Unit-1

Concept of HRM

Organizations are made up of people and function through people. Without people
organizations cannot exist. The resources of men, money, materials, and machinery are
collected, coordinated, and utilize through people. These resources by themselves cannot
fulfill the objectives of an organization; they need to be united into a team. It is through
the combined efforts of people that material and monetary resources are effectively
utilized for the attainment of common objectives. Without united human efforts, no
organization can achieve its goals. All the activities of an organization are initiated and
completed by the persons who make up the organization. Therefore, people are the most
significant resource of any organization. This resource is called human resource and it is
the most important factor of production. According to L.F. Urwick, "business houses are
made or broken in the long run not by markets or capital, patents or equipment but by
men." Of all the resources manpower is the only resource which does not depreciate, with
the passage of time.

Human resources are characterized by the following features:

(i) Human resources of an organization are the product of their biological inheritance
and interactions with the environment. Family relationships, religious influences, caste,
or racial background, educational accomplishments and organizational climate influence
the attitudes, behavior, and performance of human beings.

(ii) Human resources are heterogeneous. They consist of many individuals each having a
unique personality, different needs, attitudes, and values. Each has his own physical and
psychological traits. Most of the problems of an organization are people-related
problems. These problems arise from the mistaken belief that people are alike, and they
can be treated identically.

(iii) Human resources are dynamic and behave differently. They react to the same
situation in quite different ways. Even the same individual may behave differently at
two different points of time. It is, therefore, very difficult to predict human behavior.

(iv) Human resources are the most important element in an organization. The effective
utilization of all other resources depends upon the quality of human resources.

Meaning & definition

Human capital has been classified into three categories-intellectual capital, social
capital, and emotional capital.

Intellectual capital consists of specialized knowledge, tacit knowledge and skills,

cognitive complexity, and learning capacity.

Social capital is made up of network of relationships, sociability, and

trustworthiness.

Emotional capital consists of self-confidence, ambition and courage, risk-bearing

ability, and resilience. "

According to Flippo, "Personnel management, or say, human resource management is

the planning, organizing, directing and controlling of the procurement, development,
compensation integration, maintenance, and separation of human resources to the end
that individual, organizational and social objectives are accomplished".

According to The National Institute of Personnel Management (NIPM), “Human

resource/personnel management is concerned with people at work and with their
relationship within an enterprise. Its aim is to bring together and develop into am
effective organization of the men and women who make up an enterprise and having
regard for the well-being of the individuals and of working groups, to enable them to
make their best contribution to its success".

According to Decenzo and Robbins, "HRM is concerned with the people dimension in
management. Since every organization is made up of people, acquiring their services,
developing their skills, motivating them to higher levels of performance and ensuring that
they continue to maintain their commitment to the organization are essential to achieving
organizational objectives. This is true, regardless of the type of organization-government,
business, education, health, recreation, or social action".

Thus, HRM can be defined as a process of procuring, developing, and maintaining

competent human resources in the organization so that the goals of an organization are
achieved in an effective and efficient manner. In short, HRM is an art of managing
people at work in such a manner that they give their best to the organization for achieving
its set goals.

Nature of HRM

a)Comprehensive Function. Human resource management is concerned with

managing people at work. It covers all types of people at all levels in the
organization. It applies to workers, supervisors, officers, managers, and other types of
personnel.

b)People-oriented. Human resource management is concerned with employees as

individuals as well as groups. It is the task of dealing with human relationships within
an organization. It is the process of achieving the best fit between individuals, jobs,
organizations, and the environment. It is the process of bringing people and
organizations together so that the goals of each are met.

c)Action-oriented. Human resource management focuses on action rather than on

record-keeping or procedures. It stresses the solution of human resource problems to
achieve both organizational objectives and employees' personal goals

d)Individual-oriented Under human resource management, every employee is

considered as an individual to provide services and programmers to facilitate employee
satisfaction and growth

e)Development-oriented Human resource management is concerned with

developing potential of employees so that they get maximum satisfaction from their
work and give their best efforts to the organization. It considers the personality,
interests, opportunities, and capacities of employees for this purpose. It seeks to help
the employees to realize their full potential.

f) Pervasive Function. Human resource management is inherent in all organizations

and at all levels. It is not confined to industry alone. It is equally useful and necessary
in government, armed forces, sports organizations, and the like. It permeates all the
functional areas, e.g., production, marketing, finance, research, etc.

g)Continuous Function Management of human resources is an ongoing or never-

ending exercise rather than a 'one shot' function. In the words of Terry, “it cannot be
turned on and off like water from a faucet; it cannot be practiced only one hour each
day or one” day a week. Human resource management requires a constant alertness
and awareness of human relations and their importance in everyday operations”.

h) Future-oriented. Human resource management is concerned with helping an

organization achieve its objectives in the future by providing for competent and Well-
motivated employees. It attempts to obtain willing cooperation of people for the
attainment of the desired objectives.

i) Challenging Function. Managing of human resources is a challenging job due to the

dynamic nature of people. People have sentiments and emotions so they cannot be treated
like machines. It is, therefore, necessary to handle them tactfully. It is not simply
managing people but administering a social system.

j) Science as well as Art. HRM is a science as it contains an organized body of

knowledge consisting of principles and techniques. It is also an art because it
involves application of theoretical knowledge to the problems of human resources. In
fact, handling people is one of the most creative arts.
h) Staff Function. The function of human resource management is advisory in
nature. Human resource managers do not manufacture or sell goods, but they do
contribute to the success and growth of an organization by advising the operating
departments on human resource matters

l) Young Discipline. Human resource management is of comparatively recent origin.

It started in the last part of the 19th century. It is relatively a new specialized area as
compared to manufacturing and marketing.

m)Interdisciplinary. Human resource management involves application of

knowledge drawn from several disciplines like sociology, anthropology, psychology,
economics, etc. To deal with human problems effectively, a manager must depend
upon such knowledge. In modem times, human resource management has become a
highly specialized job.

n) Nervous System. Human resource management is like the nervous system in the
human body. The nervous system is not an adjunct to the body but is inherent in the
whole body and intimately associated with its every movement. Similarly, human
resource management is not an extraneous element to the organization structure.

Evolution of HRM

Phase one : Trade Union Movement Era

The conditions of workers in the aftermath of factory system as an outcome of

industrial revolution were very pathetic. The First World War further worsened their
conditions. This was the period when state intervention to protect the worker’s interest
was felt necessary. The Royal Commission of Labour in India (1911) under the
chairmanship of J.H, Whitley recommended the abolition of the 'Jobber' system and the
appointment of labour officers in industrial enterprises to perform the recruitment
function as well as to settle the worker's grievances. Also, workers started forming their
associations which was subsequently known as 'trade unions' to improve their lots.
Trade Union Act, 1926 was passed in India. The basic philosophy underlying trade
unionism was to safeguard the worker's interest and to sort out of their problems such
as use of child labour, long hours of work and poor working conditions. These unions
used strikes, slowdowns, walkouts, picketing, boycotts, and sabotage as weapons for
the acceptance of their problems. These activities of trade unions gave rises to
personnel practices such as collective bargaining, grievance handling system,
arbitration, disciplinary practices, employee benefit programmes, and installation of
rational and defensible wage structures.

Phase two : Social Responsibility Era

In the, starting decade of 20th century, some factory owners /employers started showing
humanistic approach towards the workers. Robert Owen a British industrialist,
reformer, and humanitarian is considered to be the first to adopt humanistic and
paternalistic approach towards workers. He viewed that the principal social and
economic environments influence the physical, mental, and psychological development
of workers. Therefore, to improve the productivity, it is necessary to improve;
conditions of employees by removing them from an adverse environment with the
provisions of more satisfactory living working conditions. The philosophy underlying
in Owens’s paternistic approach was that worker' is just like a child and owner is just
like a father. Therefore, the owner should take care of a worker just like a father takes
care of his child. Accordingly, Owen himself implemented this philosophy in his cotton
mill at Scotland by introducing facilities such as shower baths and toilets in the factory
premises, model

Phase three : Scientific Management Era.

The concept of scientific management was introduced by Fredrick Winslow Taylor 3 in

the USA early in the 20th century as an alternative to the prevailing system of
management by initiative and incentive. Based on his shop floor job experience, Taylor
developed four principles of scientific management:

1. Development and use of scientific methods in setting work standards, determining a

fair, day's work, and best way of doing work.
2. Scientific selection and placement of workers best suited to perform the various tasks
and Provision of their training and development for maximum efficiency.
3. Clear cut division of work and responsibility between management and workers.
4. Harmonious relations and close cooperation with workers to secure performance of
work in accordance with the planned jobs and tasks.

Taylor developed several techniques to introduce his scientific ideas in management. The
following are the important techniques developed by him:
1. Time study to analyze and measure the time taken in doing the various elements of a
job and to standardize the operations of a job.
2. Motion study involving close observation of the movements required to perform a job
with a view-to eliminates wasteful options and decide on the best way of doing the job.
3. Standardization of tools, equipments and machinery and working conditions.
4. Incentive wage plan with differential piece rate of wages for efficient and inefficient
workmen.
The main contribution of Taylor to management was it led to professionalisation of
management and human engineering. However, some critics criticize his views on the
ground that its focus was more on technology and not on human factor in industry.

Phase four: Human Relations Era

By 1920, it was felt that earlier approaches to human resource management were
incomplete as these did not recognize workers as human beings having their feelings,
attitudes, and needs. It was between 1925 and 1935; many experts expressed their
opinions towards the human aspects of organizational activities. A psychologist namely
Hugo Munster berg in his book

"Psychology and Industrial Efficiency" suggested the use of psychology in selection,

placement, testing and training of employees in an organization. Elton May04 and his
associates conducted a series of experiments from 1924 to 1932 at the Hawthorne
plant of the Western Electric company in the USA.

