UNIT-3

TRAINING & DEVELOPMENT

TRAINING: It is the process by which the aptitudes, skills and abilities of employees to
perform the specific jobs are increased.

EDUCATION: It is the process of increasing the general knowledge and understanding of

employees.

Basis Training Education

1. Scope Narrow Broad
2. Content Job-oriented/Vocational General/Person-oriented
3. Burden Employers Government
4. Nature Applied & Practical Pure & Theoretical
5. Place Imparted at workplace School or College
6. Duration Short duration Long duration
7. Result Quick and Apparent Delayed and Inapparent

DEVELOPMENT: It is a long term education process utilizing a systematic and organized

procedure by which managerial personnel learn conceptual and theoretical knowledge for
general purpose.

Basis Training Development

1. Definition Imparting skills and knowledgeMeans growth of an employee in all
for doing a particular job respects
2. Skills Job-related technical skills Shapes attitudes and imparts technical,
human and conceptual skills
3. Nature Reactive process- maintaining Proactive process-develop competence
and improving current job for future job performance
performance
4. Participants Non managerial personnel Managerial personnel
5. Orientation Job-Centred Career Centred
6. Initiative From Management-external From individual himself-internal
motivation motivation
7. Time Period Short term, one shot affair Long term-continuous process
8. Contents Technical and Mechanical Conceptual & Philosophical concepts
Operations

Concept of Training:
“Training is the act of increasing the knowledge and skills of an employee for doing a particular
job.”

-Its purpose is to bridge the gap between job requirements and present competence of an
employee.

It is aimed at improving the behavior and performance of a person.

Managers are required to ensure that any training program should attempt to bring about positive
changes in the (i) Knowledge (ii) Skills and (iii) attitudes of the workers.

Need for Training:

1. Changing Technology

2. Quality conscious Customers

3. Greater Productivity

4. Stable Workforce (creates feeling of confidence and a sense of security, reduces turnover &
absenteeism)

5. Increased Safety

6. Better Management-(used as effective tool of planning, prepares employees for promotion,

reduction in cost of supervision, etc)

7. Job-requirements (Employees selected for a job might lack qualifications required to perform
the job effectively).

8. Internal Mobility (Training becomes necessary when an employee moves from one job to
another due to promotion and transfer).

Importance/Objectives of Training:
1. Higher Productivity-Training improves level of performance. Trained employees
perform better.
2. Better Quality of Work-Best methods are taught to employees, so they commit less
mistakes.
3. Less Learning Period-Time is not wasted in learning through trial and error.
4. Cost Reduction-Trained employees make more economical use of resources. Fewer
machine breakdowns and better handling of equipments.
5. Reduced Supervision-Trained employees are self reliant, need less guidance and control.
They reduce supervisory burden, so span of supervision can be enlarged.
 6. Low Accident Rate-Trained employees adopt right work methods and make use of
safety devices. This improves health & safety.
7. High Morale-Training develops positive attitude employees. High morale due to
increase in earnings & job security and opportunity for promotion.
8. Personal Growth-Training enlarges knowledge & skills of employees and provides
growth opportunities.
9. Organisational Climate-IR and discipline re improved, decentralization can be
introduced, resistance can be reduced, enhances original stability (reduced turnover and
absenteeism).

Benefits of Training:
Benefits of Training to Employers

1. Quick learning
2. Higher productivity
3. Standardisation of procedures
4. Less Supervision
5. Higher Morale
6. Economical Operation
7. Preparation of Future Managers
8. Better Management

Benefits of Training to Employees

1. Confidence
2. New Skills
3. Promotion
4. Higher Earnings
5. Adaptability
6. Increased Safety

Types of Training:
Classification on the basis of purpose:

1. Introduction or Orientation Training-It is concerned with introducing or orienting a new

employee to the organisation and its procedures, rules and regulations. It is very short,
informative training given immediately after recruitment. It creates a feeling of involvement in
the minds of newly appointed employees.
2. Introduction or Orientation Training-It relates to the specific job which the worker has to
handle. It gives information about machines, process of production, instructions to be followed,
methods to be used and so on. It is the most common of formal in-plant training programs.

3. Apprenticeship Training- These training programs tends more towards educasoitn than
merely on vocational training. They combine on-the-job training and experience with class room
instructions in particular subjects.

The trainees receive wages while learning and they acquire valuable skills which command a
high wage in the labour market. Some employers look upon apprentices as a source of cheap
labour. In India, there are are so many ‘earn when you learn’ schemes.

4. Internship Training- Under this method, the educational or vocational institute enters into
arrangement with an industrial enterprise for providing practical knowledge to its students. It is
usually meant for such vocations where advanced theoretical knowledge is to be backed by
practical experience on the job. Eg. engineering and medical students. The period of such
training varies from six months to two years. The trainees do not belong to the business
enterprise but they belong to the vocational or professional institutions.

5. Refresher Training or Retraining-It is meant for the old employees of the enterprise. It’s
basic purpose is to acquaint the existing workforce with the latest methods of performing their
jobs & improve their efficiency further. This type of training is essential for following factors:

(i) Workers are required to lean what they have forgotton.

(ii) Rapid technological changes make workers obsolete in course of time.

(iii) Many new jobs which are created due to changes in the demand for goods and services are
to be handled by existing employees.

6. Training for Promotion-The talented employees may be given adequate training to make
them eligible for promotion to higher jobs in the organisation. Training is provided so that he can
learn new skills to perform his new duties efficiently.

Methods of Training:-
I On the Job Training

1. Coaching
2. Understudy
3. Job Rotation

II Vestibule Training
III Off-the-Job Training

1. Special Lecture Cum Discussion

2. Conference

3. Case Study

4. Sensitivity Training

5. Special Projects

6. Committee Assignments

I On the Job-Training:
Effective method for training operative personnel.

Worker is given training at the work place by his immediate supervisor. Worker learns in the
ctual work environment. It is based on the principle of ‘learning by doing.’

It is suitable for imparting skills that can be learnt in a relatively short time period. It permits the
trainee to learn on the equipment and in the work environment.

It is relatively cheap and less time consuming.

1.Coaching- Under this, supervisor imparts job knowledge and skills to his subordinates. The
emphasis is on learning by doing. This method is very effective if supervisor has sufficient time
to provide coaching to his subordinates.

2. Understudy- The superior give training to a subordinate as his understudy or assistant. The
subordinate learns through experience and observation. It prepares the subordinate to assume
responsibilities of the superior’s job in case the superior leaves the organisation. The purpose of
understudy is to prepare someone to fill the vacancy caused by death, retirement, promotion or
transfer of the superior.

3. Position Rotation- Under this the trainee is periodically rotated from job to job instead of
sticking to one job so that he acquires a general background of different jobs. It is used to
develop all-round workers. The employee learns new skills & gains experience in handling
different kinds of jobs. They also come to know the interrelationships between different jobs.

II VestibuleTraining:
In vestibule training, you set up a training area that simulates the work space, with equipment
and operating procedures like those found in the actual work situation, and employ full time
instructors. For eg. a vestibule training facility might simulate the work situation of the cabin-
crew of an airliner or high tension wire workers.

