PERSONNEL MANAGEMENT

People are capable of remarkable achievements. So respect them. - Abraham Lincoln ORGANIZATION One author has said 1+1 makes an organization. Organization is the place where the managers practice the art of management. An organization may be a manufacturing firm, a business concern, an insurance company, a governmental agency, social organization, hospital, a university, a religious trust and even families. It may be small or large, simple or complex. An organization is a human grouping in which work is done for accomplishment of some specific goals or mission. An organization without some structure could be compared to an airport that has no ground. MANAGEMENT OF MEN IS A CHALLENGING JOB The Management of Man is a very important and challenging job; important because it is a job, not of managing men, but of administrating a social system. It is a challenging task because of the dynamic nature of the people. In fact there no two individuals are similar in mental abilities, traditions, sentiments, and behavior; they differ widely also as groups. People are responsive; they feel, think, and act; therefore, they cannot be operated like a machine. So it needs a tactful handling by management personnel. Manpower management is a most crucial job because Managing people is the heart and essence of being a manager. Personnel management is not the brain, the controller, not only just a limb, a member: not yet the bloodstream, the energizing force; it is the nervous system. It is a line channel, not just a duct, and in some respects has automotive force. DEFINITION The personnel management is the process of attracting, holding and motivating people involving all managers- line and staff. Dunn and Stephen According to the Institute of Personnel Management, London, 1956. Personnel Management is that part of management concerned with people at work and with their relationship within an organization. Its aim is to bring together and develop into an effective organization the men and women who make up an enterprise and having regard for the well-being of the individual and of working groups, to enable them to make their best contribution to its success. According to National Institute of Personnel Management Personnel Management, Labour Management or Staff Management means quite simply the task of dealing with human relationships within an organization. Academically the three aspects of Personnel Management are The welfare aspect concerned with working conditions and amenities such as canteens, crches, housing, personal problems of workers, schools, and recreation. The labour or personnel aspect concerned with recruitment, placement of employees, remuneration, promotion, incentives, productivity etc.

The industrial relations aspects concerned with trade union negotiation, settlement of industrial disputes, joint consultation and collective bargaining. All these aspects are concerned with human element in industry as distinct from the mechanical. QUALITIES OF A PERSONNEL MANAGER Prof. Jucius has emphasized that personnel managers should possess the following types of general knowledge, besides their specialization in the field of personnel areas. Philosophy, which seeks for the underlying explanations of human nature and conduct. Ethics, which is concerned with moral and value judgments. Logic, which is concerned with the rules and principles of reasoning. Mathematics, which treats of exact relations between quantities, magnitudes and systems. Sociology, which deals with the forms and functions of human groups. Anthropology, which is concerned with physical and environmental relations to peoples social and cultural patterns. Medicine, which in all its branches is concerned with the well-being of the people. History, which seeks to record and explain past events. Economics, whose interests are in optimizing choices among competing uses of limited resources,. Management which is concerned with a skilful leadership of organizational groups. Political Science, which, in the best sense, is concerned with how people are governed and how they govern themselves. A mind with a capacity for creative thinking, for analyzing situations and reasoning objectively; He should know problem-solving techniques and have an ability to inspire, motivate and direct employees; A devoted sense of vocation and faith in humanity; Capacity for leadership, a sense of social responsibility and a standard of social justice; Personal integrity so that employees may repose confidence in him; Capacity for persuasion, coupled with patience and tolerance; A friendly, approachable nature, which is tactful and sympathetic, and a pleasing personality, a well-groomed appearance, sophisticated taste and habits, and capable of working with and through other people; Initiative and decision-making ability; Mobility of facial expression (which encourages confidence, conveys interest, registers sympathy and allays distrust); An ability to generate trust among his colleagues and develop acceptability, recognition for himself and his ideas of communication with readiness and fluency; A readiness to co-operate the subordinates in times of difficulty and never to interfere or thrust his advice on them; and finally, A promptitude in giving them the feedbacks in their handling of personnel matters whenever necessary in the interest of functioning of the organization and established personnel policies of the company.

PROCESS-SYSTEMS APPROACH TO PERSONNEL MANAGEMENT In the process systems terminology personnel management is the planning, co-coordinating, and controlling of a network of organization-wide sub-processes and facilitating sub-systems pertaining to recruitment, selection, utilization, development of, and accommodation to human resources. The subprocesses comprise the most vital aspects of personnel management; leadership, justice determination, task specialization (job and organization design), staffing, performance appraisal, training and development, compensation and reward, collective bargaining, and organization development. These processes are found, in more or less degree, in most, if not all kinds of organizations The leadership process involves in influencing the individual and group behavior towards achievement of organization goals. It is concerned with traits, philosophy, and behavior of the leader, the characteristics of subordinates, and the superiors. The justice determination process is concerned with the giving of awards and penalties to the employees in proportion to their relative contribution to the output. This provides for equal treatment to all and a fair compensation for the work. The task-specialization process consists of division of the total task into individual jobs. In other words, it consists of setting of organizational objectives; job designing; communication of the job design to employees through job descriptions and performance standards and training; job specification and the work rules. The staffing process is the more complex and important process, involving manpower planning, authorization for staffing, developing sources for recruitment; evaluation of applicants, employment decisions; offers, induction and orientation, transfers, promotions, demotions, and separations, etc. The performance appraisal process is concerned with continuous evaluation of the employees work so that when necessary, promotion, pay raises, transfers, training etc., may be given. The training and development process is a combination of many sub processes which aim at correcting the quality of work of the individual, through provision of training and development programmers, employee counseling, offering suggestions, etc. The compensation and reward process determines the mechanism and from for giving financial and non-financial rewards, fringe-benefits, etc. to the employees with a view to motivate them for work. The collective bargaining process is a process that determines the relationship between the union and the employer in regard to wages, benefits, hours and working conditions, etc.

BENCH-MARKS PRINCIPLES OF PERSONNEL MANAGEMENT From the philosophy are derived the guidelines or bench-marks, which are generally flexible. These principles change as conditions change, including human behavioral patterns. The main principles of personnel management may be set forth as follows:

People are to be Dealt with as Complete Individuals Persons are recruited because they possess the requisite technical, professional and other qualities. But whether they co-operate with one another, with the group and with the management are largely governed by their personal feelings, cultural and social attitudes, ethical standards and family background. These and technical factors should be programmed into organizational operations. The management should be quick to understand how employees feel about contemplated work assignments, personnel policies, and decisions which affect their interests. Employees should, therefore, be treated as a whole and not piecemeal. Employees Should be Made to Feel Worthwhile Men do not live by bread alone. There is something other than money which motivates them to work toward organizational goals. Personal feeling of accomplishment, pride in ones work, harmonious relations with other co-workers and co-operation with the management all these factors need to be taken into consideration by the management if the efficiency and productivity of the employees are to be maintained and increased. Fairness and Justice These should guide a managements policies and actions. Fairness in dealing with his employees would win for the employer the confidence of his employees. Rewards should be earned, not given The rewards to be given should be commensurate with the efforts put in to win them. Such rewards should be given to an employee because of what he has accomplished and not merely as a gift. Gifts are not so well appreciated as rewards for work well done. Supply Employees with Relevant Information An organization should have a properly developed twoway communication channel so that the necessary information, instructions, orders and rules are passed on to employees and a proper response is evoked. Information must be given at the right moment, otherwise much harm may result. Secrecy often breeds suspicion in the minds of employees. Judge the Strength or Intelligence of the People Properly Knowledge of the strength of its employees will always bring management their co-operation. If proper opportunities are not made available to employees, resentment and frustration may result; or they may leave the organization or resort to coercion. Therefore, employees should be associated with the decision-making process. Sell the Personnel Programme Because if employees are not made aware of it, they will learn it from some other source. The selling of a programme should be done either orally or in writing. Equal Wage for Equal Work All the employees irrespective of their sex or community but doing similar type of work must be paid equally, and the wages paid must be adequate. Set Examples Preaching alone will not bring the desired results. Actions are louder than words; and these convince the employees that the management really does what it says or means.

MAN POWER PLANNING

Your plans can brings the future to the present Abraham Lincoln MEANING No organization can be successful in the long-run without having the right number and right kind of people, doing the right Job, at the right time. The most important resource of an Organization is its human resources the people who work in the organization. It is the most vital doctor for the survival and prosperity of an organization of all the Ms in Management (i.e., the mgt of materials, machines, methods, money, and motive power), the most important is M for men or human resource. It is the most valuable asset of an organization and not the money or physical equipment. Manpower planning and human resource planning is synonymous. In the past, the phrase manpower planning was widely used; but now the emphasis is one human resource planning which is broader based. Manpower planning is the planning for human resource. It is also called man power planning or personal planning or employment planning. Manpower planning is defined by several experts in different ways. DEFINITION Manpower planning as Strategy for the acquisition, utilization, improvement, and preservation of an enterprises human resources. - Steiner Manpower planning is the process by which a management determines how an organization should more from its current manpower position to its desired manpower position. Man Human resource planning is a double edged weapon If you used properly, it leads to the maximum utilization of human resources. Reduces excessive labour turnover and high absenteeism. Improves productivity and aids in achieving the objectives of an organization.

Faultily Used: It leads to disruption in the flow of work, lower production, less Job satisfaction, high cost of production and constant headaches for the Mgt personnel. Need for manpower planning To carry on its work, each organization needs personnel with the necessary Qualifications, skills, knowledge work experience and aptitude for work. Since a large member of persons has to be replaced who have grown old or who retire, die or become incapacitated of physical or mental ailments, there is a constant need for replacing such personnel. It is essential because of frequent labour turnover which is unavoidable. In order to meet the needs of expansion programmes. To meet the challenge of a new and changing technology and new techniques of production. It is also needed in order to identify areas of surplus personnel or areas in which there is a shortage of personnel. If there is a surplus, it can be redeployed and if there is shortage, it may be made good.

Objectives of Manpower Planning To ensure optimum use of human resources currently employed. To determine future recommitment level. To provide control measures to ensure that necessary resources are available as and when required. To anticipate redundancies and avoid unnecessary dismissals. To forecast future skill requirements to serve as a basis for training and development programme. To assess future housing needs of employees. To cast the manpower component in new projects.

LEVELS OF HUMAN RESOURCE PLANNING Different institutions prepare human resource plan at different levels for their own purposes. Human resource plan may be prepared at the national level, sectored level, industry level, unit level, departmental level and job level. National Level Generally, Government at the centre plan for human resources at the national level. It forecasts the demand for and supply of human resources for the entire nation. The government uses population policy, family planning, education policy, etc., to create a match between the demand and supply of human resources. The Government of India has specified the objectives of human resources planning in successive five-year plans. Sectored Level Central and State Governments formulate human resource plans for particular sectors. For example, plans of agriculture sector, industrial sector, territory sector, etc., are example of sectored level plans. Industrial Level Manpower needs of a particular industry like textiles, cement, chemical; iron and steel are predicted taking into account the output or operation level of that particular industry. Unit Level This covers the estimation of human resource needs of an organization or company based on its corporate or business plan. Departmental Level This covers the manpower needs of a particular department in an organization. The departmental plan is submitted to top management. Job Level Manpower needs of a particular job family within department like mechanical engineering is forecasted at this level. TYPES OF HUMAN RESOURCE PLANS Human resource planning is the process of determining the number and kind of human resources required in an organization for a specific time period in future. It may be defined as strategy for the procurement, development, allocation and utilization of an enterprises human resources. Human resource planning can be divided into two main forms on the basis of time-span. They are: Short-term manpower planning, Long-term manpower planning.

Short-term manpower planning is made for a short-period ranging from one year to less than five years. It is concerned with filling existing jobs. Long-term manpower planning differs from short-term manpower planning. It is prepared for a period of five years or more on the basis of trends in the economy, labour market and production. It reflects management thinking on the organization structure, business environment and personnel policies. Long-range planning and short range plans are complementary to each other.

PROCESS OF MANPOWER PLANNING Man power planning can be logically divided into three parts: i. Forecasting manpower demand, ii. Forecasting manpower supply, and iii. Human resource actions. Forecasting manpower demand This involves assessing how many people will be required in the organization in the foreseeable future and what abilities they are required to posses in order to enable the organization to remain in operation. Several factors need to consider while forecasting the demand for human resources. These factors can be short range (production schedules/budgets, affirmative actions) as well as long range (strategic plans, demographics, economy, technological trends, and social trends). The expected growth of the organization, budgetary constraints, and the introduction of new technology are some of the important factors that need to be considering while forecasting manpower demand. Forecasting manpower supply Like any other resources, human resources are subject to subtle erosion. Employees leave the organization for a wide variety of reasons, and they need to be replaced. The management has to explore both internal and external sources of supply for such replacement needs. Human resource actions based on demand and supply forecasting. Human resource activities like selection, training, promotion and placement, career management come into focus when there is high demand for and supply of manpower in the organization. When the supply of human resource is low and the demand is high. PROBLEMS IN HUMAN RESOURCE PLANNING However, some problems crop up in the process of human resource planning. The main problems or limitations in the process of human resource planning are as follows: Resistance by employees and employers Employees and trade unions resist human resource planning as they view that it increases the workload of employees, and prepares programmes for securing human resources from outside. The other reason for their resistance is that human resource planning aims at controlling the employees through productivity maximization. Further, employers feel that human resource planning is not necessary as candidates will be available for jobs as and when required. Uncertainties Labour absenteeism, labour turnover, seasonal employment, technological changes, and market fluctuations are the uncertainties which serve as constraints to manpower planning. It is risky to depend upon general estimates of manpower in the face of rapid changes in environment.