Based on these findings, the researchers developed a human relations approach to

HRM. It was based on the view that the modem organization is a social system in
which the social environment and inter-personal relations govern the behavior of
employees. The relationship between the superiors and subordinates should relate to
the social and psychological satisfaction of the employees. In ultimate sense, the
objective of human relations approach was to make employees productive, and it was
realized that employee’s satisfaction is the best means of making the employee
productive.

Phase five : Behavioral Science Era.

We have just seen that human relations era assumes that a happy worker is a
productive worker. As a corollary to this, the behavioral science era assumes human
behavior to achieve efficiency in performance. Behavioral approach to HRM is -based
on its findings of intensive research carried out by behavioral scientists belonging to
the disciplines of sociology, social psychology, anthropology, and management
experts. The major contributions made by the behavioral scientists are in the areas of
motivation, leadership, communication, organizational change and development,
organizational culture, and individual and group dynamics. Overall, behavioral science
approach of HRM was concerned with the social and psychological "aspects of human
behavior in organizations.

Some of the important elements of the behavioral approach of HRM are outlined below:

1. Individual behavior is linked with the group behavior. For example, a person be
inclined to resist to change his behavior as an individual. But he will readily do so if the
group to which he belongs, decides to change its behavior.
2. Informal leadership rather than the formal leadership of manager is more effective in
influencing people to achieve standards of performance. From this viewpoint, democratic
leadership style of the manager is more acceptable to the subordinate and hence, more
effective.
3. By nature, people do not dislike work. Most people enjoy .work and are motivated by
self control and self development. In fact, job itself is a source of motivation and
satisfaction to employee.
4. Expanding subordinate influence, self- control and self- direction can improve
operating efficiency.

A system may be defined as a set of interdependent parts forming an organized unit or

entity. The system is defined as " an organized and complex whole: an assemblage or
combination of things or parts forming a complex unitary whole." The parts, also known
as sub-systems, interact with each other and are subject to change. These sub-systems are
inter-related and interdependent. Any working organization usually consists of the
following three broad sub- systems:
1: Technical Sub-system, i.e., formal relationships among the members of an
organization.
2. Social Sub- system, i.e., social satisfaction to the members through informal group
relations.
3. Power Sub-system, i.e., exercises of power or influence by individual or group.
The interaction of the various sub-system forms the total system, there is also interaction
between total system/sub-systems and environment, and Environment itself may
influence or be influenced by the system or sub-system. The system approach is
characterized by the following features:

Input Transformation Output

process

Feedback
 Cycle of system approach

Phase six : Contingency Approach Era. Contingency refers to the immediate

circumstances. Contingency approach believes that there is no one way of managing that
works best in all situations. According to this approach, the best way to manage varies
with the situation. Hence, this approach is also called 'situational approach'. There may
not be one universal way of managing in all situations. A particular approach may yield
fruitful results in one situation but may drastically fail in other situations. Therefore, it is
imperative for managers to analyze different situations and then use the best approach
best suitable in that situation.

Difference between HRM & personnel Management

Dimensions PM. HRM

a. Nature of relations Pluralist Unitarist or neo-unitarist
Perception of Conflict is
b. Conflict is pathological
conflict institutionalized
Beyond contract-
c. Contract Emphasis on compliance
commitment
Culture and values
d. Role of procedures Rules dominated'
dominated
e. Planning perspective Ad hoc, reactive Integrated, proactive
Acceptability of
f. Acceptable Not desirable
unions
g. Level of trust Low . High
h. Key relation Labour-management Customer
i. Management's role Transactional Transformational
J. Basis of job design Division of labour Teams
Line people and general
k. Key people PM-IR specialists
managers
Training &
1 Skill acquisition Learning organization
Development
Reward Standardized job
m Performance related
management evaluation

Functions of HRM

Functions of human resource management may broadly be classified into two

categories, viz.
(a) Managerial functions
(b) Operating functions.
Managerial Functions

Managing people is the essence of being a manager. Like other managers, a human
resource manager performs the functions of. Planning, organizing, directing, and
controlling.
1. Planning. A plan is a predetermined course of action. Planning is the process of
deciding the goals and formulating policies and programmes to achieve the goals.
Planning involves forecasting and research. Forecasting implies scientific anticipation of
the future environment. Human resource management involves forecasting needs for
human resources, predicting trends in labour market, wages, union demands, etc. and
their impact on the organization. Planning helps to successfully face the changes that are
likely to take place in future. It bridges the gap between where we are and where we want
to go. Without planning events are left to chance. Planning is the means to manage
change. Planning today avoids crisis tomorrow.

2. Organizing. To implement the plans, a sound organization structure is required.

Organizing is the process of allocating tasks among the members of the group.
Establishing authority-responsibility relationships among them and integrating their
activities towards the common objectives. In this way a structure of relationships among
jobs. Personnel and physical factors are developed. The right organization structure is the
foundation of effective management because without it the best performance in all other
areas will be ineffective. Organization is the framework through which management
directs. Controls and coordinates the efforts of people.

3. Directing. Directing is the process of motivating, activating. Leading and supervising

people. Directing includes all those activities by which a manager influences the actions
of subordinates. It involves getting others to act after all preparations have been made.
Directing is the heart of the management process because it is concerned with initiating
action. It helps to secure the willing and effective cooperation of employees for attaining
organizational goals. A manager can tap the maximum potential of employees through
proper direction. Directing also helps in building sound individual and human relations in
the organization.

4. Controlling. It implies checking verifying and regulating to ensure that everything

occurs in conformity with the plans adopted and the instructions issued. Such monitoring
helps to minimize the gap between desired results and actual performance. Controlling
the management of human resources involves auditing training programmes analyzing
labour turnover records. Directing morale surveys. Conducting separation interviews and
such other means.
Operative Functions

The operative or service functions of human resource management are the tasks
which are entrusted to the human resource department. These functions are
concerned with specific activities of procuring developing, Compensating, and
maintaining an efficient work force.
1. Procurement Function. It is concerned with securing and employing the right kind
and proper number of people required accomplishing the organizational objectives. It
consists of the following activities:

(a) Job Analysis. It is the process of studying in detail the operations and
responsibilities involved in a job so, as to identify the nature and level of human
resources required to perform the job effectively. Job descriptions and job specifications
are prepared with the help of information provided by job analysis.

(b) Human Resource Planning. It is the process of estimating the present and future
manpower requirements of the organization. Preparing inventory of present
manpower and formulating action programmes to bridge the gaps in manpower.

(c) Recruitment. It is the process of searching for required human resource and
stimulating them to apply for jobs in the organization. A proper balance should be
maintained between the internal and external sources of recruitment.

(d) Selection. It implies judging the suitability of different candidates for jobs in the
organization and choosing the most appropriate people.

(e) Placement. It means assigning suitable jobs to the selected candidates to match
employee qualifications with job requirements.

(f) Induction or Orientation. It involves familiarizing the new employees with the
company, the work environment, and the existing employees so that the new people
feel at home and can start work confidently.

2. Development Function. Human resource development is the process of improving the

knowledge, skills, aptitudes, and values of employees so that they can perform the
present and future jobs more effectively. This function comprises the following activities:

(a) Performance and Potential Appraisal. It implies systematic evaluation of

employees with respect to their performance on the job and their potential for
development.

(b) Training. It is the process by which employees learn knowledge, skills, and attitudes
to further organizational and personal goals.
(c) Executive Development. It is the process of developing managerial talent through
appropriate programmes.

(d) Career Planning and Development. It involves planning the career of employees
and implementing career plans to fulfill the career aspirations of people. It involves
mobility of human resource through promotions and transfers.

3. Compensation Function. It refers to providing equitable and fair remuneration to

employees for their contribution to the attainment of organizational objectives. It consists
of the following activities:

(a) Job Evaluation. It is the process of determining the relative worth of a job.

(b) Wage and Salary Administration. It implies developing and operating a suitable
wage and salary programme. Surveys are conducted to determine wage and salary
structure for various jobs in the organization.

(c) Bonus. It involves payment of bonus under the payment of Bonus Act, 1965 as well
as non-statutory bonus and other incentives.

4. Integration Function. It is the process of reconciling the goals of the organization

with those of its members. Integration involves motivating employees through various
financial and non-financial incentives, providing job satisfaction, handling employee
grievances through formal grievance procedures, collective bargaining, workers'
participation in management, conflict resolution, developing sound human relations,
employee counseling, improving quality of work life, etc.

5. Maintenance Function. It is concerned with protecting and promoting the physical

and mental health of employees. For this purpose, several types of fringe benefits
such as housing, medical aid, educational facilities, conveyance facilities, etc. are
provided to employees. Social security measures like provident fund, pension,
gratuity, maternity benefits, injury/disablement allowance, group insurance, etc. are
also arranged. Health, safety, and welfare measures are designed to preserve the
human resources of the organization.
Scope of Human Resource Management

The scope of human resource management has expanded considerably in recent decades.
Now, techniques and styles of managing human resources, research in behavioral science,
establishment of training institutes, etc. have contributed to the expansion of human
resource function. Human resource management is no longer confined to wage earners in
factories. It has become equally significant in offices. Hospitals, government etc.

According to Dale Yoder the scope of human resource management is very wide.

(i) Setting general and specific management policy for organizational relation-
ships and establishing and maintaining a suitable organization for leadership
and cooperation.

(ii) Collective bargaining, contract negotiation, contract administration and

grievance handling.

(iii) Staffing the organization, finding, getting, and holding prescribed types and
number of workers.

(iv)Aiding in the self-development of employees at all levels providing

opportunities for human resource development and growth as well as for
acquiring requisite skill and experience.