Advantages-

1. Trainee can concentrate on learning without disturbance of workplace noise.

2. Interest and motivation are high as real job conditions are duplicated.
3. Useful in cases, where on the job training might result in a serious injury or destruction of
valuable equipment.
4. Taught effectively by trained instructors.
5. Efficient method of training a large no. of employees of the same kind of work at the
same time.
6. Used to train clerks, bank tellers, inspectors, typists, pilots etc.

Disadvantages

1. Expensive because of additional investment on classroom, equipment and expert trainers.

2. Training situation is somewhat artificial and trainee does not get a feel of real job.

III. Off-the-Job Training

It requires the worker to undergo training for a specific period away from the workplace.
The workers are free of tension of work when they are leaning.
1. Special Lecture cum Discussion

In this one person (the trainer) does all of the talking. He or she may use handouts, visual
aids, question/answer, or posters to support the lecture. Communication is primarily one-
way: from the instructor to the learner.

Pros: Less time is needed for the trainer to prepare than other methods. It provides a lot of
information quickly when it is less important that the trainees retain a lot of details.

Cons: Does not actively involve trainees in training process. The trainees forget much
information if it presented only orally.

2. Conference Training

The conference training method is a good problem-solving approach. A group considers a

specific problem or issue and they work to reach agreement on statements or solutions.

Pros: There is a lot of trainee participation. The trainee build consensus and the trainer can
use several methods (lecture, panel, seminar) to keep sessions interesting.

Cons: It can be difficult to control a group. Opinions generated at the conference may differ
from the manager’s ideas, causing conflict.

3. Case Study

A case study is a description of a real or imagined situation which contains information that
trainees can use to analyze what has occurred and why. The trainees recommend solutions
based on the content provided.

Pros: A case study can present a real-life situation which lets trainees consider what they
would do. It can present a wide variety of skills in which applying knowledge is important.

Cons: Cases can be difficult to write and time-consuming to discuss. The trainer must be
creative and very skilled at leading discussions, making points, and keeping trainees on track.

4. Sensitivity Training or T-Group Training

It is a training in small groups in which people develop a sensitive awareness and

understanding of themselves and of their relationships with others.

It also aims at increasing tolerance power of the individual. These programmes are generally
conducted under controlled laboratory training.

According to its critics, it involves the use of psychological techniques with groups that its
critics claim are often identical to brainwashing tactics. Critics believe these techniques are
unethical.
 The two functions of a T-group or sensitivity development group are as under:-

a) To help its mebers learn how groups actually work

b) To give each meber of the group a chance to discover how other people interpret and are
affected by his own behavior.

5. Special Projects

A trainee may be assigned a project that is closely related to the objectives of his department.
E.g, a trainee may be assigned to develop a system of cost control in the execution of an
order. The trainee will study the problem, collect and analyse the data and make
recommendations upon it.

6. Committee Assignments

Under this method, a committee is constituted and is assigned a subject to discuss and make
recommendations. The committee has assigned objectives and responsibilities related to
some aspect of the organization. It will make a study of the problem and will present its
suggestions to the departmental head.

These kinds of assignments can provide the necessary general background to the trainees
because every member of the committee get a chance to learn from others.

Advantages and Disadvantages of Training Methods-

Advantages of On-the-Job Training

• Generally more cost effective.

• Less disruptive to the business-i.e. employees are not away from work.
• Training an employee in their own working environment, with equipment they are
familiar with and people they know can help they gain direct experience to a
standard approved by the employer.
• Employees may find that they have more confidence if they are supervised and
guided as they feel they are doing the job right.
• Employees may feel more at ease being taught on supervised by people they
know rather than complete strangers at an external training course.
• Managers or supervisors can assess improvement and progress over a period of
time and this makes it easier to identify a problem, intervene and resolve
problems quickly.
• On the job training is also productive, as the employee is still working as they are
learning.
 • As training progresses and the employee begins to feel more confident, this
confidence would allow them to work at a higher standard and ultimately be more
productive.
• Training “on-the-job” provides an opportunity to get to know staff they might not
normally talk to.

Disadvantages of On-the-Job training

• Teaching or coaching is a specialist skill in itself; unless the trainer has the skills and
knowledge to train, this would mean that the training will not be done to a sufficient
standard
• The trainer may not be given the time to spend with the employee to teach them properly,
which would mean substandard training has been achieved and learning has only been
half done
• The trainer may posses bad habits and pass these on to the trainee

Advantages of off-the-job training:

• Use of specialist trainers and accommodation

• Employee can focus on the training-and not be distracted by work
• Opportunity to mix with employees from other businesses

Disadvantages of off-the-job training:

• Employee needs to be motivated to learn

• May not be directly relevant to the employee’s job
• Costs (transport, course fees, examination fees, materials, accommodation)
DESIGNING A TRAINING PROGRAM

The training program is an integral part of human resource management. As shown in Fig.1 it
consists of the following inter-related steps:

1. Identification of training needs.

2. Setting training objectives
3. Organisation of training
4. Evaluation of training outcomes or results.

Identification of Training Needs

-Organizational Analysis
Task Analysis
Human Resource Analysis

Setting Training Objectives

Organization of Training Program

Trainee and Instructor
Period of Training
Training Methods and
Material

Evaluation of Training Results

Fig.1 Design of a Training Progam.

1. Identification of Training Needs

The technological changes taking place is the main cause of identification of the training needs
in an organisation. Earlier the people were acquiring training through apprenticeship and
vocational courses, which are not sufficient in the modern era of industrialisation. It is necessary
to identify the training needs because of the following reasons:

(a) Adoption of new techniques in an organisation and introduction of modern working

methods. For example, computerization of the office as has been done in Railway
bookings or Airlines bookings.
 (b) Poor performance by the workers as reflected by low output, lack of initiative,
incompetence, bad decision. This requires systematic training of the work force.
(c) Wide gaps between what workers should be going and what they are doing.
(d) Analysis of the strengths and weaknesses of an organisation may reveal the areas of
weaknesses which need to be handled seriously.

More information could be obtained from the organisation’s human resource plan. While
preparing plans, the current skills with expected needs for future should be kept in mind and
the deficiencies be highlighted. Some organisations prepare ‘skills-inventories’ classifying
employees according to their qualifications, technical knowledge, experience and various
skills. The gaps between the existing and required levels of knowledge, skills, performance
and attitudes should be specified. The problem areas that can be resolved through training
should also be identified.

Training needs can be identified through the following types of analysis:

(i) Organisational analysis

(ii) Task analysis
(iii) Manpower or Human Resource Analysis.

(i) Organisational Analysis. It is a systematic study of the organisation in terms of its

objectives, its resources, resource allocation and utilisation, growth potential its environment.
Its purpose is to determine where training emphasis should be placed in the organisation for
increasing organizational effectiveness. Organisational analysis involves the following
elements:
(a) Analysis of Objectives. The long-term and short-term objectives and their relative
priorities should be properly analysed. Specific goals for various departments should be
stated which will serve as means for achieving the overall organstional objectives. The
management would have to examine what are the specific training inputs that would
contribute towards the achievements of these objectives.

(b) Resource Utilisation Analysis. The allocation of human and physical resources and
their efficient utilistation in meeting the operational targets should be analysed. In order to
examine the need for training, the following questions need to be answered:

Whether adequate number of personnel are available to ensure the fulfillment of the
goals?
fulfillment of the goals?
Whether the personnel performance is upto the required standards?