Inaccuracy Human resource planning involves forecasting the demand for and supply of human resources. Therefore, it cannot be a cent percent accurate process. Longer is the time horizon, greater is the possibility of inaccuracy. Inaccuracy increases when department forecasts are merely aggregated without critical review. Insufficient information system In most of the Indian industries human resource information system has not been fully developed. In the absence of reliable data it is not possible to develop effective human resource plans. Time and expense: Human resource planning is a time consuming and expensive exercise. A good deal of time and cost are involved in data collection and forecasting. Lack of top management support In the absence of support and commitment from the top management, human resource experts find it difficult to obtain vital inputs. Sometimes the process is started in great fanfares but is not sustained due to lack of patience. Unbalanced focus In some organizations, human resource planning is used as a numbers game. There is too much focus on the quantitative aspect to ensure the flow of people in and out of the organization. Such an exclusive focus overlooks the quality of human resources. Career planning and development, skill levels, morale, etc., are likely to suffer due to such unbalanced approach to human resource planning. Thus, limitations of human resource planning arise both from inherent limitations of forecasting and from human weaknesses. GUIDELINES FOR MAKING HUMAN RESOURCE PLANNING EFFECTIVE The following are the main guidelines to be followed for making human resource planning effective: Tailor-made Human resource plans should be balanced with the corporate plans of the enterprise. The methods and techniques used should fit the objectives, strategies and environment of the particular organization. Appropriate time horizon The period of manpower plan should be appropriate to the needs and circumstances of the specific enterprise. The size and structure of the enterprise as well as the changing aspirations of the people should be taken into consideration. Adequate organization Human resource planning function should be properly organized. A separate section or committee may be constituted within the human resource department to provide adequate focus and to co-ordinate the planning efforts at various levels. Adequate Information system An adequate database should be developed for human resources to facilitate human resource planning. Participation To be successful, human resource planning requires active participation and coordinated efforts on the part of operating executives. Such participation will help to improve understanding of the process and thereby reduce resistance. Top management support Before starting the human resource planning process, the support and commitment of top management should be ensured. Moreover, the exercise should be carried out

within the limits of a budget. There is no use formulating plans which cannot be implemented due to financial constraints. Balanced focus The quantity and quality of human resources should be stressed in a balanced manner. The emphasis should be on filling future vacancies with right people rather than merely matching existing people with existing jobs. REQUISITES FOR SUCCESSFUL HUMAN RESOURCE PLANNING The following are the pre-requisites for successful human resource planning: Human resource planning must be recognized as an integral part of corporate planning. The planner of human resources must, therefore, be aware of the corporate objectives. Backing of top management for HRP is absolutely essential. Human resource planning responsibilities should be centralized in order to coordinate consultation between different management levels. Personnel records must be complete, up-to-date and must be readily available. The time horizon of the plan must belong enough to permit any remedial action. The techniques of planning should be those best suited to the data available and the degree of accuracy required.

EMPLOYEE RECRUITMENT
A mind once stretched by a new idea never returns to its original dimension Abraham Lincoln MEANING Once the required number and kind of human resources are determined, the management has to find the places where required human resources are/will be available and also find the means of attracting them towards the organization before selecting suitable candidates for jobs. All this process is generals known as recruitment. It is a two-way street that it takes a recruiter and recruitee. A well-planned and well-operated recruiting system generates the required number of qualified applicants. The effective selection depends on effective recruitment. This process begins when new recruits are sought and ends when their applications are submitted. Differentiation between Employment, Recruitment and Selection Some people use the term Recruitment for Employment .These two are not one and same. Recruitment is only one of the steps in the entire employment process. Some others use the term Recruitment for Selection. These two terms are not one and the same either. The function of recruitment precedes the selection function and it includes only finding, developing the sources of prospective employees and attracting them to apply for jobs in an organization, where as the selection is the process of finding out the most suitable candidate to the job out of the candidates attracted. It is a linking activity, bringing together those with jobs and those seeking jobs. DEFINITION The formal definition of recruitment would give a clear cut idea about the function of recruitment. Recruitment as the process of searching for prospective employees and stimulating them to apply for jobs in the organization. - Edwin B.Flippo Recruitment is the process of identifying and attracting candidates who are capable of filling job vacancies appropriately. The process of recruitment consists of three sub-systems in recruitment. i. Sources of recruitment, ii. To attract the candidates iii. And stimulating the candidates to apply. Objectives of Recruitment To attract people with multi-dimensional skills and experiences that suit the present and future organizational strategies, To induct outsiders with a new perspective to lead the company, To infuse fresh blood at all levels of the organization, To develop an organizational culture that attracts competent people to the company, To search or head hunt/head pouch people whose skills fit the companys values, To devise methodologies for assessing psychological traits, To seek out non-conventional development grounds of talent, To search for talent globally and not just within the company, To design entry pay that competes on quality but not on quantum, To anticipate and find people for positions that does not exist yet.

RECRUITMENT POLICY Recruitment policy of any organization is derived from personnel policy of the same organization. In other words, the former is a part of the latter. However, recruitment policy by itself should take into consideration the governments reservation policy, policy regarding sons of soil etc. Personnel policies of other organizations regarding merit, internal sources, social responsibilities in absorbing minority sections, women, etc. The following factors should be taken into consideration in formulating recruitment policy. They are Government policies, Personnel policies of other competing organizations, Organizations personnel policies, Recruitment sources, Recruitment needs, Recruitment cost, Selection criteria and preference, etc. CENTRALIZED vs. DECENTRALIZED RECRUITMENT Recruitment practices vary from one organization to another. Some organizations like commercial banks resort to centralized recruit while some organizations like the Indian railway (for group 3 and group 4 positions) resort to decentralized recruitment practices. Merits of Decentralized Recruitment The unit concerned concentrates only on those sources or places where it normally gets the suitable candidates. As such the cost of recruitment would be relatively less. Units can recruit candidates as and when they are required without any delay. The unit would enjoy freedom in finding out, developing the sources, in selecting and employing the techniques to stimulate the candidates. The unit would negatively enjoy advantage about the availability of information, control and feedback and various functions/processes of the recruitment. The unit would enjoy better familiarity and control over the employees it recruits by central recruitment agency.

Merits of Centralized Recruitment It would have more expertise available to it. It would generally be above malpractices, abuse of powers, favoritism bias etc. It would facilitate inter changeability of staff among various units/zones. It ensures the most effective and suitable placement to candidates. It enables the organization to have centralized selection procedure, promotional and transfer procedure etc. It can ensure broad uniformity among human resources of various units in respect of education, skill, knowledge, talent etc.

SOURCES OF RECRUITMENT The sources of recruitment are broadly divided into internal sources and external sources. Internal sources are sources within organizational pursuits. External sources are outside organizational pursuits. INTERNAL SOURCES Present Permanent Employees Organizations consider the candidates from this source for higher level jobs due to availability of most suitable candidates for jobs relatively or equally to the external source,

to meet the trade union demands and to the policy of the organization to motivate the present employees. Present Temporary or Casual or part-time Employees Organizations find this source to fill the vacancies relatively at the lower level owing to the availability of suitable candidates or trade and pressures or in order to motivate them on the present job. Retrenched or Retired Employees Generally a particular organization retrenches the employees due to lay-off. The organization takes the candidates for employment from the retrenched employees due to obligation, trade union pressure and the like. Sometimes the organizations prefer to re-employ their retired employees as a token of their loyalty to the organization or to postpone some inter-personal conflicts for promotion, etc. Dependants of Deceased, Disabled, Retired and present Employees Some organizations with a view to developing the commitment and loyalty of not only the employee but also his family members and to build up image provide employment to the dependants of deceased, disabled and present employees. Such organizations find this source as an effective source of recruitment. Employee referrals Employee referrals are the candidates/applicants recommended by the current employees. Current employees recommend those candidates whose behaviors are known to them as well as suitable to the job and organizational needs. This source helps the organization get high quality applicants. Organizations in the USA provide incentives to the current employees for recommending the most suitable candidates. This source reduces the cost of recruitment drastically. Why do Organizations Prefer Internal Source? Organizations prefer this source to external source to some extent for the following reasons: Internal recruitment can be used as technique of motivation. Morale of the employees can be improved. Suitability of the internal candidates can be judged better than the external candidates as known devils are better than unknown angels. Loyalty, commitment, a sense of belongingness, and security of the present employees can be enhanced. Employees psychological needs can be met by providing an opportunity for advancement. Employees economic needs for promotion, higher income can be satisfied. Cost of selection can be minimized. Cost of training, induction, orientation, period of adaptability to the organization can be reduced. Trade unions can be satisfied. Social responsibility towards employees may be discharged. Stability of employment can be ensured.

EXTERNAL SOURCES External sources are those sources which are outside the organizational pursuits. Campus Recruitment Different types of organizations like industries, business firms, service organizations, social or religious organizations can get inexperienced candidates of different types from various educational institutions like colleges and universities imparting education in Science, Commerce,

Arts, Engineering and Technology, Agriculture, Medicine, Management Studies, etc., and trained candidates in different disciplines like vocational, engineering, Medicine from the training institutes like vocational training institutes of State Governments in various trades, National Industrial Training Institutes for Engineers, etc. Private Employment Agencies/Consultants Public employment agencies or consultants like ABC. Consultants in India perform the recruitment functions on behalf of a client company by charging fee. Line managers are relieved from recruitment functions so that they can concentrate on their operational activities and recruitment functions is entrusted to a private agency or consultants. But due to limitations of high cost, ineffectiveness in performance, confidential nature of this function, managements sometimes do not depend on this source. Public Employment Exchanges The Government set-up Public Employment Exchanges in the country to provide information about vacancies to the candidates and to help the organizations in finding out suitable candidates. The Employment Exchange Act, 1959 makes it obligatory for public sector and private sector enterprises in India to fill certain types of vacancies through public employment exchanges. These industries have to depend on public employment exchanges for the specified vacancies. Professional Organizations Professional organizations or associations maintain complete bio-data of their members and provide the same to various organizations on requisition. They also act as an exchange between their members and recruiting firms in exchanging information, clarifying doubts, etc. Organizations find this source more useful to recruit the experienced and professional employees like executives, managers, engineers. Data Banks The management can collect the bio-data of the candidates from different sources like Employment exchange, educational Training Institutes, candidates, etc., and feed them in the computer. It will become another source and the company can get the particulars as and when it needs to recruit. Casual Applicants Depending upon the image of the organization, its prompt response, and participation of the organization in the local activities, level of unemployment, candidates apply casually for jobs through mail or hand over the applications in Personnel Department. This would be a suitable source for temporary and lower level jobs. Similar Organizations Generally, experienced candidates are available in organizations similar products or are engaged in similar business. The management can get most suitable candidates from this source. This would be the most effective source for executive positions and for newly established organization or diversified or expanded organizations. Trade Unions Generally, unemployed or underemployed persons or employees seeking change in unemployment put a word to the trade union leaders with a view to getting suitable employment due to latters intimacy with management. As such the trade union leaders are aware of availability of candidates. In view of this fact and in order to satisfy the trade union leaders, management enquires trade unions for suitable candidates. Management decides about the sources depending upon the type of candidates needed, time lapse period, etc. It has to select the recruitment techniques after deciding upon source.

MODERN SOURCES OF RECRUITMENT A number of modern recruitment sources and techniques are used by the corporate sector in addition to traditional sources and techniques. Walk-In The busy organizations and the rapid changing companies do not find time to perform various functions recruitment. Therefore, they advise the potential candidates to attend for an interview directly and without a prior application on a specified date, time and at a specified place. The suitable candidates from among the interviewees will be selected for appointment after screening the candidates through tests and interviews. Consult-In the busy and dynamic companies encourage the potential job seekers to approach them personally and consult them regarding the jobs. The companies select the suitable candidates from among such candidates through the selection process. Head-hunting the Companys requests the professional organizations to search for the best candidates particularly for the senior executive positions. The professional organizations search for the most suitable candidates and advice the company regarding the filling up of the positions. Head-hunters are also called search consultants. Body Shopping Professional organizations and hi-tech training institutes develop a pool of human resources for the possible employment. The prospective employers contact these organizations to recruit the candidates. Otherwise, the organizations themselves approach the prospective employees the place their human resources. These professional and training institutions are called body shoppers and these activities are known as body shopping. The body shopping is used mostly for computer professionals. Business Alliances Business alliances like acquisitions, mergers, and take-overs help in getting human resources. In addition, the components do also have alliances in sharing their human resources on adhoc basis. It does mean that, the company with surplus human resources offers the services their employees to other needy organization. E-Recruitment The technological in telecommunication helped the organization to use internet as a source of requirement. Organizations advice the job vacancies through the World Wide Web (www) internet. The job seekers sent their applications through e-mail or internet. Alternatively, job seekers place their CVs in world wide web/internet, which can be drawn by the prospective employers depending upon their requirements. THE PROCESS OF RECRUITMENT Process of Recruitment consists of three sub-systems in recruitment viz., sources of recruitment, techniques of recruitment to attract the candidates and stimulating the candidates to apply. Finding out and developing the sources where the required number and kind of employees are/will be available. Developing suitable techniques to attract the desirable candidates and employing the techniques to attract candidates.