(v) Developing and maintaining motivation for workers by providing incentives.

(vi) Reviewing and auditing manpower management in the organization.

1.The Labour or Human Resource Aspect. It is concerned with manpower

planning, recruitment, selection, placement, induction, transfer, promotion, demotion,
termination, training and development, layoff and retrenchment, wage, and salary
administration (remuneration), incentives, productivity, etc.
2.The Welfare Aspect. This aspect is concerned with working conditions and
amenities such as canteens, crèches, rest rooms, lunchrooms, housing, transport,
education, medical help, health, and safety, washing facilities, recreation, and cultural
facilities, etc.

3. The Industrial Relations Aspect. This is concerned with the company's relations
with the employees. It includes union-management relations, joint Consultation.
Negotiating, collective bargaining, grievance handling, disciplinary actions,
settlement of industrial disputes, etc.

Significance of HRM
The significance of human resource management can be discussed at four levels of
corporate, professional, social, and national.

1. Significance for an Enterprise. Human resource management can help an enterprise

in achieving its goals more efficiently and effectively in the following ways:
(a) Attracting and retaining the required talent through effective human resource
planning, recruitment, selection, placement, orientation, compensation, and
promotion policies.
(b) Developing the necessary skills and right attitudes among the employees through
training, development, performance appraisal, etc.
(c) Securing willing cooperation of employees through motivation, participation,
grievance handling, etc.
(d) Utilizing effectively the available human resources.
(e) Ensuring that the enterprise will have in future a team of competent and dedicated
employees.

2. Professional Significance. Effective management of human resource helps to improve

the quality of work life. It permits teamwork among employees by providing a healthy
working environment. It contributes to professional growth in the following ways:
(a) Providing maximum opportunities for personal development of each employee.
(b) Maintaining healthy relationships among individuals, and different work groups.
(c) Allocating work properly.

3. Social Significance. Sound human resource management has a great significance for
the society. It helps to enhance the dignity of labour in the following ways:

(a) Providing suitable employment that provides social and psychological satisfaction to
people.
(b) Maintaining a balance between the jobs available and the jobseekers in terms of
numbers, qualifications, needs and aptitudes.
(c) Eliminating waste of human resources through conservation of physical and mental
health

4. National Significance. Human resources and their management play a vital role in the
development of a nation. The effective exploitation and utilization of a nation's natural,
physical, and financial resources require an efficient and committed manpower. There are
wide differences in development between countries with similar resources due to
differences in the quality of their people. Countries are underdeveloped because their
people are backward. The level of development in a country depends primarily on the
skills, attitudes, and values of its human resources.

Fig : HRM as Central Subsystem in an Organization.

As the central subsystem, HRM interacts closely and continuously with all other
subsystems of an organization. The quality of people in all subsystems depends largely
upon the policies, programmes, and practices of the HRM subsystem. The quality of
human resources determines in turn the success of an organization.

ROLE OF HRM IN CORPORATE STRATEGIC MANAGEMENT

Throughout the world, HRM is being used to develop competitive advantage and,
therefore, its role in strategic management has been well recognized. "Strategic
management is the continuous process of relating the organization with its
environment by suitable course of action involving strategy formulation and its
implementation.” Strategy is a course of action through which the organization
relates itself with the environment to achieve its objectives. Strategy can be
formulated at the corporate level. SBU level and functional level.

Environmental Activating strategy

Environmental
opportunities and Structural
opportunities
threats and implementation
threats Behavioral
implementation
Functional
Corporate mission Strategic Choice of, Strategy
and objectives alternatives I

implementation

Role of HRM
Corporate strengths Personal values and Acquiring, Developing,
and weaknesses aspirations of Integrating, and
strategists Retaining right
personnel

Fig: Role of HR in strategic Management

HRM function can contribute to strategic plans and actions of the firm in the following
ways

1. Encouragement of Pro-active Rather than Reactive Behavior being proactive

means that the firm has a vision of where it wants to go 10 years hence and has human
resources who help it reach there. Being reactive means confronting problems as they
surface. By being reactive the firm tends to lose sight of the long-term direction. It is
people who can make the firm pro-active or allow it to simply rest on past laurels.
2. Explicit communication of Goals Generally, every firm shall have a goal, and this
must be communicated to all the employees. Everyone should work towards reaching the
goal. BHEL had the objectives of becoming a leader in its chosen area of heavy
electrical. The goal has been spread down the line and according to the CEO, "It is
clearly the zeal of people to work, systematic planning and corporate strategizing every
five years that have made BHEL stand taller."6 The role of HR manager in formulating
goals and communicating it to all is indeed crucial.
3. Stimulation of Critical Thinking Managers often depend on their personal views
and experiences to solve problems and make decisions. The assumptions on which they
make decisions can lead to success if they are appropriate to the environment in which
the firm operates. However, serious problems can arise if the assumptions are no longer
valid. The strategic HRM process can help a firm critically examine its assumptions and
determine whether the decisions that follow from those assumptions need modification or
need to be held back.
To strategies means to think critically. Analytical thinking helps an individual question
established practices, shed shibboleths, search for alternatives, and arrive at right courses
of action. By being part of strategic management process, HR manager can contribute to
the critical thinking process of employees.

4. Productivity as an HR Based Strategy The more productive an organization, the

better is its competitive advantage. Perhaps none of the resources used for productivity in
organizations are as critical as human resources. Many of the HR functions contribute to
productivity. Pay, appraisal systems, training, selection and job design are HR activities
that directly contribute to productivity.

5. Quality and Service are HR-based Strategies Besides productivity; other factors
which contribute to a firm's competitive advantage are quality and customer service.
Quality can come from people, and realizing this firms are spending vast sum of money
on quality training.
6. Proficient Strategic Management That depends heavily on competent personnel,
better-than. adequate competent capabilities and effective internal organization. Building
a capable organization is obviously always a top priority in strategy execution. , Three
types of organization. Building actions are crucial:

Staffing the Organization includes putting together a strong management team and
recruiting and retaining employees with the needed expertise and experience.

Building Core Competencies and Competitive Abilities that will enable effective
strategy execution and then keeping the competence/capability portfolio updated as
strategy and external conditions change.

Structuring the Organization and Work Effort by organizing business functions and
processes, value chain activities and decision making in a manner conducive to
successful strategy execution. The role of HRM in all the three actions is critical.

HRM.Strategies for the New Millennium

1. Right Sizing Human Resources-Manpower audit based on competence mapping in

turn making the organization right-sized.

2. Developing a Learning Culture through Continuous Learning- People were

exposed I latest technology and management technique through workshops, discussions,
and technical session in each department.

3. Web Based Customer Relationship Management-The organization linked its

manufacturing unit with each vital customer through net.

4. Introduction of Open House-The new techniques like 'Open House' system for
employees to ventilate their problems in a forum wherein present were superiors
including directors were introduced.

5. Organization of Executive Leadership Camp to Develop Corporate Pride among

to Employees-The young executives in an organization were taken into a hill station
where they were exposed to yoga, meditation and latest management techniques of team
working Etc. for ten days.

6. Introduction of Willy Korf Innovation Award Scheme-This scheme was to

encourage d employees to generate new ideas in improving the workplace productivity.
In this process employees were lending a contributory hand towards management.
7. Regular Training with a Target of Seven Man-days per Employee-It was made
compulsory for each employee to undergo training at least for 7 days in a year on
different topics identified through training needs analysis.

8. Training Programmes on Areas of Concern-The major areas of concern were

identified through-interaction with technical heads of department and the training is
imparted.

9. Special Programed-four-point programme to enhance shareholders' value through

cap city enhancement, contribution enhancement, reduction in financial cost, enhancing
U value of intangibles were adopted as strategic steps toward achieving business
performance.

Unit-2
Human Resource Planning

"Although human resource planning means different things to different people, general
agreement exists on its ultimate objectives-the most effective use of scarce talent in the
interests of the labor and the organization."
Or
"Manpower planning (HRP) is the process-including forecasting, developing,
implementing, and controlling-by which a firm ensures that it has the right number of
people and right kind of people at the right place, at the right time, doing things for which
they are economically most suitable".
Or
“Specifically, human resource planning is the process by which an organization ensures
that it has the right number and kind of people at the right place, at the right time, capable
of effectively and efficiently completing those tasks that will help the organization
achieve its overall objectives".

Or
"Human resource planning includes the estimation of how many qualified people are
necessary to carry out the assigned activities, how many people will be available, and
what, if anything, must be done to ensure that personnel supply equals personnel demand
at the appropriate point in the future”.

Based on the above definitions, following features of HRP may be identified:

I, HRP is a process which includes various aspects through which an organization tries to
ensure that right people, at right place, and at right time are available.

2. It involves determination of future needs of manpower in the light of organizational

planning and structure. Therefore, it depends heavily on these factors. Determination of
manpower needs in advance facilitates management to take up necessary actions.

3. It also considers the manpower availability at a future period in the organization

Therefore, it indicates what actions can be taken to make existing manpower suitable for
future managerial positions and the gap between needed and available manpower can be
fulfilled.

IMPORTANCE OF HUMAN RESOURCE PLANNING

1. Defining Future Personnel Need. Planning defines future personnel need and this
becomes the basis of recruiting and developing personnel. In its absence, there is
likelihood of mismatch between personnel needed and personnel available. Lack of
systematic HRP has resulted into large scale overstaffing in many public sector
organizations. For example, in Steel Authority of India Limited, there are 170,000
employees and McKinsey & Company, consultancy firm engaged by SAIL to devise its
revival strategy, has suggested pruning of this level to bring it to 100,000. Similar
problem exists in many other organizations. This type of problem exists in many private-
sector organizations and they have gone for voluntary retirement scheme offering huge
compensation. This has happened because of lack of systematic HRP. Lack of systematic
HRP has created another type of problem. Many public-sector enterprises have remained
top-less for a considerable period, prominent ones being Gas Authority of India (27
months), National Hydroelectric Power Corporation (18 months), State Farms
Corporation (17 months), and so on. This is all because of faulty or no HRP. Occurrence
of such phenomena can be avoided by proper HRP.