(c) Climate Analysis. Organisational climate reflects the attitudes of organisational

members as regards trust, loyalty, openness, commitment to organisational goals. Analysis or
organisational climate should aim at determining whether the environment in different
departments is conducive to fulfillment of their goals. This will help in knowing areas where
training is needed to improve the climate of the organisation.
 (ii) Task Analysis. It is a systematic analysis of jobs to identify job contents knowledge,
skills and aptitudes required to perform the job. Particular attention should be paid to the tasks to
be performed, the methods to be used, the way employees learn these methods and the
performance standards required of employees. Questionnaires, interviews, personnel records,
observation and other methods can be used to collect information about jobs in the organisation.

In task analysis, the main focus is on the job or task. The analysis requires the study of
various types of skills and training required to perform the job effectively.

(iii) Manpower Analysis. The quality of manpower required by the organisation has to be
carefully analysed. It has to be done in the light of both internal and external environment of the
organisation. The economic, social, technological and political environment of the organisation
should be properly scanned to determine the quality of human resources desired. To achieve
these quality standards, specific training needs should be determined on the following lines:

(a) Specific areas where individuals need training.

(b) the capability of present workforce to learn new skills and behaviours,
(c) the time frame within which training must be imparted, and
(d) job designing and redesigning, introduction of new work methods and technology.

2. Setting Training Objectives

Once the training needs are identified, the next step is to set training objectives in
concrete terms and to decided the methods to be adopted to achieve these objectives. The
overall aim of any training program is to increase organisational effectiveness. However,
each training program must also have specific objectives such as increased productivity,
improved quality, better human resources planning, better health and safety, prevention of
obsolescence and enhanced personal growth. These objectives contribute to organisational
effectiveness as explained in the beginning of the chapter. The relationship between specific
objectives and overall purpose of training is shown in Fig.2.

Specific Objectives of Training Overall Purpose of

Training
1. Increased productivity
2. Improved quality Increased
Organisational
3. Better human resource planning Effectiveness
4. Higher morale
5. Better health and safety

3. Organisation of Training Programme

Every training program includes trainees, trainers, a training period and training material.
These constituents of training are discussed below:
 (a) Selection of the Trainees. The proper selection of trainees is a major importance if
permanent and gainful results are to be obtained. A trainee should be trained for the kind of
job he likes and is fitted to perform. In this respect, training is closely related to the selection
of personnel. Careful screening of candidates for training will raise the effectiveness of the
training program.

While giving training to an employee, the first step is to attempt to place him at cease. It
is generally seen that many people are somewhat nervous when approaching an unfamiliar
task. The instructor should not forget the newness of the training program to the trainee
though he has repeated experience of this. In addition to minimise any possible apprehension,
the trainer should emphasis the importance of job, its relationship to the work-flow and the
importance of rapid and effective learning. Thus, the trainee must be given the proper
background information before he starts learning the new skills and knowledge.

In case of supervisory training, it is better to include all supervisors and other employees
considered suitable for promotion to such posts. Excluding some employees on the basis that
they do not need the training or that they are already doing their work satisfactorily is a poor
policy. Even outstanding persons benefits from well-managed training programs and their
presence assists in many ways the other trainees.

(b) Preparation of the Instructor. The instructor or trainer is a key figure in an effective
training program. He can contribute immeasurably to its success. Qualified instructor may be
obitained from inside or outside the organisation. However, many insiders are not good
instructors because they may not possess the ability to teach the skill. Trainee needs many
qualifications besides knowing how to do the work. He must be able to divide the job into
logical parts so that he may take up one part at a time without losing his perspective of the
whole. He must be tolerant and patient. He must be able to divide the job into logical parts so
that he may take up one part at a time without losing his perspective of the whole. He must
be tolerant and patient. He must be able to appreciate the value of training job in relation to
the enterprise and an understanding of what the employees would go through in order to
acquire this skills and knowledge as envisaged by the program.

The trainer needs professional expertise in order to fulfill his responsibility. If he is ill-
informed about the training process or if he knows little about possible connection between
training and good management, then he may indeed deserve the casual treatment that he
frequently receives. Therefore, it is desirable that the trainer must have at least a minimum
knowledge about the job for which he is going to instruct the trainees.

An effective instructor or trainer can present the operations involved in doing a particular
job by various ways. In most of the cases, method of explanation is favoured. In addition, an
instructor may illustrate various points through the use of pictures and other training aids.
When the job is essentially physical in nature, the demonstration on-the-job is an excellent
device. While demonstrating the operation, the trainer should stand beside the trainee rather
than in from of him so that the latter may better adopt the movements of the trainer. The
trainer should explain and demonstrates the operations step by step and should allow the
trainees to repeat these operations. He should also encourage questions from the trainees in
order to be sure that the trainees understand the job.

(c) Determination of Training Period. The length of the training period depends upon the
skill to be acquired, the trainee’s learning capacity and the training methodology used. For
instance, a simple indoctrination program for clerks may require an hour a day over a period
of one week, while a course in computer programming may be given two hours a week for 15
weeks. The use of effective and visual material usually helps to reduce the training time. To
maintain interest and secure maximum accomplishment, no single session should last longer
than two hours.

Now the question arises whether the training should be given during working hours or
after the working hours. If the training is given during working hours, the productivity will
suffer and the orgnisation will have to pay for this time. But if the training is arranged after
the working hours, the employees may not be able to make full use of training programs
because they are already tired. So, any personnel manger should try to reconcile these
situations. It is beyond doubt that a trained employee is an asset for the organisation. A big
organisation can afford to send their employees for full time training on full pay. The costs
incurred on training an employee will more than be compensated by the benefits obtained
from training in the form of increased productivity, less wastage, heightened morale, etc.

(d) Training Methods and Material. There are several on-the-job and off-the-job methods
of training as discussed earlier in this chapter. The choice of any method would depend upon
the specific objectives of the training program.

To increase the effectiveness of training, some written material is usually desirable as a basis
for instruction, review and reference. The training section may prepare the training material
with the help of line supervisors to be used for different jobs. A complete outline of the
whole course should be made with the main topics included under each heading. The training
material should be distributed among the trainees well in advance so that they may come
prepared in the lecture class and may be able to understand the subject quickly and may
remove their doubts by asking questions from the instructor.

4. Evaluation of Training

Training is indispensable for both the organisation and the individuals working therein. It is
very costly and time-consuming process. It is essential to determine its effectiveness in terms
of achievement of specific training objectives. Individuals like to know how much they learnt
or how well they are doing. The sooner employees know the results of a quiz or test, the
sooner they can assess their progress. The sooner employees receive positive feedback from
the trainer, the less time they will waste.

Self-graded tests and programd learning kits provide the necessary feedback to a person on
his progress on a particular subject. This principle does not necessarily mean frequent testing,
but the more immediate the feedback on learning the more motivating it is likely to be.
 Evaluation of training would provide useful information about the effectiveness of training as
well as about the design of future training programs. It will enable an organisation to monitor
the training program and also to modify its future programs of training. The evaluation of
training also provides useful data on the basis of which relevance of training and its
integration with other functions of human resource management can be examined.