Stimulating as many candidates as possible and asking them to apply for jobs irrespective of number of candidates required. Management has to attract more candidates in order to increase selection ratio(i.e., number of applications per one job vacancy) in order to select the most suitable candidates out of the total candidates available and due to lower yield ratio. FACTORS AFFECTING RECRUITMENT Both internal and external factors affect recruitment. The internal factors include the companys pay package including salary, fringe benefits and incentives, quality of work life, organizational culture, career planning and growth opportunities, size of the company, companys product/services, geographical spread of the companys operations viz., local, national or global, companys growth rate, and role of trade unions and cost of recruitment. The external factors include supply of demand for human resources, employment opportunities and/or unemployment rate, labor market conditions, political, legal requirement and government policies, social factors, information systems, etc.

EMPLOYEE TRAINING
Lack of ability can usually be improved with training. A trained employee benefits the company. Abraham Lincoln MEANING After the selection of people for various jobs, the next function of management is to arrange for their training and development. In fact employees at all levels-managerial, technical and operative will require some training at some point of time in their careers. Not only that every organization needs to have well trained and experienced people to perform the activities that have to be done. Therefore the function training has become the corner stone of sound management. Training is an act or process of increasing the knowledge and skill of an employee for doing a particular job. It is concerned with improving skills for a particular purpose. It is mainly job-oriented. Training is a process of learning a sequence of programmed behavior. It is application of knowledge. It gives people an awareness of the rules and procedures to guide their behavior. Definition Training as the organized procedure by which people learn knowledge and skills for a definite purpose. -Dale S.Beach In other words, training improves, changes, moulds the employees knowledge, skills, behavior, aptitude, and attitude towards the requirements of the job and organization. Thus, training bridges the differences between job requirements and employee present specifications. Objectives of training Generally, line managers ask the personnel manager to formulate the training policies. The personnel manager formulates the following training objectives in keeping with the companys goals and objectives. To prepare the employee new and old to meet the present as well as the changing requirements of the job and the organization. To prepare obsolescence. To prepare employees for higher level tasks. To develop the potentiality of people for the next level job To ensure smooth and efficient working of a department To ensure economical output of required quality. To promote individual and collective morale, a sense of responsibility, co-operative attitudes and good relationships.

NEED FOR BASIC PURPOSE OF TRAINING Every organization, big or small, productive or non-productive, economic or social, old or newly established should provide training to all employees irrespective of their qualification, skill, stability for the job, etc. training may be considered as input for developing manpower in an organization so as to improve their job performance. Generally the need for training arises on an account of the following reasons.

Job requirement Training is mainly job oriented. Employees selected for a job may lack the qualifications required to perform the job effectively. Workers must be trained to operate machines, reduce scrap and avoid accident. Technological changes Technology is changing very fast. Now mechanization, computerization and automation are being increasingly applied in offices and service sector. Increasing use of fast changing techniques requires training in new technology. No organization can take advantage of latest technology without well- trained personnel. Not only has this new job required new skills. To Improve Productivity Purposeful instruction can help employees increase their level of performance on their present assignment. Increased human performance often directly leads to increased operational productivity and increased company profit. To Improve Quality A trained employee benefits the company. Lack of ability can usually be improved with training. Better informed workers are likely to make operational mistakes. Organizational Viability With increasing liberalization and globalization in India, business firms are experiencing expansion, growth and diversification. In order to face international competition, the firm must upgrade their capabilities. Trained staff is the most valuable asset of an organization. Lower accident rate Well trained employees adopt the right work methods and make use of the prescribed safety devices. The frequency of accidents will be reduced. To improve health and safety Proper training can help to prevent industrial accidents. A safer work environment leads to more stable mental attitudes on the part of employees. Even dissatisfaction, complaints, absenteeism can be reduced if employees are well trained. Obsolescence Prevention Training and development programmes foster the initiative and creativity of employees and help to prevent manpower obsolescence which may be due to age, temperament or motivation, or the inability of a person to adapt him to technological changes. To Improve Organizational Climate A sound training programme helps to improve the climate of an organization. Industrial relations and discipline are improved. Therefore decentralization of authority and participative management can be improved. Personal Growth Training develops new knowledge and skills among the employees. Training makes the employees versatile in operations. Employee of ability can usually be improved with training. Therefore, well trained personnel can grow faster in their career. Future needs of employees will be met through training and development programmes. Change in the Job Assignment Training is also necessary when the existing employees are 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. TRAINING CONTENT FOR DIFFERENT CATEGORIES OF EMPLOYEES Training methods and content may not be the same for different categories of employees. As such management has to train the employees of different categories in different areas and through different methods based on the job analysis.

Supervisory Training Supervisors mostly learn to supervise under the guidance of a manager. Course content of training to this category include: production control, organization methods, work control, time study, job evaluation, training the subordinate, disciplinary procedure, communication, effective instruction, report writing, performance appraisal, personnel records, dealing with absenteeism, industrial and labour laws, leadership qualities etc. Sales Training Emphasis should be towards on-the-job training as well as off-the-job training methods in training the personnel. Course content include job knowledge, organizational knowledge, knowledge about company products, customers, competitors, sales administration on procedures, law concerning sales, specific skills like making presentations, handling, closing the sales etc. Clerical Training Emphasis may be given on the off-the-job training in training the clerical personnel. The training content includes maintaining ledgers, records, forms, reports, written communication, and clerical aptitude etc. AREAS OF TRAINING Organizations provide training to their employees in the following areas. Company policies and procedures This area of training is to be provided with a view to acquiring the new employee with company rules, practices, procedures; tradition, management organisation structure, environmental product / services offered by company etc.. Training in specific skills The trainer trains the employee regarding various skills necessary to do the actual job. This area of training is to enable the employee to be more on effective on the job. Human relations training This training enables the employees for better team work; which means the improved efficiency and productivity of the organisations. A human relation training assumes greater significance in organisations as employee has to maintain human relations not only with other employee but also with the other customers. Problem solving training Most of the organisational problems are common to the employees dealing with the same activity at different levels of the organisation. So trainer encourages the trainees to solve general work problems. Managerial and supervisory skills Even the non-managers sometimes perform managerial and supervisory functions like planning; decision making; organising; maintaining interpersonal relations directing and controlling. Hence; management has to train the employee in managerial and supervisory skills also.

PRINCIPLES OF TRAINING Motivation: As the effectiveness of an employee depends on how well he is motivated by management, the effectiveness of learning also depends on motivation. The trainer should find out the proper way to find out motivate experienced employees who are already enjoying better facilities in case of retraining. Progress information The trainer has to provide only the required amount of progressive information specifically to the trainee. Reinforcement The effectiveness of the trainee in learning new skills or acquiring new knowledge should be reinforced by means of reward and punishments. Management should take to award the successful trainee. Practice Continuous and long practice is highly essential for effective learning a trainee should actively participate in the training programme in order to make the learning programme an effective one. Full vs. part Generally the training process should start from the known and proceed to the unknown and from the easy to the difficult where parts are taught. However; the trainer has to teach the trainees based on his judgment on their motivation and convenience.

STAGES IN TRAINING Training should be conducted in a systematic order in order to desire expected benefits from it. The training system involves four stages viz. needs assessment, designing the training program. Stage 1: Assessment of training needs Training needs are identified on the basis of organizational analysis, job analysis, employee analysis and departmental analysis, training programme, training methods and course content are to be planned on the basis of training needs. Training needs=Job and organizational requirements employee specifications. Assessment methods Organizational requirements/weakness, departmental requirements/weakness, identifying specific problems, anticipating future problems, managements requests, observation. Stage 2: Designing the training programme Designing of the training programme should focus on: Instructional objective, principals of learning and teaching, training principles, characteristics of instructor and context of the program. Stage 3: Implementation After designing the training program and making the instructor and trainees ready, the instructor has to implement the training program. These programmes or methods are classified into on-the job and off-the job training. Stage 4: Evaluation of Training Programmes Evaluation leads to controlling and correcting the training programme. The process of training evaluation has been defines as any attempt to obtain information on the effects of training performance, and to assess the value of training in the light of that information. Hamblin suggested five levels at which evaluation of training can take place, viz, reactions, learning job behavior, organization and ultimate value.

TRAINING METHODS I do not believe you can do todays job with yesterdays methods Abraham Lincoln. Training programme is classified into on-the-job and off-the-job. Training Methods On-the-job Method Job rotation Coaching Job instruction Committee Assignments Internship ON-THE-JOB TRAINING METHODS This type of training also known as job instruction training is the most commonly used method. The trainee learns under the supervision and guidance of a qualified worker or instructor. Under this method, the employee gets training on the job and his work-place itself. Therefore this method is called learning by doing. On-the-job training methods include job rotation, coaching, job instruction or training through step-by-step and committee assignments. Job Rotation This type of training involves the movement of the trainee from one job to another. This method gives an opportunity to the trainee to understand the problems of employees on other jobs and respect them. Coaching The trainee is placed under a particular supervisor who functions as a coach in training the individual. The supervisor provides feedback to the trainee on his performance and offers him some suggestions for improvement. A limitation of this method of training is that the trainee may not have the freedom or opportunity to express his own ideas. Job Instructions This method is also known as training through step by step. Under this method, trainer explains the trainee the way of doing the jobs. Job knowledge and skills and allows him to do the job. Committee Assignments Under the committee assignments, group of trainees are given and asked to solve an actual organizational problem. These trainees solve the problem jointly. It develops team work. Off-the-job Method Vestibule training Role playing Lecture Method Discussion Method Programmed Instruction

OFF-THE-JOB TRAINING METHODS This method is also called external training method. These methods are used away from the work places. There is an opportunity for freedom of expression for the trainees. Off-the-job training methods are as follows. Vestibule training In this method a training centre or class room called vestibule is setup, and actual job conditions are duplicated or simulated in it. Material, files, and equipment which are used in actual job performance are also used in training. This type of training is commonly used for training personnel for clerical and semi-skilled jobs. The duration of this training ranges from days to a few weeks.

Role playing This method was developed by Moreno, a Venetian psychiatrist. The idea of role playing involves action, doing and practice. In this method trainees act out in a given role as they would in a stage play. This method is mostly used for developing interpersonal reactions. Lecture method The lecture method is traditional and direct method of instruction. This method can be used for very large groups which are to be trained within a short time. It is a one way communication. Conference or Discussion method It is a method in training the clerical, professional and supervisory personnel. A conference may be divided into small groups for intensive discussions. This is two way communications and hence feed-back is provided. The success of this method depends on the leadership qualities of the person who leads the group. Programmed Instruction In recent years this method has become popular. The subject matter to be learned is presented in a series of carefully planned sequential units. The trainee goes through these units by answering questions or filling the blanks. This method is thus experience and time consuming. BENEFITS OF THE TRAINING Benefits of training are multi faceted. Training benefits of the organization, individual and in the formulations of policies and in the maintenances of relations. Benefits to the Organization Leads to improved profitability and more positive attitudes towards profit orientation. Improves the job knowledge and skills at all the levels of the organization. Helps people identify with organizational goals. Improves the relationship between the boss and subordinate Aids in organizational development Improves labour- management relations. Creates an appropriate climate for growth, communication.

Benefits to the Individual Help the individual in making better decision and effective problem solving. Aids in encouraging and achieving self- development and self confidence Helps a person handle stress; tension; frustration and conflict. Develops a sense of growth in learning. Helps eliminate fear in attempting new tasks. Helps a person develop speaking and listening skills, and writing skills.

Benefits in human relations, intra and intergroup relations and policy implementation. Improves communication between groups and individuals. Provides information on the other governmental laws and administrative policies Improve interpersonal skills. Builds cohesiveness in groups.

PERFORMANCE APPRAISEL
If something cannot be measured, it cannot be improved up on. But remember it success is publicly celebrated. The sweetest of all sounds is praise Abraham Lincoln MEANING Performance appraisal is a method of evaluating the behavior of employees in the work spot, normally including both the quantitative and qualitative aspects of the job performance. Performance here refers to the degree of accomplishment of the tasks that make up on individuals job. It indicates how well an individual is fulfilling the job demands. Often the term is confused with effort, but performance is always measured in terms of results and not effort. When properly conducted performance appraisals not only let the employee know how well he is performing but should also influence the employees future level of effort, activities, results and task direction. Under performance appraisal we evaluate not only the performance of a worker but also his potential for development. Distinction between Performance Appraisal, Merit Rating and Potential Appraisals Performance appraisal and merit rating are used synonymously. But strictly speaking, Performance appraisal is a wider term than merit rating. Performance appraisal focus on employee performance and his future potential and it also measures what the person does (Performance). Merit rating focus on judging the caliber of an employee so as to decide salary increment. Potential refers to the abilities present but not currently utilized. It is the latent capacity to discharge higher responsibilities in the future roles. Features of performance appraisal Some of the important features of performance appraisal may be captured thus: Performance appraisal is the systematic description of an employees job relevant strengths and weakness. The basic purpose is to find out how well the employee is performing the job and establish plan of improvement. Appraisals are arranged periodically according to a definite plan. Performance appraisal is not job evolution. Performance appraisal refers to how well someone is doing the assigned the job. Job evolution determines how much a job is worth to the organization and, therefore what range of pay should be assigned to the job. Performance appraisal is a continuous process in every large scale organization.

