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VASAVI VIDYA TRUST GROUP OF INSTITUTUIONS, FACULTY OF MBA, SALEM -103

CLASS: I MBA
SUBJECT: HUMAN RESOURCE MANAGEMENT UNITS:5
SSUBJECT CODE: BA7204
JANUARY FEBRUARY MARCH APRIL
UNIT – I UNIT – II UNIT – III UNIT – IV (cont…)
From 18.1.17 To From 1.2.17 TO 28.2.17 From 1.3.17 To From 1.4.17 To 8.4.17
31.1.17 1.2.17 To 4.2.17(4) 18.3.17 1.4.17&3.4.17 To 8.4.17(7)
18.1.17 To The concept of best fit 1.3.17 To 4.3.17(4) Career management-
21.1.17(4) employee importance: Training And Executive Development of mentor-
Perspectives In 6.2.17 To 11.2.17(6) Development Protégé relationships.
Human Resource Importance of human Total working hrs:11
Management : resource planning- 6.3.17 To 11.3.17(6) Total working days:18
forecasting human Types of training
Evolution of resource requirement UNIT V
human resource methods-purpose-
13.2.17 To18.2.17(6) benefits-resistance. From 10.4.17 To 29.4.17
management-the Matching supply and 10.4.17 To 13.4.17
importance of the Executive development
demand programmes &15.4.17(5)
human factor- 20.2.17 To 25.2.17(6) Performance Evaluation
challenges- Internal and external 13.3.17 To 18.3.17(6) And Control Process
inclusive growth sources Common practices-
and affirmative 27.2.17 To 28.2.17(2) benefits-self 17.4.17 To 22.4.17(6)
action Recruitment-selection- development-knowledge Method of performance
23.1.17 To induction-socialization management evaluation-feedback-industry
25.1.17(3) benefits practices. Promotion,
Role of human Total working hrs:10 demotion, transfer and
resource manager- Total working days:16 separation.
Total working hrs:14
Human resource Total working days:24
policies. UNIT IV 24.7.17 To 29.4.17(6)
From 20.3.17 To 8.4.17 Implication of job change.
27.1.17 To The control process-
28.1.17& 30.1.17 20.3.17 To 25.3.17(6) importance –methods-
To 31.1.17(4) SUBTAINING requirement of effective
Computer EMPLOYEE control system grievances-
applications in INTEREST causes-implications-redressal
human resource methods
management- Compensation plan- Total working hrs:10
Human resource reward-motivation Total working days:17
accounting and
27.3.17 To 31.3.17(5)
audit.
Total working Application of theories of
hrs:6 motivation-
Total working
days:11

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UNIT-1
Perspectives in human resource management
Introduction: It is necessary to understand the term ‘Management before starting our discussion on ‘Human
Resource Management’.
Management is basically concerned with the performance of planning, organizing, directing, coordinating
and controlling, which, in fact, is their main function. Management is also regarded as the art of getting
things done through others. It is not possible for any individual to do all the work himself. The work is
always shared with others. In bank there are different individuals to look after cash, savings bank account,
fixed deposit, current account recurring deposit account and so on. The overall control lies with the bank
manager. Thus, it becomes clear that the work is assigned to many in any work that is the manager, knows
how to get things done through others, that is subordinates. A manager who is unable to make his
subordinates work cannot be a successful manager.
Meaning: Human resources management means employing people, developing them, utilizing, maintaining
and compensating their services in tune with the job and organizational requirements.
Definition: “Human Resource Management is part of management process which is primarily concerned
with the human constitutes of an organization” - E.F.L. Brech.
EVOLUTION OF HRM
The evolution of the concept of Human Resource Management is presented below.
Period before industrial revolution – The society was primarily an agriculture economy with limited
production. Number of specialized crafts was limited and was usually carried out within a village or
community with apprentices assisting the master craftsmen. Communication channel were limited.
Period of industrial revolution (1750 to 1850) – Industrial revolution marked the conversion of economy
from agriculture based to industry based. Modernization and increased means if communication gave way to
industrial setup. A department was set up to look into workers wages, welfare and other related issues. This
led to emergence of personnel management.
Post Industrial revolution – The term Human resource Management saw a major evolution after 1850.
Various studies were released and many experiments were conducted during this period which gave HRM
altogether a new meaning and importance. A brief overview of major theories release during this period is
presented below
Strategic Human Resource Management Approach: Strategic HRM focuses on actions that differentiate
the organization from its competitors and aims to make long term impact on the success of organization.
IMPORTANCE OF HUMAN FACTOR

Taking care about the people needs and maximizing their value are the most important aspects that a
manager should have in mind, otherwise he will fail.

It hadn't been raining for two years; the Nile's waters were almost drought out. The consequences of the
drought were very severe: there were no grain, there was no food. The people who were working at the
construction of the pyramid were more and more tired; they were suffering because of the starvation and
were announcing a rebellion. The worker's messengers said to the Majesty that they will not work anymore,
because they are too weak to handle the big stones. “We will all have patience” was the pharaoh answer.
Even though he wanted so much that the great pyramid to be finished as fast as it could, Keops decided that
people should stop working until it rained. Then, he opened the royal treasure and sold a lot of jewels in
order to buy grains from Canaan and Kharu. He also sacrificed some of the temple and royal domain cattle's
so that he could feed the people.
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Environmental factors vs. Human factor

The more a man has, the more he wants. This adage carries a grain of truth, but it does not come true for
everybody. Keops was a powerful pharaoh, good and correct who cherished the human being. Putting the
people above everything, even above his greatest dream - the dream to build an enormous pyramid, to last
for centuries, Keops commanded to stop working until the Nile's waters will rise again. Thus, what mattered
to him, first of all, were the people, so that it won't shy of a thing and that it would rise in the world.

Unlike other leaders, who fallowed their interests, Keops got involved in the internal problems of his
country, paying a special attention to develop the human and economic factor. In order to win his people by
his side, he was concerned about the way people are living. And in case of a crisis, he had the power to sell
even from his part of treasure in the use of his people. With certainty, Keops represents a worthy example to
follow for all the managers, politicians and presidents from the whole world.

Stand on the human factor

If you don't consider the human factor, it's unlikely that you obtain fast and efficient results. One of the
reasons because a lot of companies don't manage to climb the top is because managers don't communicate
efficiently with the employees and they don't manage to build a performing way of working. Instead of
determining the employees to have a cooperative attitude, stimulating them in building a career, some
managers trace some targets and give orders without thinking at the needs, the pretences and the aspirations
of their employees. The fact that certain work skills can tire the people doesn't affect at all some managers,
who many times ask for the impossible and they are also displeased that the employees are not productive,
are not interested and they are very little involved in the company activities.

People are active part of any company, and the managers have to count on their strong points to obtain good
results. Also, people represents the most important source of increasing the profitability of a company and
without it, the company could not function. It's clear why the most dynamic companies in the world give so
much importance to the human factor and make all that is possible to form a professional team, who will be
able to accomplish with devotion and responsibility the tasks they were given.

In conclusion: Leading a company has to stand on the human factor, to assure favourable working
conditions, offering employees the possibility to remark themselves and to progress in their career based on
their achievements. Taking care about the people needs and maximizing their value are the most important
aspects that a manager should have in mind, otherwise he will fail.

CHALLENGES OF HRM
Workplace diversity. This may consist of issues involving age, education, ethnicity, gender, income, marital
status, physical limitations, religion, sexual orientation, or any number of other things.

Change management. This is another challenge that more and more HR departments are facing. Being able
to deal with their own changing roles in corporate society, in addition to the changes to other jobs, the
overlapping responsibilities, and more.Understanding that change is required is the first step toward
accepting the change.

Compensation and benefits. With a slow economy and tightening corporate purse-strings, the issue of
compensation and employee benefits is one that almost every business must deal with. The key is to present
mandatory changes in such a way that employees can accept, if not necessarily agree with them while
providing non-monetary morale boosting incentives whenever possible to make the changes less traumatic.

Recruiting skilled employees. In an era of rising unemployment, it would seem that finding qualified
workers would be easier than ever. But that’s seldom the case. Many industries are facing dire needs for
employees with acceptable skills and the required training or degree. This applies not only to health care, but
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also to technology and other fields as well, causing many employers to search outside their local
marketplace for workers who can do the jobs they need filled.

Training and development. This is another challenge that HR managers and personnel must deal with more
frequently. With the need to cut training costs, training itself often suffers. Yet the skills an employee needs
must still be taught. Many companies are meeting this challenge by providing eLearning opportunities that
allow employees to receive the training they need without the expenses associated with travel, on-site
trainers, hours away from their jobs and high-priced materials.

AFFIRMATIVE ACTION
“Affirmative action” means positive steps taken to increase the representation of women and minorities in
areas of employment, education, and culture from which they have been historically excluded. When those
steps involve preferential selection—selection on the basis of race, gender, or ethnicity—affirmative action
generates intense controversy.
The development, defense, and contestation of preferential affirmative action has proceeded along two
paths. One has been legal and administrative as courts, legislatures, and executive departments of
government have made and applied rules requiring affirmative action. The other has been the path of public
debate, where the practice of preferential treatment has spawned a vast literature, pro and con. Often enough,
the two paths have failed to make adequate contact, with the public quarrels not always very securely
anchored in any existing legal basis or practice.
The ebb and flow of public controversy over affirmative action can be pictured as two spikes on a line, the
first spike representing a period of passionate debate that began around 1972 and tapered off after 1980, and
the second indicating a resurgence of debate in the 1990s leading up to the Supreme Court's decision in the
summer of 2003 upholding certain kinds of affirmative action. The first spike encompassed controversy
about gender and racial preferences alike. This is because in the beginning affirmative action was as much
about the factory, the firehouse, and the corporate suite as about the college campus. The second spike
represents a quarrel about race and ethnicity. This is because the burning issue at the turn of the twentieth-
first century is about college admissions. In admissions to selective colleges, women need no boost; African-
Americans and Hispanics do.
Inclusive growth is a concept that advances equitable opportunities for economic participants during
economic growth with benefits incurred by every section of society. The definition of inclusive
growth implies direct links between the macroeconomic and microeconomic determinants of the economy
and economic growth.
ELEMENTS OF INCLUSIVE GROWTH:

o Poverty Reduction

o Employment generation and Increase in quantity & quality of employment.

o Agriculture Development

o Industrial Development

o Social Sector Development

o Reduction in regional disparities

o Protecting the environment.

o Equal distribution of income

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ROLE OF HUMAN RESOURCE MANAGER

Manage HR Department:

The manager of the human resources department is responsible for ensuring that department employees are
well-versed in their areas of expertise. The various disciplines of HR require expertise in compensation,
benefits, safety, payroll, recruiting and training. Ideally, the human resource manager is a generalist, which
means his expertise is cross-discipline. An article on the All Business website titled “Should Your Office
Manager Also Handle HR Duties?” cautions small businesses to reconsider a decision to combine two roles
into one, such as the office manager and the human resource manager. “A thousand things can go wrong if
this individual is not aware of the potential liabilities inherent in HR management,” the article warns.

Knowledge of Laws

Managing the human resources department also requires knowledge of federal and state employment and
labor laws and regulations that apply to human resources professionals.