2. Coping with Changes. In the Indian and international business scenes, fast changes
are taking place. In the Indian context, such changes have been brought by liberalization
of economy. At the international level, there is growing global competition because of the
freedom in international trade initiated by World Trade Organization. Every organization
is trying to compete based on technology and managerial talents which have resulted into
global talent war. In this war, only those companies will survive which adopt a formal,
meticulous HRP. Change in technology has attached more premium to knowledge and
skills resulting into surplus manpower in some areas and shortage in other areas. HRP
helps in creating a balance in such a situation as through this, manpower needs, and
availability can be identified much in advance.

3. Providing Base for Developing Talents. Jobs are becoming more and more
knowledge oriented. This has resulted into changed profile of manpower. For example, in
Larsen and Toubro, MBAs, engineers, and technicians constitute about 70 per cent of its
total employee strength of 20,000. Because of increasing emphasis on knowledge, there
is shortage of certain category of personnel and
there are frequent movements of personnel from one organization to another. The
replacement cost of such personnel is estimated to be 1.5 times of the expenses incurred
on these personnel. 5 Therefore, an organization must be ready to face such an
eventuality by taking proper HRP.

5. Forcing Top Management to Involve in HRM. Systematic HRP forces top

management of an organization to participate actively in total HRM functions, an area
that has been neglected by most of the companies until recently. As we shall see shortly,
if there is active involvement of top management in the preparation of human resource
plans, it is expected to appreciate the real value of human resources in achieving
organizational effectiveness.

Process of Human Resource Management

1. Organizational Objectives, Plans and Policies. The starting point of any activity in an
organization is its objectives which generate various plans and policies which provide
direction for future course of action. Out of this direction, various subsystems of the
organization devise their own plans and programmes. Thus, each subsystem's plans and
programmes are linked to organizational plans and policies. To the extent, this linkage is
not proper; a subsystem's contribution to the achievement of organizational objectives is
adversely affected. This is true with HRP too. While going through the process of HRP.
Therefore. Organizational policies about effective utilization of human resources should
be identified and incorporated in planning process. Specifically, following questions are
important in this regard:
1. Are vacancies to be filled by promotions from within or by hiring from outside?
2. How do the training and development objectives interface with the HRP objectives?
3. What union constraints are encountered in HRP and what policies are needed to handle
these constraints?
4. How to enrich employee's job? Should the routine and boring jobs continue or be
eliminated?
5. How to downsize the organization to make it more competitive?
6. To what extent production and operations be automated and what can be done about
those displaced?
7. How to ensure continuous availability of adaptive and flexible workforce?

2. Human Resource Planning: Taking direction from organizational objectives and

plans and the above policy considerations, human resource plan is prepared. The planning
process consists of two major activities: forecasting needs of human resources and
 forecasting supply of human resources. Both these types of forecasting aim at finding out
the additional requirement of personnel both in terms of quantity and quality-at a future
date.

3. Identification of Human Resource Gap: Forecasting needs for human resources and
forecasting supply of human resources, both taken together, help to identify gap between
human resources needed and their availability. This gap may be in two forms: either there
may be surplus human resources or there may be shortage of human resources.

4. Action Plans: Various action plans are devised to bridge the human resource gap. If
there is surplus of human resources either because of improper HRP in the past or
because of change in organizational plan, such as divestment of business or closing some
businesses because of various reasons, action plans may be devised to prune their size
through layoff, voluntary retirement, etc. If there is shortage of human resources, action
plans may be devised to recruit additional personnel

Organizational objectives,
plans and policies

Forecasting needs for Human Resource Forecasting supply of

human resources Planning human resources

Identification of Human
resource Gap
Surplus human resources Shortage of human
resources

Action plans for bridging

gap
 Fig: Human Resource Planning

Forecasting Demand for Human Resources

1. Management Judgment
2. Work-Study Method
3. Ratio-Trend Analysis
4. Delphi Technique
5. Flow Models
6. Mathematical Models.

1.Management Judgement. This technique is very simple and timesaving. Under this
technique, either a "bottom-up' or a 'top-down' approach is employed for forecasting
future hum resource requirement of an organization. In case of bottom-up approach, line
managers prepare departmental requirements for human resource and submit it to the top
managers for their review. Consideration. In the 'top-down' approach, the top managers
prepare the departmental forecasts which are reviewed with the departmental heads or
managers. However, neither of these approaches is accurate. Forecasts based on these
approaches suffer from subjectivity. This technique is suitable only for small firms or in
those organizations where sufficient data- base is not readily available.

2. Work-Study Method. This method can be used when it is possible to measure work
and set standards and where job methods do not change frequently. In this method, as
used by Fredrick Winslow Taylor9 in his 'Scientific Management', time and motion study
are used to ascertain standard time for doing a standard work. Based on this, the number
of workers required to do standard work is worked out.
The following example illustrates this method.
Planned output for next year
25’000 units
Standard hours per unit 4
Planned hours required for the year (25000 x 4) Productive hours per worker/year (after
allowing normal overtime, absenteeism, and idle time) Number of workers required
1, 00,000
Number of workers required 2,000

Number of workers required ! , 00,000/

2000 = 50

3. Ratio- Trend Analysis. This is one of the quickest forecasting techniques. Under this
method, forecasting for future human resource requirements is made based on time series
data. In other words, this technique involves studying past ratios (e.g., total output!
number of workers, total sales volume! number of salespersons, direct workers, is made
for indirect workers) and based on these, forecasting is made for future ratios. While
calculating future ratios, allowances can be made for expected changes in organization,
methods, and jobs. The demand for human resources is calculated based on established
ratios between two variables.
Production level in 1999-2000 1, 00,000 Units
Number of workers in 1999-2000 100
Ratio 100:1, 00,000 or 1:1,000
Number of supervisors in1999-20000 10
Estimated production in 2000-2001 1,20,000 Units

Number of workers required in 2000-2001 1, 20,000 X 1/ 1,000 =120

Numbers of supervisors required 200-2001 1/10X120=6.

In case, there is change in the employee’s mental and physical health in 2000-2001, the
above estimates need to be revised accordingly to estimate appropriate requirement for
human resources in 2000-200 1.

4. Delphi Technique. Delphi technique is named after the ancient Greek oracle at the
city of Delphi. This is one of the judgmental methods of forecasting human resource
needs. It is a more complex and time-consuming technique which does not allow group
members to meet face-to-face. Therefore, it does not require the physical presence of the
group members. The following steps characterize the Delphi technique.

Job Analysis
Job: In simple words, a job may be understood as a division of total work into
packages/positions. According to Dale Yoder, "Job is a collection or aggregation of
tasks, duties and responsibilities which as a whole, is regarded as a regular assignment to
individual employees and which is different from other assignments". Thus, a job may be
defined as a group of positions involving some duties, responsibilities, knowledge, and
skills. Each job has a demote title based on standard trade specializations within a job.
Each job is different from other jobs like peon, clerk, supervisor, and accountant.
Manager, etc. A job may include many positions. A position is a particular set of duties
and responsibilities regularly assigned to an individual.

Definition of Job Analysis: According to Jones and Decothis , "Job analysis is the
process of getting information about Jobs: specially, what the worker does; how he gets it
done; why he does it; skill, education and training required; relationship to other jobs,
physical demands; environmental conditions".

Edwin B. Filippo has defined job analysis as the process of studying and collecting
information relating to the operations and responsibilities of a specific job. The
immediate products of this analysis-are job descriptions and job specifications".

There are two major aspects of job analysis: These are:

1. Job Description'
2. Job Specification

Job Description
Job description is prepared based on data collected through job analysis. Job description
is a functional description of the contents what the job entails. Thus, job description
differentiates one job from the other. In sum, job description is a written statement of
what a holder does, how it is done, and why it is done. Purposes of Job Description. is
done for fulfilling the following purposes:
• Grading and classification of jobs
• . Placement and Orientation of new employees
• . Promotions and transfers
 • . Outlining for career path
• . Developing work standards
• . Counseling of employees
• . Delimitation of authority

Job Specification
Job specification is a statement of the minimum levels of qualifications, skills, physical
and other abilities ,, experience, judgment and attributes required for performing job
effectiveIy.1n other words it is a statement of the minimum acceptable qualifications that
an incumbent must possess to perform a given job. It sets the knowledge, skills and
abilities required to do the job effectively.

Purposes of job specification

• Personal planning
• Performance appraisal
• Hiring
• Training & development
• Job evaluation and compensation
• Health and safety
• Employee discipline
• Work schedule
• Career planning

Importance of job analysis

Job analysis is useful for the overall management of all personnel activities. Importance
of Job analysis is as follows:

1. Human resource planning: HRP is to estimates the quantity and quality of people for
future. What type of people will be required depends on the job to be filled .Job related
information available through job analysis is, “therefore necessary for human resource
planning.

2. Recruitment and Selection: Recruitment succeeds job analysis. Basically, the goal of
the observation or, human resource planning is to match the right people with the right
job. This is possible only after collection that having adequate information about the jobs
that need to be staffed. It is job analysis that provides job information. Thus, job analysis
serves as basis for recruitment and selection of employees in the organization.

3. Training and Development: Job analysis by providing information about what a job
entails i.e. Knowledge and skills required to perform a job, enables the management to
design the training and development programmes to acquire these job requirements.
Employee development programmes like job enlargement, job enrichment, job rotation,
etc., are also based on job analysis only.

