM is the effective management of people at work.
1.2. characteristics of HRM
The following are the main features of HRM:
Comprehensive function: HRM is concerned with managing people at work. It covers all
type of people at all level in the organization. It applies to workers, supervisors, officers,
managers and other type of personnel.
People-oriented: HRM is concerned with employees as an individual as well as groups. It
is a task of dealing with human relationship within an organization. It is the process of
achieving the best fit between individuals, jobs, organizations and the environment. It is
the process of bringing people and organizations together so that the goals of each are
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met.
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Alemayehu Fanta (BSc, MPA, MA) Page 1

Action-oriented: HRM focuses on action rather than on record keeping or procedures. It
stresses the solution of personnel problems to achieve both organizational objectives and
employees personal goals.
Individual oriented: under HRM, every employee is considered as an individual so as to
provide service and program to facilitate employee satisfaction and growth.
Development oriented: HRM is concerned with developing potential of employees so that
they got maximum satisfaction from their best efforts to the organizations.
Future oriented: HRM is concerned with helping an organization achieve its objectives in
the future by providing competence and well motivated employees.
Challenging function: managing of human resource is a challenging job due to the
dynamic nature of people. People have sentiment and emotions so they cannot be treated
like machines. It is, thereof, necessary to handle them tactfully. It is not only managing
people but administrating a social system.
Continuous function: MHR is an ongoing or never ending exercise rather one shot
function.
Pervasive function: HRM is inherent in all organizations and at all levels. Each and every
manager is involved with human resource function.
Science as well as an art: HRM is a science as it contains an organized body of
knowledge consisting of principles and techniques. It is also an art b/c it involve an
application of theoretical knowledge to the problems of human resource.
1.3. The importance of Human Resource Management

The importance of HRM can be grouped into four dimensions. These are
Corporate(enterprise) dimension
Professional dimension
Social dimension and
National dimension
1. Significance for enterprise: HRM can help the enterprise in achieving its goal more
efficiently and effectively in the following ways.
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Attracting and retaining the required talent through effective human resource
planning (HRP), recruitment, selection, placement, orientation, and compensation
and promotion policies.
Developing the necessary skills and right attitudes among the employees through
training, development, performance appraisal etc.
Securing willing cooperation of employees through motivation, participation,
grievance handling etc.
Utilizing effectively the available human resource
Ensuring the enterprise will have in future a team of competent and dedicated
employees.
2. Professional significance: Effective MHR (management of human resource) helps to
improve the quality of work life. It permits team work among employees by providing
healthy working environment. It contributes to professional growth in the following
ways:
Providing maximum opportunities for personal development of each employee
Maintaining health relationship b/n individuals and different work groups.
Allocating work properly
3. Social significance: Sound HRM has a great significance for the society. It help to
enhance the dignity of labor in the following ways:
Providing suitable employment that provides social and psychological satisfaction
to people.
Maintaining a balance b/n the job available and the job seekers in terms of
numbers, qualifications, needs and aptitudes.
Eliminating waste of human resources through conservation of physical and
mental health.
4. National Significance: HR and their management play a vital role in the development of a
nation. The effective exploitation and utilization of nations natural, physical and
financial resources require an efficient and committed manpower.
1.4. Objective of the HRM function
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The contributions HRM makes to organizational effectiveness include the following

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Helping the organization reach its goals

Employing the skills and abilities of the work force efficiently
Providing the organization with well-trained and well-motivated employees
Increase to the fullest the employees job satisfaction and self-actualization
Developing and maintaining a quality of work life that makes employment in the
organization desirable.
Communicating HRM policies to all employees
Helping to maintain ethical policies and socially responsible behavior
Managing change to the mutual advantage of individuals groups, the enterprise and
the public.
1.5. Human resource management process
HRMP may be summarized as the follows:
1. Human resource planning
2. Entry
Recruitment
Selection
Induction
3. Performance Management
Performance Monitoring
Rewards
Development
4. Exit
Redundancy
Retirement
Dismissal
1.6. Function of human resource management
There are two broad functions of HRM. These are
Management function(planning, organizing, leading and controlling)
Operative function(procurement, development, compensation, integration and
maintenance)
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1.7. Roles of human resource management: The most common roles played by human
resource management are:
As a specialist
As an information source
As a change agent
As a housekeeper
As a fire fighter
1.8. Evolution of HRM

The history of HRM can be traced to England, where carpenters, leather workers and other craft
people organized themselves into association. They used their unity to improve their work
conditions. The field further developed with the arrival of the industrial revolution in the latter
part of the 18th century, which laid the basis for a new and complex industrial society. The
drastic change in technology, the growth of the organizations, the rise of unions, and government
concern and intervention resulted in the development of personnel department. There is no
specific data assigned to the appearance of the first personnel department but around the 1920s
more and more organization seemed to take note of and do something about the conflict b/n
employee and management.
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Chapter Two
Human resource Environment
2.1. Definitions
Environment is referred to as those forces/ influence that affect the functioning of human
resource department internally or externally. This forces/ influences may affect the functions
positively or negatively. Any human resource management program or activity in an
organization does not operate in a vacuum. It is influenced by and influences are the external
environment and internal environment.
2.2. An external influence includes:
Government laws and regulations
Union procedures
Economic conditions
The labor forces Etc.
Government laws and regulations: a powerful external environmental influence is
government law and regulations, which affect organization directly. Federal regulations
influence HRM activities, policies and programs. When an organization makes decision
about hiring, promotions, managing diversity, performance evaluation, downsizing and
discipline, it must go in line with government regulation.
Union procedures: The presence of a union directly affects most aspects of HRM
recruiting, selection, performance evaluation, promotion, compensation and benefits,
among others. A union is an organization that represents the interest of employees on
such issues as working conditions, wages and salaries, fringe benefits, employees on such
issues as working hours.
Economic conditions: Two aspects of economic conditions affects HRM programs. These
are: productivity and the work sector of the organization.
Productivity: Data, empirical evidence, and general opinion indicate that
the productivity of employees is an important part of a nations general
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economic condition. mangers are concerned with productivity b/c they feel

it is a representative indicator of the overall efficiency of an organization.
Productivity is defined as output of goods and services per unit of input of
resources used in production process. Input includes: labor, capital,
material, fuel and energy. Productivity problems will not solved without
utilization of HRM activities.
The work sector of the organization: HRM in public sector is
fundamentally different from HRM in private sector. B/c it varies
structurally. The public faces a different world. HRM in public sector is
under much more direct outside pressure. Politians, the general public
pressure groups and reporters influence human resource manger much
more in the public sector than in the private sector.
The labor forces. The level of education has increased leading to significant changes in
employee values. Understanding the characteristics and composition of the labor force is
important when designing a HRM.
2.3. Internal factors include:

Strategy
Goal
Organization culture
Nature of task
Work group
Leaders style and experience
The internal Environmental influences , such as strategy, goals, organizational couture, nature
of the task, work group and leaders style and experiences and factors that that are found within
the organization.
Strategy: A strategy indicates what an organizations key executives hope to accomplish in
the long run. As a plan , a strategy takes the firm into the area of competition in the
environment and into alignment with the resource of the firm.
Goal: the goals of the organization differ with and among the departments. All departments
probably have goals that include employee satisfaction, survival, and adaptability to
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change. How much the HRM functions is valued and how it implemented is affected by
these goals.
Organization culture: it refers to system of shared meaning held by members that
distinguishes the organization from other organization. The organization culture represents
the perception held by the organization employees. culture can have an impact on:
o the behavior
o productivity and
o expectation of employees
It can provide a benchmark of standards of performance among employees. it can also
provide clear guidelines on attendance, punctuality, concern about quality and customer
service.
Nature of task: HRM serve as the effective matching of the nature of the task with
the nature of the employees performing the task. The nature of the task obviously
affect recruiting and selection, since employees will probably be more satisfied
and productive if their preferences are met. With jobs that are difficult, dirty, or
in smoky or hot environment, the manager must provide additional incentives
(more pay, shorter hours, priority in vacations)b/c few people prefer such jobs or
the manger should try to find employees who can handle the conditions better.
Work group: Work group directly related to the success of HRM activities. If
work group opposes HRM programs, it can damage them. HRM programs that
can be success or failure depending on the support or resistance they receive from
work groups include incentive compensation, profit sharing, sharing, and safety
and labor relations. Operational and HR managers who desire success in such
programs should at least consider permitting work-group participation in
designing and implementing HRM.
Leaders style and experience: the experience and leadership style of the
operating manager or leader directly affect HRM activities b/c many, if not most ,
program must be implemented at the work unit level. thus, operating manger is a
crucial link in the HRM functions.
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2.4. Human resource management model
1. Environmental analysis
2. organizational mission and goals analysis
3. Analysis of organizational strengthen and culture
4. Analysis of organizational strategies
Choice and implementation of human resource strategies
Planning human resource attracting human resources
Placing, developing and Motivating and rewarding
Evaluating human resources Human resources
Maintaining high
Performance
Review and evaluation of human resource strategies
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Chapter three:
Job analysis and Human resource planning
3.1. Meaning and definition of Job analysis
Job analysis has been defined as the process of determining by observation and
studies the tasks, which comprise the job, the methods, and equipment used and
skilled and attitude required for the successful performance of the job. Job analysis is
essentially a process of collecting and analyzing data related to a job. It is the part of
overall work planning called work design. Job analysis may also called, task analysis
or skills analysis.
Job analysis provides the following information about the job: These are;
identify the job in terms of its title and code number
the operation and task involved in the job including the training, significance,
complexity and sequence
Location, physical setting, hazards and discomforts, supervision given and
received and other characteristics of the job.
Duties involved in the job along with the frequency of occurrence of each
duty.
Materials, methods and equipments used in performing the job.
how the job is performed
Relationship of the job with other jobs in the organization
Personal attributes required for performing the job( physical, educational,
mental skill, attitude, experience and training etc.
Terminology (vocabularies) of jobs:
Job: It is a group of positions involving some duties, responsibilities, knowledge and skill
Position: It implies collection of tasks and duties regularly assigned to one person.
Occupation: it implies a group of jobs which are similar as to the type of work which
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contains common characteristics. e.g. business is an occupation consists of several types

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of jobs like production, sale, etc.

Duty: it means related sequences of tasks. e.g. Pickup, sort and delivering incoming mail.
Task: it refers to a distinct work activity with identifiable beginning and end. eg. Sorting
mail into appropriate boxes.
Job analysis: a purposeful, systematic process for collecting information on the important
related aspects of a job.
Job description: A factual statement of tasks and duties involved in the job.
Job specification: A written explanation of the knowledge, skills, abilities, traits and
characteristics necessary for effective performance on given job.
job family: it implies jobs of similar nature e.g. clerical jobs
3.2. Objective of analysis
The main objectives of job analysis are:
Job redesign: A job may be analyzed to simplify the process and methods involved. work
simplification helps to improve productivity
Work standards: in order to establish job and time standards.
to reveal what actually done as opposed to what should be done on a job.
to find out criteria for successful job performance
Miscellaneous: job analysis provides support to other personnel activities like:
recruitment, selection, training, performance appraisal, job evaluation, safety etc.
3.3. The steps in job analysis;
The main steps involved in the job analysis are;

1. Organizational analysis: an overall view of various jobs in the organization should be
known. it helps to judge the linkage b/n jobs and the organization interrelationships
among jobs and contribution of various jobs to efficiency and effectiveness of the
organization. Background information should be collected in the form of:
Organizational chart: it shows the relation of jobs with other jobs in the
organization.
Class specification: it describes the general requirements of the job family.
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Work flow chart: it indicate the flow of activities involved in a job.

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2. Organizing job analysis program: it is necessary to plan and organize the program of
job analysis. A budget and a time schedule should be developed.
3. Deciding the uses of job analysis information: It is true that information generated by
job analysis can be utilized for practically of all functions of HRM
4. Selecting representative jobs for analysis: it would be highly time consuming and costly
to analysis all jobs. it is, therefore, desirable to select a representative simple of jobs for
the purpose of detailed analysis.
5. Collection of data: Data may be collected from employees who actually perform the job
or from their supervisors.
6. Developing job description: the information collected in the previous step is used in
preparing a job description. This is a written statement that describes in brief the task,
duties, and responsibilities which need to be discharged for effective job performance.
7. Preparing job specification: the last step in job analysis is to prepare a job specification
or employee specification. This is the written statement which specifies the personal
attributes in terms of education, training, experience and aptitude required to perform the
job.
Job analysis provides information necessary for organizing work in ways that allow employees
to be both productive and satisfied.
Summary
I. Collection background information

organizational chart
Class specification
work flow chart
II. Deciding the use of job information
procumbent
development
compensation
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integration
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maintenance

III. selecting the representative jobs
Number of jobs to be analyzed
priorities of different jobs
IV. Collection of job information
V. Job description
VI. job specification
VII. use of information from step 1-6 for
job design
planning
recruitment
selection and training
performance evaluation
Compensation and benefits
3.4. Importance of job analysis
A comprehensive program of job analysis is an essential element of sound human resource

management. It provides valuable information for taking right decisions about the organizations
human resources. Or Job analysis is a human resources discipline that helps employers pick
better candidates for jobs, get the most out of existing workers and produce valuable training and
educational materials.
Job analysis is a very important HRM component. Using this, companies are able to analyze and
document the requirements for each job in the company. The company identifies the skills
needed for each job. On the basis of this, the company is able to decide on the authority,
responsibility, accountability and pay for each position.
The specific uses of job analysis are:
Organizational design: job analysis is useful in classifying jobs and interrelationships among
them. Responsibility commensurate with authority and accountability for various jobs can be
specified so as to minimize duplication or overlapping.
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Determining Job Requirements: Job analysis lets the company able to establish its wants for
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each job. The company decides on what job needs: What skills, education qualifications and past

experience. One particular job may need only entry-level employees. Another may need
employees with a particular educational qualification. Yet another job may need a minimum
degree of education as well some a specific level of prior experience. By determining job
requirements, the company is able to match the right employees to the right jobs.
Placement and orientation: A clear understanding of job requirements helps in matching these
requirements with abilities, interest and aptitudes of the people. Each job must ne assigned to the
person who is best suited for it. The orientation program can geared towards the employees
learn the activities, task and other duties that required to perform a given job more effectively.
Performance appraisal: job analysis helps in determine performance standards sets and its
critical part of the job. the superior can compare actual performance with standards set with help
of job analysis
Job evaluation: Job analysis serves as a basis for determining the relative worthiness of
different jobs. it is , therefore, helps in determining appropriate wage and salary structure with
internal pay equity b/n jobs.
Labor relations: information obtained through job analysis is helpful for management and labor
union for collective bargaining. it is also help to resolve disputes and grievances related to work
load, work procedures.
Growth Plans: The Company is able to evaluate the areas where it wishes to grow and the
requirements for the new openings that would come up. For example, if the company presently
manufactures shoes and is planning to start manufacturing clothes as well, it would need
additional manpower with the required skills. It would need textile engineers, tailors and
individuals who have prior experience in marketing garments.
Evaluation of Safety Standards: With job analysis, the company is able to evaluate whether it
is providing the minimum safety standards to its employees. Some jobs need employees to work
with very high-power machines. For this, the employees are required to wear protective clothes.
Also, some employees involved in the production process may be exposed to noxious fumes. The
company then takes the apt measures to mitigate the dangers associated the jobs.
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Training and Development: The job analysis establishes all the areas where the employees
need to be trained and developed. The company may have acquired new assets and the
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employees may need to be trained on how to operate them, or the company may have recently
developed new software and may need its employees to be taught how to use it.
3.4. Methods of collecting job analysis information
1. Job performance: In this method the job analyst actually performs the job in question. The
analyst, thus, receives first hand experience of contextual factors on the job including physical
hazards, social demands, emotional pressures and mental requirements. This method is useful for
jobs that can be easily learned. It is not suitable for jobs that are hazardous (e.g., fire fighters) or
for jobs that require extensive training (e.g., doctors, pharmacists).
2. Personal observation: The analyst observes the worker(s) doing the job. The tasks
performed, the pace at which activities are done, the working conditions, etc., are observed
during a complete work cycle. During observation, certain precautions should be taken
The analyst must observe average workers during average conditions.