Interaction with Executive Leadership

An effective human resource manager is in constant communication with executive leadership. The HR
department is not a revenue-generating source. Consequently, it is important for an organization’s leaders to
understand the return on investment (ROI) in human resources activities as a contribution to the company’s
bottom line. In a small business, the ROI may be more readily seen than in a large conglomerate. The human
resource manager for a small business, and thus a smaller workforce, can easily implement methods and
strategies that may show faster results. The bureaucratic hierarchy of a large organization often puts many
more layers of authority between the human resource manager and executive leadership.

Employee Relations A human resource manager who stays in her office all day will not be effective at
building strong relationships with employees. Another function of the human resource manager is to gain the
trust and confidence of employees--the best way to establish trust and confidence is through daily interaction
with the workforce

HUMAN RESOURCE POLICIES


Human resource policies are the formal rules and guidelines that businesses put in place to hire, train,
assess, and reward the members of their workforce. These policies, when organized and disseminated in an
easily used form, can serve to preempt many misunderstandings between employees and employers about
their rights and obligations in the business place. It is tempting, as a new small business owner, to focus on
the concerns of the business at hand, and put off the task of writing up a human resource policy. All business
analysts and employment lawyers will advise a new business owner to get a policy down on paper, even if it
is a simple one drafted from a boilerplate model.Having policies written is important so that it is clear to all
what the policies are and that they are applied consistently and fairly across the organization. Moreover,
when issues concerning employee rights and company policies come before federal and state courts, it is
standard practice to assume that the company's human resource policies, whether written or verbal, are a part
of an employment contract between the employee and the company. Without clearly written policies, the
company is at a disadvantage.

SUBJECTS COVERED BY COMPANY HR POLICIES


Small business owners should make sure that they address the following basic human resource issues when
putting together their personnel policies:
 Equal Employment Opportunity policies

 Employee classifications
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 Workdays, paydays, and pay advances

 Overtime compensation

 Meal periods and break periods

 Payroll deductions

 Vacation policies

 Holidays

 Sick days and personal leave (for bereavement, jury duty, voting, etc.)

 Performance evaluations and salary increases

 Performance improvement

 Termination policies

COMPUTER APPLICATIONS IN HUMAN RESOURCE MANAGEMENT:


The computer application in human resource management is the managerial applications of computer use
which is usually known as management information system. In case of Human Resource Management, it is
known as Human Resource Information System (HRIS). Computer converts the data into meaningful
information needed by the manager to make decisions, planning and control.
Data and Information:
There is a distinction between data and information. Data are facts and figures in the form of historical
records that are not used in making decisions. Information on the other hand consists of data which are
retrieved and processed and used for making decisions, forecasting and argument. Processed data is
information.
Decisions Support System:
A decision support system can be created in which senior and experienced manager’s procedures and
methods of decision making can be replicated. It will help the managers immensely to arrive quickly at a
decision on any problem related to human resources of the organisation.
Data base Management System
Data base management system provides access to file inquiries and information, other details regarding
employees, updates records, creates reports etc. It makes efficient use of computerized storage space.
Management Information System:
Management information system or MIS is the old concept. The computerized MIS is new. Executives used
MIS for planning and control. Computerized MIS added new dimensions by way of increased speed and
accuracy. The use of computer has made the management information system feasible. It is not necessary
that management information system should be computerized. There are host of tasks that are performed
perfectly by employees and executives but there are certain tasks that can be speedily and accurately
performed by this electronic machine” computer.
HUMAN RESOURCE ACCOUNTING AND AUDIT

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According to American accounting association committee, Human Resource Accounting is the process of
identifying and measuring data about human resource and identifying and measuring data about human
resource and communicating this information to interested parties. Likert (1971) explained that Human
Resource Accounting serves several purposes in an organization. It provides cost/value information for
taking management decisions about acquiring, allocating, developing, and maintaining human resources in
order to attain cost-effectiveness. It permits management employees to scrutinize effectively the use of
human resources. Jasrotia (2004) emphasized the need for human resource accounting on India. The
investigator concentrated on the remarkable shift from manufacturing to service rendering in the Indian
economy where success of organizations depends on the knowledge and intellectual capabilities of
personnel. The suggestion from the research was that Indian government should make the accounting and
reporting of human resources mandatory for every organization just like as it is adopted in Denmark from
the year 2015. HRA provides effective basis of human asset control, that is, whether the asset is appreciated,
depleted or conserved. It assists in the development of management principles by classifying the financial
consequences of various practices.
Uses of Human Resource Accounting
Grojer and Johansson stated that human resource accounting is a political tool used to demonstrate
mismanagement of human resource. It works as a pedagogical instrument for analyzing and structuring, and
used as a decision making aid to ensure that decision on HR are more rational from the management point of
view.
Benefits of Human Resource Accounting
There is several advantage of using human resource accounting. These include foresee the changes, provides
different methods of testing , Increase productivity, brings high return, helps individual employee to aspire,
provides scope for advancement, throws light on the strength and weaknesses of existing workforce and
helps potential investors to judge a company

HUMAN RESOURCE AUDIT

Auditing has been a usual practice in the field of finance, particularly because it is a constitutional
obligation. However, in case of Human Resource, there is no legal binding to implement auditing. Some of
the companies favor the process of Human Resource audits. Human resource audit is a tool which appraises
effectiveness of human resource functions of an organization.
HUMAN RESOURCE AUDIT PROCESS
The human resource audit process is conducted in different phases. Each phase is designed to build upon the
preceding phase so that the organisation will have a very strong impression of the HR function. The general
process of conducting an audit includes seven key steps that are to determine the scope and type of audit,
develop the audit questionnaire, collect the data, benchmark the findings, provide feedback about the results,
create action plans and foster a climate of continuous improvement.
Scope and type of the audit: To reveal the needed information, it is vital to establish exactly what areas
should be targeted for check. If the organization has never audited its human resource function, or if there
have been current significant organizational or legal changes, the audit team can carry out a comprehensive
review of all human resource practice areas. Alternatively, if concerns are limited to the sufficiency of a
particular process or policy, the audit must concentrate a review of that particular area.
Develop the audit questionnaire: In next step, it is important to invest enough time in developing a
comprehensive document that obtains information on all the subjects of the inquiry. A list of specific
questions must be composed to ensure that the questionnaire is complete.
Collect the data: The next stage includes the actual process of assessing specific areas to collect the data
about the company and its human resource practices. Audit team members will use the audit questionnaire as
tool to review the specific areas identified within the range of the audit.

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Benchmark the findings: To completely review the audit findings, auditors must be compared with human
resource benchmarks. This comparison will offer insight into how the audit results compare against other
similar size of firms. Typical information that might be internally benchmarked includes the company's ratio
of total employees to HR professionals, general and administrative costs, cost per new employees hired, etc.
Benchmarking might include the number of days to fill a position, average cost of annual employee benefits,
absenteeism rates.
Provide feedback about the results: In this step of the audit process, the audit team must review the data
and give feedback to the company's human resource experts and senior management team in the form of
findings and recommendations. Findings normally are reduced to a written report with recommendations
prioritised based on the risk level assigned to each item.
Create action plans: In this step, it is crucial actually to analyse the information identified as a result of an
audit. The company must generate action plans for implementing the changes proposed by the audit, with
the findings separated by order of importance: high, medium and low. It really increases legal risk to
conduct an audit and then fail to act on the results.
Foster a climate of continuous improvement: In the process of continuously monitoring human resource
systems, it is to ensure that they are updated with latest information and to have follow-up mechanisms built
into every one of them. Similarly, it is important to keep track of the audit findings/changes made, turnover,
complaints filed, hotline issues, employee survey results to recognize trends in the company's employment-
related issues. Identifying problematic issues, growth areas or declining problem spots can assist in the
decision of where to allocate time, money and take preventive measures.

UNIT-2 THE CONCEPT OF BEST FIT EMPLOYEE

HUMAN RESOURCE PLANNING:


Human Resource planning is the very first function of HRM. The effectiveness and efficient functioning of
all other functions of HRM purely depends on effective and appropriate human resource planning. It is a
process of acquiring suitable human resources for the organization to attain its objectives. The most
important of all the resources of a business enterprise is its human resource. The very fate of an organization
is determined by the number and type of persons working in it. In fact, an institution is recognized more by
the quality of its staff rather than by its physical structure.
Meaning:
HRP, in simple terms, is the process of determine the manpower needs of an enterprise so that it is possible
to fill up any vacancy as and when it arises. Such a plan eliminates the risk of surplus (or) shortage of staff at
any time. It is therefore, important that an organization has the right number and type of persons at any point
of time to be successful and this is what is achieved through manpower planning or human resource
planning.

Definitions:
“Human resource or manpower planning is the process of determining the manpower requirements and the
means for meeting those requirements in order to carry out the integrated plan of the organisation “ –
Coledman.
IMPORTANCE OF HUMAN RESOURCE PLANNING:
Estimating future demand for human resource: Human Resource Planning determines the future
requirements of personnel on the pace of development, expansion and diversification of business. It also
deals with surplus and deficit workforce of the organization.

Bridging the gap: Human Resource Planning plays an important role in bridging the gap between demand
and supply of workforce in an organization.

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Enhancing workforce: Human resource planning advocates for training and development of workforce to
cater to the future demand for workforce.

Coping with changes: Human resource planning facilitates to cope with changes. As the changes are
inevitable, human resources planning focuses on change in nature of workforce, technological change,
organization change, demographic changes, in dealings with workforce.

Determining the cost of human resource: Outflow of money is involved in every process of human
resource management. Human resource planning takes into account the money spent on every activity of
human resource planning and facilitates cost control and cost reduction.

Cost of hiring and training: Human resource planning minimizes the cost of hiring and procurement. It is
simple to understand that money unspent is money saved.

Expansion of business: Expansion of business results in demand for workforces. Human resource planning
determines the qualitative and quantitative workforce requirement for an organization.

Management development programmes: Human resource planning decides upon the need for
management development programmes and facilities to conduct the same more effectively and efficiency.

Optimal utilisation of human resource:


Effective human resource planning will help ascertain the adequate workforce and facilitate to use them
optimally.

Essential for strategic planning:


Strategic plans are the long-term plans of the organization. In the absence of human resource planning
strategic planning will become ineffective.

FORECASTING HUMAN RESOURCE REQUIREMENT


Forecasting human resource demand is the process of estimating the future human resource requirement of
right quality and right number. As discussed earlier, potential human resource requirement is to be estimated
keeping in view the organisation's plans over a given period of time. Analysis of employment trends;
replacement needs of employees due to death, resignations, retirement termination; productivity of
employees; growth and expansion of organisation; absenteeism and labour turnover are the relevant factors
for human resourced forecasting. Demand forecasting is affected by a number of external and internal
factors.

Job analysis and forecasting about the quality of potential human resource facilitates demand forecasting.
So, existing job design must be thoroughly evaluated taking into consideration the future capabilities of the
presentemployees.

FACTORS AFFECTING HR DEMAND FORECASTING

Human Resource Demand Forecasting depends on several factors, some of which are given below.

 Employment trends;

 Replacement needs;

 Productivity;

 Absenteeism; and

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 Expansion and growth.

(a) Managerial Judgment: Under the 'bottom-up approach', line mangers send their departmental
requirement to top management. Top management ultimately forecasts the human resource requirement for
the overall organisation on the basis of proposals of departmental heads. Under the Top-down approach', top
management forecasts the human resource requirement for the entire organisation and various departments.