4. Placement and Orientation: As job analysis provides information about what skills
and qualities are required to do a job, the management can gear orientation programmes
towards help in the employees learn the required skills and qualities. It, thus, helps
management place an employee on the job best suited to him/her.

5. Job Evaluation: As mentioned earlier also, job evaluation refers to determination of

relative worth of different jobs. It, thus, helps in developing appropriate wage and salary
structures. Relatively worth is determined mainly based on information provided by job
analysis.

6. Performance Appraisal: Performance appraisal involves comparing the actual

performance an employee with the standard one, i.e., what is expected of him/her. Such
appraisal or assessment serves as basis for awarding promotions, effecting transfers, or
assessing training needs. Job analysis helps in establishing job standards which may be
compared with the actual performance contribution of each employee.

7. Personnel Information: Increasing number of organizations maintains computerized

information about their employees. This is popularly known as 'Human Resource
Information System (HRIS). HRIS is useful as it helps to improve administrative
efficiency and provides decision support. Information relating to human resources
working in the organization are provided by job analysis only.

8. Health & Safety: Job analysis helps in identifying and uncovering hazardous
conditions and unhealthy environmental factors such as heat, noise, fumes, etc. And thus
facilitates management to take corrective action to minimize and avoid the possibility of
accidents.

Process of Job Analysis

Organizational Job analysis

Selection of representative Jobs

Data Collection

Job description

Job Specification
Fig. The Job Analysis Process

1. Organizational Job analysis: This, according to Terry 8, is required to know the

makeup of a job, its relation to other jobs, and its contribution to performance of the
organization. Such information can be had by dividing background information in various
forms such as organization charts i.e., how the job is related to other jobs; class
specifications i.e., the general requirement of the job family; job description!.1 suitable
for jobs to starting point to build the revised job description, and flow charts i.e., flow of
activities involved are not complete job particulars.

2 Selecting Representative Jobs for Analysis: Analyzing all jobs of an organization is

both costly and time consuming. Therefore, only a representative sample of jobs is
selected for the purpose of detailed analysis.

3. Collection of Data for Job Analysis: In this step, job data features of the job and
required qualifications of the employee are collected. Data can be collected either
through questionnaire, observation, or interviews. However, due care should be taken to
select and use the method of data collection that is the most reliable in the given situation
of the job.

4. Preparing Job Description: The job information collected in the above ways is now
used to prepare a job description. Job description is a written statement that describes the
tasks, duties and responsibilities that need to be discharged for effective job performance.

5. Preparing Job Specification: The last step involved in job analysis is to prepare job
specification based on collected information. This is a written statement that specifies the
personal qualities, traits, skills, qualification, aptitude etc. required to effectively perform
a job.
Methods of Job Analysis

1. Personal Observation
Personal observation method of job information collection is quite old and is applicable
mostly in the case of manual jobs. In this method, the job analyst observes the job
performance process by a worker or group of workers. The tasks performed, the pace at
which activities are carried out, the working conditions, the hazards involved, etc., are
observed during a complete work cycle. The information collected is recorded in a
standardized format. This method is appropriate for jobs which involve manual,
standardized and short cycle activities such as mechanic, weaver and other workers
involved in repetitive activities. This method is quite simple but does not disclose the
information relating to mental processes involved in performing the jobs. Therefore, this
method must be supplemented by other methods.

2 Interviews

In this method, the job analyst personally interviews the job holder, his immediate
superior and other persons concerned with the job. Generally, a standardized
interview schedule is prepared covering various aspects of the job under analysis. For
a particular job, the information is collected from several employees to avoid
inconsistencies and to identify the common and critical aspects of the job. The
interview method of information collection can be used for any type of job, both
operative and managerial. It helps in providing information which cannot be collected
by personal observation. However, this method is quite time consuming. This
problem is more acute in the case of collection of information for managerial and
professional jobs which usually require much longer time. As is usual with the
interview method of information collection for any purpose, this method has chances
of bias which may be generated by the interviewer and the job holder. The
effectiveness of interview method depends on the ability of the interviewer to solicit
the relevant information and the ability and willingness of the job holder to provide
such information.

3. Log Records
In the log records method, also known as diary method, a diary or logbook is given to
each job holder in which he records the activities preformed and time taken in
performing each activity. Based on these records, the job analyst collects information
relevant to job analysis. This method provides more accurate information if done
faithfully. However, it is quite time consuming. Further, each job holder may
maintain records according to his own way which presents problems in analysis at
later stage. Therefore, it has limited application.

4. Critical Incidents

In this method, job holders are asked to describe incidents concerning the job based
on their experience. Various such incidents are collected and classified according to
the job areas they describe. The analysis of these incidents provides the information to
distinguish between effective and ineffective behaviors of the job holders on the job.
However, this method requires high skills to analyze the job based on the narration of
various incidents.

5. Checklist
Checklist is like a questionnaire in which various questions are given based on
subjective judgment or prepared based on collection of preliminary information from
supervisors, industrial engineers, and other knowledgeable persons. The job holders
provide information about their jobs by putting ticks on appropriate descriptions. The
questions in the checklist tend to be either of yes or no variety. The information
provided in the form of checklist is analyzed to develop job description. However,
preparation of a checklist is a time-consuming process and requires high skills

6. Questionnaire

In this method, a questionnaire is used to solicit various information concerning job

from the job holders. The questionnaires are filled by the job holders, checked by the
supervisors, and analyzed by the job analyst. The questionnaire generally contains the
questions related to the following aspects of the job:
1. The job title.
2. The job title of the job holder's immediate superior.
3. The job titles and number of persons reporting to the job holder.
4. A brief description of the overall role or purpose of the job.
5. A list of the main tasks and duties that the job holder must carry out.
6. The reS0urce used in carrying out the job.
7. The amount of supervision received, and the degree of discretion allowed in
making decisions.
8. The typical problems to be solved and the amount of guidance available in solving
the problems.
9. The relative difficulty of the tasks to be performed there are certain standardized
questionnaires developed by a few agencies which are used by various organizations
for job analysis.
Most of these questionnaires are of two types: position analysis questionnaire and
management position description questionnaire.

6. Position Analysis Questionnaire. Position analysis questionnaire (PAQ) is a

highly specialized instrument for analyzing a job in terms of employee activities. The
PAQ developed by Purdue University is a comprehensive questionnaire for collecting
information for job analysis. In this questionnaire, various job elements have been
grouped into six categories with each category containing relevant job elements
resulting into 195 elements as shown in Table

Information input 35
Mental processes 14
Work output 49
Relationships 36
Job context 19
Other job characteristics 42
7. Management Position Description Questionnaire

Management position description is a highly structured questionnaire containing 208

items relating to managerial responsibilities, restrictions, demands and other
miscellaneous position characteIistics.These 208 items have been grouped under 13
categories as shown in table:

• Product, marketing, and financial strategy planning.

• Coordination of other organizational units and personnel. 3. Internal business
control.
• Products and services responsibility.
• Public and customer relations.
• Advanced consulting.
• Autonomy of actions.
• Approval of financial commitments.
• Staff service.
• Supervision.
• Complexity and stress.
• Advanced financial responsibility. .
• Broad personnel responsibility

8. Functional Job Analysis

Functional job analysis (FJA) is employee-oriented analytical approach of job analysis.

This approach attempts to describe the whole person on the job. The main features of FJA
include the following:
1. A fundamental distinction is made between what has been done and what need to be
done to get the things done.
2. Jobs are performed in relation to data, people, and things. Data aspect includes
synthesizing. Coordinating. Analyzing, compiling, and computing. Copying and
comparing activities. People aspect relates to monitoring. Negotiating, instructing,
supervising, diverting. Persuading. Speaking signaling, serving, and taking instructions.
Thing’s aspect is concerned with setting up, precision working, operating-controlling,
driving-operating. Manipulating, feeding-off, bearing, and handling. all jobs require
employees to relate data, people, and things to some degree.
3. The levels of difficulty required in dealing with data, people and things are hierarchical
and can be represented by an ordinal scale.

Recruitment – sources and process

MEANING AND NATURE OF RECRUITMENT

According to Edwin B. Flippo, “Recruitment is the process of searching for prospective

employees and stimulating them to apply for the jobs in the organization”.

In other words, the term 'recruitment' stands for discovering the sources from where
potential employees will be selected. Systematic recruitment leads to greater productivity,
higher morale, reduction in labour turnover and better reputation of the concern.

Features of Recruitment

The features of recruitment are as under:

(i) Recruitment is a positive function as it seeks to develop a pool of eligible persons

from which most suitable ones can be selected.

(ii) The basic purpose of recruitment is to locate the sources of people required to meet
job requirements and attracting such people to offer themselves for employment in the
organization.

(iii) Recruitment is a linking activity as it brings together those with jobs (employer) and
those seeking jobs (prospective employees).

(iv) Recruitment is a process or a series of activities rather than a single act of event.

(v) Recruitment is a pervasive function as all organizations engage in recruiting activity.

But the volume and nature of recruitment varies with the size, nature, and environment of
the organisation.