The analyst should observe without getting directly involved in the job.
The analyst must make note of the specific job needs and not the behaviors
specific to particular workers.
The analyst must make sure that he/she obtains a proper sample for
generalization.
This method allows for a deep understanding of job duties. It is appropriate for manual, short
period job activities. On the negative side, the methods fail to take note of the mental aspects of
jobs.
3. Critical incidents: The critical incident technique (CIT) is a qualitative approach to job analysis
used to obtain specific, behaviorally focused descriptions of work or other activities. Here the job
holders are asked to describe several incidents based on their past experience. The incidents so
collected are analyzed and classified according to the job areas they describe. The job
requirements will become clear once the analyst draws the line between effective and ineffective
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behaviors of workers on the job. For example, if a shoe salesman comments on the size of a
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customer's feet and the customer leaves the store in a huff, the behavior of the salesman may be

judged as ineffective in terms of the result it produced. The critical incidents are recorded after
the events have already taken place both routine and non-routine. The process of collecting a
fairly good number of incidents is a lengthy one. Since, incidents of behavior can be quite
dissimilar, the process of classifying data into usable job descriptions can be difficult. The
analysts overseeing the work must have analytical skills and ability to translate the content of
descriptions into meaningful statements
4. Interview: The interview method consists of asking questions to both incumbent and
supervisors in either an individual or a group setting. The reason behind the use of this method
is that job holders are most familiar with the job and can supplement the information obtained
through observation. Workers know the specific duties of the job and supervisors are aware of
the job's relationship to the rest of the organization.
Due diligence must be exercised while using the interview method. The interviewer must be
trained in proper interviewing techniques.
It is advisable to use a standard format so as to focus the interview to the purpose of analyst.
Although the interview method provides opportunities to elicit information sometimes not
available through other methods, Interviewing is a flexible method for all levels and types of job.
An interview may focus on what a hypothetical job might involve. Interviews generate
descriptive data and enable job-holders to interpret their activities. A good interviewer can probe
sensitive areas in more depth. Structured questionnaires cannot easily do this. Jobholders can
give overviews of their work and offer their perceptions and feelings about their job and the
environment. Rigid questionnaires tend to be less effective where the more affective aspects of
work are concerned.
It has limitations.
First, it is time consuming and hence costly.

Second, the value of data is primarily dependent on the interviewer's skills and may be
faulty if they put ambiguous questions to workers.
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Last, interviewees may be suspicious about the motives and may distort the information
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they provide. hard to bring together

there is potential for interviewer bias
certain areas of the work may fail to be picked up
an interview may stress one area and neglect others.
there are problems in interpretation and analysis with the possibility of distorted
impressions
the subjectivity of the data captured needs to be considered A
If seen as an opportunity to improve their positions such as to increase their wages, workers may
exaggerate their job duties to add greater weight age to their positions.
Interviewing as the sole method of job analysis in any particular project has disadvantages.
Interviews are time consuming and training is needed. Co-counseling may remove the analyst
and enable jobholders to discuss work between themselves. Through inexperience however they
may miss items and there is the natural problem of people not establishing and maintaining
rapport with each other during an interview.
4. Questionnaire method: The questionnaire is a widely used method of analyzing jobs and
work. Here the job holders are given a properly designed questionnaire aimed at eliciting
relevant job-related information. After completion, the questionnaires are handed over to
supervisors. The supervisors can seek further clarifications on various items by talking to the job
holders directly. After everything is finalized, the data is given to the job analyst. The success of
the method depends on various factors.
The structured questionnaire must cover all job related tasks and behaviors.
Each task or behavior should be described in terms of features such as importance,
difficulty, frequency, and relationship to overall performance.
The job holders should be asked to properly rate the various job factors and
communicate the same on paper.
The ratings thus collected are then put to close examination with a view to find out
the actual job requirements.
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Questionnaire method is highly economical as it covers a large number of job holders

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at a time.

The collected data can be quantified and processed through a computer.
The participants can complete the items easy
Designing questionnaires, however, is not an easy task.
Proper care must be taken to see that the respondents do not misunderstand the
questions.
Further, it is difficult to motivate the participants to complete the questionnaires
truthfully and to return them.
3.5. Potential problems with job analysis
1. Lack of top management support: Role of top management is to communicate to

incumbents that purpose of job analysis is to enhance performance in organization.
2. Lack of training of the analyst and incumbent: Incumbent should be trained about job
analysis as purpose of job analysis, if not, incumbents distort data of job analysis because
employee think that process seen as a threat to employee
3. Use of only one method: Each method also has advantage and disadvantage so you should
use at least 2 methods for job analysis. Note that job analysis includes both collecting of data and
review data so that you should not use only one method.
4. Use of single source of data only: Information source of job analysis include many one from
internal one to external one One can not reflect all data about position so that you should use
at least 2 ones of job analysis information.
5. Other problems are:
Intentional or unintentional distortion from incumbent

Absence of a review
Lack of participation of all stakeholders
Job-based rather than person-based.
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Lack of reward for providing quality information

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Insufficient time allowed for the process
Time spent of job analysis too lengthy.
3.6. Meanings and definition of human resource planning
According to R. Wayne Mondy's in "Human Resource Management," human resource planning

is the systematic process of matching the internal and external supply of candidates with job
openings that a company anticipates over a certain period of time. Put simply, human resource
planning is keeping an up-to-date collection of candidates inside and outside the company for
future positions.
In short HRP is the process by which management determines how an organization should move
from current manpower position to its desired manpower.
3.7. Objective of human resource planning

to ensure optimum use of existing human resource planning
to access the surplus and shortage of human resources
To forecast future requirement for human resources
To determine the levels of recruitment and training
To link human resource planning with organizational planning
3.8. Importance of human resource planning

HRP is helpful in selection and training activity: It ensures that adequate number of
persons are selected and trained well in advance to fill future job vacancies in the
organization.
Identifies gap in existing manpower in terms of their quality and talent.
Facilitates the expansion and diversification of an organization: in the absence of
human resource plans, the required human resources will not be available to execute
expansion and diversification plans at the right time.
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HRP is useful in anticipating the cost of human resources: Through proper manpower
planning, management can avoid both shortage and surplus of manpower and thereby
control labor cost.
HRP helps to effectively utilize the technological progress: to meet the challenges of
new technology existing employees need to be retained and new employees may be
recruited.
3.9. Steps in human resource planning
Analyzing organizational plan: plans concerning technology, production, marketing,
finance, expansion and diversification give an idea about the volume of future work
activity. Each plan can further be analyzed into sub-plans and detailed program.
Forecasting demand for human resource: On the basis of corporate and functional
plans and future activity levels, the future needs for human resources in the organization
are anticipated. It is necessary to make projections for new positions to be created and the
vacancies arising in current manpower.
Forecasting supply of human resource: Every organization has two sources of supply
of human resource. These are: External and internal sources. Internally human resource
can be obtained for certain posts through promotion and transfers.
Estimating manpower gaps: Manpower gaps can be identified by comparing demand
forecasts and supply forecasts. Such comparison will reveal either deficit or surplus of
human resources in future. Deficit suggests the number of persons to be recruited from
oust side whereas surplus implies redundant to be redeployed or terminated.
Action planning: once the manpower gaps are identified, plans are prepared to bridge
these gaps. Plan to meet the surplus manpower may be redeployment in other department.
Deficit can be made through recruitment, selection, transfer, promotion and training
plans.
Monitoring and control: Once the action plans are implemented, the human resource
structure and system need to be reviewed and regulated. This phase involves allocation
and utilization of human resources over time.
3.10. Factors affecting human resource planning (problems of human resource planning)
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Uncertainties: labor absenteeism, labor turnover, technological changes and market

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fluctuations are the uncertainties which serve as constraints in human resource planning.