(b) Work-Study Technique: This technique is suitable where the estimated work-load is easily
measureable. Under this method, estimated total production and activities for a specific future period are
predicted. This information is translated into number of man-hours required to produce per units taking into
consideration the capability of the workforce.

(c) Ratio-Trend Analysis: Demand for manpower/human resources is also estimated on the basis of ratio of
production level and number of workers available. This ratio will be used to estimate demand

(d) Econometrics Models: These models are based on mathematical and statistical techniques for
estimating future demand. Under these models relationship is established between the dependent variable to
be predicted (e.g. manpower/human resources) and the independent variables (e.g., sales, total production,
work-load, etc.). Using these models, estimated demand of human resources can be predicted.

(e) Delphi Technique: Delphi technique is also very important technique used for estimating demand of
human resources. This technique takes into consideration human resources requirements given by a group of
experts i.e. mangers. The human resource experts collect the manpower needs, summarises the various
responses and prepare a report. This process is continued until all experts agree on estimated human
resourcesrequirement.

MATCHING SUPPLY AND DEMAND


OR PROCESS OR STEPS INVOLVED IN HUMAN RESOURCE PLANNING:

Analysing the organizational plans:

Every business enterprise will have plans for the successful performance of the following activities:

Purchasing of raw materials


Installation of machines and their maintenance.
Production
Finance and Accounting
Marketing
Research and Development
Maintenance of employee records and so on.

An analysis of these various plans would reveal the manpower needs of the organisation.

Process of Human Resources Planning

Analysing the Forecasting Demand Forecasting Supply Estimating Net HR requirements


Organizational Plans

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Preparing the Action plan

Forecasting the demand for Human Resource:


Keeping in mind the expansion and diversification programmes of the enterprise in the near future, the rate
of labour and absenteeism, the technological changes, the trend in the industry and in the job market and so
on, the future manpower requirements of the enterprise need to be forecasted. The quantity as well as the
quality (in terms of skill, experience, knowledge etc.) of the human resource shall be taken into account
while making the forecast.
Some of the methods used for forecasting the manpower requirements are:

 Managerial judgement: The head of the various departments will be in a position to estimate the
manpower needs of their respective departments in the near future.

 Time Study Method: The time study makes use of the concept of standard time for completing a
certain task. By using such a study, it is possible to determine the manpower needs of an
organisation.

 Ratio Analysis: Ratio may be calculated for the past data relating to the number of employees in
each category to the level of activity. Such ratios are useful in knowing the future manpower needs of
the enterprise.

Forecasting Supply
Collecting information about the existing human resource inventory is what is the first step in forecasting
the future supply of human resource. Information on the existing human resource inventory is gathered:

 Department-wise (production, marketing, finance etc)


 Job-category-wise(clerks, cashiers, sales representatives etc)
 Age-wise
 Skill-wise
 Experience-wise
 Pay-Scale-wise
 Sex-wise and so on.

Once information on the existing human resource is obtained, the nest step is to estimate the future loss of
human resource. Loss of human resource can arise on account of the following reasons:

 Retirement
 Resignation
 Death
 Dismissal
 Disablement
 Lay-off
 Retrenchment etc.

Making an estimate of the net human resource requirements:


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A comparison between the demand and supply forecasts of human resource would indicate the net
manpower requirements of the enterprise. It may be either surplus or deficit. Surplus indicates that some
employees are redundant while deficiency implies the need for additional hands.
Preparing the action plan:
In case of surplus manpower, the employees, found in excess of the requirements, may be redeployed, i.e.,
sent to branch offices or sister concerns where there is shortage of manpower. If there is deficiency, the
number of persons needed may be recruited from outside sources.
RECRUITMENT:
Meaning: It is the process of searching for prospective employees and stimulating them to apply for job in
an organisation.
Definition: According to Edwin b. Flippo, “Recruitment is the process of searching for prospective
employees and stimulating them to apply for jobs in the organisation”
Vacancies may arise in an organisation due to any of the following reasons:

 Retirement of an employee on attaining a certain age(usually 58)


 Death of an employee
 Resignation of job by the employee due to certain reasons
 Disablement of an employee (may be due to an accident either within the work place or outside) and
as a result he may not be able to remain in service
 Dismissal of an employee from service for certain reasons.

In all the above cases, vacancies are bound to arise. Vacancies also arise when new posts are created in an
organisation particularly when expansion activities are undertaken.
IMPORTANCE OF RECRUITMENT:
1. To attract and encourage more and more candidates to apply for a job in the organization.
2. To forward a talented pool of candidates for further selection processes for the job.
3. To determine present and future requirements of the organization.
4. To increase applicants at minimal cost.
5. To bridge the gap between job seekers and job providers.

SOURCES OF RECRUITMENT:

Basically there are two sources of recruitment. They are:

 Internal source and


 External source

Internal source: In the case of internal source, the selection of candidates for the jobs will be done from
among the existing employees of the organisation. The following are the ways of filling up vacancies
internally:
Transfer: It a particular department having surplus staff and another department is short staffed, the surplus
staff may be transferred to that other department.

Promotion: when a vacancy arises at a higher level in an organization, it is filled by elevating a person who
comes next in the organizational structure. The process of elevating a person to a higher level job is what is
known as promotion.
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Recommendation by existing employees: Vacancies may also be filled up internally based on the
recommendations made by the existing employees of the concern. As such candidates are recommended by
the existing employees, it is safe to employ them.

External sources:
It consists of the various outside sources from which an employer can find candidates eligible for the various
posts in his eligible for the various posts in his organisation. The various outside sources are:

Advertisements:
The employer can advertise vacancies his organization in popular newspapers. Such advertisements usually
specify the following:

Nature of the work


Nature of the vacancy
Qualification and experience desired
Salary and other perquisites offered
The mode of applying and
The time within which the candidate has to apply.

Employment Exchanges:
Employment exchanges function under the control of the government. They register the names of job
seekers and also maintain their bio-data. They provide these details to any employer who approaches them.

Private employment consultancy: Employers having vacancies in their organisation may also approach
employment consultants who may help them by finding suitable candidates. They do this work for a
consultancy fee.

Campus Interviews: Many employers visit colleges and universities every year and interview students who
are in their final year of study.Those students who are found to be deserving may be given placement by the
employers in their concerns.

Rival firms: It is not uncommon to find an employer drawing efficient employees from rival firms by
offering them higher remuneration. Efficient salesman, chartered accountants and management professionals
are often the target.

Unsolicited Applicants: An organisation may often receive applications for jobs from many educated
unemployed persons although it has not notified vacancies. Such applications are called unsolicited
applications.
FACTORS AFFECTING RECRUITMENT:
Certain organizations may have difficulty in finding efficient persons for various jobs. On the other hand,
there are organizations with which many candidates would like to be associated. The following are some of
the important factors that influence recruitment of candidates:
I.INTERNAL FACTORS:
Size:
It is obvious that an organization which is huge in size will certainly require more people to carry-out
various functions of the organizations. On the contrary, a small organization will require lesser number of
personnel.

Image:

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Good (OR) bad image of the organization has an influence in attracting the potential candidates to
aspire to apply for the job. The perception of the people about the image of an organization will
decrease/increase the number of applicants.

Growth:
The rate and space of growth and development of an organization determines the volume of
workforce required to meet the rising demand.

Nature:
The nature of functions and job to be performed resolves the proportionate combination of quality
and quantity of the workforce required in an organization.

Finance:
Recruitment involves outflow of money. Inadequate of finance will lead to postponing recruitment.
In term, it will hamper the growth and expansion of business.

Policies:
The human resources policy of an organization affects the recruitment to fill the vacancies in
different levels of the organization either from the internal sources (OR) from the external sources.

II.EXTERNAL FACTORS:

Government policies: The central and state government emphasize on equitable growth by enforcing quota
system, reservation and giving priority for differently able people while providing job opportunity in an
organization.

Labour laws: The recruiters have to hire with the social and labor legislative provisions in recruiting and
using labor forces. They have to consider acts such as:
-The contract Labour Act, 1970.
-Bonded Labour System Act, 1976.
-The child Labour (prohibition and Regulation) Act 1986.

Labour market: Manpower requirement of an organization is met by both internal and external sources. In
case the labor market is weak or inefficient it will adversely affect the recruitment.

Competition: In the absence of healthy competition, the competitors may employ any other unethical and
illegal recruitment practices in procuring good people for their organization.

Level of unemployment: The rate of unemployment determines the number of job seekers and facilitates
recruitment.

DIFFERENTIATE BETWEEN RECRUITMENT AND SELECTION:

S.NO RECRUITMENT SELECTION

1. It is a continues process. It is a process of choosing the suitable


candidates.

2. It stimulates people to apply jobs. It demands confidence to prove themselves.

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3. It facilitates selection process. It depends upon recruitment.

4. It is a positive approach. It is negative in approach.

5. It is a process of addition. It is an eliminating process.

6. It always precedes selection. It always succeeds recruitment.

7. It does not result in appointment. It leads to contract of appointment.

INTERVIEW
MEANING:
An interview is a face-to-face oral examination of a candidate by an employer. Interview may be held at two
stage – preliminary stage and final stage.

TYPES OF INTERVIEW:
Structured Interview:
In a structured interview the interviewer has a list of questions with answers prepared well in advance. The
candidates interviewed are asked questions only from the prepared list.

Unstructured Interview;
In this case the interviewer does not keep any list of questions. He can ask any question that he thinks is
relevant and see how the interviewee respondents.

Depth Interview:
As the very name suggests depth interview attempts to know the in-depth knowledge of the candidate in his
chosen field of activity.

Stress Interview:
This kind of interview is necessary to select candidates for jobs that require tremendous amount of patience,
the capacity to overcome resistance or protest and the mental courage to overcome stress and strain.

Board Or Panel Interview:


In this kind of an interview the candidate is interviewed simultaneously by a panel of experts. Such an
interview is necessary where the employer desires that assessment of the candidate by a group or a team of
experts is required.

Group Interview:
In this case a group of candidates will be interviewed simultaneously.A practical problem is given to them
and each one is asked to discuss it to find a solution. The performance of each individual in the group
discussion will decide whether he will be selected or not.

SELECTION:
Meaning: It is the process of choosing the suitable persons out of all the applicants. In this process relevant
information about applicants is collected and deserving candidates are provided with job opportunity. It is a

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process of matching suitable candidates with available job vacancies. Proper selection is helpful in
increasing the efficiency, productivity, growth and development of the organization.

Definition
According to dale Yoder,” Selection is the process in which candidates for employment are divided into two
classes those who are to be offered employment and those who are not to be”

STAGES INVOLVED IN SELECTION OF CANDIDATES:


The process of selection of candidates for the jobs involves the following stages:

Receiving application forms:


The first step in the selection of candidates is to receive application forms from all eligible candidates. The
candidates may be asked to submit their application together with their bio-data on a plain paper.

1. Name of the candidate-------------------------------

2. Date of birth------------------------------------------- 3. Sex----------------------------------

4. Mother tongue---------------------------------------- 5. Religion----------------------------

6. Community (i) OC (ii) BC (iii) MBC (iv) SC (v) ST

7. Nationality-----------------------------------

8. Address for Communication--------------------------

9. Educational qualification:

Course/degree Name of School/college Board/University Class Obtained

10. Proficiency in sports:

11. Previous work experience:

Name of the employer Nature of work Period of work

12. Referred by: 1. 2.


(Give the names and
addresses of two
persons who can certify
your candidature)

Declaration: I declare that the particulars given above are true to the best of my knowledge and belief.