FACTORS AFFECTING RECRUITMENT

There are several factors that affect recruitment. These may be classified into two
categories: (1) Internal Factors

(2) External Factors

1. Internal Factors

The internal factors that influence the recruitment policy are as follows:

(I) Organizational Image. Every person with the right qualifications

wil1 has his own reservations about the kind of jobs he wants to be and
the organisation he likes to work for. If the image of a particular
organisation 111 the public is not good, it may not interest the
qualified and the best applicants, and they may not apply, despite the
organisation performing this function most efficiently.
(II) Personal policies. If the personnel policies of the organisation are not
favourable, they hold no attraction to the prospective applicants and
may in fact encourage them to apply for jobs in such an organisation.
(III) Job attractiveness. Just as image of organisation affects recruitment,
so does the image of the job also .better remuneration and working
conditions make the job attractive.
(IV) Union interference. When the trade unions interference in the matters
of the recruitment and selection ,they force management to hire people
not based on merit but on some extraneous grounds such as friend
,relatives
(V) Size of the organisation. The size if the organisation affects
recruitment process .experience suggests that large organizations find
recruitment less problematic than smaller organizations.

2. External Factors

Following are the external factors that influence the recruitment policy of an
organisation:
(i) Labour Market. Labour market conditions i.e., supply and demand of labour is of
particular importance in affecting recruitment process. For example, if the demand for a
specific skill is high relative to its supply, recruiting employees will involve more efforts.
On the contrary if supply is more than demand for a particular skill, recruitment will be
relatively easier.

(ii) Unemployment Situation. The rate of unemployment in the region or country is yet
another external factor having its influence on the recruitment process, when the
unemployment rate in each region is high; the recruitment process tends to be simpler.
The reason is not difficult to seek. The number of applicants is expectedly very high
which makes easier to attract the best qualified applicants.

(iii) Demographic Factors. The demographic factors of the country's population have
profound influence on recruitment process. Demographic factors include sex, age,
literacy, economic status, etc.

(IV) Legal Factors. The recruitment policy must pursue government's policy regarding
reservation of jobs for candidates belonging to various categories like scheduled castes
(sq, scheduled tribes ,ST) and other backward classes (OBC). Besides this the provisions
of various labour laws should also be allowed. These include:

I, The Child Labour (Prohibition and Regulation) Act, 1986 prohibits employment of
children in certain employments.

2. The employment exchange (Compulsory Notification of Vacancies) Act, 1959

mandates that employers (industrial establishments employing 25 workers each and
above) must notify the vacant position to the employment exchange of their areas.

3. The Apprenticeship Act, 1961.

4, The Interstate Migrant Workman (Regulation of Employment and Conditions of

service) Act, 1979.

SOURCES OF RECRUITMENT

Basically, there are two sources of recruitment:

(a) Internal Sources, I.e., present employees.

(b) External Sources, I.e., workforce outside the organisation.

INTERNAL RECRUITMENT

There are two important internal sources of recruitment, namely,

(I) Transfers: Transfer involves the shifting of an employee from one job
to another. At the time of transfer, it is ensured that
the employee to be transferred the new job can perform It. In fact ,
transfer does not involve any drastic change in the responsibilities and
status of the employee.

(II) Promotions. A promotion is the transfer of an employee. to a job that

pays more money or one that enjoys some preferred status. A
promotion involves reassignment of an employee to a position having
higher pay, increased responsibilities, more privileges, increased
benefits, and greater potential. The purpose of promotions to provide a
vacancy which is worth more to the organisation than the incumbent's
present position.

Advantages of Internal Recruitment

The following advantages may accrue from internal recruitment:

(i) It promotes greater loyalty and morale among the employees.

(ii) It encourages self-development among employees. They look forward to developing

skills for rising to higher posts.

(iii) It creates a sense of security, stability, and continuity of employment.

(IV) It eliminates the chances of hasty decisions.

(v) It is a cheaper source of recruitment as compared to external sources.

Limitations of internal recruitment

These are as below:

(i) When vacancies are filled through internal promotions, the scope for fresh blood
entering the organisation is reduced.

(ii) The employee may become lethargic if they are sure of time bound promotions

(iii) The spirit of competition among the employees may be hampered.

(v) Frequent transfers reduce the overall productivity of the organisation.

(vi) There are possibilities that the internal sources may" dry up". It may be difficult to
find the requisite personnel from within an organisation.

EXTERNAL RECRUITMENT

All the organizations must depend on external sources of recruitment at one time or the
other. The commonly used external sources of recruitment discussed below: I

(i) Factory Gate Hiring

An important source of recruitment is direct recruitment by placing a notice on the

noticeboard of the enterprise specifying the details of the jobs available. The practice of
direct recruitment is followed to fill casual vacancies. The workers thus appointed are
known as budli workers. It is usually many unemployed persons assemble every day at
the gate of every big factory. Whenever unskilled workers are required, the personnel
manager will scrutinize in a general way the workers available and pick' the required
number. This method of recruitment has the following.

(a) It is a direct method of recruitment. It avoids cost of advertising vacancies.

(b) It is the simplest method to fill up casual vacancies.

(c) This source can be easily tapped whenever there is a greater rush of work.

(ii) Advertisement

Advertisement in local or national newspapers and trade and professional journals is

generally used when qualified or experienced personnel are not available from other
sources. Most of the senior positions in industry are filled, by this method when they
cannot be filled from within. The advantage of advertising is that more information about
the organization, job description and job specification can be given in the advertisement
to allow se1f-screening by the candidates. Advertisement gives the management a wider
range of candidates from whom to choose. But its disadvantage is that it brings a. flood of
response, many from quite unsuitable candidates and many applicants, try to woo or
approach the members of the selection body.

(III) Employment Exchanges

Employment exchanges and employment agencies provide a nation-wide service for

getting the required personnel. Employment exchanges in India are run by the
Government. For unskilled, semi-skilled, skilled, clerical posts etc., it is often used as a
source of recruitment. In certain cases, it has been made obligatory for the business
concerns to notify their vacancies to the employment exchange. In the past, employers
used to turn to these agencies only as a last option.

(V) Employee Referrals

The existing employees know both the company and the candidate being recommended.
Hence some companies encourage their existing employees to assist them in getting
applications from persons who are known to them. In certain cases, rewards may also be
given if candidates recommended by them are selected by the company. In addition, the
applicants introduced by friends and relatives may also be used as a source of
recruitment.

(VI) Labour Contractors

This method of recruitment is used for hiring unskilled and semi-skilled workers. The
contractors keep themselves in touch with the labour and bring the workers at the places
where they are required. They get commission for the number of persons appointed
through them. The disadvantage of this system is that if the contractor himself decides to
leave the organization, all the workers employed through him will follow suit.

(VII) Headhunters or Management Consultants

Management consultancy firms help the organizations to recruit technical, professional,

and managerial personnel. They specialize in middle level and top-level executive
placements. They maintain data banks of persons with different qualifications and skills
and even advertise the jobs on behalf of their client to recruit right type of personnel.
These days, professional bodies of accountants, engineers, etc. also help their members to
get suitable placements in industrial organizations.

(VIII) Telecasting

the practice of telecasting of vacant jobs over T.V. (Doordarshan and other channels) is
gaining importance these days. Special programmes like job Watch, Youth Pulse and
Employment News etc. over the T.V. have become quite popular in recruitment for
various types of jobs. The detailed requirement of the job and the qualities required to do
it are publicized along with the profile of the organization where vacancy exists.

(X) Body Shopping

Many hi-tech training institutes have developed their pool, of human resources for the
possible employment. The prospective employers can contact these organizations to
recruit the candidates. In practice, such institutions also approach the prospective
employers for the placement of their human resources. That is why, such institutions are
also called 'body shoppers' and these activities are known as body shopping or leasing.
Body shopping is used mostly for computer professionals.
(XI) Outsourcing

Some employment agencies have started developing human resource pool, by employing
the candidates for themselves. These organizations do not utilize the human resources;
instead, they supply them to various company’s base on their needs on temporary basis.
In other words, the companies, rather than employing human resources can draw then
from these organizations on commission basis. This arrangement is called outsourcing.

Advantage of External Recruitment

The advantages of external sources of recruitment are as under:

(I) External sources provide many applicants. This permits the enterprise to have a free
hand in making the right choice of candidates.

(ii) The enterprise can expect to get fresh, talented candidates from outside. This means
infusion of new blood and new ideas into the enterprise.

(iii) Internal candidates must compete with external candidates for the higher jobs. It
serves as inducement for the existing employees to show better performance.

(iv) Sometimes recruitment from internal sources or promotions creates an atmosphere of

resentment or jealous feelings in the firm. This can be avoided by recruiting from outside
sources.

(v) As compared to internal source, outside source is everlasting and never" dries up."

(vi) External sources are of much significance and provide candidates especially when
suitable candidates from inside the firm are not available, and when the firm is growing
or diversifying.

Limitations of External Recruitment

The limitations of external recruitment are as under:

(i) Recruitment from outside may cause dissatisfaction and frustration among the
existing employees who aspire for promotion.
(ii) External recruitment takes more time than the internal recruitment since the enterprise
must publicize the vacancies and wait for response of prospective candidates.

(iii) The prospective candidates from outside mayor may not be good for the enterprise.
There is no guarantee that the enterprise will be able to attract suitable applicants even
after advertisement and other steps.

(iv) It is very costly to recruit staff from external sources which require funds for
advertising and processing the applications.

METHODS OF RECRUITMENT

Recruitment sources tell us about the places where human resources may he produced,
but recruitment methods or techniques deal with the question of how to tap, these
sources, i.e., what are the ways to procure required candidates from given Sources. As
soon as the personnel manager has determined the qualities required to fill a current
vacancy and has also decided about the possible Sources of recruitment, the next step will
be to contact such candidates. the following methods may be

(1) Direct method

(2) Indirect method
(3) Third party method

Selection

Selection is a critical process as it requires money to get right types of people. If the right
types of persons are not chosen, it will lead to huge loss of the employer in terms of time,
effort, and money. Therefore, it is essential to devise a suitable selection procedure. Each
step in the selection procedure should help in getting more and more information about
the applicants to facilitate decision-making in selection.