Inefficient information system: in the absence of reliable data it is impossible develop
effective human resource plans.
Time and expense; manpower planning is time consuming and expensive exercise.
Employees resistance: Employee may also resist human resource planning feeling that
it increases the cost of manpower.
Unbalanced focus: There is too much focus on the quantitative aspect to ensure the flow
of people and out of the organization. due to this the quality human resource may be
overlooked.
Chapter Four: Recruitment and selection
4.1. Employee Recruiting:

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Recruitment is the process of finding potential candidates and stimulating them to apply for
jobs in the organization. The recruitment process helps in encouraging the right people to
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apply at the right time. The job may be vacant through retirement or some other reasons.
Recruitment of office staff has to done with great care because the efficiency of an
organization depends much upon the efficiency of the office.
4.1.1. Features of recruitment:
Recruitment has the following features

It is the process of activities rather than a single act or events.
It is a linking activity as it brings together those with jobs (employers) and those seeking
jobs (employees).
It is a positive function, as it seeks to develop a pool of eligible persons from which most
suitable ones can be selected.
The basic purpose of recruitment is to locate the source of people required to meet job
requirements and attracting such people to offer themselves
Recruitment is an important function as it makes possible to acquire the number and type
of person necessary for the continued functioning of the organization.
Recruitment is pervasive function as all organization engage in recruiting activity.
Recruitment is a complex process or job b/c too many factors affect it. e.g. image of the
organization, nature of the job offered, organization policy, working conditions,
compensation levels in the organization and rate of growth of the organization etc.
4.1.2. Purpose of recruitment:
Need for proper recruitment come up because of the following reasons?
Need for greater productivity. If the recruitment is scientific the productivity may
increase
Need for better wage for workers. As productivity is good the workers also get the
benefit of better wages.
Better morale. Since the recruitment is scientific, the morale of the work force is better.
Low labor turnover. Better job adjustment due to scientific recruitment, leads to lower
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rate of labor turnover. Turnover is not only costly but it is also dislocates (disturb) work.
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Better image. Due to the above factors, an organization using scientific recruitment
techniques enjoys better reputation among the public.
4.1.3. Factors governing Recruitment

A properly planned and systematic recruitment policy is necessary to minimize disruption of
work due to changes in employees and to secure equitable distribution of employment
opportunities. A recruitment policy involves the employers commitment to such general
principles. These are:
A. To find and employ the best qualified persons for each jobs
B. To train the most promising of those hired
C. To offer promising opportunities for the life time working careers
D. To provide facilities and opportunities for personal growth on the job.
There are several fundamentals of a good recruitment policy. These are
abide by the relevant public policy and legislation on hiring and employment
relationship
provide employee with job security and continuous employment
integrate organizational need with employee needs
provide each employee with freedom and opportunity to utilize and develop
knowledge and skills to the maximum possible extent
Treat all employees fairly and equitably in all employment relationships.
Encourage responsible trade unions
be flexible enough to meet the changing needs of the organization
4.1.4. Sources and methods of recruitment: There are two sources of producing employees in
business houses. These are:
Internal sources
External sources
Internal Recruiting: If vacancies are filled by internal candidates, that is, from those persons who
are already working in the organizations are known as internal sources. It includes:
Transfer of surplus employees
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Mail-adjusted employees
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Promotion of employees from the lower positions.

Advantage:
Better morale of employees
Enables the employer to effectively evaluate employees
Facilitates the attraction of better applicant qualities of external opportunities.
It is good in providing promotion from within.
Quicker and cheaper than external.
Less training needs.
Smooth flow of work.
Disadvantages:
Encourage inbreeding. Employee tent to demonstrate on the job only he/she has learned
in the organization.
Insufficiency of supply. Narrow choice that may be faced in small organization.
Nepotism (bias) or discrimination in appointments.
Sources of external recruitment:
1. Employee agencies
2. Advertising
3. employee referrals
4. Unsolicited applicants
5. recruiting at school and college
Employee Agencies: Public and private employment agencies are an important source of applicants
for office positions. Employment agency provides employers with an economical procedure for
contacting qualified applicants. These agencies are operated by:
state
charge no fee
handle all level of personnel
Advertising: it is a new media and it is usually an effective means of securing applicants on short
notice. They attract a large number of qualified applicants.
Employee Referrals: Encouraging employees to recommend friends and contacts for work.
Employees pleased with organization usually recommend well-qualified workers. It is crucial that all
recruiting effort obey or fulfill with existing equal employment opportunity.
Unsolicited applications: Even if a vacancy does not exist, an organization may receive applications
and letter of inquiry (question) for employment.
Recruiting at schools and colleges: School and colleges provide selectivity and access to get
potential candidates. This may be because of a students progress is one index of his probable
success on job. In addition, options of teacher concerning:
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the student ability

personality
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Character of students easily identifiable through teachers.
All school and colleges must have placement offices. These placement offices must arrange a time
for employment Managers to visit their school and interview students nearing graduation.
Merits of External recruitment

better choice
introduction of new blood
Demerits of external recruitment

blocks chance of promotion
Conflict with old staffs
chance of selections of miss-fits
Expensive
Time consuming
1. Employee selection
Selection is the process of choosing the most suitable person out of all the applicants. In this
process relevant information about the applicant is collected through series of steps so as to
evaluate their suitability for the job to be filled. Selection is different from recruitment.
Recruitment is identifying the source of manpower and stimulating them to apply for the jobs in
the organization. However, selection is the process of choosing the best out of those recruited.
4.1.1. Selection criteria
The selection process can be successful if the following conditions are satisfied.
Some one should have the authority to select. This authority comes from the employment
requisition as developed through analysis of work-load and work force.
There must be some standard with which applicants can be compared. or compressive job
description and job specification should be available beforehand.
There must be sufficient number of applicants from whom the required number of
employees may be selected.
4.1.2. Selection process
The selection process consists of a series of steps. At each stage fact may come to light which
may lead to the rejection of the applicant. It is a series of successive hurdler or barriers which
an applicant must cross. Steps in employees selection may involve the following:
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1. Preliminary Interview: it is an initial screening done to weed out totally undesirable or
unqualified candidates at the outset. it saves time and effort of both the company and
candidate. it avoid unnecessary waiting for the rejected candidate and waste of many on
further process of an unsuitable candidate. it is the first contact of an individual with the
organization. Therefore, the interviewer should be courteous, receptive and informal
particularly when the candidate is turned down.
2. Application blank: Application form is a traditional and widely used device for
collection information from candidates. The application form should provide all the
information relevant to selection.
2. Reference checks: the applicant is asked to mention in his/ her application form the
names and addresses of two or three persons who know him/her very well. They may be
previous employers, head of educational institutions or public figures.
4. Psychological test: it is the most widely used in employee selection. it provide systematic
basis for comparing the behavior, performance and attitude of two or more persons. Personal
tested are used as aid in selecting the best qualified applicants. Test can measure certain:
abilities, attitudes and Skills that provide objective information on how well the applicants
can be expected to perform on the job.
There are five broad categories of personnel tests
1. Intelligence test: Measures the ability to learn and analyze or the capacity of a person
understand.
2. Aptitude test: measures capacity to learn certain jobs or skills.
3. Achievement test (skill test): help to measured level of ability to perform particular functions
such as typing or help to measure the level of proficiency attained by an individual
4. Personal test: aim at judging the temperamental (unpredictable) qualities and emotional
balance of a person.
5. Interest (preference) test: measure interest in or preference activities.
5. Employment interview: It is a conversation b/n two persons. I selection it involves a