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Date: Signature

After obtaining the application, the candidate has to carefully fill up all the particulars and forward it to the
employer or before the stipulate date.
Scrutiny: Once the applications have been received from the eligible candidates, the next step is to
scrutinize the same. To scrutinize the application means to check all the particulars given by the candidates
to ensure that they are correct.

 Age of the candidate


 Sex
 The community to which he belongs.
Preliminary interview: All those applicants, whose applications have been considered by the employer,
may be called for a preliminary interview. The object of preliminary interview is to see the candidate
personally to ensure whether he is physically and mentally suitable for the job.
Tests: A test is a sample measurement of a candidate’s ability and interest for the job. Different types of tests
are usually conducted for the purpose these are

 Aptitude test
 Intelligence test
 Proficiency test
 Interest test
 Personality test
Interview:
An interview is a face-to-face oral examination of a candidates by an employer. Interview may be
held at two stage:- 1. Preliminary stage, 2. Final stage.

Checking references:
The candidate would have already been required to mention in his application the names and address
of a few persons known to him. At this stage the employer may contact such persons and get information
regarding the conduct and character of the candidate.

Medical examination;
It is important that a person selected for a job must also be medically fir to perform it. The candidate,
therefore, will be asked to undergo medical examination to prove his/her fitness.

Appointment:
If the employer is satisfied with the medical reports of the candidate, he may appoint him in his
concern. The candidate is then give the appointment order. The appointment order states the date of
appointment, the nature of the job, the salary and other allowances payable, the period of probation etc.

Probation:
It is the initial testing period of the candidate during which his performance will be watched. The
period of probation may vary from company to company. In certain organization it may be six months while
in others it may extend up to one year.

Consideration of service:
Only on successful competition of the period of probation the candidate’s appointment will be
confirmed. It is only after getting the confirmation order the candidate becomes eligible to contribute to PF
(provident fund) and such other schemes.

TESTS
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MEANING: Several tests are being conducted in the process of selection to determine whether the
applicant possess the necessary qualities to fit into the interested position in the organization.
DEFINITION:
“A test is a sample of an aspect of individual’s behavior, performance and attitude”.
-MILTON M. BLUM.
TYPES OF TEST:
Aptitude test: An aptitude test is conducted to know whether the candidate has the potentials to learn the
skill necessary to the work to be assigned to him. A candidate who is going to be employed as a salesman
cannot be judged by his academic achievements.
Intelligence test: The object of conducting intelligence test is to test the mental capacity of the candidates. A
person’s intelligence is measured by what is called ‘Intelligence quotient’ (IQ). The IQ of a person is judged
by his ability to answer a certain number of questions within a stipulated time.
Proficiency test: It is conducted to measure a person’s skill to do his job. For certain jobs the skill of the
individual is more important than his IQ or aptitude. A typist’s performance for example, will be judged by
his or her ability to type with maximum speed and without committing mistakes.
Interest test: The purpose of interest test is to measure a candidate’s interest in a particular type of work.
Interest test enables the employer to assign the job for which the candidate has greater interest so that he can
derive maximum job satisfaction.
Personality test: It helps to judge the personal traits of a candidate. It brings out such qualities of an
individual as his courage, values, initiative, curiosity, temperament, judgement, like and dislikes
INDUCTION AND ORIENTATION
Induction is the process of welcoming introducing and socializing the new entrants to the existing group of
people. It is also called orientation programme. It is done to make the new employees feel welcome at the
new workplace and with his senior employees. It facilitates interaction amongst employees and helps them
to get to know each other and develop a better inter personal relationship and rapport with colleagues.

Objectives:
1. To avoid insecure feeling of new entrants.
2. To get to know co-workers quickly.
3. To enable the new entrants feel at home.
4. To promote interpersonal relationship and self-confidence.
5. To overcome false impression and negative feeling about the organization.

SOCIALIZATION BENEFITS:
Socialization refers to the process through which a new employee 'learns the ropes,' by becoming sensitive
to the formal and informal power structure and the explicit and implicit rules of behavior.
 Employee orientation
 Harmonious relation.
 Improved performance.
 Employee satisfaction.
 Organizational stability.
 Screen out deviant employees.
 Pre-arrival stage.
 Encounter Stage.
UNIT-3
TRAINING AND EXECUTIVE DEVELOPMENT:
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Training
Meaning: Training is the acquisition of knowledge, skills, and competencies as a result of the teaching of
vocational or practical skills and knowledge that relate to specific useful competencies. Training has specific
goals of improving one's capability, capacity, productivity and performance.Training and development is a
function of human resource management concerned with organizational activity aimed at bettering the
performance of individuals and groups in organizational settings.

IMPORTANCE OF TRAINING:
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 up-dating the skills and knowledge. As
such an organisation has to retrain the old employees.

Specifically, the need for training arises due to the following reasons:

To match the employee specifications with the job requirements and organisational needs:
Every management finds deviation 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., to the tune of the job requirements and organisational needs.

Organisational viability and the transformation process:


If the organisation desired to adapt 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.

Technological Advances:
Every organisation in order to survive and to be effective should adopt the latest technology that is
mechanisation, computerisation and automation. So, organisation should train the employees to enrich them
in the areas of changing technical skills and knowledge from time to time.

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 situation calls for
training in the skills of coordination, integration and adaptability to the requirements of growth,
diversification and expansion.

Human relations:
The organisation has to maintain human relations besides maintaining sound industrial relations although the
managers are not accustomed to deal with the workers accordingly. So training in human relations is
necessary to deal with human problems (including alienation, inter-personal and inter-group conflicts, etc.)
and to maintain human relations.

Change in the job assignment:


Training is also necessary when the existing employee is to promoted to the higher level in the Organization
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.
The need for training also arises to:
- Increase productivity.
- Improve quality of the product/service.

- Help a company to fulfil its future personnel needs.


- Improve organisational climate
- Improve health and safety

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- Prevent Obsolescence.
- Effect the personal growth.
- Minimise the resistance to change.

The factors discussed above are mostly external factors and they are beyond the personnel manager’s
control.
TRAINING METHODS.
Definition of Training:
According to Edwin Flippo, ‘training is the act of increasing the skills of an employee for doing a particular
job’.
On the Job Trainings: These methods are generally applied on the workplace while employees is actually
working. Following are the on-the-job methods.

On the Job Training Methods

Job Rotation: In this method, usually employees are put on different jobs turn by turn where they learn all
sorts of jobs of various departments.

Job Coaching: An experienced employee can give a verbal presentation to explain the nitty-gritty’s of the
job.

Job Instruction: It may consist an instruction or directions to perform a particular task or a function. It may
be in the form of orders or steps to perform a task.

Apprenticeships: Generally fresh graduates are put under the experienced employee to learn the functions
of job are known as apprenticeship.

Internships and Assistantships: An intern or an assistants are recruited to perform a specific time-bound
jobs or projects during their education. It may consist a part of their educational courses.

Off the Job Trainings:

These are used away from work places while employees are not working like classroom trainings, seminars
etc. Following are the off-the-job methods;

Off the Job Training Methods

1. Classroom Lectures: It is a verbal lecture presentation by an instructor to a large audience.


2. Audio-Visual: It can be done using Films, Televisions, Video, and Presentations etc.
3. Simulation: Creating a real life situation for decision-making and understanding the actual job
conditions.
4. Case Studies: It is a written description of an actual situation and trainer is supposed to analyze and
give his conclusions in writing.
5. Role Plays: Here trainees assume the part of the specific personalities in a case study and enact it in
front of the audience. It is more emotional orientation and improves interpersonal relationships.
6. Sensitivity Trainings: This is more from the point of view of behavioural assessment, under
different circumstances how an individual will behave himself and towards others. There is no
preplanned agenda and it is instant.
7. Programmed Instructions: Provided in the form of blocks either in book or a teaching machine
using questions and Feedbacks without the intervention of trainer.

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8. Computer Aided Instructions: It is extension of PI method, by using computers.

PURPOSE OF TRAINING:

 Employment of inexperienced and new labour requires detailed instructions for effective
performance on the job.
 People have not to work, but work effectively with the minimum of supervision, minimum of cost,
waste and spoilage, and to produce quality goods and services.
 Increasing use of fast changing techniques in production and other operations requires training into
newer methods for the operatives.

BENEFITS
(i) Economy in Operations:
Trained personnel will be able to make better and economical use of materials and equipment’s. Wastage
will be low.

(ii) Greater Productivity:


Training increases the skills of the employees in the performance of a particular job. An increase in the skills
usually helps to increase both quantity and quality of output.

(iii) Uniformity of Procedures:


With the help of training, the best available methods of work can be standardised and made available to all
employees.

(iv) Less Supervision:


If the employees are given proper training, the responsibility of supervision is lessened. Training does not
eliminate the need for supervision, but it reduces the need for detailed and constant supervision.

(v) Systematic Imparting of Skills:


A systematic training programme helps to reduce the learning time to reach the acceptable level of
performance. The employees need not learn by trial and error or by observing others and waste time if the
formal training programme exists in the organization.

(vi) Higher Morale:


The morale of employees is increase if they are given proper training. A good training programme will
mould employees’ attitude to achieve support for organisational activities and to obtain greater cooperation
and loyalty.

Types of training:
Technical or Technology Training
Technical training is a type of training meant to teach the new employee the technological aspects of the job.
In a retail environment, technical training might include teaching someone how to use the computer system
to ring up customers.
Quality Training
Quality training refers to familiarizing employees with the means of preventing, detecting, and eliminating
non quality items, usually in an organization that produces a product.

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Skills Training Skills training, the third type of training, includes proficiencies needed to actually perform
the job. For example, an administrative assistant might be trained in how to answer the phone, while a
salesperson at Best Buy might be trained in assessment of customer needs.
Soft Skills Training
Soft skills refer to personality traits, social graces, communication, and personal habits that are used to
characterize relationships with other people. Soft skills might include how to answer the phone or how to be
friendly and welcoming to customers.
Professional Training and Legal Training
In some jobs, professional training must be done on an ongoing basis. Professional training is a type of
training required to be up to date in one’s own professional field. For example, tax laws change often, and as
a result, an accountant for H&R Block must receive yearly professional training on new tax codes.
Team Training
The goal of team training is to develop cohesiveness among team members, allowing them to get to know
each other and facilitate relationship building. We can define team training as a process that empowers teams
to improve decision making, problem solving, and team-development skills to achieve business results.
Managerial Training
After someone has spent time with an organization, they might be identified as a candidate for promotion.
When this occurs, managerial training would occur. Topics might include those from our soft skills section,
such as how to motivate and delegate, while others may be technical in nature. For example, if management
uses a particular computer system for scheduling, the manager candidate might be technically trained. Some
managerial training might be performed in-house while other training, such as leadership skills, might be
performed externally.
Safety Training
Safety training is a type of training that occurs to ensure employees are protected from injuries caused by
work-related accidents. Safety training is especially important for organizations that use chemicals or other
types of hazardous materials in their production.

RESISTANCE TRAINING
Resistance Training is another name for exercising your muscles using an opposing force i.e. dumb bells
or resistance bands. In the old days it used to be called 'Weight Training', but this phrase invoked images of
huge sweaty men with bulging biceps and wasn't very popular with women.