Need for performance appraisal Performance appraisal is needed in order to Provide information about the performance, ranks basing on which decision regarding salary fixation, conformation, promotion, transfer and demotion are taken.

Provide feedback information about the level of achievement and behavior of sub-ordinates. This information helps to review the performance of the subordinate, rectifying performance deficiencies and to set new standards of work, if necessary. Provide information which helps to counsel the subordinate. Provide information to diagnose deficiency in employee regarding skill, knowledge determine training and developmental needs and to prescribe the means for employee growth provides information for correcting placement. To prevent grievances and in disciplinary activities.

Purpose of performance appraisal Purpose of performance appraisal can be broadly of two types.i.e; Administrative purposes and Developmental purposes. I. Administrative purposes: It includes Document human resource decisions with regard to performance and its related issues. Determine promotion of employees. Determine transfers and change in job assignments. Identify poor performance areas of employees. Decide retention or termination. Decide on layoffs. Validate selection criteria relating performance scores to selection test and interview scores. Meet legal requirements. Evaluate the performance of training programmes. Plan for changes in human resource requirements. Decide on salary and reward issues.

II. Developmental purposes: It includes Provide performance feedback to all concerned. Identify individual skills, core competencies, strengths and weakness. Recognize individual performance levels. Assist the employees in setting goals/identifying goals on unit level/departmental level and organizational goals. Evaluate goal achievement of employees. Determine organizational training needs. Reinforce authority structure. Allow employees to discuss concerns. Improve communication. Provide a forum for leader to help the subordinates

WHO WILL APPRAISE? 360 Performance Appraisal The appraiser may be any person who has through knowledge about the job content, contents to be appraised, standards of contents and who observes the employee while performing a job. The appraiser should be capable of determining what is more important and what is relatively less important. He should relatively prepare reports and make judgments without bias. Typical appraisers are: supervisor, peers, subordinates, employees themselves, users of service and consultants. Performance appraisal by all these is called 360 Performance Appraisal. Supervisors General practice is that immediate superiors appraise the performance which in turn is reviewed by the departmental head/manager. This is because supervisors are responsible for managing their subordinated and they have the opportunity to observe, direct and control the subordinate continuously. Moreover, they are accountable for the successful performance of their subordinates. Peers Of an employee are in better position to evaluate certain aspects of his behavior. Since the employee is more closely linked to his peers at the work place, they may be able to appraise his contribution to the group efforts, interpersonal effectiveness, communication skills, reliability, initiative, etc. Subordinates The concept of having superiors rated by subordinates is being used in most organizations today, especially in developed countries. Such a novel method can be useful in other organizational settings too provided the relationships between superiors and subordinates are cordial. Self Appraisal If individuals understand the objectives they are expected to achieve and the standards by which they are to be evaluated, they are to a great extent in the best position to appraise their own performance. Employees who appraise their own performance may become highly motivated. Users of Services, Customers Employee performance in service organization relating to behaviors, promptness, speed in doing the job and accuracy, can be better judged by the customers or users of services. Consultants: Sometimes consultants may be engaged for appraisal when employees or employers do not trust supervisor appraisal and management does not trust the self-appraisal or peer appraisal or subordinate appraisal. In this situation, consultants are trained and they observe the employees at work for sufficiently long time for the purpose of appraisal. WHAT OF APPRAISAL The what of the performance appraisal consists in appraising non supervisory employees for their current performance, and managers for future potential. It is also evaluation of human traits. WHEN TO APPRAISE In most organizations employees are formally evaluated once a year, in others twice a year. New employees are rated more frequently than the older ones. The time of rating should not coincide with the time of salary reviews, for if the two occur.

WHAT SHOULD BE RATED?

The seven criteria for assessing performance Quality The degree to which the process or result of carrying out an activity approaches perfection. Quantity The amount produced, expressed in monetary terms, number of units, or number of completed activity cycles. Timeliness The degree to which an activity or a result produced. Cost Effectiveness The degree to which the use of the organization resources (human, monetary, technological, material) is maximized in the sense of getting the highest gains. Need for supervision The degree to which a job performer can carry out a job function without supervisory assistance. Interpersonal impact The degree to which a performer promotes feelings of self esteem, good will and co-operation among co-worker and subordinates. Training Need for training for improving his skills, knowledge.

WHY OF APPRAISAL The Why of an appraisal is concerned with: Creating and maintaining a satisfactory level of performance of employees in their present jobs. To highlight employee needs and opportunities for personal growth and development. Aiding in decision making, transfers, promotions, lay off and discharges; Promoting understanding between the supervisor and subordinates.

SYSTEM OF PERFORMANCE APPRAISAL Performance appraisal is a nine step process. They are: At the first stage performance standards are established based on job description and job specification. The standards should be clear, objective and incorporate all the factors. The second stage is to inform these standards to all the employees including appraisers. These are: Establish performance standards, Communicate standards/expectations to employee, Measure actual performance by following the instructions, Adjust the actual performance due to the environmental influence, Compare the adjusted performance with that of others and previous, Compare the actual performance with standards and find out deviations, if necessary, Follow up performance appraisal report. The third stage is following the instructions given for appraisal, measurement of employee performance by the appraisers through observation, interview, records and reports. The fourth stage is finding out the influence of various internal and external factors on actual performance. The influence of these factors may be either inducing or hindering the employees performance. The measured performance may be adjusted according to the influence of external and internal factors. The performance derived at this stage may be taken as actual performance.

The fifth stage is comparing the actual performance with that of other employees and previous performance of the employee and others. This gives an idea where the employee stands. If performance of all the employees is ranked either too high or too low, there may be something wrong with the standards and job analysis. The sixth stage is comparing the actual performance with the standards and finding out deviations. Deviations may be positive or negative. If employees performance is more than the standards, it is positive deviations and vice versa is negative deviation. The seventh stage is communicating, the actual performance of the employee and other employees doing the same job and discuss with him about the reasons for positive or negative deviations from the pre-set standards as the case may be. The eight stage is suggesting necessary changes in standards, job analysis, internal and external environment. The ninth stage is follow up of performance appraisal report. This stage includes guiding, counseling, coaching and directing the employee or making arrangements for training development of the employee in order to ensure improved performance. If actual performance is very poor and beyond the scope of improvement is necessary to take steps for demotion or retrenchment or any other suitable measure.

EMPLOYEE COMPENSATION
Reward is real merit Abraham Lincoln MEANING Employee compensation is a very significant issue from the view point of employers, employees and nation as a whole. No organization can expect to attract and retain qualified and motivated employees unless it pays them for compensation. Employee compensation therefore influences vitally the growth and profitability of an organization. A sound compensation program enhances the organizations ability to attract and retain employees. Compensation is a comphrensive term which includes wages, salaries, all other allowances and benefits. Compensation consists of the wages paid directly to the employees for the amount of time worked or the no. of units produced. It also includes the monetary and nonmonetary benefits that an employee receives a part of his employment relationship with the organization. DEFINITION Compensation includes direct cash payments, indirect payments in the form of employee benefits and incentives to motivated employees to strive for higher levels of productivity. Employee compensation may be classified into two categories .1) Base or primary compensation 2) Supplementary compensation. Primary compensation refers to basic pay in the form of wages and salaries. It is a fixed and non-incentive payment on the basis of time expended on the job. Supplementary compensation consists of incentives and variable payments, based on either individual output or output of the group as a whole. Objectives of compensation A reward system that seems equitable to both employer and the employee and That the employee will be motivated to continue to work more effectively for the compensation received.

FACTORS DETERMINING FAIR COMPENSATION Employee worth The amount of compensation received by a given employee reflects the worth of the employee in an organization. Organization needs to place a value on the services of each of its employees to establish a level of compensation for the employee. Worth of the job Jobs vary significantly in their difficulty, complexity and challenge. Some jobs require high level of knowledge and skills. Few people with high level of skills tend to receive high pay. Worth of employee performance The quality of an employees work affects that persons worth to an employer. Almost all organizations endorse the concept of pay for performance. Employee supply Demand and supply of labour influence wage and salary fixation. A low wage may be fixed when the supply of labour exceeds the demand for it. A higher wage will be paid when the demand exceeds supply.

COMPENSATION STRUCTURE Compensation structure in INDIA generally consists of following components. Basic wage The basic wage provides the foundation of pay pocket. It is a price for services rendered. It is a price for and physical requirements of the job as measured through job evaluation. Dearness allowances This allowance is given to protect the wages of workers during inflation. Minimum wages act described DA as cost of living allowance. Dearness allowance has be an integral part of the wage system in INDIA. Bonus &other incentives Bonus is an extra payment to the workers beyond the normal wage. The bonus is to be paid within months from the close of the accounting year. Fringe benefits Fringe benefits covers bonus, social security measures, retirement benefits like provident fund, pension, gratuity, workmens compensation, housing, medical, canteen, co-operative credit, educational facilities, recreational facilities, financial advice and so on.

FRINGEBENEFITS
You can give without loving, but you cannot love without giving Amy Carmichael MEANING Different terms are used to denote fringe benefits. They are welfare measures, social charges, social security measures, supplements, sub-wages, employee benefits. The term fringe benefits covers bonus, social security measures, retirement benefits like provident fund, pension, gratuity, workmens compensation, housing, medical, canteen, co-operative credit, educational facilities, recreational facilities, financial advice and so on. DEFINITION Cockmas defined fringe benefits as those benefits which are provided by an employer or for the benefit of an employee and which are not in the form of wages, salaries and time related payments. Objectives of fringe benefits To motivated the employees by identifying and satisfying their unsatisfied needs. To boost up employee morale. To provide qualitative work environment and work life. To create and improve sound industrial relations. To meet requirements of various legislations relating to fringe benefits.

NEED FOR EXTENDING FRINGE BENEFITS Employee demands Employee demands more and varied types of fringe benefits rather than pay hike with a view to reduce the tax burden and meet the galloping price and cost of living with confidence. Trade union demands Trade unions compete with each other for getting a variety of fringe benefits for their members, such as life insurance and other facilities. As a social security The employer has to provide various benefits like safety measures, compensation in case of involvement of workers in accidents, medical facilities etc., with a view to provide security to his employees against various contingencies. To improve human relations In generally human relations are maintained when the employees are satisfied economically, socially and psychologically. Fringe benefits satisfy the workers economic, social and psychological needs. Employers preference Employers also prefer fringe benefits to pay hike as fringe benefits to motivate the employees to perform well.

TYPES OF FRINGE BENEFITS Dale Yoder and Paul D. Standohar classified the fringe benefits under four heads as given here under. For employment security Benefits under this head include unemployment insurance, technological adjustment pay, leave travel pay, overtime pay, level for negotiation, leave for maternity, leave for grievance, holidays, cost of living, bonus, jobs for the sons/daughters of the employees and the like. For old age& retirement Benefits under this head include accident insurance, disability insurance, health insurance, hospitalization, life insurance, medical care, sick benefits, and sick leave. For health protection Benefits under this category include: differed income plans, pension, gratuity, provident fund old age assistance, old age counseling, medical benefits for retired employees, jobs to sons/daughters of the diseased employee and the like. For personal identification, participation & stimulation This category covers the following benefits: anniversary awards, attendance, bonus, canteen, co-operation credit societies, tax aid, recreational programmes and safety measures etc. Some of the popular fringe benefits are as following Payment without work, such as sick leave, maternity leave, paid vacations etc. Health and safety benefits Retirement benefits like provident fund, pension, gratuity etc. Subsidized housing, transport, lunch, free dress etc. Medical, legal, child care, counseling, educational and recreational facilities. Consumer co operative stores, interest free loans, holiday trips etc.

MORALE
Try not to became a man of success, gut try to become a man of value Albert Einstein MEANING Morale is the term usually applied to armed forces during war time and to sports and athlelitic teams. It refers to team spirit and co-operation of people for a common purpose. Its importance has been realized by the management only recently. It is felt by the management that if morale is high, production would be higher and on the other hand. If it is low, the production would also be low. Morale represents the attitude of individuals and groups in an organization towards their work. It is a biproduct of the group relationships. It is a mental process which once created, permeates in the entire group creating a mood which results in the formation of a common attitude. DEFINITION Morale is the state of mind and emotions affecting the attitude and willing to work, which in term affects individual and organizational objectives. -THEO HAIMAN Characteristics of Morale Morale is basically a psychological process. Morale is a group phenomenon consisting of a pattern of attitude. Morale is a dynamic in nature. It cannot be developed overnight. Morale is multidimensional. Morale is intangible. Morale is a bi-product of group relationships.