EFFECTIVENESS OF TRAINING

Training effectiveness is the degree to which trainees are able to learn and apply the
knowledge and skills acquired during the program. It is influenced by the attitudes, interests,
values and expectations of the trainees and the training environments. A training program is
likely to be more effective when the trainees want to lean, are involved in their jobs and have
career plans. Contents of training program, and the ability of trainers also determine training
effectiveness to a certain extent.

Evaluating Training Effectiveness

Need for Evaluation. It is necessary to evaluate the extent to which training programmes have
achieved the aims for which they were designed. Such an evaluation would provide useful
information about the effectiveness of training as well as about the design of future training
programmes. Evaluations enables an organisation to monitor the training programe and also to
update or modify in future programmes of training. The evaluation of training oritenne or
consequences also provides useful data on the basis of which relevance of training and its
integration with other functions of human resource management can be judged.

Concept of Training Effectiveness. Training effectiveness is the degree to which trainees are
able to learn ad apply the knowledge and skills acquired in the training programme. It depends
on the attitudes, interests, values and expectations of the trainees and the training environment. A
training programme is likely to be more effective when the trainees want to learn, are involved in
their jobs, have career strategies. Contents of a training programme, and the ability and
motivation of trainers also determine training effectiveness. Fig. 9.2 illustrates the influence of
trainee attitudes on training effectiveness.
 Environmental Favour

Reaction Social task

To skill Assessment

Motivation to Learn Motivation to Transfer

Locus on Control
Learning

Career/Job Attitudes Behaviour Change

-Explorations Result
-Job Involvement

Career Planning

Reactions to
Training
Explanatory Pre-training Motivation Learning
Behaviour
Behaviour

Performance
Fig.9.2. Influence of Attitudes on Training Effectiveness

Source: Arun Gupta. “The Influence of Training Attitudes on Training Effectiveness.” The Indian Journal of Training and
Development, January-February, 1987, p.42.

Evaluation Criteria. Evaluation of training effectiveness is the process of obtaining

information on the effects of a training programme and assessing the value of training in the light
of that information. Evaluation involves controlling and correcting the training programme. The
basis of evaluation and mode are determined when the training programme is designed.
According to Hambin, training effectiveness can be measured in terms of the following criteria.

(i) Reactions. A training programme can be evaluated in terms of the trainers reactions to the
objectives, contents and methods of training. In case the trainees considered the programme
worthwhile and like it, the training can be considered effective.

(ii) Learning. The extent to which the trainees have learnt the desired knowledge and skills
during the training period is a useful basis of evaluating training effectiveness.

(iii) Behaviour. Improvement in the job behavior of the trainees reflects the manner and extent
to which the learning has been applied to the job.

(iv) Results. To ultimate results in terms of productivity improvement, quality improvement,

cost reduction, accident reduction, reduction in labour turnover and absenteeism are the best
criteria for evaluating training effectiveness.

Table 9.2 provides a broad framework for evaluation in terms of types, levels and
methods. However, it may not always be possible to employ a comprehensive evaluation system
due to organisational constraints, e.g. lack of clear training policy, inadequate infrastructure,
unwillingness of the management to change human resource policies, performance appraisal
system and organisational processes on the basis of feedback.

Methods of Evaluation. Several methods can be employed to collect data on the outcomes of
training. Some of these are:

1. The opinions and judgements of trainers, superiors and peers.

2. Asking the trainees to fill up evaluation forms.
3. Using a questionnaire to know the reactions of trainees.
4. Giving oral and written tests to trainees to ascertain how far they have learnt.
5. Arranging structured interviews with the trainees.
6. Comparing trainees performance on-the-job before and after training.
7. Studying profiles and careet development charts of trainees.
8. Measuring levels of productivity, wastage, costs, absenteeisms and employee turnover
after training.
9. Trainees comments and reactions during the training period, and
10. Cost benefit analysis of the training programme.

Feedback. After the evaluation, the situation should be analysed to identify the possible
causes for a difference between the expected outcomes and the actual outcomes. Necessary
precautions should be taken in designing and implementing future training programmes so as
to avoid these causes. The outcomes of a training programme should justify the time, money
and efforts invested by the organisation in training. Information collected during evaluation
should be provided to the trainees and the trainers as well as to others concerned with the
designing and implementation of training programmes. Follow-up action is required to
ensure implementation of evaluation report at every stage.

Principles of Training. The following guidelines can help to make training more effective.

1. Clear Objectives. The objectives and scope of a training programme should be clearly
defined. A comparison of operational requirements and existing human resource skills
will help to determine the specific training needs of employees. Operational requirements
depend upon the performance needed to achieve organisational objectives. A well defind
set of performance standards should be created.

2. Training Policy. A clearly defined training policy serves as the guide for designing and
implementing training programmes. Such a policy should specify who is responsible for
training, what is to be spent in training, etc.

3. Motivation. Employees tend to be most responsive to training progammes when they

feel the need to learn. Therefore, training must be related to the needs and problems of
the trainees as well as their abilities and aptitudes. Information provided in the training
material should be meaningful. It should be presented in a sequential manner from the
simple to the more complex. Audio-visual aids should be used to avoid boredome and
fatigue of the lecture method.
 4. Reinforcement. According to B.F. Skinner’s Behaviour Modification Model, when a
behavior is repeatedly rewarded, it becomes a permanent part of one’s personality.
Learning is more effective when there is reinforcement in the form the rewards and
punishments. Rewards or positive reinforcements are more effective in changing
behavior than punishments or negative reinforcements. Pay raise, promotions and praise
should, therefore, be used to reward trainees who learn and apply the knowledge and
skills. Rewards should quickly follow the desired behaviour and performance. Trainees
should be encouraged to participate, discuss and discover the desirable patterns of
behavior.

5. Organised Material. Training material should be properly organised. A complete outline

of the whole course should be distributed in advance so that the trainees can prepare
themselves before coming to the class. Training material should be prepared by the
training sections in consultation with line supervisors.

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

7. Preparing the Instructor. The instructor or trainers is the key figure in a training
programme. The trainer should not only be a good teacher but must know the subject and
the job also. Good trainers should be developed both from inside and outside the
organisation.

8. Feedback. Trainees should be provided information on how much they have learnt and
how well they are doing. Every trainee should know what aspect of his
behavior/performance is not upto par and what he can do to improve it. The feedback
should be positive, fast and frequent. Self graded tests and programmed learning can be
used to provide feedback.

9. Practice. Practice makes a man perfect. Skills that are practiced often are better learned
and less easily forgotton. Therefore, trainees should be allowed continuous practice. Tell
and demonstrate knowledge and skills and then let the trainee try it himself.

10. Appropriate Techniques. The methods and processes of training should be related
directly to the needs and objectives of the organisation. It should be conducted as far as
possible in the actual job environment so as to be meaningful. To be effective, training
should be based on the tested principles of learning.

9.10 Retraining
Retraining is the process of providing training to persons who underwent training earlier
in their job. Retraining programmes are generally arranged for employees who have long been in
the service of an organisation. Such programmes are designed to avoid obsolescence of a person
in terms of job requirements. Retraining is required on account of the following factors:

(i) Some employees concentrate on a narrow task and lack all-round knowledge and
skills. Training is required to widen their knowledge and attitudes.

(ii) Employees who are called back to work after layoff are given training so as to handle
highly skilled jobs.