EXECUTIVE DEVELOPMENT PROGRAM


Executive development is the whole of activities aimed at developing the skills and competencies of those
that (will) have executive positions in organizations. In this way, executive development is much more
strategic than typical corporate training & development which is used for most employees of an
organization.

COMMON PRACTICE EXECUTIVE DEVELOPMENT PROGRAMMES

1) On the job development or executive development: It means increasing the ability of the executives
while performing their duties, to develop them in real work situation. It includes the following methods:

a) On the job coaching: under this method superior only guides his subordinate about various methods and
skill required to do the job. The superior is responsible for subordinate’s performance. So the superior must
always provide the subordinate necessary assistance whenever required.

b) Understudy: under this method of development the trainee is prepared to fill the position of his superior.
He in the near future will assume to do the duties of his superior when he leaves the job due to retirement,
transfer or promotion.

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c) Job rotation: Here the executive is transferred from one job to another or from one plant to other. The
trainee learns the significance of the management principles by transferring learning from one job to another.
This method helps in injecting new ideas into different departments of the organization.
d) Committee assignment: under this method committee is constituted and assigned a subject to give
recommendations. The committee makes a study of the problem and gives suggestions to the departmental
head. It helps the trainees because every member of the committee gets a chance to learn from others.
2) Off the job development or executive development: here the executives gets the training off the job
means not when they are doing the job. It involves following methods:
a) Special courses: here the executives attend the special courses which are organized by the organization.
Under this experts from professional institutions provide them the training.
b) Specific readings: here the human resource development manager provides copies of specific articles
published in the journals to the executives to improve their knowledge. The executives study such books or
articles to enhance their knowledge.
c) Special projects: under this method the trainee is given a project related to the objective of the
department. The project helps the trainee in acquiring the knowledge of the particular topic.
d) Conference training: here the organization conducts a group meeting. In which the executive learn from
the others by comparing his opinion with others.
e) Sensitivity training: It helps in increasing the tolerance power of the individual and ability to understand
others. T group generally sits together and discuss for hours where the members learn about their own
behavior and behavior of others.

BENEFITS
 Improved leadership skills through greater self-awareness, sophisticated influencing skills and
understanding your impact on others
 Unparalleled business connections that can offer guidance, expand your global perspectives and
widen your sphere of contacts
 Improved teamwork and performance within your organisation
 The ability to harness the power and value of diverse groups – in your organisation and beyond

SELF DEVELOPMENT

The process of improving oneself through such activities as enhancing employment skills, increasing
consciousness and building wealth. The growing success of the self-help and personal development
movement has assisted many business managers in obtaining more qualified and motivated personnel for
their companies, and it has also encouraged more people to go into business for themselves.

KNOWLEDGE MANAGEMENT

Knowledge management is essentially about getting the right knowledge to the right person at the right time.
This in itself may not seem so complex, but it implies a strong tie to corporate strategy, understanding of
where and in what forms knowledge exists, creating processes that span organizational functions, and
ensuring that initiatives are accepted and supported by organizational members. Knowledge management
may also include new knowledge creation, or it may solely focus on knowledge sharing, storage, and
refinement.

KM Strategy: Knowledge management strategy must be dependent on corporate strategy. The objective is
to manage, share, and create relevant knowledge assets that will help meet tactical and strategic
requirements.

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Organizational Culture: The organizational culture influences the way people interact, the context within
which knowledge is created, the resistance they will have towards certain changes, and ultimately the way
they share (or the way they do not share) knowledge.

Organizational Processes: The right processes, environments, and systems that enable KM to be
implemented in the organization.

Management & Leadership: KM requires competent and experienced leadership at all levels. There are a
wide variety of KM-related roles that an organization may or may not need to implement, including a CKO,
knowledge managers, knowledge brokers and so on.

Technology: The systems, tools, and technologies that fit the organization's requirements - properly
designed and implemented.

Politics: The long-term support to implement and sustain initiatives that involve virtually all organizational
functions, which may be costly to implement (both from the perspective of time and money), and which
often do not have a directly visible return on investment.

UNIT-4

SUSTAINING EMPLOYEE INTEREST:

COMPENSATION PLAN

Compensation is a systematic approach to providing monetary value to employees in exchange for work
performed. Compensation may achieve several purposes assisting in recruitment, job performance, and job
satisfaction.

How is compensation used?


Compensation is a tool used by management for a variety of purposes to further the existence of the
company. Compensation may be adjusted according to the business needs, goals, and available resources.

Compensation may be used to:

 Recruit and retain qualified employees.

 Increase or maintain morale/satisfaction.

 Reward and encourage peak performance.

 Achieve internal and external equity.

 Reduce turnover and encourage company loyalty.

 Modify (through negotiations) practices of unions.

Types of compensation
Different types of compensation include:

 Base Pay

 Commissions

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 Overtime Pay

 Bonuses, Profit Sharing, Merit Pay

 Stock Options

 Travel/Meal/Housing Allowance

 Benefits including: dental, insurance, medical, vacation, leaves, retirement, taxes...

COMPENSATION PLANS

Develop a program outline.

 Set an objective for the program.

 Establish target dates for implementation and completion.

 Determine a budget.

Designate an individual to oversee designing the compensation program.

 Determine whether this position will be permanent or temporary.

 Determine who will oversee the program once it is established.

 Determine the cost of going outside versus looking inside.

 Determine the cost of a consultant's review.

Develop a compensation philosophy.

 From a compensation committee (presumably consisting of officers or at least including one officer
of the company).

 Decide what, if any, differences should exist in pay structures for executives, professional
employees, sales employees, and so on (e.g., hourly versus salaried rates, incentive-based versus non
contingent pay).

 Determine whether the company should set salaries at, above, or below market.

 Decide the extent to which employee benefits should replace or supplement cash compensation.

Conduct a job analysis of all positions.

 Conduct a general task analysis by major departments. What tasks must be accomplished by whom?

 Get input from senior vice presidents of marketing, finance, sales, administration, production, and
other appropriate departments to determine the organizational structure and primary functions of
each.

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 Interview department managers and key employees, as necessary, to determine their specific job
functions.

 Decide which job classifications should be exempt and which should be nonexempt.

 Develop model job descriptions for exempt and nonexempt positions and distribute the models to
incumbents for review and comment; adjust job descriptions if necessary.

 Develop a final draft of job descriptions.

 Meet with department managers, as necessary, to review job descriptions.

 Finalize and document all job descriptions.

Evaluate jobs.

 Rank the jobs within each senior vice president's and manager's department, and then rank jobs
between and among departments.

 Verify ranking by comparing it to industry market data concerning the ranking, and adjust if
necessary.

 Prepare a matrix organizational review.

 On the basis of required tasks and forecasted business plans, develop a matrix of jobs crossing lines
and departments.

 Compare the matrix with data from both the company structure and the industry wide market.

 Prepare flow charts of all ranks for each department for ease of interpretation and assessment.

 Present data and charts to the compensation committee for review and adjustment.

Determine grades.

 Establish the number of levels - senior, junior, intermediate, and beginner - for each job family and
assign a grade to each level.

 Determine the number of pay grades, or monetary range of a position at a particular level, within
each department.

Establish grade pricing and salary range.

 Establish benchmark (key) jobs.

 Review the market price of benchmark jobs within the industry.

 Establish a trend line in accordance with company philosophy (i.e., where the company wants to be
in relation to salary ranges in the industry).

Determine an appropriate salary structure.

26
 Determine the difference between each salary step.

 Determine a minimum and a maximum percent spread.

 Slot the remaining jobs.

 Review job descriptions.

 Verify the purpose, necessity, or other reasons for maintaining a position.

 Meet with the compensation committee for review, adjustments, and approval.

Develop a salary administration policy.

 Develop and document the general company policy.

 Develop and document specific policies for selected groups.

 Develop and document a strategy for merit raises and other pay increases, such as cost-of-living
adjustments, bonuses, annual reviews, and promotions.

 Develop and document procedures to justify the policy (e.g., performance appraisal forms, a merit
raise schedule).

 Meet with the compensation committee for review, adjustments, and approval.

Obtain top executives' approval of the basic salary program.

 Develop and present cost impact studies that project the expense of bringing the present staff up to
the proposed levels.

 Present data to the compensation committee for review, adjustment, and approval.

 Present data to the executive operating committee (senior managers and officers) for review and
approval.

Communicate the final program to employees and managers.

 Present the plan to the compensation committee for feedback, adjustments, review, and approval.

 Make a presentation to executive staff managers for approval or change, and incorporate necessary
changes.

 Develop a plan for communicating the new program to employees, using slide shows or movies,
literature, handouts, etc.

 Make presentations to managers and employees. Implement the program.

 Design and develop detailed systems, procedures, and forms.

 Work with HR information systems staff to establish effective implementation procedures, to


develop appropriate data input forms, and to create effective monitoring reports for senior managers.
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 Have the necessary forms printed.

 Develop and determine format specifications for all reports.

 Execute test runs on the human resources information system.

 Execute the program.

Monitor the program.

 Monitor feedback from managers.

 Make changes where necessary.

 Find flaws or problems in the program and adjust or modify where necessary.

WHAT IS REWARD?

Reward management is concerned with the formulation and implementation of strategies and policies that
aim to reward people fairly, equitably and consistently in accordance with their value to the organization.

EXPLAIN THE WAYS TO CLASSIFY REWARDS.


There are a number of ways to classify rewards.
1. Intrinsic versus extrinsic rewards: The satisfactions one gets from the job itself are its intrinsic rewards.
These satisfactions are self initiated rewards, such as having pride in one’s work, having a feeling of
accomplishment, or being part of a team. On the other hand extrinsic rewards include money, promotions,
and fringe benefits.

2. Financial versus Non financial rewards: Rewards may or may not enhance the employees financial well
being. If they do they can do this directly through wages, bonuses, profit sharing, and the like, or indirectly
through supportive benefits such as pension plans, paid vacations, paid sick leaves and purchase discounts.
Non financial rewards are potentially at the disposal of the organization. They do not increase the
employee’s financial position, instead of making the employees life better off the job, non financial rewards
emphasize making life on the job more attractive.
3. Performance based versus membership based rewards: The rewards that the organization allocates
can be said to be based on either performance criteria or membership criteria. While the managers in most
organizations will vigorously argue that their reward system pays off for performance, you should recognize
that this is almost invariably not the case. Few organizations actually rewards employees based on
performance. However, without question, the dominant basis for reward allocations in organization is
membership.

WHAT IS MOTIVATION?
Motivation is a theoretical construct used to explain behavior. It gives the reasons for people's actions,
desires, and needs. Motivation can also be defined as one's direction to behavior or what causes a person to
want to repeat a behavior and vice versa.

EXPLAIN THE APPLICATION THEORIES OF MOTIVATION.


1) Herzberg’s Two-Factor Theory of Motivation

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In 1959, Frederick Herzberg, a behavioural scientist proposed a two-factor theory or the motivator-hygiene
theory. According to Herzberg, there are some job factors that result in satisfaction while there are other job
factors that prevent dissatisfaction. According to Herzberg, the opposite of “Satisfaction” is “No
satisfaction” and the opposite of “Dissatisfaction” is “No Dissatisfaction”.