FACTORS DETERMINING MORALE The degree of morale in any organization is determined by several factors. Configuration in leadership If the leader of the organization is able to win the confidence of the employees, morale will be high. If the leader is systematic, fair, honest, helpful and friendly, he may win the confidence of his subordinates and boost their morale. Job satisfaction The morale of the employee would be high if he satisfied with the job he is performing. Hence, right men should be placed in the right job to boost up their satisfaction in their job. Confidence in the co-workers Man is a social being and he finds himself more enthusiastic in the company of others. If he finds that his companions or fellow workers are co-operating with him, his morale would be high. Sound& efficient organization Proper sound and effective organization is an important factor affecting the employees morale. At the same time, the channel of communication should be effective. Otherwise, the employees may feel dissatisfaction.

Fair remuneration Fair and reasonable remuneration is essential to secure enthusiasm and willingness of the workers to do the job. Monetary incentives should be provided to them as and when necessary and possible. Security of job If the employees feel security, they should also be made to realize that if they work properly, they will be promoted and adequately rewarded. This feeling will definitely boost their morale. Working conditions The provision of safety, prompt medical and hygiene facilities, sanitation and clean lines of the place of work, location of the plant and so on give them satisfaction and boost up their morale. Physical & mental health An employee with weak health and if he mentally strained that will also reduce his motivation and morale. Significance of Morale Morale is a vital ingredient of organizational success because attitudes and sentiments of employees greatly influence the productivity and satisfaction of employee. High morale leads to good discipline, high degree of interest in the job loyalty to the organization and high performance. High morale is indispensable for the efficiency and effectiveness of the organization in the long run. Moral is the only one of the factor influence the productivity.

The following measures are to be taken to improve the morale of the employees in the organization A fair system of wage payment A sense of security of the job The promotion policy Completely supervisory Free and frank consultation Employee welfare schemes The channel of communication.

INDUSTRIAL HEALTH
MEANING The term health is a positive and dynamic concept and implies more than absence of illness. The W.H.O has defined health as an a state of complete physical, mental and social wellbeing and not merely the absence of disease or infirmity. Industrial health refers to a system of public health and preventive medicine which is applicable to industrial concerns. Industrial health depends not only on individual but also on the environment in which he lives and works. The basic objective of industrial health is the prevention of disease and injury rather than the cure of the disease. Industrial Health Is Required For Following Reasons To maintain and improve productivity and quality of work. To improve employee motivation and morale. To reduce spoilage and cost of operations. To reduce industrial unrest, indiscipline and accidents. To minimize absenteeism and turnover. To preserve the physical and mental health of employees.

Significance of Industrial Health To maintain and improve productivity and quality of work. To improve employees motivation and morale. To reduce industrial unrest, indiscipline and accidents. To reduce spoilage and cost of operations. To minimize absenteeism and turnover. To preserve the physical and mental health of employees.

FACTORS AFFECTING WORKERS HEALTH Prevalence of insanitary conditions Prevalence of insanitary conditions in industries is the main cause of board industrial health. The basic facilities such as facilities of drinking water, latrines and urinals etc are not properly provided by most of the employers in India. Improper Lightening Adequate and proper lightening is essential for higher efficiency and good quality of work. Poor lightening on the other hand, causes eye strain, mental fatigue, accidents and spoilage of materials. Lack of proper temperature and ventilation Flow of fresh air with right temperature and humidity is necessary for protection of health. Stale air causes headache to workers. In hot and humid climate employees fed tired and sleep. Ventilators, fans, coolers or heaters, air conditioners help to maintain the temperature and humidity. Dust control At some work places, there is high ratio of dust. Dust affects workers health as well as the life machinery. Therefore, it is necessary to keep the work place free from dust.

Working space and seating arrangement Proper seating arrangements are essential for comfort and health of workers. Adequate space should be provided for free movement of persons and machines. MEASURES TO IMPROVE HEALTH CONDITIONS The Government of India, since independence has taken the following steps or measures to protect the health of the workers. Legislative measures The national commission on labour and other committees have stressed the creation and maintenance of as healthy an environment as possible both at the work place and in the homes of workers. The Government of India has therefore, exacted several labour acts protecting the health of the workers. For instance, Factories act 1948; Mines act 1952, Coal mines act, Employees State insurance act etc; have been exacted. Under these acts, several provisions are made to protect the health of workers. The measures in these acts are both curative and preventive. A. Preventive measures Pre-employment and periodical examination. Removable of health hazards to the maximum possible extent. Check over women and other workers exposed to special risks. Training of first aid staff. Educating workers in health and hygiene.

B. Curative measures: Supervision and maintenance of hygiene and sanitation in factory premises and surrounding areas. Inoculation for the prevention of communicable diseases. Active co-operation with public health agencies. Periodical medical check-up of employees. Pre-employment check-up of new employees. Adequate emergency care and hospitalization facilities.

SPECIAL ADVISORY COMMITTEE A special advisory committee on industrial health has been set up to conduct research on health problems and to investigate the following: Effect of noise on workers. Sickness and absenteeism due to accidents. Incidence of bad intoxication. Assessment of toxicity of industrial dust.

INDUSTRIAL HEALTH PROGRAMME Every industrial establishment should formulate and implement a positive policy and programme to maintain the good health of its employees.

EDUCATION & TRAINING IN INDUSTRIAL HEALTH A special course in industrial hygiene has been introduced at all India Institute of Hygiene and public health to train medical personnel connected with industries. An industrial health and safety bulletin is being published regularly to educate the workers. STATUTORY PROVISIONS UNDER THE FACTORIES ACT, 1948 The Factories Act, 1948 insists that the following preventive measures must be adopted in industrial establishment: Cleanliness Every factory should be white washed at least over in 14 months or painted at least over in five years. Floors should be swept and cleaned, at least over every week with some disinfecting fluid. Disposal of water and effluents Effective arrangements should be made for their disposal and/or treatment. Ventilation and Temperature Provision should be made for the circulation of fresh air and temperature should be maintained by building walls and roofs of such materials as would keep it within reasonable limits. High temperature may be controlled by white washing, spraying and insulating the factory premises and by screening outside walls, roofs and windows. Dust and Fume Where dust or fume or impurity of such a nature as in likely to be injurious or offensive to workers is given off as a result of the manufacturing process carried on in a factory effective measure shall be taken in the factory for prevention of inhalation or accumulation of dust and fumes in work rooms. Lightening Sufficient and suitable lightening, natural or artificial or both should be made available in the factory premises. Over Crowding No room should be over crowded. There should be at least 5 cubic feet or 14.2 cubic meters space for every worker. Drinking Water A sufficient quantity of cool drinking water should be made available for the employee throughout the year, particularly during the hot summer months. Latrines and Urinates Adequate latrines and urinals should be separately provided for men and women employee. First Aid Applicants There should be an adequate number of boxes containing first aid materials, qualified personnel to administer first aid and an ambulance or at least a room where an injured employee may be given first aid.

INDUSTRIAL SAFETY
Remember that technical deficiencies can generally be good by training Abraham Lincoln MEANING Industrial safety or employee safety refers to the protection of workers from danger industrial accidents. Every organization should formulate and implement a safety policy because it is a primarily responsibility of management. Generally industrial workers are exposed to several types of hazards and accidents. According to the factories act, 1948 it is an occurrence in an industrial establishment causing bodily injury to a person whom makes him unfit to a resume his duties in the next 48 hours. In other words, industrial accident is an unexpected event which is neither anticipated nor designed to occur. However, self-inflicted injuries or injuries inflicted with the consent of a person cannot be regarded as accidents. TYPES OF ACCIDENTS Generally accidents are of different types. They may be classified as major and minor. Ones depending upon the severity of the injury. An accident which ends in a death or which result in a prolonged disability to the injured is a minor accident. An accident may be internal or external. Accident may be fatal or non-fatal. An accident free plant or industrial establishment enjoys certain benefits. CAUSES OF INDUSTRIAL ACCIDENTS Accidents are caused by a combination of factors each one of these may vary from situation to situation. Accidents do not just happen, they are caused. There are three basic causes or factors that contribute to accidents in industrial establishments. They are: I. Unsafe Conditions Unsafe conditions are work related causes and are the most frequent causes of accidents. Such causes are associated with defective plants, equipments, tools, materials, buildings and other technical factors. Since these causes are related to the technical aspects of work, these are known as technical causes. Various work related factors which cause accidents to occur are as follows: Nature of the job. Nature of machinery and equipment. Poor physical conditions. Psychological climate at work place Work schedules.

II. Unsafe Acts Unsafe acts are those activities which are not taken according to the prescribed Standards or procedures. Such acts are of the following nature: Operating without authority. Failure in using safety devices. Operating machines or equipments at unsafe speed. Taking unsafe positions under suspended loads. Failure to listen of warning

III. Personal Characteristics Various personal characteristics can be associated with events causing accidents in the following ways Untrained and unskilled persons are more prone to accidents than trained and skilled ones. Emotionally maladjusted persons are more prone to accidents than emotionally well adjusted ones. Alcoholic and drug addict persons are more prone to accidents than those who are away from such vices Persons who work under stress caused by their personal factors are more prone to accidents than those who do not. Male workers are more prone to accidents than female workers because female workers adopt safety measures more pre-cautiously.

STATUTORY PROVISIONS CONCERNING SAFETY Various statutory provisions concerning industrial safety have been made under sections 21 to 41of the Factories act 1948. These safety provisions are absolute and the occupier of every factory is bound to follow them. These provisions are as follows: Fencing of machinery In every factory every dangerous part of every machinery shall be securely fined by safeguards of substantial construction which shall be constantly maintained and kept in position while the parts of machinery they are fencing are in motion or in use. Self-acting machines No traversing part of self acting in any factory and no material carried there on shall be allowed to run on its onward or inward traverse with a distance of 45 centimeters from any fixed structure which is not a part of the machine. Precautions against dangerous fumes In any factory no person required or allowed to enter any chamber, tank, vat, pit, flue pipe or other confined space in which any gas, fume, vapour or dust is likely to be present to such an extent as to involve risk to persons being overcome, there by unless it is provided with a manhole of adequate size or other effective means of regress. Precautions regarding the use of portable electric light No portable electric light or any other electric appliance of voltage exceeding 24 volts shall be permitted for use inside any chamber; tank, pit or other confined space in a factory, unless adequate devices are provided. Precautions in case of fire In every factory, all practicable measures shall be taken to prevent outbreak of fire and its spread, both internally and externally and to provide and maintain. Safety officers In every factory where in 1000 or more workers are ordinarily employed or where in the opinion of the state government every manufacturing should maintain a safety officer.

EMPLOYEE SELECTION
MEANING After identifying the sources of human resources, searching for prospective employee and stimulating them to apply for jobs in an organization, the management has to perform this function of selecting the right employees at the right time. The obvious guiding policy in selection is the intention to choose the best qualified and suitable job candidate for each unfilled job. The objective of the selection decision is to choose the individual who can most successfully perform the job from the pool of qualified candidates. The selection procedure is the system of functions and devices adopted in a given company to ascertain whether the candidates specifications are matched with the job specifications are matched with the job specifications requirements or not. The selection procedure cannot be effective until and unless: Requirements of the job to be filled, have been clearly specified (job analysis etc). Employee specifications (physical, mental, social, behavioural etc) have been clearly specified. Candidates for screening have been attracted.

Thus, the development of job analysis, human resource planning and recruitment are necessary prerequisites to the selection process. A breakdown in any in any of these processes can make even the best selection system ineffective. ESSENTIALS OF SELECTION PROCEDURE The selection process can be successful if the following requirements are satisfied: Someone should have the authority to select. This authority comes from the employment requisition, as developed by an analysis of the work-load and work-force. There must be some standard of personnel with a perspective employee may be compare, i.e., a comprehensive job description should be available beforehand. There must be a sufficient number of applicants from whom the required no. of employees may be selected. SIGNIFICANCE OF SELECTION PROCESS Selection of HR to man to organization is a crucial, complex and continuing function. The ability of an organization to attain the goals effectively and to develop in a dynamic environment largely depends upon the effectiveness of its selection programme. If right personnel are selected, the remaining functions of personnel management become easier, the employee contribution and commitment will be at optimum level and employee-employer relations will be congenial. In an opposite situation where the right person is not selected, the remaining functions of personnel management, employee-employer relations will not be effective. If the person is selected, he is a valuable asset to organization and if faulty selection is made, the employee will become a liability to the organization. FACTORS AFFECTING SELECTION DECISIONS The goal of selection is to sort out or eliminate those judged unqualified to meet the job and organizational requirements, whereas the goal of requirement is to create a large pool of persons available and willing to work. Thus, it is said that recruitment tends to be positive while selection tends

to somewhat negative. A number of factors affect the selection decision of candidates. The important among them are: Profile Matching Tentative decision regarding the selection process of candidates (who are known) is taken in advance. The scores secured by these known candidates in various tests are taken as a standard to decide the success or failure of other candidates at each stage. Normally, the decision about the candidates is taken at interview stage. Possible care is also taken to match the candidates bio-data with the job specifications. Organizational and Social Environment Some candidates, who are eminently suitable for the job, may fail as successful employees due to varying organizational and social environment. Hence, candidates specifications must match with not only the job specifications but also with organizational and social environmental requirements. Successive Hurdles In this method hurdles are created at every stage of selection process. Therefore, applicants must successfully pass each and every screening device in each case of successive hurdles. Multiple Correlations Multiple correlations are based on the assumption that a deficiency in one factor can be counter balanced by an excess amount of another. A candidate is routed through all the selection steps before a decision made. The composite test score index is taken into accounting the selection tests. Hence, for boarder line cases multiple correlation method is useful and for other successive hurdles method is useful. ENVIRONMENTAL FACTORS INFLUENCING SELECTION Both internal and external factors influence selection process and decision. Internal Environment Internal environmental factors that influence selection include: size of the company, type of organization structure, type of job design, complexity, technological and volatility, attitude and seriousness of line managers towards selection, personal prejudice and nepotism and favourism of the line managers in selection process. External Environment External environment factors influencing selection include: labour laws, government rules, regulations and policies, influence of politicians in recommending the candidates, labour market conditions, culture of the country with regard to nepotism, favoritism, and written and unwritten reservation policy of the government, influence of trade unions and professional associations. SELECTION PROCEDURE There is no standard selection process that can be followed by all the companies in all areas. Companies mat follow different selection techniques or methods depending upon the size of the company, nature of the business, kind and no. of persons to be employed, government regulations to be followed, etc. thus, each company may follow any one or the possible combinations of methods of selection in order convenient or suitable to it. Following are the selection methods generally followed by the companies.