Definition: Selection involves a series of steps by which the candidates are screened for
choosing the most suitable persons for vacant posts.
Distinguish features of recruitment and selection:

Basis Recruitment Selection

Meaning It is a process of searching candidates for It is the process of selection
vacant jobs and making them apply for the of right types of candidates
same.
Nature It is a positive process as it stimulates people It is a negative process as it
to apply for vacant jobs. leads to rejection of
unsuitable candidates
Aim Its aim is to attract more and more Its aim is to pick up the
candidates for vacant jobs. most suitable people for the
vacant jobs.
Procedure The firm notifies the vacancies through The firm asks the
various sources and distributes application candidates to pass through
forms to candidates. several stages such as filling
of form, employment test,
interview, medical exam,
etc.
Contract of No contractual relation is created. Selection follows
service Recruitment implies recruitment and it leads to a
contract of service between
the employer and the
employee.
There is no restriction upon the number of Only a certain number of
Number candidates are selected candidates are selected.

Significance of selection:

The selection procedure must be designed carefully because errors committed at the time
of selection may prove to be very costly. If selection process is faulty, absenteeism will
be too high, and the rate of labour turnover will also be higher. Whenever unsuitable
candidates are appointed, the efficiency of the organization will go down. Such persons
will shirk work and will absent themselves from the work more often. In many cases,
unsuitable employees must leave their jobs. This will lead to waste of time, energy, and
money in hiring such employees. The training cost incurred on them will also go waste.
Proper selection and placement of personnel will keep the rates of absenteeism and
labour turnover low and will increase the morale of the employees. If the employees are
quite suitable according to the requirements of the jobs, they will show higher efficiency
and will enable the organization to achieve its objectives effectively. Scientific selection
and placement of personnel will go a long way towards building up a stable workforce. It
will keep the rates of absenteeism and labour turnover low and will increase the
productivity. If the employees are suitable according to the requirement of the job, they
will show higher efficiency and productivity. It will also enable the organization to
achieve its objectives effectively.

Selection process:

Process of selection always vary from organization to organization and even department
to department according to the kind of the job to be filled .Thus every organization will
design the selection procedure that suits its requirements. However, the stages or steps
could be incorporated in the selection procedure are as follows:

1. Preliminary interview
2. Reviewing applications
3. Screening applications
4. Employment test
5. Employment interview
6. Checking references
7. Physical examination
8. Final selection

1. Preliminary Interview:
In many organizations, the selection process, particularly for executive posts, begins with
preliminary interview. The preliminary interview generally brief and does the job of
eliminating the totally unsuitable candidates. The preliminary interview offers advantages
not only to the organization but also to the applicants. If an applicant is eliminated at this
stage, the organization will be saved from the expenses of processing him through the
remaining steps of the selection procedure and the unsuitable, candidate will be saved
from the trouble of passing through the long procedure. Preliminary interview may take
place across the counter in the organization’s employment office. It may consist of a
short exchange of information with respect to organization’s interest in hiring and the
candidate’ inquiry. It may serve primarily to determine whether it is worthwhile for the
applicant to fill in an application blank. Candidates who pass this screening are usually
asked to fill in the application blank.

2. Reviewing application:
Whenever there is a vacancy, it is advertising or enquiries are made from the suitable
sources, and applications are received from the candidates .Standard application form is
to give to the to the candidates on request .It gives the general information about the
candidates. The written information about age, qualification experience, etc. may prove
to be of greater value to the interviewers. It makes the processing of applications very
easy since there is uniformity of filling the data in the application form.

3. Screening of Applications:
After the applications are received, they are screening committee, and a list is prepared of
the candidates to be interviewed. Applicants may call for interview on some specific
criteria like sex, desired age group, experience, and qualifications. The screened
applications are then reviewed by the personal manager and interview letters are
dispatched by registered post or under certificate of post.
All applications received must be scrutinized by the screening committee of Personnel
Department to eliminate those applicants who do not fulfill job requirements. For
example, where the minimum qualification for a job is B.Com. a person possessing B.A.
degree (who might have applied for the job) will be out rightly rejected. After the
screening of applications is completed, a list is prepared of the candidates to be called for
various tests or direct interview. The applicants may be called for tests or interview on
some specific criteria like sex, desired age group, experience, and qualifications. The
number of candidates to be called for tests or interview is normally five to seven times
the number of posts to be filled up. The screened applications are then reviewed by the
Personnel Manager and letters for tests or interview are dispatched by registered post.

5. Employment Tests
Employment tests are used to get information about the candidate which is not available
from the application blank or interview. They help in matching the characteristics of
individuals with the vacant jobs to employ right type of personnel. The following types of
tests l1ave gained 'popularity in industry these days. .
(a) Intelligence tests.
(b) Achievement tests.
(c) Aptitude tests.
(d) Personality tests.
(e) Interest tests.

6. Employment Interview
Generally, application blank and employment tests do not provide the complete
information about the candidates required for their selection or rejection. Interview may
be used to secure more information about the candidates. The main purposes of an
employment interview are:

(a)To find out the suitability of the candidate.

(b)To seek more information about the candidate, and
(c)To give the candidate an accurate picture of the job with details of terms and
conditions and some idea of organization policies and' employer-employee relations. The
occasion, i.e., personal meeting between the panel of interviewers and the candidate may
also be used for testing certain qualities and capabilities of the candidate.
The coverage of the interview may include:
(a) Experience and education,
(b) Previous employment,
(c) Gaps in employment history,
(d) Information on health, financial and domestic matters,
(e) Marital status, if likes and dislikes,
(g) Expected level of achievement, extracurricular activities, and so on. However,
interview is not a foolproof tool of selection. It may suffer from the following drawbacks
or limitations:
(a) Interview is an expensive device and, sometimes, it is interpreted as having greater
meaning and validity than is justified.
(b) Interview can test only the personality of the candidate and not his skills and ability
for the job.
(c) Interview depends too much on the personal judgment of the interviewers which may
not always be accurate. Prejudice may affect the results of the interview.
(d) The interviewers may not be experts and may not be able to extract maximum
information from the candidate.

7. Checking References:

An applicant may be asked in the application blank to supply two types of references
(a) Character reference, and
(b) Experience reference.
The references may be requested to provide information regarding behaviors of the
applicant. A notable limitation of this method is that it lacks standardization and
objectivity. It is natural in case of character reference to give names of references of only
those persons who would always write favorably for the applicant. It is very rare to get a
frank opinion about the candidate, even after giving art assurance to the referee that the
information supplied will be kept confidential.

8. Medical Examination:

Certain jobs require unusual stamina, strength, or tolerance of hard-working conditions.

A physical examination reveals whether a candidate possesses these qualities. It brings
out deficiencies, not as a basis of rejection but as a positive aid to selective placement as
indicating restrictions on his transfer to other positions. After a candidate has cleared the
above hurdles, he is asked to go through a medical examination by a panel of doctors
appointed by the employer for this purpose.
According to Dale Yoder, "Physical examination should disclose the physical
characteristics of the individual that are significant from the standpoint of his efficient
performance of the job he may enter or of those jobs to which he may reasonably expect
to be transferred or promoted.

9. Final selection and appointment letter:

After a candidate has cleared all the hurdles in the selection procedure, he is formally
appointed by issuing an appointment letter.

REQUIREMENTS OF EFFECTIVE SELECTION

Selection process will be called effective of it can provide right kinds of persons for the
vacant jobs in minimum time and at a minimum cost. The requirements of effective
selection process are as under:

1. Simple and dear. Selection process should be easy and clear so that the candidate may
know what hurdles he will have to cross before final selection.
2. Unbiased. Selection process should be unbiased so that right person alone is selected.
If the selection is biased it damages interest of the organization and persons not selected
will have poor opinion about it.
3. Nature of job. Selection process should be designed considering the nature of jobs to
pick up right kinds of people.
4. Flexible. Selection process should be such as could be changed according to the need.
For instance, if employees are required immediately then the long selection process
should be curtailed.
5. Economical. Selection process must be quite economical. To make it economical,
unnecessary tests be eliminated from the process. It will save both money and time.
6. Complete Information. Selection Process should make available all necessary
information about the applicant. In this way alone qualified persons would be available.

Employment Test
Concept: The use of tests is, perhaps, the most controversial of all personnel procedures.
Attitudes range from those who place complete reliance on test scores to those who
refuse even to consider their use and instead-prefer to place complete reliance on their
own personal judgment of the applicants. In practice, neither point of view is realistic. No
personnel manager ever expects to provide perfect prediction because even the most
comprehensive battery of tests gives only a small sample of an individual behavior.

SIGNIFICANCE OF EMPLOYMENT TESTS

1. Employment tests have become widely accepted in the selection process. However,
these should be considered simply as a step and not a replacement of the other phases of
the selection processes. The real value of the tests lies in eliminating those applicants
who have very little chance of job success than in selecting applicants who will be
successful on the jobs.
2. The existence of individual differences provides the basis for the selection tests. People
in a group will vary considerably in terms of their relative work efficiency and
performance. There are psychological and other tests which measure the extent of
differences among people.

3. Tests are given to the individuals on the assumption that there is a direct and important
relationship between the possession of one or more of these qualities and the individual's
ability to do certain jobs. This relationship enables to predict the candidate's eventual job
performance.

4. Tests reduce the costs of selection and placement because many applicants can be
evaluated within a short period of time. If an employer expects to continue in a
competitive business, the costs of hiring plus the costs of training must be maintained.

5. Psychological tests can reduce the costs of hiring people who will be successful by
measuring their aptitude and predicting their success.
6. Tests can help to uncover talent that may otherwise be over-looked, and the ability
required for the present job. Another advantage is that a great deal of information about a
person can be collected in a relatively short period of time by using tests.