FIGURE: Herzberg’s view of satisfaction and dissatisfaction


Herzberg classified these job factors into two categories-

a. Hygiene factors- Hygiene factors are those job factors which are essential for existence of
motivation at workplace. These do not lead to positive satisfaction for long-term. But if these factors
are absent / if these factors are non-existant at workplace, then they lead to dissatisfaction. The
hygiene factors symbolized the physiological needs which the individuals wanted and expected to be
fulfilled. Hygiene factors include:

 Pay

 Company Policies and administrative


policies

 Fringe benefits

 Physical Working conditions

 Status

 Interpersonal relations

 Job Security

b. Motivational factors- According to Herzberg, the hygiene factors cannot be regarded as motivators.
The motivational factors yield positive satisfaction. These factors are inherent to work. These factors
motivate the employees for a superior performance. Motivational factors include:

 Recognition

 Sense of achievement

 Growth and promotional opportunities

 Responsibility
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 Meaningfulness of the work

2) Maslow's hierarchy of needs

Maslow's hierarchy of needs is often portrayed in the shape of a pyramid with the largest, most fundamental
levels of needs at the bottom and the need for self-actualization and self-transcendence at the top.
Physiological needs:
Physiological needs are the physical requirements for human survival. If these requirements are not met, the
human body cannot function properly and will ultimately fail. Physiological needs are thought to be the
most important; they should be met first. Air, water, and food are metabolic requirements for survival in all
animals, including humans.
Safety needs
Once a person's physiological needs are relatively satisfied, their safety needs take precedence and dominate
behavior. In the absence of physical safety due to war, natural disaster, family violence, childhood abuse,
etc. people may (re-)experience post-traumatic stress disorder or trans generational trauma. In the absence of
economic safety due to economic crisis and lack of work opportunities these safety needs manifest
themselves in ways such as a preference for job security, grievance procedures for protecting the individual
from unilateral authority, savings accounts, insurance policies, disability accommodations, etc.
Love and belonging
After physiological and safety needs are fulfilled, the third level of human needs is interpersonal and
involves feelings of belongingness. This need is especially strong in childhood and can override the need for
safety as witnessed in children who cling to abusive parents. Deficiencies within this level of Maslow's
hierarchy – due to hospitalism, neglect, shunning, ostracism, etc. – can adversely affect the individual's
ability to form and maintain emotionally significant relationships in general, such as:

 Friendship

 Intimacy

 Family
Esteem
All humans have a need to feel respected; this includes the need to have self-esteem and self-respect. Esteem
presents the typical human desire to be accepted and valued by others. People often engage in a profession
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or hobby to gain recognition. These activities give the person a sense of contribution or value. Low self-
esteem or an inferiority complex may result from imbalances during this level in the hierarchy. People with
low self-esteem often need respect from others; they may feel the need to seek fame or glory.
Self-actualization
"What a man can be, he must be." This quotation forms the basis of the perceived need for self-actualization.
This level of need refers to what a person's full potential is and the realization of that potential. Maslow
describes this level as the desire to accomplish everything that one can, to become the most that one can
be. Individuals may perceive or focus on this need very specifically.
EXPLAIN CAREER MANAGEMENT.
Career management is conscious planning of one’s activities and engagements in the jobs one undertakes in
the course of his life for better fulfilment, growth and financial stability. It is a sequential process that starts
from an understanding of oneself and encompasses occupational awareness.
LIST OUT THE INDICATORS OF CAREER PROGRAM EFFECTIVENESS.

 Matching the Standards with the Results: Comparison between already established goals and
objectives and achievement is the biggest indicator of the effectiveness of a career program. Lesser
the difference between the two, more successful the program is. But before matching the two, HR
managers should make sure that the set standards were feasible to achieve and achieved output is
calculated without any bias.

 Greater Self Awareness among Employees: If the employee feels that they have achieved greater
self awareness and self-determination and acquired necessary and useful information about their
career, the program is definitely a big success.

 Balance between Employee and Organization Requirements and Objectives: Implementation of


a career development program should result in better communication at all levels within the
organization, a balance match between individual and organizational career and identification of
talent pool by HR specialists are other major indicators that can help you measure the effectiveness
of a career development program.

 Changes in Performance Indexes: Improved employee performance ratings, improved employee


morale, reduced turnover rates, reduced employee absenteeism, increased promotions from within
and reduced time to fill job openings are other positive indicators for measuring the effectiveness of
a career program. Along with this, a positive change in the attitude and behaviour of employees and
adequacy of organizational career information can also be seen as indicators of career program
effectiveness.

DEVELOPMENT OF MENTOR:

Different mentoring relationships generate a whole host of mentor types and styles.

 The wise leader is someone who through executive title, seniority, or status within the organization has
reached the pinnacle of his or her career and is worthy of and willing to impart knowledge and wisdom
to others in the organization.
 The life coach is a professional mentor, often in the organization's human resources division or an
outside consultant. Staff looking to change jobs or careers often hires life coaches outside the work
environment to evaluate their performance, prepare for new career opportunities, or simply set and
achieve personal goals.

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 The teacher could be an educator, working with current or past students to build their professional
talents and skills, or someone who assumes the "honorary" role of teacher—promoting learning and
growth by imparting knowledge, debating ideas, or recommending resources.
 Peer mentors participate in informal relationships in which colleagues or friends pair up to help each
other grow within an organization.
 The confidante is not so much a mentor as someone to use as a touchstone or sounding board. It is
helpful in both healthy and dysfunctional work environments to have a confidante with whom to bat
ideas around, air frustrations, request reality checks, and seek advice.
 The self-help mentor takes the form of books, manuals, articles, checklists, software, Web sites, and so
forth that provide proven formulas or step-by-step advice on how to grow professionally.
 The inner mentor is the internal voice that calls upon intuition to glean and mold life experiences into
a personalized leadership philosophy. It is the deconstruction the picking apart of these experiences to
reveal underlying values and beliefs that will translate into a customized set of leadership principles .
The process of mentoring yourself is difficult it takes concentration, self-reflection, and the ability to
trust your own instincts.

EXPLAIN PROTEGE RELATIONSHIPS.

A protégé is an active partner who receives advice, coaching, assistance and feedback from a more
experienced person, resulting in the enhancement of the protégé’s professional career. The protégé must
have clear goals established and be internally motivated to learn in order for the relationship to be
successful.

 The formal portion of the HRM Mentor Program is for a period of eight-months (September - April)

 Protégés are encouraged to refrain from requesting internship positions or job offers from mentors

 If a relationship reaches an end before the eight-months, it is expected that the protégé close off the
relationship in a professional manner and under the direction of the Program Coordinator

 Protégés are encouraged to take the initiative to establish and maintain contact with their mentor

 Protégés are encouraged to prepare for each meeting with an agenda and relevant questions for
discussion

 Participants should communicate periodically with the Program Coordinator about the successes or
problems of the match.

UNIT-5

PERFORMANCE EVALUATION AND CONTROL PROCESS:

PERFORMANCE EVALUATION/APPRAISAL:

Meaning: Performance evaluation, or performance appraisal (PA), is the process of assessing an employee's
job performance and productivity. The assessment is conducted based on previously established criteria that
align with the goals of the organization.

EXPLAIN THE TECHNIQUES / METHODS OF PERFORMANCE APPRAISALS:

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Numerous methods have been devised to measure the quantity and quality of performance appraisals. Each
of the methods is effective for some purposes for some organizations only. None should be dismissed or
accepted as appropriate except as they relate to the particular needs of the organization or an employee.
Broadly all methods of appraisals can be divided into two different categories.
 Past Oriented Methods
 Future Oriented Methods
Past Oriented Methods
1. Rating Scales: Rating scales consists of several numerical scales representing job related performance
criterions such as dependability, initiative, output, attendance, attitude etc. Each scales ranges from excellent
to poor. The total numerical scores are computed and final conclusions are derived.
2. Checklist: Under this method, checklist of statements of traits of employee in the form of Yes or No
based questions is prepared. Here the rater only does the reporting or checking and HR department does the
actual evaluation.
3. Forced Choice Method: The series of statements arranged in the blocks of two or more are given and the
rater indicates which statement is true or false. The rater is forced to make a choice. HR department does
actual assessment.
4. Forced Distribution Method: Here employees are clustered around a high point on a rating scale. Rater
is compelled to distribute the employees on all points on the scale. It is assumed that the performance is
conformed to normal distribution.
5. Critical Incidents Method: The approach is focused on certain critical behaviours of employee that
makes all the difference in the performance. Supervisors as and when they occur record such incidents.

7. Field Review Method: This is altogether different approach to performance appraisal. In this case, an
interviewer from the personnel department of the enterprise would meet the supervisor and gather
information on the performance of the subordinates working under him. The interviewer records the views
of the supervisor carefully and the same will be preserved for future reference or guidance.

9. Confidential Records: It is Mostly used by government departments, however its application in industry
is not ruled out. Here the report is given in the form of Annual Confidentiality Report (ACR) and may record
ratings with respect to following items; attendance, self expression, team work, leadership, initiative,
technical ability, reasoning ability, originality and resourcefulness etc. The system is highly secretive and
confidential.

10. Essay Method: In this method the rater writes down the employee description in detail within a number
of broad categories like, overall impression of performance, promote ability of employee, existing
capabilities and qualifications of performing jobs, strengths and weaknesses and training needs of the
employee.

11. Cost Accounting Method: Here performance is evaluated from the monetary returns yields to his or her
organization. Cost to keep employee, and benefit the organization derives is ascertained. Hence it is more
dependent upon cost and benefit analysis.

12. Comparative Evaluation Method (Ranking & Paired Comparisons): These are collection of
different methods that compare performance with that of other co-workers. The usual techniques used may
be ranking methods and paired comparison method.
 Ranking Methods: Superior ranks his worker based on merit, from best to worst. However how best
and why best are not elaborated in this method.
 Paired Comparison Methods: In this method each employee is rated with another employee in the
form of pairs. The number of comparisons may be calculated with the help of a formula as under.
N x (N-1) / 2

Future Oriented Methods

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1. Management By Objectives: Here the performance is rated against the achievement of objectives stated
by the management. MBO process goes as under.
 Establish goals and desired outcomes for each subordinate
 Setting performance standards
 Comparison of actual goals with goals attained by the employee
 Establish new goals and new strategies for goals not achieved in previous year.
2. Psychological Appraisals: These appraisals are more directed to assess employees potential for future
performance rather than the past one. It is done in the form of in-depth interviews, psychological tests, and
discussion with supervisors and review of other evaluations. It is more focused on employees emotional,
intellectual, and motivational and other personal characteristics affecting his performance. This approach is
slow and costly and may be useful for bright young members who may have considerable potential.

3. Assessment Centers: An assessment center is a central location where managers may come together to
have their participation in job related exercises evaluated by trained observers. It is more focused on
observation of behaviours across a series of select exercises or work samples. Assesses are requested to
participate in in-basket exercises, work groups, computer simulations, role playing and other similar
activities which require same attributes for successful performance in actual job.

4. 360-Degree Feedback: It is a technique which is systematic collection of performance data on an


individual group, derived from a number of stakeholders like immediate supervisors, team members,
customers, peers and self. This technique is highly useful in terms of broader perspective, greater self-
development and multi-source feedback is useful. 360-degree appraisals are useful to measure inter-personal
skills, customer satisfaction and team building skills.

Here are some suggestions to follow their lead in revamping your company's employee review process.