(iii) Due to technological changes some jobs may become unnecessary. Employees
working on such jobs are retained for other jobs.

(iv) Retraining is necessary to develop a versatile workforce capable of performing more

than one job.

(v) Retraining becomes necessary when the knowledge and skills of employees
computerisation, new skills become necessary.

(vi) Due to changes in demand for goods and services, some new jobs are created.
Retraining of existing staff is needed to handle new jobs.

Retraining may be required at all levels. But it is more common for rank and file workers.
This is so because technological change make an immediate impact on these people. Moreover,
they are less equipped to forsee their personal needs and, therefore, require greater assistance
than others. Workers need refresher courses to help them recall what they have forgotton. They
require retraining when work tools and methods change due to technological progress.

MANAGEMENT DEVELOPMENT

Management development is a planned, systematic and continuous process of learning and

growth designed to induce behavioural change in individuals by cultivating their mental abilities
and inherent qualities through the acquisition, undertaking and use of new knowledge, insight
and skills as they are needed for effective managing.

Methods of Executive Development

(i) On-the-Job Methods

(ii) Understudy
(iii)Job Rotation
(iv) Multiple Management- is the name given to the system where junior board of directors is
established in a company for the training of the executives. The junior board is given the
power to discuss any problem which the senior board could discuss.
 All recommendations that are forwarded to the senior board must be unanimous. This will
prevent the lower board from dumping their problems upon the senior board. The senior board is
under no compulsion to accept the recommendations of the junior board.

ADVANTAGES-

(a) It gives board members an opportunity to gain knowledge and experience in various
aspects of business.
(b) It helps identify those who have good executive talent
(c) The junior executives gain practical experience in group decision-making and in team
work.
(d) It is relatively less expensive method of development and it permits a considerable
number of executives of participate within a reasonable period of time.
(v) Committee Assignment- Under this method an ad-hoc committee is constituted and is
assigned a subject to discuss and make recommendations. The committee will make a
study of the problem and present its suggestions to the departmental head. Committee
assignments can provide the necessary general background to the trainees because every
member of the committee gets a chance to learn from others.

1. Off-The-Job Methods
(i) Special Courses
(ii) Special Projects
(i) Conference Training
(ii) Sensitivity Training
(iii) Role Playing-It is used for human relations and leadership training. Its purpose is
to give relations skills through practice and to develop insight into one’s own
behavior and its effect upon others.

Under this method, a conflict situation is artificially constructed and two or more trainees
are assigned different roles to play.

The situation is usually written as a prepared brief and the different perspectives on the
same situation are handed out to the different people who will come together to discuss the
situation. Each person will have a particular objective, or objectives they want to fulfil which
may well be in conflict with t heir fellow role player or role players. It is how each role player
handles the situation that forms the basis of skills practice, assessment and development.

Role-Playing is an excellent exercise for:

• Analyzing problems
• Job interview to see how comfortably they communicate
• Developing teamwork, cooperation, and creative problem-solving
 • Exercise for improving listening skills

(vi) SIMULATION METHOD

A simulation method is used to develop in a controlled environment, a situation that is as

near to real as possible, whereby people can learn from their mistakes. There are three basic
simulation techniques which are discussed below:-

a) In-Basket Method- It is structured around the familiar receptacle used for collecting
incoming mail, memos and reports. Materials that require problem solving are put into an
in-basket and the trainee plays the role of a manager responsible for solving the
problems. The trainee is given background information on the personalities and situations
involved.
Then, using experience as a guide, the trainee is asked to take appropriate action within a
short period of time. After the time is over, the student will meet the trainer who will
evaluate the former’s performance and suggest ways for improvement.
The in-basket method is used mostly to learn about effective management and
supervision.
b) Case Study
c) Management Games- It is a class-room exercise in which a number of teams of trainees
compete against each other to achieve certain objectives. The game is designed to be a
close representation of real-life conditions. The trainees are asked to make decisions
about production, cost, research and development, inventories, sales etc. for a simulate
organization.

Under this method, the executives learn by analyzing problems by using intuition and by
making trial and error type of decisions. A management game has an objective feedback
of the consequences of business decisions.

The game has a limitation that the model upon which a game is built may be typical of a general
kind of situation, yet it may not be realistic.
 Career Planning
Effective HRM encompasses career planning, career development and succession planning. An
organization without career planning and career development initiatives is likely to encounter the
highest rate of attrition, causing much harm to their plans and programmes. Similarly without
succession planning managing of vacancies, particularly at higher levels, become difficult. There
are examples of many organizations that had to suffer for not being able to find a right successor
for their key positions. With the increase scope for job mobility and corporate race for global
headhunting of good performers, it is now a well established fact that normal employment span
for key performers remains awfully short.

The term career planning and career developments are used interchangeably in most of the
organizations. It is also correct that but for their subtle difference in the definitional context, their
process remains the same.

Overview

Career planning generally involves getting to know who you are, what you want, and how to get
there. Keep in mind that career planning is a continuous process that allows you to move from
one stage to another stage as your life changes. You may even find yourself going back to look
at who you are again after exploring how to get there. Learning to negotiate the career planning
process now is essential, considering most people will change careers several times in a lifetime.

If a career plan is to be effective, it must begin with an objective. When asked about career
objectives, most managers will probably answer by saying that they want to be successful. What
is success? Definition of success depends on personal aspirations, values, self-image, age,
background and other different factors. Success is personally defined concept. In order to plan
your career, you need to have an idea of what constitutes career success.

Important Elements of Career

Analyzing definitional context, it is clear that career has following important elements-

1. It is a proper sequence of job-related activities. Such job related activities vis-a-vis experience
include role experiences at diff hierarchical levels of an individual, which lead to an increasing
level of responsibilities, status, power, achievements and rewards.
2. It may be individual-centered or organizational–centered, individual-centered career is an
individually perceived sequence of career progression within an occupation.
3. It is better defined as an integrated pace of internal movement in an occupation of an individual
over his employment span.

Objectives

Career planning seeks to meet the following objectives:

1. Attract and retain talent by offering careers, not jobs.

2. Use human resources effectively and achieve greater productivity.
3. Reduce employee turnover.
4. Improve employee morale and motivation.
5. Meet the immediate and future human resource needs of the organization on a timely basis.

CAREER PLANNING PROCESS

The career planning process involves the following steps:

(i) Identifying individual needs and aspirations

Most individuals do not have a clear cut idea about their career aspirations, anchors and goals.
The human resource professionals must, therefore, help an employee by providing as much
information as possible showing what kind of work would suit the employee most, taking his
skills, experience, and aptitude into account. Such assistance is extended through
workshops/seminars while the employees are subjected to psychological testing, simulation
exercises, etc. The basic purpose of such an exercise is to help an employee form a clear view
about what he should do to build his career within the company. Workshops and seminars
increase employee interest by showing the value of career planning. They help employees set
career goals, identify career paths and uncover specific career development activities (discussed
later). These individual efforts may be supplemented by printed or taped information. To assist
employees in a better way, organizations construct a data bank consisting of information on the
career histories, skill evaluations and career preferences of its

Employees (known as skill or talent inventory).