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personal, observation and face to face appraisal of candidates for employment. it serve
for three purposes:
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obtaining information about background, education, training, work history and
interest of the candidate
Giving information to the candidate about the company, the specific job and
personnel policies.
Establishing friendly relationship b/n the employer and the candidate so as to
motivate the successful applicant to work for the organization.
6. Selection decision: In most of the organizations, selection process is carried out by the
human resource department. The candidate short listed by the department is finally
approved by the executives of the concerned department.
7. Physical examination: Applicant who has crossed the above stages is sent for physical
examination either to the companys physician or to medical officer approved for the
purpose. such examination serve for the following purposes:
it determines whether the candidate is physical fit to perform the job
it revealed existing disabilities and provides a record of the employees health at
the time of selection
it prevents the employment of people suffering from contagious diseases
8. Final approval: Employment is offered in the form of an appointment letter
mentioning the post, the rank, the salary grade, the date by which the candidate should
join and other terms and condition in brief.
4.2.3. Factors affecting selection process
perception: Inability to understand others accurately is probably the most
fundamental barrier to selecting the right candidate
Fairness; no individual should be discriminated against religion, region race,
gender
Validity: Validity is attest that helps predict job performance of an incumbent
Reliability; a reliable method is one which will produce consistent result
when repeated in similar situation
Pressure: it brought on the selectors by politicians, bureaucrats, relatives and
friends to select particular candidates.
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4.3. Orientation/Induction
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After the hiring decision has been made, the final phase of selection process is introduction and
orientation. Orientation is the process that introduces new employees to their new work
environment. It mainly involves:
Making introduction of the new employee to colleagues.
Discussing specific job duties and responsibilities.
Explaining the organizations history, rules. Policies, regulations and objectives.
Familiarizing the products, processes and major operations of the organizations.
Introducing the line and staff relationships in the organization
Some of the benefit that occurs from an effective orientation program is:
It create a positive attitude towards: his/her job, the company, his/her supervisor
Aids learning and saves time and avoid trouble (problem).
Transfer the clear message that the new employee is valued and the organization is
willing to invest in them.
Reduce the amount of fear of job failure that new employee experience.
The supervisor should be responsible (in charge) of orienting the new employees. To whom he/s
should report, the organizational chart etc. Visual aids and illustrated booklets to be distributed
among the new employees must be included during the orientation period.
Chapter Five
Training and Development
Training is teaching of lower-level or technical employees on how to do their present jobs. Whereas
development is teaching of mangers and professionals the skill needed for both present and the
future jobs.
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Training involves the specific: Skills, Knowledge and Attitudes needed by individuals to perform the
present job.
Development helps to provide adequate knowledge and educate employees beyond the current
requirement of the job. Generally both development and training help to develop an individuals:
Knowledge, Skills and Attitudes so as to improve present and future organization performance.
5.1. Object of training
The objective of training is not always the same for every organization. The major objectives of the
training are as follows:
To instruct the employee in the company cultural pattern.
To train the employee, to increase his/her quantity and quality of output.
To train the employee for promotion to higher jobs.
To instruct the employee towards better job adjustment.
to reduce supervision and accidents
Properly planned, systematic and supervised training program result in:

Less error.
Less wastage of materials and supplies.
Higher productivity.
More efficient utilization of machines and equipment.
Sound attitude towards work.
Reduce disciplinary problems
5.2. Process of training and development
The model below traces the steps necessary in the training process:
Organizational Objectives
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1.
2. Needs Assessment
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3. Is There a Gap?
4. Training Objectives
5. Select the Trainees
6. Select the Training Methods and Mode
7. Choose a Means of Evaluating
8. Administer Training
9. Evaluate the Training
1. Organizational objective
Your business should have a clearly defined strategy and set of objectives that direct and drive
all the decisions made especially for training decisions. Firms that plan their training process are
more successful than those that do not.
Most business owners want to succeed, but do not engage in training design that promise to
improve their chances of success. Why?
The five reasons most often identified are:
Time - Small businesses managers find that time demands do not allow them to train
employees.
Getting started - Most small business managers have not practiced training employees.
The training process is unfamiliar.
Broad expertise - Managers tend to have broad expertise rather than the specialized
skills needed for training and development activities.
Lack of trust and openness - Many managers prefer to keep information to themselves.
By doing so they keep information from subordinates and others who could be useful in
the training and development process.
Skepticism as to the value of the training - Some small business owners believe the
future cannot be predicted or controlled and their efforts, therefore, are best centered on
current activities i.e., making money today.
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A well-conceived training program can help your firm succeed. A program structured with the
company's strategy and objectives in mind has a high probability of improving productivity.
Identifying Training Needs
Training needs can be assessed by analyzing three major human resource areas: the organization
as a whole, the job characteristics and the needs of the individuals. This analysis will provide
answers to the following questions:
Where is training needed?
1. What specifically must an employee learn in order to be more productive?
2. Who needs to be trained?
Begin by assessing the current status of the company how it does what it does best and
the abilities of your employees to do these tasks. This analysis will provide some
benchmarks against which the effectiveness of a training program can be evaluated. Your
firm should know where it wants to be in five years from its long-range strategic plan.
What you need is a training program to take your firm from here to there.
Second, consider whether the organization is financially committed to supporting the
training efforts. If not, any attempt to develop a solid training program will fail.
Next, determine exactly where training is needed. It is foolish to implement a
companywide training effort without concentrating resources where they are needed
most. An internal audit will help point out areas that may benefit from training. Also, a
skills inventory can help determine the skills possessed by the employees in general. This
inventory will help the organization determine what skills are available now and what
skills are needed for future development.
3. Selection of Trainees
Once you have decided what training is necessary and where it is needed, the next decision is
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who should be trained? For a small business, this question is crucial. Training an employee is
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expensive, especially when he or she leaves your firm for a better job. Therefore, it is
important to carefully select who will be trained.
4. Training Goals
The goals of the training program should relate directly to the needs determined by the
assessment process outlined above. Course objectives should clearly state what behavior or
skill will be changed as a result of the training and should relate to the mission and strategic
plan of the company. Goals should include milestones to help take the employee from where
he or she is today to where the firm wants him or her in the future. Setting goals helps to
evaluate the training program and also to motivate employees. Allowing employees to
participate in setting goals increases the probability of success.
5.3. Methods of training
On-the-job raining and job rotation

off-the-job training (class room training)
Orientation training.
Programmed and computer assisted instruction.
Conferences and case discussion.
Job rotation
Apprenticeships
On-the-job raining and job rotation
On-the-job raining and job rotations: this is when an experienced employee is asked to take a new
employee and show the newcomer how to perform job duties. The organization senior employees
often conduct in-house training. It can reduce costs for training facilities, materials, or instructor fees
and easy to transfer learning back to the job.
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Off-the-job training (class room training)

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Off-the-job training (class room training includes): lectures, films and audiovisual techniques and
Simulations (imitation) such as university management and apprenticeship.
Orientation training
Orientation training in which newcomers are introduced to the organizations culture using company
owned training centers
Programmed and computer assisted instruction.
Programmed and computer assisted instruction in which the employee works at his/her pace to learn
from the text that includes exercises and quizzes to enhance learning.
Conference and case discussion
Conference and case discussion groups in which participants analyze cases or discuss topics assisted
by a training leader.
Job rotation
Job rotation involves moving an employee through a series of jobs so he or she can get a good feel
for the tasks that are associated with different jobs. It is usually used in training for supervisory
positions. The employee learns a little about everything. This is a good strategy for small businesses
because of the many jobs an employee may be asked to do.
Apprenticeships
Apprenticeships develop employees who can do many different tasks. They usually involve several
related groups of skills that allow the apprentice to practice a particular trade, and they take place
over a long period of time in which the apprentice works for, and with, the senior skilled worker.
Apprenticeships are especially appropriate for jobs requiring production skills.
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5.4. Career Development

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Career development is an organized approach used to match employee goals with the business
needs of the agency in support of workforce development initiatives.
The purpose of career development is to:
Enhance each employee's current job performance.