STEPS IN SCIENTIFIC PROCESS Job Analysis Job analysis is the basis for selecting the right candidate. Every organization should finalize the job analysis, job description, job specification and employee specification before proceeding to the next step of selection. Recruitment Refers to the process of searching for prospective employees and stimulating them to apply for jobs in the organization. It is the basis for the remaining techniques of the selection and the later varies depending upon the former. Application Form It is also known as application blank. It is a traditional and widely used device for collecting information from the candidates which is widely in use. Small firms design number of application form and also for the person to write about their age, qualification, work experience, mental status and other details on a piece of paper. But large companies use different types of application forms for different jobs. Generally the application form contains the following information: His name, address, phone number, e-mail id if any. His work experience, job duties and salary incentives. His age, place of birth, mental state etc. His family background, his technical and academic qualifications. Having some extracurricular activities like sports and games.

Witten Examination The organizations have to conduct written examination for the qualified candidates after they are screened on the basis of the application forms so as to measure the candidates ability in arthematic calculations, to know the candidates attitude towards the job, to measure the candidates aptitude, reasoning, and knowledge in various disciplines, general knowledge in English language. Preliminary Interview This is a process in which candidates are given necessary information about the nature and organization of the job. Necessary information is obtained from the candidates about their education, experience, skill and salary expected. Suppose, if the candidates are found suitable, he or she are selected for the further screening. This saves time and effort of the both organization and candidate. It also avoids unnecessary waiting for the referred candidates and waste of money for further processing of the unsuitable candidates. Preliminary interview is brief, which is generally carried out by junior executives across the countries (or) at the time at reception office. Hence proper care should be taken to ensure that suitable candidate is selected. Business Game Business games help to evaluate the applications in the areas of decision making, identifying the potentialities, handling the situations, problem-solving skills, and human relation skills etc. participants are placed in a hypothetical work situation and are required to play role situations in the game. The hypothesis is that the most successful candidate in the game will be the most successful one in the job. Group Discussions The technique of group discussions is uses in order to secure further information regarding the suitability of the candidate for the job. Group discussion is a method where groups of the successful applicants are brought around a conference table and asked to discuss either a case study or a subject matter. The candidates are in the group are required to analyze, discuss, find alternative solutions and select the sound solution. The selection panel based on its observation judges the candidates skill and ability and ranks them according to their merit. In some cases, the selection panel may also ask the candidates to write the summary of the group discussion in order to know the candidates writing as well.

Tests The next stage in selection process is conducting different tests. The objective of tests is to solicit further information to assess the employee suitability to the job. It would be difficult for the organization to evaluate the candidates performance only on the basis of application form or interviews. Employee-test helps the management in evaluating candidates suitability to the job. These tests are also called as psychological tests because psychologists have contributed a lot in developing these tests. The purpose of these tests is to help in judging the ability of a candidate in a given job situation. The tests help in ranking candidates and are valuable in determining subsequent success on the job. Types of Tests are classified into five types. They are (i) aptitude tests,(ii) achievement tests,(iii) situational tests,(iv) internet tests and (v) personality tests

GRIEVANCE
MEANING When an employee feels that something is unfair in the organization, he/she is said to have a grievance. A grievance is a sight of employees discontent with job and its nature. The employee has got certain aspirations and expectations which he thinks must be fulfilled by the organization where he is working. When the organization fails to satisfy the employee needs, develops a feeling of discontent or dissatisfaction. Thus, grievance is caused due to difference between the employee expectations and management practice. Grievance means any real or imaginary feeling of dissatisfaction and injustice which an employee has about his employment relationship. The concept Grievance has been defined in several ways by different authorities. DEFINITION Jucius defines grievance as any discontent or dissatisfaction, whether exposed or not, whether valid or not, arising out of anything connected with the company which an employee thinks, believes or even feels to be unfair, in just or inequitable. According to this definition a grievance may be factual or imaginary or disguised and it is problem whether expressed or not, valid or not. CHARACTERISTICS OF GRIEVANCE Factual The employer employee relationship depends upon the job contract in any organization. This contract indicates the norms defining the limits with in which the employee expects the organization to be fulfilled; the employee will be dissatisfied with the job. Such dissatisfaction is called factual grievance. Imaginary When the job contract is not clear cut and does not indicate the norms defining the limits within which the employee expects the organization fulfill his needs or aspirations, the employee develops such needs which organization is not obliged to meet. Here, grievance is not based on facts. This is called imaginary grievance. Disguised In general organizations consider the basic requirements of their employees. Psychological needs for recognition, affection, power, achievement etc., are normally unattended and ignored. Hence, disguised grievances should also be considered since they do have far reaching consequences in case they are unattended and ignored. CAUSES OF GRIEVANCE In an organization, there may be a no. of factors, significant or insignificant, which may cause grievances. Grievances may arise due to the following factors or reasons. Grievance arising out of working conditions Poor physical conditions of work place. Very light production standards. Non-availability of proper tools and machines. Unemployed changes in schedules and procedures. Mismatch of the worker with the job. Poor relationship with the supervisor.

Grievances arising from management policy Wage rates and method of wage payment. Overtime and incentive schemes. Transfers, promotions, demotions etc. Lack of opportunities for career growth. Hostility towards trade union activities.

Grievance arising from alleged violation Work too hard or too easy to be interesting and motivating. Too much ambitious to adjust within the present work. Improper attitude towards work creating dissatisfaction.

EFFECTS OF GRIEVANCES Grievances if they are not identified and redressed, may affect adversely the workers, managers and the organization. Effects on production Low quality of production. Low quantity of production and productivity. Increase in the wastage of material, spoilage of machinery. Increase in the cost of production per unit.

Effects on the employees Increase the rate of absenteeism and turnover. Reduces the level of commitment, sincerity and punctuality. Reduces the level of employee morale. Increases the incidence of accidents.

Effects on the managers Stains the superior subordinate relation. Increase the degree of supervision, control and follow up. Increase in indiscipline.

IDENTIFICATION OF GRIEVANCES Grievance means discontent in connection with ones employment. Grievances affect not only the employees, managers bet also the organization as a whole. If the individual grievances are ignored and unattended, there is a danger that these grievances may result in collective disputes. They affect the employee morale adversely. Managers can know and understand grievances with the help of following methods. Exit interview An interview of every employee who quits the organization can reveal employee grievances. Most of the employees quit the company due to some dissatisfaction.

Gripe box system On the pattern of suggestion box system. The management can use gripe box system to collect information about grievances from the employees. Under this system, employees can develop their anonymous complaints in gripe boxes. Opinion surveys Conducted periodically on the employee related issues, provide relevant information about the state grievances among them. Such surveys may be in the form of morale survey, attitude survey, job satisfaction survey and grievance survey. Open-door policy Implies that the employees are invited to discuss their problems freely and frankly at anytime or drop their complaints to the relevant manage rooms at anytime. In large organizations such open door policy should be adopted at each successive management level.

EMPLOEE PLACEMENT
MEANING When once the candidate reports for duty, the organization has to place him initially in that job for which he is selected. Placement is the process of assigning a specific job to each one of the selected candidates. It implies assigning a specific rank and responsibilities to an individual. In the words of pigors and Myers placement is the determination of the job to which an accepted candidate is to be assigned and his assignment to that job. Immediately the candidate will be trained in various related jobs during the period of probation of training or trial. The organization generally, decides the final placement after the initial training is over on the basis of candidates aptitude and performance during training/probation period. Probation period generally ranges between six months and two years. If the performance is not satisfactory, the organization may extend the probation or ask the candidate to quit the job. If the employees performance during the probation period is satisfactory, his services will be placed permanently on a job. EMPLOYEE PLACEMENT PROCESS Collect details about the employee. Construct the employees profiles. Compare sub-group profile and individual profile. Match between job family job family profile and sub-group profile. Assign the individuals to job family. Assign the individual to specific job after further counseling and assessment.

Proper placement helps to improve employment morale. It also helps to reduce employee turnover, absenteeism and accident rates. If a candidate adjusts himself to the job and continuous to perform as per expectations, it might means that the candidate is properly placed. PRINCIPLES OF PLACEMENT Man should be placed on the job according to the requirements of the job. The job should not be adjusted according to the qualifications or requirements of the man. Job first, man next should be the principle of placement. The job should be offered to the man according to his qualifications. Neither higher, nor lower job should be offered to the new employees. The employees should be made conversant with the conditions prevailing in the organization and all things relating to the job. He should also be made aware of the penalties if he commits a wrong. While introducing the job to the new employee an effort should be made to develop a sense of loyalty and co-operation in him so that he may realize his responsibilities better towards the job and organization.

COLLECTIVE BARGAINING
MEANING Employees and employers, with differing interests must work together, if their respective goals are to be attained. Yet, the very fact of differing interests creates an atmosphere of opposing forces, which inhibits desirable cooperative efforts. In organized industrial life, ways must be sought to minimize tensions and promote bargaining. Here collective bargaining is the cornerstone of congenial industrial relations and of constructive peace. It helps to bring the unreserved cooperation between employees and employer by minimizing the lacuna between the varying interests of union and management. Collective bargaining is opposite of individual bargaining which takes place between organized group of employees with either a single employer or multiple employers. Collective bargaining is a technique used for compromising the conflicting interests of employees and employer. It is called collective because the employees as a group select representatives to meet and consult with management. Collective bargaining helps in ironing out many differences between worker and management ironing. DEFINITIONS The phrase of Collective Bargaining is coined by Sydney and Beatrice Webb. According to them, collective bargaining is a method by which trade unions protected and improved the conditions of their members working lives. According to Michael Jucius, Collective Bargaining refers to a process by which employer on the one hand and representatives of employees on the other, attempts to arrive at agreements concerning the conditions under which employees will contribute and be compensated for their services. CHARACTERISTICS OF COLLECTIVE BARGAINING Group action On the management side are its delegates at the bargaining table; on the side of the workers is their trade union, which may represent the local plant, the city membership or nationwide membership. Flexible and mobile It has fluidity and scope for compromise, for a mutual give-and take before the final agreement is reached or the final settlement is arrived at. Two-party process It is a mutual give-and-take rather than a take-it-or-leave-it method of arriving at the settlement of a dispute. Both parties are involved in it. Continuous process Collective bargaining is a continuous process that provides mechanism for continuing and organized relationship between management and trade unions. Dynamic Collective bargaining is dynamic because it is a relatively new concept and is growing, expanding and changing. In the past, it used to be emotional, turbulent and sentimental; but now it is scientific, factual and systematic. Its coverage and style have changed. Industrial democracy at work Industrial democracy is the government of labour with the consent of the governed the workers. The principle of arbitrary unilateralism has given way to that of self-government in industry. Not a competitive process collective bargaining is not a competitive process, but it is essentially a complementary process, i.e., each party needs something that the other party has namely, labour can

make a greater productive effort and management has the capacity to pay for that effort and to organize and guide it for achieving its objectives. Art It is an art, an advanced form of human relations. To substantiate this, one need only witness the bluffing, the oratory, dramatics and coyness mixed in an inexplicable fashion which may characterize to a bargaining session. NECESSITY OF COLLECTIVE BARGAINING Evidence in the west has it that the evolution of mature labour relations characterized by a greater degree of order and stability and sound wages structure is almost invariably associated with some measurable aspects of collective bargaining. On the basis of the experience of the advanced countries, where collective bargaining is said to have made considerable advances, to identify some indicators of mature collective bargaining practices. IMPORTANCE OF COLLECTIVE BARGAINING Collective bargaining plays a vital role in setting and preventing industrial disputes. Specially, its importance is evident from the following: Increase the economic strength of unions and management. Establish uniform conditions of employment with a view to avoiding industrial disputes and maintaining stable peace in the industry. Secure a prompt and fair redresses of grievances. Avoid interruptions in work which follow strikes, go-slow tactics and similar coercive activities. Lay down fair rates of wages and norms of working conditions. Achieve an efficient operation of the plant and Promote the stability and prosperity of the industry. It provides a method for the regulation of the conditions of employment of those who are directly concerned about them. It provides a solution to the problem of sickness in industry and ensures old age pension benefits and other fringe benefits. It creates new and varied procedures- for the solution of the problems as and when they ariseproblems which vex industrial relations; and its form can be adjusted to meet new situations. Since basic standards are laid down, the employee assured that he will be required to work under the stipulated audit. It provides a flexible means for the adjustment of wages and employment conditions to economic and technological changes in the industry, as a result of which the chances for conflicts are reduced. As a vehicle of industrial peace, collective bargaining has no equal. It is the most important and significant aspect of labour- management relations, and extends the democratic principle from the political to the industrial field. It build up a system of industrial jurisprudence is by introducing civil rights in the industry. In other words, it ensures that management is conducted by rules rather than by arbitrary decisions.