(ii) Analyzing career opportunities

Once career needs and aspirations of employees are known, the organization has to provide
career paths for each position. Career paths show career progression possibilities clearly. They
indicate the various positions that one could hold over a period of time, if one is able to perform
well. Career paths change over time, of course, in tune with employee’s needs and organizational
requirements. While outlining career paths, the claims of experienced persons lacking
professional degrees and that of young recruits with excellent degrees but without experience
need to be balanced properly.

(iii) Aligning needs and opportunities

After employees have identified their needs and have realized the existence of career
opportunities the remaining problem is one of alignment. This process consists of two steps: first,
identify the potential of employees and then undertake career development

Programmers (discussed later on elaborately) with a view to align employee needs and
organizational opportunities. Through performance appraisal, the potential of employees can be
assessed to some extent. Such an appraisal would help reveal employees who need further
training, employees who can take up added responsibilities, etc. After identifying the potential of
employees certain developmental techniques such as special assignments, planned position
rotation, supervisory coaching, job enrichment, understudy programs can be undertaken to
update employee knowledge and skills.
(iv) Action plans and periodic review

The matching process would uncover gaps. These need to be bridged through individual career
development efforts and organization supported efforts from time to time. After initiating these
steps, it is necessary to review the whole thing every now and then. This will help the employee
know in which direction he is moving, what changes are likely to take place, what kind of skills
are needed to face new and emerging organizational challenges. From an organizational
standpoint also, it is necessary to find out how employees are doing, what are their goals and
aspirations, whether the career paths are in tune with individual needs and serve the overall
corporate objectives, etc.

CAREER PLANNING IN AN ORGANIZATION

Career planning is the process by which one selects career goals and the path to these goals. The
major focus of career planning is on assisting the employees achieve a better match between
personal goals and the opportunities that are realistically available in the organization. Career
programmers should not concentrate only on career growth opportunities. Practically speaking,
there may not be enough high level positions to make upward mobility a reality for a large
number of employees. Hence, career-planning efforts need to pin-point and highlight those areas
that offer psychological success instead of vertical growth.

Career planning is not an event or end in itself, but a continuous process of developing

Human resources for achieving optimum results. It must, however, be noted that individual and
organizational careers are not separate and distinct. A person who is not able to translate his
career plan into action within the organization may probably quit the job, if he has a choice.
Organizations, therefore, should help employees in career planning so that both can satisfy each
other’s needs.

CAREER PLANNING VS. HUMAN RESOURCE PLANNING

Human Resource planning is the process of analyzing and estimating the need for and
availability of employees. Through Human Resource planning, the Personnel Department is able
to prepare a summary of skills and potentials available within the organization. Career planning
assists in finding those employees who could be groomed for higher level positions, on the
strength of their performance.

Human Resource planning gives valuable information about the availability of human resources
for expansion, growth, etc. (expansion of facilities, construction of a new plant, opening a new
branch, launching a new product, etc.). On the other hand, career planning only gives us a picture
of who could succeed in case any major developments leading to retirement, death, resignation
of existing employees.

Human Resource planning is tied to the overall strategic planning efforts of the organization.
There cannot be an effective manpower planning, if career planning is not carried out properly.
 Succession Planning
Succession planning is the process of developing talent to replace executive, leadership or other
key employees when they transition to another role, leave the company, are fired, retire or die. It
is relevant to all companies, from the largest to the smallest, in both the for-profit and not-for-
profit sectors. The planning process is meant to create a talent pipeline of successors that will
keep the organization running with little to no interruption when inevitable staff changes occur.

Effective succession planning works by assessing staffing needs that may arise and creating
long-term goals and strategies to manage those gaps, including through leadership development.
The HR department, sometimes referred to as the human resources management (HRM)
department, is typically a key driver in the succession planning, which is sometimes referred to
as replacement planning, although support from top leadership and other stakeholders is critical
to success.

Different uses of the term succession planning

It’s important to note that succession planning is often used narrowly in reference to the CEO or
executive director, or slightly more expanded to include board members, key leaders or the C-
suite. However, extending the concept of succession planning to a broader range of employees is
also gaining widespread traction, especially through the use of HR software, generally, or talent
management software, specifically. Succession planning may also be used to indicate the passing
of company ownership onto employees.

When used only in the sense of replacement plans for the top leader or leaders, succession
planning has specifics that may not apply when used more generally. For example, if referring to
the CEO, the board of directors must be involved, whereas this will be less likely when
discussing role replacements farther down the corporate ladder.

Still, while the top executive is a key factor in a company’s performance, taking a wider lens to
the concept of succession planning is increasingly seen as critical, particularly in the current
challenges facing talent management in companies today.

Reasons for and benefits of succession planning

When an employee leaves, there is a ripple effect. It may be most evident when the key leader
leaves, but the hole created when an employee leaves his or her position can be profound, even at
lower levels. Replacing employees can be a difficult task, especially in industries with noted
talent shortages and skills gaps, and it can be a lengthy process to get a replacement employee to
full productivity.

In addition, there are specific business issues facing companies today that strongly point to the
need for succession planning in a more widespread way, not just for the CEO, executive director
or C-suite. Regardless, numerous studies have found that far too many companies fail to create a
succession plan, even for their highest executive. This lack of planning can especially sink
smaller businesses and family businesses, which don’t have the sheer candidate numbers from
 which to choose. In addition, employees may serve in multiple capacities and have a wider array
of corporate knowledge known only to themselves, which leaves when they do.

Succession planning strategy and process

Depending on the size of the organization and its goals, the strategic planning and process for
success planning can vary wildly. However, fundamentals include the following:-

• Gaining the support of key stakeholders, including the CEO or executive director;
• Assessing positions (and individuals) and deciding which ones to focus on;
• Identifying high-potential employees for key leadership positions and creating learning and
development plans tailored to a wider range of employees for more expansive succession plans;
• Assessing the extent to which internal candidates can fill roles (likely with development), who
will be more familiar with company culture and processes and which roles HR should look
externally for the right talent pool;
• Creating effective learning and development processes that support the succession strategy,
especially experiential development, such as job shadowing and cross-functional moves.
• Determining which HR software will be used in support of the succession planning strategy and
process.

Real-world succession planning example

For several years before Steve Jobs stepped down as CEO of Apple in 2011, he had groomed
successor Tim Cook to take the top leadership role. This included Cook working a wide range of
operational roles and directly with Jobs for CEO-specific experience. Cook also stepped in to
lead day-to-day operations twice when Jobs was on sick leave.

Career Development
Career development is the series of activities or the on-going/lifelong process of developing
one’s career. Career development usually refers to managing one’s career in an intra-
organizational or inter-organizational scenario. It involves training on new skills, moving to
higher job responsibilities, making a career change within the same organization, moving to a
different organization or starting one’s own business.

Career development is directly linked to the goals and objectives set by an individual. It starts
with self-actualization and self-assessment of one’s interests and capabilities. The interests are
then matched with the available options. The individual needs to train himself to acquire the
skills needed for the option or career path chosen by him. Finally, after acquiring the desired
competency, he has to perform to achieve the goals and targets set by him.
Importance of Career Development

Every employee working in an organization is looking for a career development which moves in
the right direction. Career path taken by an employee determines the growth. Career should be
planned in a way that it moves forward. Career development provides the framework with Skills,
goals, awareness, assessment and performance which helps an individual to move in the right
direction and achieve the goals one has in one’s career.