FEEDBACK
1. Embrace technology. There is an increasing trend in the development and use of employee engagement
apps, such as tinypulse, Impraise and Workday. These apps give employees and managers a chance to
communicate regarding assignments daily, tracking progress, providing feedback and incorporating other
business aspects so that each member of the team is on track and on the same page.
2. Institute performance-related pay increases. Sixty-four percent of the people polled by Tinypulse
wanted pay increases tied to their performance reviews. Consider quarterly bonuses or increases to
positively reinforce good work as well as the employee's confidence that you value him or her as both an
individual and a contributor.
3. Make reviews more frequent. With immediate feedback provided on social media sites like Facebook,
people are increasingly used to hearing the good and bad on our thoughts and actions in real time. Tinypulse
found that employees are in favor of more frequent reviews, so consider conducting evaluations at key
milestones, such as at the end of a major project, or quarterly.

12 PERFORMANCE APPRAISAL AND PERFORMANCE MANAGEMENT BEST INDUSTRY


PRACTICES:

- Think of Performance Management as an entire system, starting in interviews with potential


employees and continuing through orientation, training, coaching and counseling, and recognizing
peak performance.

- Stop communicating about performance appraisals and performance management as if it is merely an


annual event. The only annual part of it is salary action and/or filing forms. Think of the performance
appraisal as an ongoing workplace conversation.

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- Train managers and employees on giving and receiving positive and negative feedback on an
ongoing basis.

- Hold managers accountable for having ongoing conversations around work and goals.

- Actively seek to align individual goals with organizational goals.


- Encourage employee participation and ownership in the performance appraisal process. Create an
environment where together the manager and employee can question, challenge and discuss goals
and objectives to gain clarity.

- Use the performance management system, Armstrong advised, to link with the organization’s values.
& mquotValues should be reflected in the organization’s core competencies and they should show up
in interviewing as well as in performance appraisals.&quot

- Link the performance management system with retention, development, and succession planning
initiatives. This linkage explains why specific people advance.

- Get support at the senior level. & quotIf you don’t have support at the senior level,&quot Armstrong
noted, &quot you’re not going to have a robust, effective performance management system . if you
want a world-class performance management system that really does retain talent and increase
productivity, you’ve got to get the c-suite onboard and they’ve got to talk it and walk it &quot

- Openly communicate to all employees how your compensation system works. If merit pools average
2 to 3 percent annually, for example, let everyone know this. Manage expectations around annual
increases to control the rumor mill and misinformation.

- Where possible, have a second-level review of performance appraisals, either by HR or second-tier


management.

- Understand the legal pitfalls associated with performance management, such as penalizing
employees for taking legally-protected leave (e.g., FMLA leave), and allowing unlawful bias to
infect performance appraisals.

PROMOTION
Definition:
According to Scott and Clothier, “A promotion is the transfer of an employee to a job which pays more
money or one that carries some preferred status.”

TYPES OF PROMOTION
The different types of promotions are:

(a) Limited Promotion:


(b) Dry Promotion:
(c) Multiple Chain Promotion
(d) Up and Out Promotion

CRITERIA FOR PROMOTION.

 Seniority
 Merit

DEMOTION.

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Meaning:Demotion is a process by which the employee is downgraded and sent to a lower position from the
one he is holding at present. When an employee is moved to a job with less responsibility, status or
compensation he is said to be demoted. Demotion is the reverse of promotion. It is more a punishment for
inefficiency or incompetence.

EXPLAIN THE CAUSES OF DEMOTION.

 Demotion may be used as a disciplinary weapon.

 Demotion may be resorted to when employees, because of ill health or personal

 Reasons cannot do their job properly. If a company curtails some of its activities, employees are
often required to accept

 Lower-level position until normally is restored. If an employee finds it difficult to meet job
requirement standards, following his promotion he may be reverted to his old position.

TRANSFER.

Meaning:

It refers to lateral movement of an employee within the same grade from one job to another. In the
words of Flippo, “A transfer is a change in the job accompanied by a change in the place of job
without a change in the responsibilities or remuneration”.

Transfer may be permanent or temporary – permanent transfers are effected due to charge in work
load, death, retirement or resignation of some employees. Temporary transfer arises due to ill health,
absenteeism etc. of the some employees.

EXPLAIN THE REASONS FOR TRANSFER.

 Transfer due to vacancy


 Promotion transfer
 Compulsory transfer
 Punishment transfer
 Request transfer
 Mutual transfer

SEPARATION.
Separation means cessation of service of agreement with the organization. Separation canbe the result of:

LIST OUT THE CAUSES OF SEPARATION.

(a) Resignation
A resignation is a voluntary separation. When a termination is initiated by the employee himself, it is termed
a resignation.
(b) Discharge
A discharge involves permanent separation of an employee from the organization because of poor
performance, violation of rules or poor code of conduct.
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(c) Dismissal
When the termination is initiated by the organization, it is termed as dismissal. A dismissal is the termination
of the services of an employee by way of punishment for some misconduct, or for prolonged absence from
duty.
(d) Retrenchment
Retrenchment is termination of service due to redundancy. It is a permanent termination of the services of an
employee for economic reasons in a going concern. It must be noted that termination of services as a
punishment given by way of disciplinary action or superannuation or continued ill health does not constitute
retrenchment.
(e) Layoff
Lay off refers to an indefinite separation of the employee from the pay roll due to factors beyond the control
of the employer. The employee is expected to be called back in the forseeable future. The laid-off employee
is not a discharged employee and is still carried on the roll as an employee. Layoff is resorted to by the
employer for factors beyond his control.

(f) Golden Handshake


It is a method of retrenchment wherein the employees with a certain minimum service can opt for voluntary
retirement and get a fat lumpsum in return. Golden handshake is usually offered by the Government to
reduce the size of the bureaucracy and close down chronically loss-making public sector enterprises. Many
thinkers on the subject are of the opinion that golden handshake is the fallout of the new economic policy
followed by the Government of India. In the 1992–93 Union Budget, the Government had provided Rs. 450
crores for the Voluntary Retirement Scheme (VRS) for its employees.

(g) Retirement
In India, the retirement age is 58 or 60 years. Some employers may extend the age upward or downward
from this base. For those employees who retire, it is a significant milestone. Regardless of the age at which
retirement occurs, workers may need preparation through counselling.

IMPLICATION OF JOB CHANGE.


At a career crossroads, whether changing jobs or becoming self-employed, it is important to make a robust
decision, having thought about all the implications of your planned change. These implications need to
include legal ones which affect your rights and choices.

This is a guest blog, part 1 of 2, by Michael Scutt who is an employment lawyer. It explores the employment
law implications of changing jobs, specifically your notice period.

Changing your job can feel a risky and anxious experience. There may be many reasons why you are
changing your job; dissatisfaction at a lack of prospects, wanting more pay or responsibility, feeling
undervalued or simply relishing a new challenge. However, for some, there can be truth in the old adage of
“better the devil you know”. For the more risk averse, making the decision to leave voluntarily can therefore
be a daunting step.In many situations, the decision to change jobs can be forced upon an employee by
redundancy or dismissal, but whatever the reason for departure from one job, it is never an easy step
psychologically. So what are the legal issues you need to think about before ‘jumping ship’?

PROCEDURES:

Your Notice Period:


The first step is to look at your contract of employment. How much notice do you have to give before you
can leave? In many cases, and it depends on your seniority in the business you are leaving, your notice
period may be no more than one month or, depending on length of service, one week per year of service up
to a maximum of 12 weeks (being the statutory notice due). In other cases, particularly with more senior
employees, the period of notice you are required to give maybe three or even six months. Only very senior
employees might be required to give 12 months notice.
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In the absence of anything in writing, the statutory provisions will prevail being such period as is
‘reasonable’ in all the circumstances. You should not work for a new employer until your notice period has
expired. Again, a look at your employment contract will tell you whether your employer can pay you in lieu
of notice (called a ‘PILON clause’), meaning they can pay you the money you would have received during
your notice period (had you served it) in a lump sum. If there is no PILON clause in your contract, your
employer may be able to pay you the value of the notice period gross of tax and National Insurance
contributions.

However, if you are the one who instigated the move, it is unlikely that your employer will wish you to
leave so quickly, particularly if there is any risk that you might take their clients or customers with you to
your next job. On the other hand, if the employer is terminating your employment, perhaps for reason of
redundancy, they may be prepared to pay you in lieu of notice. If the departure is likely to be amicable, then
it can be worth speaking to your employer to negotiate the timing of your exit.

When considering changing jobs, it is worth checking your existing contract of employment and, if
necessary, take advice from an employment lawyer. At the same time you could also take advice on the
terms of the new contract you are being asked to enter into so that you are forewarned for any future issues
that may arise when you finally move on from that employment.

CONTROL:
The term control has different connotations depending upon the context of the use of the term. In
manufacturing it refers to a Device or mechanism installed or instituted to guide or regulates the activities or
operation of an apparatus, machine, person, or system; in law it refers to controlling interest and in
management as an authority to order and manage the workings and management of an entity.

LIST OUT THE CONTROL PROCESS.


Following are the steps involved into the process of control:
1. Establish the Standards:
Within an organization’s overall strategic plan, managers define goals for organizational departments in
specific, precise, operational terms that include standards of performance to compare with organizational
activities. However, for some of the activities the standards cannot be specific and precise.

2. Measure Actual Performance:


Most organizations prepare formal reports of performance measurements both quantitative and qualitative
(where quantification is not possible) that the managers review regularly. These measurements should be
related to the standards set in the first step of the control process.

3. Compare Performance with the Standards:


This step compares actual activities to performance standards. When managers read computer reports or
walk through their plants, they identify whether actual performance meets, exceeds, or falls short of
standards.

4. Take Corrective Action and Reinforcement of Successes:


When performance deviates from standards, managers must determine what changes, if any, are necessary
and how to apply them. In the productivity and quality-centered environment, workers and managers are
often empowered to evaluate their own work. After the evaluator determines the cause or causes of
deviation, he or she can take the fourth step— corrective action.

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IMPORTANCE OF CONTROL.
 Guides the Management in Achieving Pre-determined Goals
 Ensures Effective Use of Scarce and Valuable Resources
 Facilitates Coordination
 Leads to Delegation and Decentralization of Authority
 Spares Top Management to Concentrate on Policy Making

ENUMERATE IN DETAIL ABOUT THE REQUIREMENTS OF EFFECTIVE CONTROL


SYSTEM.
A control system is not an automatic phenomenon but deliberately created. Though different organisations
may design their control systems according to their unique and special characteristics or conditions, yet in
designing a good and effective control system the following basic requirements must be kept in view:

1. Focus on Objectives and Needs:


The effective control system should emphasise on attainment of organizational objectives. It should function
in harmony with the needs of the enterprise.

2. Immediate Warning and Timely Action:


Rapid reporting of variations is at the core of control. An ideal control system could detect, not create
bottlenecks and report significant deviation as promptly as possible so that necessary corrective action may
be taken well in time.

3. Indicative, Suggestive as well as corrective:


Controls should not only be able to point to the deviations, but they should also suggest corrective action
that is supposed to check the recurrence of variations or problems in future.

4. Understandable, Objective, and Economical:


Controls should be simple and easy to understand, standards of performance are quantified to appear
unbiased, and specific tools and techniques should be comprehensive, understandable, and economical for
the managers.

5. Focus on Functions and Factors:


Control should emphasize the functions, such as production, marketing, finance, human resources, etc and
focus on four factors – quality, quantity, timely use and costs. Not one, but multiple controls should be
adopted.