Enable individuals to take advantage of future job opportunities.
Fulfill agencies' goals for a dynamic and effective workforce.
Steps in career development
Step Action
1 Conduct self-assessment.
2 Explore careers that interest you.
3 Make decisions and set goals.
4 Create an action planner.
5 Manage your career.
It is important to know your overall goal. Think about where you would like to be at the end of
your career and set your plan to get there. The best way to ensure compatibility and balance in
your life and career is to consider all aspects of your life from the beginning of your plan.
Once you have a sense of what you are trying to accomplish overall, it is important for you to
establish your current status. A personal inventory can reveal your:
abilities
interests and
attitudes
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The inventory will define your:

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strengths and
weaknesses
Looking for a match between your strengths and the work you are doing or considering is the
most important step before making any decisions. Assessing your personality and attitudes
will help you determine the best way for you to move toward your goal:
What are your current skills and achievements?

What about knowledge and values?
How will your learning style impact your pursuit?
What are your interests?
When you are clear on these things, you will be able to make better choices about the direction
you want your career to take - and do a better job of convincing prospective employers that
you are the best choice!
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Chapter Six
Performance appraisal
Evaluating performance against planned objectives developed initially for each individual is another
important technique for developing an effective work force. Performance appraisal is the process of
determining the degree to which an employee is performing a job effectively. It is the process of
observing and evaluating: An employees performance, Recording the assessment and providing
feedback to the employee.
6.1. Purpose of valid performance appraisal or evaluation

It provides employees with feedback. So that they will know how well they are
performing.
It develops valid data for pay (salary and bonus) and promotion decision.
It provides means of warring for subordinates about unsatisfactory performance.
It motivates employees through recognition and support.
It encourages management-subordinate relations.
It provides input (contribution) to the human resource planning.
6.2. The process of performance appraisal
It consists of the following steps

1. Establishing performance standards: The performance appraisal process beings with
the setting up of criteria to be used for appraising the performance employees.
2. Communicating the standards: the performance standard specified in the first step are
communicated and explained to the employees so that they come to know what is
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expected from them.

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3. Measuring performance: once the performance standards are specified and accepted,
the next stage is the measurement of actual performance.
4. Comparing the actual with the standards: Actual performance is compared with the
predetermine performance standards. it will reveal the deviations which may be negative
or positive.
5. Discussion the appraisal: the result of appraisal are communicated to and discussed with
employees. Along with the deviations the reason behind them are also analyzed and
discussed.
6. Tacking corrective action: through mutual discussions with employees, the steps required
to improve performance are identified and initiated. Training, coaching and consulting
are examples of corrective actions that help to improve performance.
6.3.Problems associated with performance appraisal
The main problems involved in performance appraisal are:

Errors in rating: performance appraisal may not be valid indicator of performance and
potential of employees due to the following types of errors:
Halo effect: it is the tendency to rate an employee again and again high or low on the
basis of overall impression. One trait of employee influences the raters appraisal on all
other traits. E.g. an employee may be rated high on performance just b/c of sits on the job
late in the evening. Similarly, a person who does not shave regularly may be considered
lazy at work and may be underrated. This error may be minimized by rating all the
employees on one trait before taking up another trait.
Stereotyping: this implies forming a mental picture of a person on the basis of his/ her
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age, sex, caste, religion etc. it results in an over simplified view and shadow the
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assessment of jobs performance.

Central tendency: assigning average ratings to all the employees in order to avoid
commitment or involvement. This is adopted b/c the raters do not have to justify or
clarify the average ratings. As a result the ratings are clustered around the midpoint.
Constant error: some evaluators tend to lenient (soft) while others are strict in assessing
performance.
Personal bias: it may become invalid b/c the rater dislikes an employee. Such bias may
arise on the basis of regional or religious beliefs and habit and or personal conflicts. Bias
may also be the result of time. Recent experience or first impression of the rater may
affect the evaluation.
Spill over effect: this arises when past performance affects assessment of present
performance. For instance, recent behavior or performance of an employee may be used
to judge him/her.
Lack of reliability: Reliability implies stability and consistency in the measurement.
Lack of consistency over time among different raters may reduce the reliability of
performance appraisal. Factors like imitative are highly subjective and cannot be
quantified.
Incompetence: Raters may fail to evaluate performance accurately due to lack of
knowledge and experience. Post appraisal interview is often handled ineffectively.
Negative approach: performance appraisal loses most of the value when the focus of the
management is on punishment rather than on development of employees.
Multiple objectives: Raters may get confused due to too many objectives or unclear
objectives of performance appraisal.
Resistance: Trade union may resist performance appraisal on the ground that it involves
discrimination among its members. Negative ratings may affect interpersonal relations
and industrial relations particularly when employees/ unions do not have faith in the
system of performance appraisal.
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6.4. performance appraisal methods
To be effective, a performance appraisal system should satisfy the following

requirements
Mutual trust: An atmosphere of mutual trust and confidence should be created in the
organization before introducing the appraisal system. such atmosphere is importance
for frank discussion of appraisal. it also help to obtain the faith of employees in the
appraisal system.
Clear objectives: The objective and use of performance appraisal should be made
clear and specific. The objective should be relevant, timely and open. The appraisal
system should be fair so that it is beneficial to both the individual employee and the
organization. The system should be adequately and appropriately linked with other
subsystem of HRM.
Standardization: Well-defined performance factors and criteria should be
developed. These factors as well as appraisal form, procedures and techniques should
be standardized. It will help to ensure uniformity and comparison of ratings. The
appraisal techniques should measure what they are supposed to measure. these should
also be easy to administer and economical to use. The system should be performance
based and uniform. Employee should be made fully aware of performance standards
and should be involved in setting the standards.
Training: Evaluators should be given training in philosophy and techniques of

appraisal. They should be provided with knowledge and skills in documenting
appraisals, conducting post appraisal interviews, rating errors etc.
Job relatedness: The evaluators should focus attention on job-related behavior and
performance of employees
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Documentation: The raters should be required to justify their ratings. Documentation
will encourage evaluators to make conscious efforts minimizing personal biases. it
will also convey accountability for ratings.
Feedback and participation: Arrangement should be made to communicate the
ratings to both the employees and raters. The employee should actively participate in
managing performance and in the ongoing process of evaluation.
Individual difference: While designing the appraisal system, individual differences