FACTORS THAT INFLUENCE CAREER DEVELOPMENT

There are several factors that are play when it comes to career development. We will try to look
at each of them.

(i) Personal traits and characteristics of the individual

People have varying personalities, and it is these differences that make others more responsive to
career development than others. It is possible that someone who is too shy will end up advancing
slower in his career in the field of marketing, as compared to someone who is outgoing and a go-
getter.

Knowing your quirks and personality traits early on will give you a head start in your career
planning and development. Today, self-assessment tests for purposes of career planning are
being conducted for high school students so that, early on, they will have an idea what
workplaces they are interested in, and what line of work would be a good fit for them.
(ii) Skills and knowledge

People who are skilled and knowledgeable about a job are the ones who are most likely to be
hired by a company, while those who don’t may not even make it past the second round of
screening.

This means that, for those who made it, their mental abilities aided their advancement in their
career. For those who did not, their lack of skills and know-how served as a barrier to their career
development.

(iii) Physical abilities

Physical limitations may also be hindrances to getting further up the career ladder. There are jobs
that have specific requirements with respect to the physical abilities of the person who will
perform the involved tasks.

Those who are able will have great chances for advancement; those who are not should look for
other career paths that will match their physical abilities and accommodate their limitations.

(iv) Social and economic factors

An individual may have grown up wanting to become a physician. However, financial

constraints and other socio-economic issues may have kept him from going to med school and
getting the career that he originally wanted. Family situations and other similar circumstances are
also factors that may impact an individual’s development in his desired career.
 Employee Compensation
COMPENSATION

Compensation is a wide range of financial and non financial rewards to employees for their
services rendered to the organization. It is paid in form of wages, salary, other benefits such as
vacations, maternity leave, medical facilities etc. compensation helps in motivating the
employees and reduce labor turnover.

Components of compensation

1. Base compensation
2. Supplementary compensation

Base compensation: It involves monetary benefit to the employees in the form of wages and
salaries. It is giving the remuneration to the workers for doing the work. Wages are generally
given to the workers based on hourly, daily, weekly or monthly basis. But salary is the
compensation given to the office employees. Wages may be based on the number of units
produced i.e. piece wage system or the time wage system i.e. the time spent on the job. But
salary is always based on the time spent on the job. When it is difficult to judge the production of
the company then the compensation is paid in form of salary.

Supplementary compensation: now days the organizations use supplementary compensation

over and above the base compensation. It helps in satisfying the employees as well as retaining
them for long time. It can be given in form of various services like housing, medical, educational
facility. Supplementary compensation is also called fringe benefit as well as hidden payroll. The
basic purpose of fringe benefit is to maintain efficient human resources in the organization and to
motivate the employees.

Supplementary compensation is again divided into following types

(i) Protection against hazards: supplementary compensation helps in protecting against the
hazards of illness, injury, old age, death, permanent disability.

(ii) Employee services: some big organizations provide housing, low-cost loan, food, medical,
and day care centre for children, educational facilities to their employees for their services.

(iii) Payment for time not worked: the employees are also paid for the time they are not
working like wash up time, lunch period, vacations, holidays, sick leave etc.

(iv) Legal payments: payment under this category involves unemployment; layoff
compensation, old age benefits etc.

Thus, there are various kinds of supplementary compensation which are given to the employees.

Significance of Employee Compensation (Or Personnel Remuneration)

The issue of personnel remuneration, whether in the form of wages or salaries, is highly
significant from the viewpoint of industrial relations, social peace and economic implications. In
fact, it is the centre from which the circle of industrial relations is drawn; it being the crux of
industrial conflicts.

Following are some of the points which highlight the significance of personnel
remuneration:

(i) Wages/ salaries constitute the primary source of income to employees. Their adequacy or
otherwise would very much determine their standard of living.

(ii) Adequate remuneration is a source of motivation to employees. It makes them committed and
loyal to the organization; and paves way for excellent industrial relations.

(iii) Through making adequate and timely payment of employee remuneration, an employer can
attract and retain good personnel to and in the organization. This helps to ensure a stability of
labour force – bringing several valuable advantages in the wake for the organization.

(iv) Specially, in labour-intensive industries, wages constitute a substantial part of the cost of
production. As such wage payments affects the cost and price-structures of an industrial
enterprise. Prices of goods and services, in turn, have social implications; as these directly affect
the purchasing power of money held by the society.

Wage Policy in India:-

Consist of following components:

(i) Basic Wage/Salary

(ii) Dearness Allowance (D.A) and other allowances like-CCA, HRA, Medical allowance,
Education allowance, Tiffin allowance, Car allowance etc.

(iii) Bonus and other incentives.

(iv) Fringe benefits or Perquisites.

Incentives:- They are the additional payment to the employees besides the payment of wages
and salaries. Often they are linked with productivity either in terms of higher production or
cost saving or both. These incentives may be given on individual basis or group basis.

Fringe Benefits:- They include such benefits that are provide to the employees either having
long term impact like provident fund, gratuity, pension, medical benefit, accident relief,
health &insurance or facilitation in performance of job like uniform, centres, recreation etc.

Prerequisite: They are normally provided to the managerial personnel either to facilitate
their job performance or to retain them in the organisation. Eg: company Car, Club
membership, free residential accommodation, paid holidays trips, stock options, etc.
 Type of Incentives:-

1. Financial Incentives
2. Non Financial Incentives.

1. Financial Incentives- are in direct monetary form or measurable in monetary worth that are
provided to employees to motivate them for better performance. They may be classified on
individual or group basis.

Individual Incentives Group Incentives

Time Based
-Halsey Plan -Priestman Plan
-Rowan Plan -Scanlon Plan
-Emerson Plan
-Bedeam Plan

Output Based
-Taylor Plan
-Merrick Plan
-Gantt Plan

Other financial incentives are: Bonus, Profit sharing, co-partnership, Stock option, cafeteria
compensation plan, etc.

2. Non-Financial Incentives: do not affect employees in monetary terms but motivate them for
higher performance by making life on the job more attractive.

Eg:- Interesting and challenging job, social importance of job status, opportunity for personal
growth, opportunity for promotion, motivational environment over non monetary benefits (casual
dress, birthday wishes etc.)

Advantages of Incentive Plans:

(i) Provide opportunity for hardworking & ambitious workers to earn more.
(ii) Employees are encourages to become innovative. They think & more efficient ways of doing
work.
(iii) Help to improve discipline and industrial relations.
(iv) Costs of supervision are reduced as workers themselves are motivated to work hard &
improve performance.
(v) Sound technique of improved productivity.
(vi) Create a spirit of mutual cooperation and teamwork.

Limitations of Incentive Plans:

(i) In the absence of a ceiling on incentive earnings, workers may overwork and spoil their
health.
(ii) In order to maximize output, workers may sacrifice quality unless strict check is maintained.
(iii) There may be resistance while changing standards and rates.
(iv) Increase in cost & time of clerical work.
(v) Jealously & conflict among workers may arise.