6. Strategic Points Control:


Control should be selective and concentrate on key result areas of the company. Every detail or thing cannot
and is not to be controlled in order to save time, cost and effort. Certain strategic, critical or vital points must
be identified along with the expectations at those points where failures cannot be tolerated and appropriate
control devices should be designed and imposed at those stages.

7. Flexibility:
Control must not become ends in themselves. It must be environment friendly and be able to make
modifications or revisions necessitated by the rapidly changing and complex business environment.

8. Attention to Human Factor:


Excess control causes corruption. It should not arouse negative reactions but positive feelings among people
through focus on work, not on people. The aim of control should be to create self-control and creativity
among members through enmeshing it in the organisational culture.

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9. Suitability:
Controls have to be consistent with the organization structure, where the responsibility for action lies,
position, competence, and needs of the individuals who have to interpret the control measures and exercise
control.

EXPLAIN THE METHODS OF CONTROL.


Controls can be numerous in kind. These may be classified on the basis of (a) timing, (b) designing systems,
(c) management levels, and (d) Responsibility

On the basis of timing:


Control can focus on events before, during, or after a process. For example, a local automobile dealer can
focus on activities before, during, or after sales of new cars. Such controls may be respectively called as
Preventive, Detective, and Corrective.

1. Feed forward Control:


The objective of feed forward control or preliminary control is to anticipate the likely problems and to
exercise control even before the activity has started or problem has occurred or been reported. It is future
directed. This kind of control is very popular in airlines. They go in for preventive maintenance activities to
detect and prevent structural damage, which may result in disaster.

2. Concurrent Control:
The technique of direct supervision is the best-known form of concurrent control. Concurrent control is
designed to ensure that employees’ activities produce the correct results and to correct the problems, if any,
before they become costly.

3. Feedback Control:
The control takes place after the job is over. Corrective action is taken after analysing variances with the
planned standards at the end of the activity. It is also known as ‘post action control’, because feedback
control is exercised after the event has taken place.

On the basis of designing Control Systems:


Three approaches may be followed while designing control systems, viz., Market Control, Bureaucratic
Control, and Clan Control. However, most organisations do not depend only on just one of them.

1. Market Control:
Control is based upon market mechanisms of competitive activities in terms of price and market share.
Different divisions are converted into profit centres and their performance is evaluated by segmental top line
(turnover), bottom line (profit) and the market share.

2. Bureaucratic Control:
Bureaucratic control focuses on authority, rule and regulations, procedures and policies. Most of the public
sector units in India go in for bureaucratic control. If they do not go by the rulebook, the legislative
committees and the ministries under whom they work will reprimand them. In a hospital no medicine can be
used unless the prescription is there and it is recorded in the issue register, even if the patient may die in
between.

3. Clan Control:
The control systems are designed in a way that give way to shared vision, shared values, norms, traditions
and beliefs, etc., part of the organisational culture. It is not based upon hierarchical mechanisms, but work-
related and performance measures. This kind of control is most suitable for the organisations which use team
style of work groups and where technology changes very fast.
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On the basis of Levels:
People at different level have different planning responsibilities, so do they undertake controlling. On the
basis of levels controls, can be categorised as Operational, Structural, Tactical, and Strategic.

1. Operational Control:
Its focus remains upon the processes used by the organisation for transforming the inputs (resources) into
outputs (products/services). Operational controls are used at the lower management. It is exercised almost
every day. Quality control, financial controls are part of operational controls.

2. Structural Control:
Are the different elements of organisation structure serving their intended aims? Is there overstaffing? Is the
ratio of staff to line increasing? Necessary action is to be undertaken. Two important forms of structural
control can be bureaucratic control and clan control, about which we have already talked. Structural control
is exercised by top and middle management.

3. Tactical Control:
Since tactical control deals with the departmental objectives, the controls are largely exercised by middle
management levels.

4. Strategic Control:
Strategic controls are early warning systems. Strategic control is the process to determine whether the
effectiveness of a corporate, business and functional strategies are successful in helping organisations to
meet its goals. Strategic controls are exercised by top level management.

On the basis of Responsibility:


Who has the responsibility of controlling? The responsibility may rest with the person executing the things
or with the supervisor or manager. This way control may be internal and external.

Internal control permits highly motivated people to exercise self-discipline. External control means that the
thread of control is in the hands of supervisor or manager and control is exercised through formal systems

GRIEVANCES.

MEANING: A grievance is any dissatisfaction or feeling of injustice having connection with one’s
employment situation which is brought to the attention of management. Speaking broadly, a grievance is any
dissatisfaction that adversely affects organizational relations and productivity.

EXPLAIN THE CAUSES OF GRIEVANCES.

 Economic
 Work environment
 Supervision
 Organizational change
 Employee relations
 Miscellaneous

EXPLAIN THE IMPLICATIONS OF GRIEVANCES.


Grievances, if not identified and redressed, may adversely affect workers, managers, and the organization.

The effects are the following:


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1. On the production:
a. Low quality of production
b. Low productivity
c. Increase in the wastage of material, spoilage/leakage of machinery
d. Increase in the cost of production per unit
2. On the employees:
a. Increase in the rate of absenteeism and turnover
b. Reduction in the level of commitment, sincerity and punctuality
c. Increase in the incidence of accidents
d. Reduction in the level of employee morale.
3. On the managers:
a. Strained superior-subordinate relations.
b. Increase in the degree of supervision and control.
c. Increase in indiscipline cases
d. Increase in unrest and thereby machinery to maintain industrial peace

DISCUSS IN DETAIL ABOUT THE REDRESSAL METHODS.

Methods of resolving grievance can be divided in to two parts:

 Decisional Processes: Binding Decisions


 Non-Decisional (Collaborative) Processes: Managed Negotiations
Decisional Processes: Binding Decisions

The dispute resolver makes a ruling, judgment or determination on legal and/or factual issues: Arbitration,
Adjudication, Reconciliation & Expert Determination are the methods under the decisional procerss.

(i). Arbitration

Arbitration (sometimes called “Adjudication”), is a private, trial-like process that can be commenced by any
two or more parties who agree to arbitrate — either under a contract, by legislation, or by simple written
agreement. A properly designed, well managed arbitration process can be completed quickly and is a highly
efficient means of resolving many types of dispute. The Arbitrator is usually an expert in the area of the
dispute, e.g. an accountant for a financial/commercial dispute; a doctor for a medical dispute etc. If the
issues are mainly legal in nature, the Arbitrator may be a legal expert, e.g. a solicitor, barrister or even a
retired judge.

(ii) Adjudication

Adjudication generally refers to processes of decision making that involve a neutral third party with the
authority to determine a binding resolution through some form of judgment or award. Adjudication is carried
out in various forms, but most commonly occurs in the court system. It can also take place outside the court
system in the form of alternative dispute resolution processes such as arbitration, private judging, and mini-
trials.

(iii) Reconciliation

Compared to conflict handling mechanisms such as negotiation, mediation, adjudication, and arbitration, the
approach called ‘reconciliation’ is perhaps the least well understood. Its meaning, processes, and application
have not been clearly articulated or developed. A place to start understanding what it entails might be by
trying to distinguish it from the other approaches used in grievance redressal and peace building. If we were
to look at the ‘degree of mutual participation by the conflicting parties in the search for solutions to the
problems underlying their conflict’ we could place these approaches in a spectrum.
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(iv) Observations

We notice that as we move from the left to the right on the spectrum, i.e., as the participation of all the
parties in the search for solution increases, the likelihood of achieving a mutually satisfactory and durable
solution also increases. We know that solutions imposed by force will only last until the vanquished is able
to muster sufficient force to reverse the situation. Solutions imposed by adjudication and arbitration, unless
somehow the loser gives up, can always be frustrated by the latter’s endless appeals or lack of cooperation in
the implementation process. If, however, the parties are engaged earnestly in the search for the solutions and
are able to find resolutions that could satisfy the needs and interests of all involved, there could be no better
guarantee for the durability of the settlements. It would be in the interest of every one to see to it that they
are fully enforced. This is what we believe problem-solving negotiations, mediation, and reconciliation can
do.

(V) Healing and Reconciliation

Despite the lack of knowledge about how to operationalize reconciliation, there is however no question
about the tremendous need for it. In fact, it could be said that the need in today’s world is much greater than
at any other time in the past.

What Does Reconciliation Entail-

Reconciliation as a conflict handling mechanism entails the following core elements:

 Honest acknowledgment of the harm/injury each party has inflicted on the other;
 Sincere regrets and remorse for the injury done:
 Readiness to apologize for one’s role in inflicting the injury;
 Readiness of the conflicting parties to ‘let go’ of the anger and bitterness caused by the conflict and
the injury;
 Commitment by the offender not to repeat the injury;
 Sincere effort to redress past grievances that caused the conflict and compensate the damage caused
to the extent possible;
 Entering into a new mutually enriching relationship.
Reconciliation then refers to this new relationship that emerges as a consequence of these processes. What
most people refer to as ‘healing’ is the mending of deep emotional wounds (generated by the conflict) that
follow the reconciliation process.

A very important aspect of the process of reconciliation and one that distinguishes it from all the other
conflict handling mechanisms is its methodology. In most of the conflict handling mechanisms such as
adjudication, arbitration, and for that matter even negotiation and mediation the method used for establishing
responsibility for the conflict or its consequences is adversarial.

(VI) Private Judging

As above, with the added attraction of using retired senior judges to manage the dispute resolution process in
the form of confidential, private trials. These result in written judgments (awards) that are legally binding on
the parties. Private Judging has most of the authority of a court process, added to which it is confidential,
quicker, more efficient and significantly cheaper than litigation.

2. Non-Decisional (Collaborative) Processes: Managed Negotiations

Under these methods a dispute resolver is generally appointed or agreed upon. He manages a problem
solving negotiation process that is designed and run to help parties understand and come to terms with their

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respective positions and interests, generate options for resolution and develop mutual agreements. Types of
non-decisional processes are:

(i) Facilitation

Facilitators bring professional communication and people management skills to meetings and important
negotiations. They help to redress grievances, where parties recognise they have serious differences, but
don’t consider themselves to be in dispute – or don’t want to acknowledge that they could be in dispute

(ii) Mediation (Facilitated)

Facilitative Mediators manage a style of negotiation process designed to help solve problems and generate
settlement options. This type of Mediator is a neutral process manager who is neither expected nor required
to express opinions on the issues. Being focused on the process, the Facilitative Mediator does not actively
encourage the parties towards settlement, instead they help the parties to develop their perceptions, draw
their own conclusions and develop their own solutions.

(iii) Mediation (Directed)

Directive Mediation is a more robust style of mediation. The Mediator is expected/required to provide
opinions and suggestions and to actively encourage the parties towards grievance redressal. Directive
Mediation is, by far, our most successful and most popular dispute resolution process.

(iv) Advisory & Evaluative Processes: Expert Opinions (non-binding)

The dispute resolver assesses the legal and/or factual and/or technical issues in dispute and advises the
parties of the absolute and relative strengths and weaknesses of their positions:

(v) Neutral Interventions: Factfinding & Problem Solving

The dispute resolver has a mandate to “get in and see what they can do” to help rectify and resolve a
situation that may otherwise develop into a serious conflict

********UNIT-5 ENDS*********

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