in organizations should be recognized. The appraisal system should be modified for
the particular organization.
Post appraisal interview: After appraisal, an interview with the employee should be
arranged. it is necessary to supply feedback, to know the difficulty under which the
employee work and to identify the training need.
Review and appeal: A mechanism for review of rating should be provided. The
review may be made by committee consists of line executives and personnel experts.
The committee will see whether the raters are usually strict or lenient.
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Chapter Seven
Employee Compensation
6.1. Definition:
Compensation refers to all forms of pay and rewards received by employees for the performance
in their jobs including all forms of cash, benefits, services, and bonus. It is important to
recognize and communicate your "total" compensation as "all" the pay you are providing your
employees. This should be done so that the value of what you are offering in compensation is
clear and that it in turn attracts and retains the people you need
In other words, Compensation is the HRM function that deals with every type of reward
individual receive in exchange for performing organizational tasks. It is the major cost of doing
business for many organizations at the start of 21st century. From the employee point of view,
pay is necessity of life. It is one of the chief reasons people seek employment. It also more
provide for the physiological need of employees. Employee compensation may be classified into
two categories.
Base or primary compensation: it refers to basic pay in the form of wages and
salaries. It is a fixed and non-incentive payment on the basis of time expended
on the job.
Supplementary compensation: it consists of incentives and variable payments
such as bonus and profit sharing based on either individual output or group
output.
The basic purpose of compensation management is to establish and maintain an equitable wage
and salary structure and an equitable labor cost structure.
7.2. Objective of compensation
The objective of compensation function is to create a system of rewards that is equitable to the
employer and employee alike. A sound compensation management seeks to achieve the
following objectives:
To establish a fair and equitable remuneration: there should be internal and external
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equity in remuneration paid to employees. Internal equity means similar pay for similar
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work. External equity utilizes pay for a job should be equal to pay for a similar job in
other organization.
To attract competent personnel: a sound compensation management helps to attract
qualified and hard working people by ensuring an adequate payment for all jobs.
To retain the present employees: By paying at competitive levels, the company can
retain its personnel. it can minimize the incidence of quitting and increase employee
loyalty.
To improve productivity: Sound compensation management help to improve the
motivation and morale of employees which in turn lead to higher productivity.
To establish job sequences and lines of promotion wherever applicable.
To improve public image of the company: wage and salary program also seeks to
protect the image of a progressive employer and to comply with legal requirements
relating to wages and salaries.
Meet legal requirements
Motivate performance
Motivate personal growth
Sustain high morale
7.3. Importance of compensation
A fair compensation system is a must for every business organization. The fair compensation
system will help in the following:
An ideal compensation system will have positive impact on the efficiency and results
produced by employees. It will encourage the employees to perform better and achieve
the standards fixed.
It will enhance the process of job evaluation. It will also help in setting up an ideal job
evaluation and the set standards would be more realistic and achievable.
Such a system should be well defined and uniform. It will be apply to all the levels of the
organization as a general system.
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The system should be simple and flexible so that every employee would be able
to compute his own compensation receivable.
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It should be easy to implement, should not result in exploitation of workers.
It will raise the morale, efficiency and cooperation among the workers. It, being just and
fair would provide satisfaction to the workers.
Such system would help management in complying with the various labor acts.
Such system should also solve disputes between the employee union and management.
The system should follow the management principle of equal pay.
It should motivate and encouragement those who perform better and should provide
opportunities for those who wish to excel.
Sound Compensation/Reward System brings peace in the relationship of employer and

employees.
It aims at creating a healthy competition among them and encourages employees to work
hard and efficiently.
The system provides growth and advancement opportunities to the deserving employees.
The perfect compensation system provides platform for happy and satisfied workforce.
This minimizes the labour turnover. The organization enjoys the stability.
The organization is able to retain the best talent by providing them adequate
compensation thereby stopping them from switching over to another job.
The business organization can think of expansion and growth if it has the support of
skillful, talented and happy workforce.
The sound compensation system is brand of organizations success and prosperity. The
success and stability of organization is measured with pay-package it provides to its
employees
7.4. Factor affecting employee compensation
The Overall Macroeconomic situation where in the state of the economy of the country
in which the firm is situated plays a major role in determining the compensation to be
paid. For instance, if an economy is booming or is in a high growth trajectory, chances
are that the employers would pay the employees more and conversely, if the economy is
in a downward trajectory, chances are that the employers would pay the employees less.
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We often hear about how because of the recession, salary hikes have been deferred or cut
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down. This is a direct result of the linkage between firm performance and the
performance of the economy.
The Demand for a particular skill weighs heavily on the way in which the employer
fixes the compensation for the employee. For instance, premium skills like Consulting
and Accountancy are paid more as are the Technology Professionals who might be
experts in their chosen field. As discussed in earlier articles, it is the expertise and the
relative scarcity of such experts that determines how much the employer is willing to pay.
The Position of the company in the Business Cycle often determines how much the
company is willing to offer to the employee. For instance, if a company is a start-up,
chances are that the company would pay more because of the need to get the best possible
talent into the company. Further, many start-ups give their employees ESOPs or
Employee Stock Option Plans wherein the employees can redeem their stocks after the
lock-in period.
Finally, the urgency of the firm in filling up the position plays an important role in
determining how much the employer is willing to pay the employee and in many cases, if
the time to get on board the employee is less, staffing managers along with the line
manager in charge of hiring the employee might decide to pay more because they want
the employee to come on board as quickly as possible.
7.5. Employee benefit and services

Indirect financial compensation is called benefits and services. Employees are paid several
benefits in addition to wage, salaries, allowances and bonus. This benefits and services are
called fringe benefits. The international labor organization has described fringe benefits as:
benefits and services supplement to regular wages and salaries
These benefits are paid to workers not for any job or performance but to stimulate
their interest in the work.
Benefits and service involve a labor cost for the employer and are not meant directly
to improve efficiency.
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Benefits like paid holidays, provident fund, pensions, housing etc, or service like
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legal aid, dispensary etc.

Vacation
Most employee benefit packages include vacation time. These days off are usually paid,
though some employers may offer unpaid vacation time as well. The amount of vacation
time varies greatly and depends on the company's policy, but amounts typically range
from five to 20 vacation days per year. Vacation time is usually accrued on a per month
basis. The employee must schedule the use of vacation days in advance and gain approval
from his immediate supervisor or human resources.
Sick Days
Employees may receive paid or unpaid sick days as part of their employee benefit
package. The amount of sick days an employee receives varies depending on company
policy and seniority. The amount of sick time given to an employee typically ranges from
five to 10 days, though employers may offer more or less time. Some companies may
require a note from a physician that verifies illness before approving the use of a sick
day.
Retirement
An employer may offer pension or savings plans for employees to save for retirement. An
employer may set specific amount of money to be contributed to an employees on an
incremental basis or the employer may offer a matching benefits program. Typically, this
means the employer will match the amount of money an employee contributes to her or
his up to a certain amount.
Types of employee benefits and services

1. Mandated benefit program
Three benefit programs offered for the employees are:

Unemployment compensation
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Social security(income for retirees, disabled, survivors of deceased

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workers, health insurance

workers compensation (Job related illness, accidents)
2. Voluntary benefits
Compensation for time off

Employer purchased insurance (health, life and disability income
insurance)
3. Employee services
Stock ownership plans

Education program
Financial incentives
Child care
social and recreational program
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CHAPTER EIGHT
INTEGRATION AND MAINTENANCE
8.1. Employee discipline
Discipline means neatness or absence of disorder, chaos, and confusion in human behavior and
action. It occurs when employees behave in an orderly and responsible manner. According to
Richard, discipline may be considered as the force that prompts (on time) individual or groups
to observe rules, regulations, standards and procedures deemed necessary for an organization.
The objectives of discipline are:

to gain willing acceptance of the rules, regulations, standards and procedures of the
organization from the employees
To develop the feeling of cooperation among workers
To maintain good industrial relations
To promote moral and efficiency among the workers
To develop sense of tolerance and respect for human dignity
Types of discipline
There are two types of discipline: positive and negative discipline
Positive discipline implies a sense of duty to observe the rules and regulations. It is also called
self-discipline. It can be achieved through rewards and effective leadership. Positive discipline
promotes cooperation and coordination with a minimum of formal organization. it reduces the
need for personal supervision required to maintain standards.
Negative discipline is also known as punitive or corrective discipline. Punishment is used to

force workers to obey rules and regulations. The objective is to ensure that employees do not
violate the rules and regulations. Negative discipline action involves such as techniques as
fines, reprimand, demotion, layoff, transfer etc.
Minor penalties:
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Oral warning
written warning
Page