Essentials of a Sound Incentive Plan:

1. Proper Climate- Trust & Understanding

2. Worker’s Participation
3. Scientific Standards
4. Guaranteed Minimum Wage
5. Simplicity
6. Equitable
7. Economical
8. Flexible
9. Prompt Payment
10. Adequate Incentive
11. Ceilings on Earnings
12. Reasonable Standards-neither too low nor too high
13. Grievance Machinery
14. Appraisal System
15. Follow- Up

Fringe Benefits:

Besides base compensation and incentives, employees are provided various types of benefits and
services by the organisation. These benefits and services are not linked to employee’s
productivity but are provided to different classes of employees either as a matter of statutory
requirement or on voluntary basis or a combination of both.

They are called by various names such as ‘fringe benefits’, ‘employee welfare’, ‘wage
supplements,’ ‘subwages,’ supplementary compensation’, ‘social security,’ ‘transpeuniary
incentive’, etc.

Need/Objectives of Fringe Benefits:

1. Employee demands
2. To boost employee morale
3. Improve industrial relations
4. Employee’s preference-goodwill of company
5. Provide qualitative work environment and work life
6. Promote employee welfare-recreation.
7. Meet legislative requirements.
8. To protect health & to provide safety.
9. To provide social security etc.
Types of Fringe Benefits:

1. For Employment Security:- Unemployment, insurance technological adjustment pay,

leave for negotiation, leave for maternity, leave for grievances, holidays, cost of living
bonus, call back pay, lay off pay retiring rooms, jobs of sons/daughters of employees.

2. For health protection:- Accident insurance, Liability insurance, health insurance,

hospitalisation, life-insurance, medical care, sick benefits, sick leave etc.

3. For Old age and Retirement:- Pension, gratuity, P.F., Old age counseling, medical
benefits for retired employees, travelling concession to retired employees, etc.

4. For personnel identification, participation, stimulation- Anniversary awards,

attendance bonus, canteen, Cooperative Credit Societies, educational facilities, housing,
income-tax aid, Counseling, quality bonus, stress counseling, recreational facilities,
safety measures etc.

Fringe Benefits adopted in India:

(i) Payment for time not worked:-

(a) Hours of work

(b) Paid Holidays
(c) Shift Premium
(d) Holiday Pay
(e) Paid Vacation
(f) Maternity Leave
(g) Paid rest periods, waste-up time, lunch periods
(h) Weekly off, Gazeetted holidays, casual leave, sick leave etc.

(ii) Employee Security:-

(a) Retrenchment compensation

(b) Lay-off compensation

(iii) Safety and Health:-

Provisions of Factories Act, 1948 for safe working conditions

Workmen’s Compensation Act, 1923
Health Benefits: Medical services like hospitals, dispensary
Employee State Insurance Act, 1948
Sickness benefit, Maternity benefit, disablement benefit, dependent’s benefit, medical benefit,
etc.
(iv) Welfare and Recreational Facilities:
Canteens, Consumer Societies, Credit Societies, Housing, Legal Aid, Employee counseling,
Welfare organisations, Holiday homes, Educational facilities, Transportation, Parties & Picnics,
and Other benefits like Organising game, Sports with awards, Christmas gifts, Birthday gifts,
Diwali gifts, L.T.C, Performance awards etc.

(v) Old Age and Retirement Benefits:

(a) Provident Fund

(b) Pension
(c) Employee’s Deposit Linked Insurance Scheme
(d) Gratuity
(e) Medical Benefit

(vi) Holidays and Leave Facilities:

(a) Privileged Leave (Vacation)

(b) Sick Leave
(c) Casual Leave
(d) National-Festival holidays
(e) Quarantine Leave
(f) Accident Leave, etc.
 Job Evaluation
Concept:

Job evaluation is an orderly and systematic technique of determining the relative worth of
the various jobs within the organisations so as to develop an equitable wage and salary structure.

Objectives:

(i) To determine equitable wage differentials between difficult jobs in organisations.

(ii) To eliminate wage inequities.
(iii) To develop a consistent wage policy
(iv) To establish a rational basis for incentive and bonus schemes.
(v) To provide a framework for periodic review and review and revision of wage rates.
(vi) To provide a basis for wage negations with trade unions.
(iv) To minimise wage discrimination on the basis of age, caste, gender, region, religion
etc.
(v) To enable management to gange & control payroll costs.

Advantages/Significance:

1. Logical and objective technique of ranking jobs and removing wage inequities.
2. Helps to improve industrial relations and increases employee satisfaction on wage
differentials.
3. Provides clear and objective basis for wage negotiation and collective bargaining.
4. Simplifies wage administration by making wage rates more uniform.
5. Facilitates job redesign by reallocating easy & difficult tasks equally among different jobs.
6. Facilitates better utilization of workforce.
7. Realistic basis for wage fixation because in many cases performance depends on machine than
on worker.
8. Date generated may be used for selection, training and placement of employees.

Limitations:

1. No standard list of factors to be measured and some job factors cannot be measured. So it
lacks scientific precision.
2. It fails to consider some factors which influence value of a job from worker’s point of
view. Eg-Skill, Security of service, Career prospects, social status, nature of supervision
etc.
3. It makes wage and salary structure inflexible. Little provision left for adjusting to
prevailing wage rates & changing conditions.
4. Not suitable for determining the relative worth of managerial jobs, because their skills
cannot be measured in quantitative terms.
5. The system faces resistance from trade unions and workers.
6. Time consuming process.
Process of Job Evaluation:
1. Gaining Acceptance

2. Constituting Job Evaluation Committee

3. Selecting Jobs to be evaluated

4. Describing the jobs

5. Selecting the Method of Evaluation

6. Weighting Job Factors

7. Assigning Money Value

8. Periodic Review

individual abilities or performance of the workers concerned.” The British Institute of

Management has defined job evaluation as “the process of analysis and assessment of jobs to
ascertain reliably their relative worth using the assessment as the basis for a balanced wage
structure.”

Job evaluation needs to be differentiated from job analysis and merit rating. Job analysis is the
process of collecting information relating to a job in terms of duties, working conditions,
supervision etc. It provides the informant for revaluating a job. Therefore, job evaluation is
something more than job analysis. Job evaluation begins with job analysis and ends up with the
classification of jobs according to their worth. A job cannot be evaluated unless and until it is
analyzed.

Job evaluation also differs from merit rating or performance appraisal. Performance appraisal is
the process of assessing the worth of a jobholder whereas job evaluation involves assessment of
the worth of a job. The purpose of job evaluation is to determine basic wage rates for different
jobs whereas the aim of performance appraisal is to determine incentives, and rewards for
superior performance.

5.5 Methods of Job Evaluation

Various methods of job evaluation may be grouped as under

1. Quantitative methods
(a) Point Rating
(b) Factor Comparison
2. Non-quantitative methods
(a) Ranking or Job comparison
(b) Grading or job classification

Job Evaluation vs Performance Appraisal

Job Evaluation Performance Appraisal

1. Evaluation the job and not the job holder. Evaluates job holder on the basis of job
performance.
2. Job is evaluated before the job holder is Evaluation is done after the employee has
appointed. performed the job.
3. Applicable over a no of years. Undertaken every year.
4. Done by a committee of specialists. Done by concerned superiors and other persons
5. Not adopted by all organisations Undertaken by all organisation
6. Basic objective is to measure the relative There are many objectives of appraisal:
worth of a job in comparison to other jobs. wage/salary inc, promotion/demotion, transfer,
assessing training needs.