NEED FOR COLLECTIVE BARGAINING A high degree at collective bargaining as measured in terms of the proportion of workers covered by collective agreements. Qualitative conduct of the parties to collective bargaining both before a situation warranting negotitiation develops and the methods followed at the time of arriving at agreements. The right of priorities assigned to different methods in the agreement and their changing pattern overtime and A structure of bargaining with emphasis on central bargaining which is purported to give some order and stability to labour management relations.

FORMS OF COLLECTIVE BARGAINING At the outset it should be stated that there is a great deal of variation in the collective bargaining practices ranging from an informal oral agreement to a very formal and detailed agreement. Collective bargaining takes the following forms: Single Plant Bargaining It may be a single plant bargaining, that is, bargaining may be between a single trade union. This type of collective bargaining prevails in the United States and India. Multiple Plants Bargaining It may be multiple plants bargaining, that is, bargaining may be between a single factory or establishment having several plants and the workers employed in all these plants. Multiple Employees Bargaining It may be a multiple employer bargaining, that is, bargaining between all trade unions of workers in the same industry through their federal organizations and the employers federation. This is possible both at the local and the regional levels and is generally resorted in to the textile industry.

IN INDIA, COLLECTIVE BARGAINING HAS BEEN CLASSIFIED UNDER THREE CATEGORIES

Negotiated by Officers Agreements which are negotiated by officers during the course of conciliation proceedings and are called settlements under the industrial disputes act. Negotiated by Parties Agreements which are concluded by the parties themselves without reference to a Board of Conciliation and are signed by them. Copies of such agreements, however, are sent to appropriate governments and to conciliation officers. Negotiated on Voluntary Basis Agreements which are negotiated by the parties on a voluntary basis when disputes are sub judice and which are later submitted to industrial tribunals, labour courts or labour arbitrators for incorporation into the documents as parts of awards. These are known as consent awards. Agreements which are drawn up after direct negotiation between labour and management and are purely voluntary in character. These depend for their enforcement on moral force and on the goodwill and cooperation of the parties.

ESSENTIAL CONDITIONS FOR THE SUCCRSS OF COLLECTIVE BARGAINING Equal Bargaining Power Constructive consultation between trade union and management is possible only when the bargaining power of two parties relatively equal and is exercised with responsibility and discrimination. Free Consultation Two parties of collective bargaining accept the principle of free consultation and free enterprise consistent with the advancement of public interest. Representative Union The willing acceptance by management to recognize representative union for this purpose. Mutual Confidence Both the parties must have mutual confidence, good faith and a desire to make collective bargaining machinery a success. Proactive Approach Management should not await the union to raise problems but should make the every reasonable effort to prevent them from arising and to remove them promptly when they arise. Thus management should have proactive approach. Problem Solving, Not Legalism An emphasis upon a problem solving approach with de-emphasis upon excessive legalism. Quick Disposal Dispose of the issues in the same meeting and minimize of the pending items. Desire to Settle Desire of the management to settle the issues to the satisfaction of employees. This does not mean that union management must relinquish its right to direct the company or that it must accede to all union demands. Union Cooperation Union must understand the economic implications of collective bargaining and realize that union demands must be met from the income and resources of the organization. Mutual Respect Both the parties should respect the rights and responsibilities of each other. No Unfair Practices The process of bargaining should be free from unfair practices. Unanimity among workers Before entering into negotiations, there must be unanimity among workers. At least the representatives of workers should be able to represent the opinions or demands of majority of workers. Positive Attitudes The attitudes of the parties should be positive. Both the parties should reach the negotiating table with an intention to find better solutions. Give and Gain The parties involved in collective bargaining should be prepared to give away something in order to gain something. Respect Previous Agreements Both the parties to collective bargaining should observe and follow the terms and conditions of previous agreements that are reached. Collective bargaining, being a continuous process, can be effective only with the successful implementation of previous agreements. Any lapse on the part of any party concerned shows its effect on present process. Clarity of Implications The representatives of both the parties should fully understand and be clear about the problems and their implications.

Beyond Salaries The workers can make effective use of collective bargaining process to achieve participative management and good working conditions. They should not confine collective bargaining for mere monetary benefits. FUNCTIONS OF COLLECTIVE BARGAINING Collective bargaining plays an important role in preventing industrial disputes, setting industrial disputes and maintaining industrial peace by performing the following functions: Economic Strength Increase the economic strength of employees and management. Uniformity Establish uniform conditions of employment. Fair Redressal Secure a prompt and fair redressal of grievances. Norms Lay down fair rates of wages and other norms of working conditions. Efficiency Achieve an efficient functioning of an organization. Stability Promote the stability and prosperity of the company. Regulation It provides a method of the regulation of the conditions of employment of those who are directly concerned about them. Solution It provides a solution to the problem of sickness in industry and ensures old age pension benefits and other fringe benefits. New Procedures It creates new and varied procedures for the solution of the problems as and when they arise- problems which vex industrial relations; and its form can be adjusted to meet new situations. Since basic standards are laid down, the employee is assured that he will be required to work under the stipulated conditions incorporated in the agreement; and the employer is protected from unfair competition by those who are engaged in similar industry. Flexible Means It provides a flexible means for the adjustment of wages and employment conditions to economic and technological changes in the industry, as a result of which the changes for conflicts are reduced. Democratic Principles As a vehicle of industrial peace, collective bargaining is the most important and significant aspect of labour-management relations and extends the democratic principle from the political to the industrial field. Industrial Jurisprudence It builds up a system of industrial jurisprudence by introducing civil rights in the industry. In other words, it ensures that management is conducted by rules rather than by arbitrary decisions. FACTORS HINDERING THE FUNCTIONING OF COLLECTIVE BARGAINING The efficient functioning of collective bargaining helps for the maintenance of industrial peace. But, the functioning of collective bargaining as often affected by certain factors. The factors those hinder the functioning of collective bargaining are:

The failure of some employers to accept trade unions as a permanent feature of the national economy. The separatist tendencies of the craft trade unions. The failure of both parties to devote enough time and energy to the preparations for collective bargaining. The non-availability of factual information. Unfair practices. The absence of willingness on the part of either party to assume the responsibilities which are inherent in the bargaining process and. The unequal strength of the parties. Both sides should be strong enough not to be shaken or intimidated or overawed by each other.

INDUSTRIAL RELATIONS
Man is a social animal therefore he cannot live without others Abraham Lincoln MEANING The concept of industrial relations means the relationship between employees and management in the day-to-day working of industry. But the concept has a wide meaning. When taken in wider sense, industrial relations are a set of functional interdependence involving historical, economic, social psychological, demographic, technological, occupational, political and legal variables. According to Dale Yoder, industrial relations are a whole field of relationship that exists because of the necessary collaboration of men and women in the employment process of an industry. The concept of industrial relations has been extended to denote the relations of the state with employers, workers and their organizations. CHARACTERISTICS OF INDUSTRIAL RELATIONS Industrial relations are outcome of employment relationship in an industrial enterprise. Industrial relations develop the skills and methods of adjusting to and cooperating with each other. Industrial relations system creates complex rules and regulations to maintain harmonious relations. The government involves shaping the industrial relations through laws, rules, agreements, awards etc. The important factors of industrial relations are: employees and their organizations, employer and their associations and Government.

FACTORS AFFECTING OF INDUSTRIAL RELATIONS Industrial relations are influenced by various factors, viz., institutional factors, economic factors and technological factors. Institutional Factors These factors are include government policy, labour legislation, voluntary courts, collective agreement, employee courts, employers federations, social institutions like community, caste, joint family, creed, system of beliefs, attitudes of works, system of power status etc. Economic Factors These factors include economic organization, like capitalist, communist mixed etc., the structure of labour force, demand for and supply of labour force etc. Technological Factors computerization etc. These factors include mechanization, automation, rationalization,

Social & Cultural Factors These factors include population, religion, customs and traditions of people, race ethnic groups, cultures of various groups of people etc. Political Factors These factors include political systems in the country, political parties and their ideologies, their growth, mode of achievement of their policies, involvement in trade unions etc. Government Factors These factors include Government policies like industrial policy, economic policy, labour policy, export policy etc.

THREE ACTORS OF INDUSTRIAL RELATIONS According to John T. Dunlop, industrial societies necessarily create industrial relations defined as the complex of inter relations among workers, management and government. Three major participants or actors of industrial relations, viz., workers and their organizations, management and government are identified. Workers & their organizations The total worker plays an important role in industrial relations. The total worker includes working age, educational background, family background, psychological factors, social background, culture, skills, attitude towards other work etc. workers organization play their role more prominently in trade unions. The main purpose of trade unions is to protect workers economic interest through collective bargaining pressure on management through economic and political tactics. Trade union factors include leadership, finances, activities etc. Employers &their Organizations the employer is a crucial factor in industrial relations. He employs the worker, pays the wages and various allowances, and regulates the working relations through various rules, regulations and by enforcing labour laws. He expects the worker to follow the rules, regulations and laws. He further expects them to contribute their resources to the maximum. The difference between the demands of worker and employer results in industrial conflicts. Normally, employers have a higher bargaining power than the workers. But their bargaining power is undermined when compared to that of trade unions. Employers form their organizations to equate their bargaining power with that of trade unions. These organizations protect the interest of the employer by pressuring the trade unions and government. Government Plays a balancing role as the custodian of the nation. Government exerts its influence on industrial relations through its labour policy, industrial relations policy, implementing labour laws, the process of conciliation and adjudication by playing the role of a mediator etc. it tries to regulate the activities and behavior of both employees organizations and employers organization. PRINCIPLES OF SOUND INDUSTRIAL RELATIONS Maintenance of sound industrial relations is as crucial and difficult as that of human relations. Hence, the following principles should be followed to maintain sound industrial relations. Recognition of the dignity of the individual and of his right to personal freedom and equality of opportunity. Mutual respect, confidence, understanding, goodwill and acceptance of responsibility on the part of the both employer, management and workers and their representatives in the exercises of the rights and duties in the operation of the industry. Similarly, there has to be an understanding between the various organizations of employers and employees who represent the management and workers Scope of industrial relations Industrial relations are relation between employee and employer in their day-to-day work. Hence, it is continuous relationship. The scope of industrial relations includes: Relationship among employees, between employee and their superiors or managers.

Collective relations between trade unions and management. It is called union management relations. Collective relations among trade unions, employers associations and government.

Objectives of industrial relations The primary objective of industrial relations is to maintain congenial relations between employees and employer. The other objectives are: To promote and develop congenial labour management relations. To enhance the economic status of the worker by improving wages, benefits and by helping the worker in evolving the sound budget. To regulate the production by minimizing industrial conflicts through state control. To socialize industries by making the government as an employer. To provide an opportunity to the workers to have a say in the management and decision making. To improve workers strength with a view to solve their problems through mutual negotiations and consultation with the management. To encourage and develop trade unions in order to improve the workers strength. To avoid industrial conflict and their consequences and To extend and maintain industrial democracy.

Functions of industrial relations Communication is to be established between workers and the management in order to bridge the traditional gulf between the two. To establish a report between managers and the managed. To ensure creative contribution of trade unions to avoid industrial conflicts, to safeguard the interests of workers on the one hand and the management on the other hand, to avoid unhealthy, unethical atmosphere in an industry. To lay down such considerations which may promote understanding, creativity and cocooperativeness to raise industrial productivity, to ensure better workers participation?

APPROACHES TO INDUSTRIAL RELATIONS Industrial relations issues are complex and multifarious. They are the results of social, cultural, economic, political and governmental factors. An economist interprets industrial conflict in terms of impersonal market forces; a psychologist interprets in terms of individual goals, organizational goals, motives etc. Similarly, a sociologist interprets from his own view point. But the study of industrial relations should be from the multidisciplinary approach. Psychological Approach to Industrial Relations According to psychologists, issues of industrial relations have their origin in the difference in the perceptions of management, unions and rank and the file workers. The perceptual differences arise due to differences in personalities, attitudes, etc. similarly, factors like motivation, leadership, group goals versus individual goals etc, are responsible for industrial conflicts.

Sociological Approach to Industrial Relations Industry is a social world in miniature. Organizations are communities of individuals and groups with differing personalities, educational and family backgrounds, emotions, sentiments etc. These differences in individuals create problems of conflict and competition among the members of industrial society. Human Relations Approach to Industrial Relations Human resources are made up of living human beings but not machines. They need freedom of speech, of thought, of expression, of movement and of control over their timings. This approach implies that relationship between employee and employer as between two human beings. The term human relationship during the out of employment situations. GANDHIAN APPROACH TO INDUSTRIAL RELATIONS Mahatma Gandhis views on industrial relations are based on his fundamental principles of truth, nonviolence and non-possession. Under the principle of non-violence and truth, Gandhi meant a peaceful co-existence of capital and labour. Trusteeship implies co-operation between capital and labour. Gandhi advocated the following rules to resolve industrial conflicts: Workers should seek redressal of reasonable demands through collective action. Trade unions should decide to go on strike taking ballot authority from all workers and remain peaceful and use non-violent methods. Workers should avoid strikes to the possible extent. Strikes should be resorted to only as the last resort. Workers should avoid formation of unions in philanthropical organizations. Worker should take recourse to voluntary arbitration to the possible extent where direct settlement failed.