Loss of privilege
Suspension
Major Penalties
Withholding increment
Demotion/ stopping promotion
Discharge
Dismissal
Negative discipline does not eliminate undesirable behavior rather in merely suppress (holdback)
it. Punishment also causes resentment (anger) and hostility (unfriendly). While exercising
negative discipline management should continue in a sequential manner like: oral warning,
written warning, temporarily suspension, discharge and dismissal.
Causes of Indiscipline:
The main causes of indiscipline are

Ineffective leadership
Lack of well defined code of conduct to guide behavior on both sides
Faulty supervision
Divide and rule policy of management
Bias or favoritism in disciplinary action
Unfair management practices
lack of timely redressal of employee grievance
lack of protection opportunities
drunkenness and family problem
political and trade union
Procedures to take disciplinary action

Preliminary investigation
Issue of a charge sheet: Once misconduct is established, the management
should proceed to issue a charge sheet to the employee
Suspension pending enquiry
Notice of enquiry
Conduct of enquiry
Recording the findings
Awarding punishment
Communicating punishment
8.2. Collective bargaining

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Page

Collective bargaining is a process of negotiations between employers and a group of employees
aimed at reaching agreements that regulate working conditions. The interests of the employees
are commonly presented by representatives of a trade union to which the employees belong. The
collective agreements reached by these negotiations usually set out:
wage scales
working hours,
training
health and safety
overtime
grievance mechanisms and
rights to participate in workplace or company affairs
The union may negotiate with a single employer (who is typically representing a company's
shareholders) or may negotiate with a group of businesses, depending on the country, to reach an
industry wide agreement. A collective agreement functions as a labor contract between an
employer and one or more unions. Collective bargaining consists of the process of negotiation
between representatives of a union and employers (generally represented by management, in
some countries[which?] by an employers' organization) in respect of the terms and conditions of
employment of employees, such as wages, hours of work, working conditions and grievance-
procedures, and about the rights and responsibilities of trade unions. The parties often refer to the
result of the negotiation as a collective bargaining agreement (CBA) or as a collective
employment agreement (CEA).
8.3. Grievance handling

Grievance may be any genuine or imaginary feeling of dissatisfaction or injustice which an
employee experiences about his job and its nature, about the management policies and
procedures. It must be expressed by the employee and brought to the notice of the management
and the organization. Grievances take the form of collective disputes when they are not resolved.
Also they will then lower the morale and efficiency of the employees. Unattended grievances
result in:
49
Frustration
dissatisfaction
Page
low productivity

lack of interest in work
Absenteeism, etc.
In short, grievance arises when employees expectations are not fulfilled from the
organization as a result of which a feeling of discontentment and dissatisfaction arises. This
dissatisfaction must crop up from employment issues and not from personal issues.
Grievance may result from the following factors-
a. Improper working conditions such as strict production standards, unsafe workplace, bad
relation with managers, etc.
b. Irrational management policies such as overtime, transfers, demotions, inappropriate
salary structure, etc.
c. Violation of organizational rules and practices
The manager should immediately identify all grievances and must take appropriate steps to
eliminate the causes of such grievances so that the employees remain loyal and committed to
their work. Effective grievance management is an essential part of personnel management. The
managers should adopt the following approach to manage grievance effectively-
1. Quick action- As soon as the grievance arises, it should be identified and resolved.
Training must be given to the managers to effectively and timely manage a grievance.
This will lower the detrimental effects of grievance on the employees and their
performance.
2. Acknowledging grievance- The manager must acknowledge the grievance put forward
by the employee as manifestation of true and real feelings of the employees.
Acknowledgement by the manager implies that the manager is eager to look into the
complaint impartially and without any bias. This will create a conducive work
environment with instances of grievance reduced.
3. Gathering facts- The managers should gather appropriate and sufficient facts explaining
the grievances nature. A record of such facts must be maintained so that these can be
used in later stage of grievance redressal.
50
4. Examining the causes of grievance- The actual cause of grievance should be identified.
Page
Accordingly remedial actions should be taken to prevent repetition of the grievance.

5. Decisioning- After identifying the causes of grievance, alternative course of actions
should be thought of to manage the grievance. The effect of each course of action on the
existing and future management policies and procedure should be analyzed and
accordingly decision should be taken by the manager.
6. Execution and review- The manager should execute the decision quickly, ignoring the
fact, that it may or may not hurt the employees concerned. After implementing the
decision, a follow-up must be there to ensure that the grievance has been resolved
completely and adequately.
An effective grievance procedure ensures an friendly work environment because it redresses the
grievance to mutual satisfaction of both the employees and the managers. It also helps the
management to frame policies and procedures acceptable to the employees. It becomes an
effective medium for the employees to express their feelings, discontent and dissatisfaction
openly and formally.
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Chapter Nine
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CHAPTER ONE

An over view of Human resource management

1.1. Definition and background

The following are few definitions by different scholars

Alemayehu Fanta (BSc, MPA, MA) Page 1

1.3. The importance of Human Resource Management

Alemayehu Fanta (BSc, MPA, MA) Page 2

The contributions HRM makes to organizational effectiveness include the following

Helping the organization reach its goals

Alemayehu Fanta (BSc, MPA, MA) Page 3

Alemayehu Fanta (BSc, MPA, MA) Page 4

1.8. Evolution of HRM

Alemayehu Fanta (BSc, MPA, MA) Page 5

Human resource Environment

Alemayehu Fanta (BSc, MPA, MA) Page 6

2.3. Internal factors include:

Alemayehu Fanta (BSc, MPA, MA) Page 7

Alemayehu Fanta (BSc, MPA, MA) Page 8

Alemayehu Fanta (BSc, MPA, MA) Page 9

3.1. Meaning and definition of Job analysis

contains common characteristics. e.g. business is an occupation consists of several types

of jobs like production, sale, etc.

Alemayehu Fanta (BSc, MPA, MA) Page 10

3.3. The steps in job analysis;

The main steps involved in the job analysis are;

Work flow chart: it indicate the flow of activities involved in a job.

Alemayehu Fanta (BSc, MPA, MA) Page 11

I. Collection background information

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A comprehensive program of job analysis is an essential element of sound human resource

Alemayehu Fanta (BSc, MPA, MA) Page 13

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3.4. Methods of collecting job analysis information

The analyst must observe average workers during average conditions.

Alemayehu Fanta (BSc, MPA, MA) Page 15

First, it is time consuming and hence costly.

they provide. hard to bring together

Alemayehu Fanta (BSc, MPA, MA) Page 16

Questionnaire method is highly economical as it covers a large number of job holders

Alemayehu Fanta (BSc, MPA, MA) Page 17

3.5. Potential problems with job analysis

1. Lack of top management support: Role of top management is to communicate to

5. Other problems are:

Intentional or unintentional distortion from incumbent

Lack of reward for providing quality information

Alemayehu Fanta (BSc, MPA, MA) Page 18

3.6. Meanings and definition of human resource planning

According to R. Wayne Mondy's in "Human Resource Management," human resource planning

3.7. Objective of human resource planning

3.8. Importance of human resource planning

Alemayehu Fanta (BSc, MPA, MA) Page 19

Uncertainties: labor absenteeism, labor turnover, technological changes and market

Alemayehu Fanta (BSc, MPA, MA) Page 20

Chapter Four: Recruitment and selection

4.1. Employee Recruiting:

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4.1.1. Features of recruitment:

Recruitment has the following features

4.1.2. Purpose of recruitment:

Need for proper recruitment come up because of the following reasons?

Alemayehu Fanta (BSc, MPA, MA) Page 22

4.1.3. Factors governing Recruitment