DUNLOPS APPROACH John T. Dunlop in his book on Industrial Relations System (1958) presented an analytical framework of industrial relations. The purpose of his presentation was to provide tools of analysis to interpret and to gain understanding of the widest possible range of industrial facts and practices. Actors of industrial relations include workers at all levels of an enterprise and their associations specialized government and private agencies, employers and their associations. The rules include the regulations and laws that govern the relationship among three actors. The ideology is a philosophy or a systematized body of beliefs and sentiments held by the actors. INTERACTIVE OUTCOME OF HRM APPROACH HRM deals with the management of people from the stage of acquisition to the stage of separation including human resource development, compensation and utilization of people. Thus, HRM mostly deals with the interactive behavior between employee and employer. However these are other agencies providing outsourcing services in the HRM process like recruiting agencies, training agencies and benefits administrators.

MC GREGORS THEORY X and THEORY Y

Passion moves people Abraham Lincoln INTRODUCTION The view about the nature of people was presented by Douglas Mc Gregor in his book "The human side of enterprise". In order to explain the nature of the people, Mc Gregor identified two sets of assumptions known as theory X assumptions and theory Y assumption. Mc Gregor suggested that in order to manage, managers should begin by asking themselves the basic question of how they (managers) see themselves in relations to others. THEORY X ASSUMPTIONS Theory X has a pessimistic and rigid view of human nature and includes some of the "traditional" assumptions pertaining to it. Some of the assumptions of this theory are: Individuals inherently dislike work and will avoid work if they can (I can but I wont). Due to the inherent aversion of humans to work, managers have to control, coerce, direct, and threaten employees with punishment in order to make them work towards the achievement of organisational goals and objectives. People prefer to be directed, wish to avoid responsibility, have little ambition and above all, want security.

THEORY Y ASSUMPTIONS Theory Y has an optimistic, dynamic, flexible and positive view of employees. The assumptions on which this theory is based are as follows: People do not have a natural dislike for work they put in physical and mental effort for work as naturally as they play or rest. People are internally motivated to achieve the goals and objectives to which they are committed. Thus, external control and threat of punishment are not the only means for getting employees to achieve organisational objectives. The degree of commitment shown to the achievement of goals and objectives is proportionate to the size of the rewards associated with their achievement. Under proper conditions, people learn to accept responsibility and also try to seek responsibility. Most of the people are capable of being innovative in solving organisational problems. Thus, the capacity to exercise a relatively high degree of imagination, ingenuity and creativity to solve organisational problems is not confined to only a few people in the organisation, but is widely distributed among all the employees of the organization. The complete utilization of the intellectual potential of the average person does not take place under the conditions of modern industrial life.

Thus theory X emphasis control and supervision of subordinates by the superior to make them achieve organisational goals and objectives, whereas, theory Y supports self-direction and self-control by the subordinates and the integration of individual needs with organisational goals. There is no doubt that the assumptions managers make as outlined in these two influence the manner in which the managers carry out their functions and activities. CLARIFICATION OF THE THEORIES Mc Gregor named his theories Theory and Theory Y because he wanted to have a neutral terminology for his theories and wanted to avoid connecting them as good" or "bad". He was concerned that his theories may be misinterpreted, and so, in order to keep the assumptions in the right perspective, McGregor made the following clarifications pertaining to some of the areas that could be misunderstood. Theory X and Theory Y are just assumptions and are not to be treated as prescriptions or suggestions for managerial strategies. These assumptions are only initiative deductions and are not based on research .It is very important that these assumptions be tasted against reality rather than being blindly followed. Theory X and Theory Y do not indicate "hand or "soft" management. Resistance and antagonism may result if the management adopts a "hand" approach. On the other hand a "soft" approach may result in "Laissez faire management, which is not congruent with Theory Y. An effective manager recognizes the dignity and capability of his subordinates understand their limitations and adjusts his behaviour according to what the situation demands. Theory X and Theory Y have a totally contrasting view of people X and Y type personalities do not constitute the two extremes of a continues with X on one end and Y at other end. The difference between these two types of personalities is not in terms of degree. Instead, X and Y represent opposite types of personalities. Theory cannot be considered as an argument against the use of managerial authority. Neither should it be considered as a case for management. According to theory Y, authority is only one of the various ways in which managers exert leadership. Different tasks and situations require different approaches to management. While authority and structure may approve to be effective for certain tasks, other tasks and situations may require a different approach.

John J.Morse and Jay W.Lorsch suggested that different approaches are effective in different situations. Thus, a productive organisation is one in which the managerial demands on employees closely match with the employees and the particular situation.

WAGE AND SALARY

There is no free lunch in this world Abraham Lincoln MEANING Wages is understood in two ways-broad sense and narrow sense. Wages in the widest sense mean any economic compensation paid by the employer, under some contract, to his workers for the services rendered by them. Wages, therefore, include family allowance, relief pay, financial support and other benefits. But in the narrow sense, wages are the price paid for the services of labour in the process of production and include only the performance wages or wages proper. They are composed of two partsthe basic wage and other allowance. The basic wage is the remuneration, by way of basic salary and allowances, which is paid to an employee, in terms of his contract of employment, for the work done by him. Allowances, on the other hand are paid in addition to the basic wages to maintain the value of basic wages over a period of time. Such allowances included in the definition of wages. However, in India, different Acts include different items under wages. Under Workmen Compensation Act, Wages for leave period, holiday pay, overtime pay, bonus and good conduct bonus form of wages. Under Payment of Wages Act 1948, retrenchment compensation, payment in lieu of notice and gratuity payable on discharge constitute wages. The following types of remuneration, if paid do not amount to wages under any of the Acts: Bonus or the other payment under a profit sharing scheme, which do not form a part of the contact of employment. Value of any of any house accommodation, supply of light, water, medical attendance or any other concession. Any contribution to pension fund, provident fund or a scheme of social security and social insurance benefits.

TYPES OF WAGES Wages may be of different types, such as minimum wage, fair wage and living wage. These are broadly based on the needs of workers, capacity of the employers to pay the general economic conditions prevailing in a country. Minimum Wage is the one which provides not merely for bare substances of the life, but also for the preservation of the efficiency of the worker. For this purpose, the minimum wage must also provide for measure of education, medical requirements and amenities. Minimum wage may be fixed by an agreement b/w the management and workers, but it usually determined through legislation. This is more so in the unorganized sector where labour is not unionized. In fixation of minimum wages, besides the needs of workers, other factors like ability of the concern to pay, nature of the job and so on are also considered. Fair Wage is understood in two ways. In a narrow sense, wage is fair if it is equal to the rate prevailing in the same trade and the neighborhood of similar work. In a wider sense, it will be fair if it is equal to the predominant rate for similar work throughout in the country and for trades in general. Irrespective of the way in which fair wage is understood, it can be fixed only by comparison with an accepted standard

can be determined with reference to those industries where labour is well-organized and has been able to bargain well with the employers. According to the committee on fair wages fair wage is the wage which is above the minimum wage but below the living wage. Living wage is a step higher than fair wage. Living wage may be described as one which should enable the wage earner to provide for himself and his family not only the bare necessities of life like food, clothing and shelter, but a measure of frugal comfort including education for children, protection against ill-health, requirements of essential social needs and a measure of insurance against more important misfortunes including old age. A living wage must be fixed considering the general economic conditions of the country. The concept of living wage therefore varies from country to country. In the more advanced countries, living wage itself forms the basis for the minimum wage. In India, minimum wage is determined mainly for sweated industries under the provisions of the Minimum Wages Act 1948. Fair wages is fixed for other industries considering prevailing rates of wages, productivity of labour, capacity of the employer to pay, level of national income and other related factors. Tribunals, Awards and Wage Boards play major role in fair wage fixation. Many people are of the opinion that living wage is a luxury for a developing country like India and therefore, be deferred. Objectives of wage and salary To establish a fair and equitable remuneration To attract competent personnel To retain the present employees To improve productivity To control costs To establish job sequences and lines of promotion To improve union management relations To improve public image of the organization

PROCESS OF WAGE DETERMINATION: The wage determination process consists of the following sequential steps: Job analysis The responsible for determining wages are advised to conduct job analysis. The data collected through job analysis is used to prepare job description and job specification. On the basis of these statements standards of job performance is laid down. Job evaluation The relative value of every job is determined through job evaluation. The relative job value so as to fix basic wage for the job. A number of techniques is available for job evaluation. Wage survey Wage or salary surveys are conducted to find out wage or salary levels prevailing in the region or industry for similar jobs. Other organizational problems such as recruitment policy, fringe benefits etc., are also considered. Developing wage structure, Payments equal to, more or less than prevailing wages, Wage administration rules, Employee appraisal.

FACTORS EFFECTING WAGE RATE Wages and salaries have significant influence on distribution of income, consumption, savings, employment and prices. Generally, a large no. of factors influences the wages and salaries levels in organization. The main factors influencing wage or salary levels are as follows: Demand for and supply of labour influence wage and salary fixation. A low wage way may be fixed when the supply of labour exceeds the demand for it. A higher wage will have to be paid when the demand exceeds supply, as in the case of skilled labor. For instance, executive salaries have increased in India after liberalization due to the rise in demand for professional managers. Organizations ability to pay An organization ability to pay its employees is an important determinant of wage level. Ability to pay depends upon the profit earning capacity of the organization. Marginal firms and non-profit organization pay relatively low wages because of low or no profits. But multinational corporations pay relatively higher salaries due to their higher paying capacity. In the short run, the influence of ability to pay may be practically nil. Trade unions bargaining power Wage level also depends to a large extent on the relative bargaining power of the trade union or workers and employers. Well-organized trade unions exert pressure for higher wages and allowances. This pressure is exercised through collective bargaining, strikes and other methods. Salary levels in commercial banks are relatively high due to higher bargaining power of bank unions. Thus, the wages and salaries are often influenced by the strength of unions, their bargaining capacity and their strategies. Cost of living The cost of living is another important factor that influences the quantum of salary and wages. The employees expect that their purchasing power be maintained at least at the same level, if not increased by adjusting wages to changes in cost of living. In recent years, in advanced countries a no. of labour agreements have escalator clauses providing for automatic wage and salary increase as cost of living index raises. Dearness allowance is given according to changes in consumer price index. It is a sort of relief granted to the worker to offset the increased cost of living with an additional allowance. Prevailing wage rates This is also known as the comparable wage or going wage rate. It is the most widely used technique. Wages paid by other firms in the same market for similar work also influence the wage levels. Wage rates must also be consistent with the wages paid by other firms in the same industry. The comparative wages will increase the job satisfaction among the workers. This is also necessary to retain and attract qualified workers. Job requirements Generally, the more difficult a job, the higher are the wages. A worker is compensated according to the job requirements. If a job requires higher skill, greater responsibility and risk, the worker placed in that job will naturally get higher wages in comparison to other jobs which do not require the same degree of skill, responsibility and risk. The relative worth of a job can be estimated through job evaluation. Productivity of Labour Productivity is considered to be the main basis of wage determination. There is an increasing trend towards linking wage increases to gains in productivity or performance of workers. In some firms annual increment in wages and salaries is based on merit. In some other concerns, pay increases every year without any relation to productivity or performance of a worker. Productivity linked

wages may help to utilize human resources better. But this is hardly acceptable to labour and labour organizations. Conditions to product market The wage levels will be influenced by the degree of competition prevailing in the market for the product of the enterprise. If it is perfect competitive market, the wage levels may be at par with the value of net additions made by the workers to the total output. But in any given enterprise or occupation, wages may not reach this level if imperfect competition exists in the product market. Psychological and social factors This factor determine in a significant measure how hard a person will work for the compensation received, or what pressure he will exert to get his compensation increased. Psychologically, persons perceive the level of wages as a measure of success in life. Therefore, this factor should not be overlooked by the management in establishing wage rates. Sociologically and ethically, people feel that equal work should carry the equal wages and that no distinction is made on the basis of caste, color, sex or religion. To satisfy the conditions of equity fairness and justice, a management should take these factors into consideration in determining wage rate. The economy The state of the economy has its impact on wage and salary fixation. A depressed economy will probably increase the labour turnover. This in turn should serve to lower the going wage rate. Labour unions and government are all less likely to press for pay increments in a depressed economy. Government Legislations Government Legislations influence wage determination. Government has enacted laws to protect the interest of the working class. No organization can violate laws relating to minimum wages, payment of bonus, dearness allowance and other allowances, equal pay for work etc. In India, the important legislations which affect wage fixation are the Payment of Wages Act 1936 and the Minimum Wages Act 1948. Statutory minimum wage is determined according to the procedure prescribed by the relevant provisions of Minimum Wages Act.