BENEFITS OF EMPLOYMENT TESTS

The employment tests can offer the following advantages to the employee:

(i) A test is an objective and standardized sample of certain qualities. It

eliminates biasness in the selection of personnel.

(ii) Tests can identify talents of individuals which might be overlooked

by other methods
(iii) Tests reduce the costs of selection and placement because large
number of applicants can be evaluated within the least possible time.

(iv) Psychological tests can measure the aptitude of candidates and predict
their success

(v) Tests provide a healthy basis for comparing applicants' background and
compel the interviewers to think through their evaluation more carefully.

LIMITATIONS OF TESTS

Employment tests are often criticized on the following grounds:

(i) Tests measure only a part of the total information needed to make accurate
selection. This criticism would be justified if tests were the selection method
used. Tests are rarely used as the only selection method

(ii) The objective should be to maximize accuracy in selection by choosing proper

combination of methods.

(iii) Sometimes, tests cannot make prediction of chances of success off applicant
 because he was nervous. But this is valid only when the test results for the
entire group are not valid. However, research data regarding till validity is
lacking.

(iv) No test can measure with guarantee. Remembered that tests have been
devised which do measure far complex functions and faculties.

TYPES OF TEST:

(a) Intelligent Test: These tests are used to Judge the mental capability of applicants.
They measure the individual learning abilities, i.e., ability to understand instructions and
ability to make decision and judgment. So many verbals as well as non-verbal
intelligence tests constructed by the experts for different jobs. Intelligence tests are
widely used in the selection of person for almost every kind of job from the unskilled to
the skilled.

(b) Aptitude Tests. Aptitude means the potential which an Individual required to do a
job efficiently. Aptitude tests measure a learning capacity and his potential for
development. There are two general type of aptitude test:

(a) Cognitive: which measure mental aptitude.

(b) Motor test: Which measure physical dimensions

d) Interest Tests: Interest tests identify patterns of interests that is areas in which the
individual shows special concern: fascination and involvement. These tests will suggest
what types of jobs may be satisfying to the employees. Interest tests are more often used
for vocational guidance also. They help the individuals in selecting occupations of their
interest.

(e) Personality Tests: Personality tests probe the qualities of the personality, the
combination of aptitude, interest and usual mood and temperament. It is very difficult to
devise and use personality tests because they are concerned with discovering clues to an
individual's value system, his emotional reactions, maturity, etc.

(f) Proficiency Test: proficiency tests are those which are designed to measure the skills
already acquired by the individuals. They are also known as performance, occupational or
trade tests. A trade test takes a sample of individual’s behavior which is designed as
replica of the actual work situation such as typing.

EMPLOYMENT INTERVIEW

Concept

According to Julius Michael, "An interview is a face-to-face, oral, observational and

personal appraisal method". Usually, it is more than a means of getting information it
involves

(I) Giving information that will help the applicant make up his mind about the company

(ii) Giving advice that may serve to change the mental attitude of the interviewee since
talking with others is such a familiar experience, perhaps the interview is apparently a
simple, but essentially a very difficult and intricate part of the selection procedure.

In interview, the candidate must appear before the interviewer or a group of interviewers.
The candidate's overall personality is judged in the interview. The interview may last for
10 to 20 minutes or even more. Various questions are asked to the candidate to judge is
ability, knowledge, capacity and so on. The best candidates are decided after such
interview. Interviewing technique is used in all companies and in the case of all
categories of staff to be recruited. However, selection is not exclusively dependent on the
interview. Grades received in the employment tests, previous background of the
candidate, and reference checks are also important in the final selection of the candidate.

TYPES OF INTERVIEW

(I)PATTERED OR STRUCTURED INTERVIEW: in this interview, a series of

questions which can illuminates the significant aspects of the applicant's background are
used and standardized in advanced. Answers to these questions are compared with a
critical score and used in determining who is to be selected.
(II) UNSTRUCTURED OR NON –DIRECTED INTERVIEW: The interviewer does
not ask direct and specific questions. He tries to create an atmosphere in which the
candidate feels free to talk on the subject selected by the interviewer. The interviewer is
basically passive listener as he

avoids making value judgment interrupting the candidates and revealing his opinion.

(III) STRESS INTERVIEW: In this type of interview applicant are putted in stress by
interrupting or criticizing the viewpoint and keeping silent after he has finished his
speaking. This type of interviews used for selecting managerial jobs.

(IV)GROUP INTERVIEW: In this type of interview is taken in a group. Reactions of

applicants in dealing with each other can be seen by the interviewer. It is used where it is
essential to know how the candidates behave in groups.

SIGNIFICANCE OF INTERVIEW IN SELECTION

The following points bring about the importance of interview in the selection of
personnel:

I. Since the candidate is physically present; the interviewers get an opportunity to

evaluate various aspects of his personality. In fact, they get the whole view of the
candidate and this facilitates selection process, the physical features of candidates are
clearly visible in the interview.

2 In the interview, the candidate is asked various questions. Such questions relate to his
field of education and experience. The knowledge, ability to speak, manners, aptitude,
likings, etc. are visible to the interviewers. This enables the interviewers to judge the
candidates correctly.

3. The mental and social make-up of the candidate is manifested in the interview. It,
therefore, acts as a tool for scientific selection. This suggests that interview is a useful
and popular element in the selection process,

4. Many companies do not follow elaborate selection procedure as it is cost and time-
consuming. They can rely on interview if it is properly planned an administered.

LIMITATIONS OF INTERVIEW

Personal interview is perhaps the most widely used method for selection employees. But
it has certain limitations also as discussed below

1. Interview is an expensive device.

2. Interviewer’s judgment regarding an applicant is always affected by list of available

applicants. For example, a good person looks better in contrast to a group of average
or below –average.

3. Information’s from interviews is not integrated or discussed in systematic manner.

4. Interviewer’s judgment is always affected by perception errors.

5. Interviewer may make snap judgment early in the interview. Consequently, they
block out further potentially useful in information.
PROMOTION

Definition: “A promotion is the transfer of an employee to a job that pays more money or
one that enjoys some preferred status”. A promotion involves reassignment of an
employee to a position having higher pay, increased responsibilities, more privileges,
increased benefits, and greater potential. The purpose of a promotion is to provide a
position which in general, is worth more to the organization than the incumbent's present
position.
According to Pagers and Myers, "PROMOTION IS THE ADVANCEMENT OF AN
EMPLOYEE TO A BETTER JOB-BETTER IN TERMS OF GREATER
RESPONSIBILITIES, MORE PRESTIGE OR STATUS, GREATER SKILL, AND
ESPECIALLY INCREASED SCALE OF PAY OR SALARY."

Promotion vs. Up gradation

Promotion means advancement of an employee to a higher post with greater
responsibilities and higher salary, better service conditions and thus higher status. When
the salary of an employee is increased without corresponding change in job status, it is
called upgrading. The job itself may be Upgraded to a higher scale of pay or if there are
variable scales of pay for the same job according to the skill required, upgrading may
mean moving to changing the job. But promotion involves a change in salary, grade of
job and status. Both promotion and upgrading are devices used by management to reward
employees for better performance and to increase their morale. They generate in the
employees a sense of loyalty toward organization.

Importance of Promotion

(I) To recognize an individual's performance and reward him for his work so that he may
have an incentive to forge ahead. Employees will have little motivation if better jobs are
reserved for outsiders.
(ii) To promote job satisfaction among the employees and give them an opportunity
motivation, for unbroken, continuous service.
(iii) To increase an employee's organizational effectiveness, and employee loyalty.
(iv) To build up morale, loyalty, and a sense of belonging on the part of the employees
when it is brought home to them that they would be promoted if they deserve it.
(v) To create among employees a feeling of contentment with their present conditions
and encourages them to succeed in the company.
(vi) To reduce discontent and unrest among the employees.
(vii) To develop a competitive spirit among the employees for producing better
performance.
Promotions have a salutary effect on the satisfaction of the promoted person's needs for
esteem, belonging and security.

Promotion vs. Recruitment from outside

Sound personnel policy requires at least a minimum percentage of vacancies to higher
positions should be referred for promotion from within the enterprise. If the persons of
required skill, ability and caliber are available, such vacancies will be filled through the
internal candidates.

Advantage
The merits of the policy of internal promotion are as follows:
(a) The internal candidates having intimate knowledge of the organization can handle the
new jobs easily
(b) It will Increase the morale of the employees.
(c) It will ensure sincere effort on the part of employees because they know that they may
rise to senior positions by promotions.
(d) The costs of training the insiders on the senior posts will be less.

Disadvantage
The policy of filling up higher posts from among the internal candidates may be
associated with the following drawbacks:
(a) Better qualified outsiders may not be reached by the management. Moreover, the
person promoted to a senior job may not possess the required qualities. ..
(b) The mobility of manpower is restricted. Once a man joins an organization, he will
stick to that organization. Employee turnover to a certain extent is good for the health of
the organization.
(c) In promotion, there may be clash between factors like seniority and ability. The
decisions may lead to favoritism.
(d) Further growth of the business is hindered by the old talent. The entry of fresh talent
into the organization will be restricted.

Basis of Promotion-Merit vs. Seniority

Merit base Promotion

Management often shows greater preference for use of merit as the basis of promotion.
Merit as the basis of promotion has the following advantages:
(1) Merit as the basis of promotion, offers maximum inducement for improvement.
Employees know that competence is the only basis for getting promotion. The result is
that employees earnestly desire to increase their competence and ability and thus become
eligible for promotion.
(b) Promotion based on merit motivates the employees having potential for development.
(c) Merit based on promotion ensures that efficiency of the organization is maintained.
(d) Merit based promotion policy also attracts young and promising candidates to apply
for jobs in the organization. This infuses fresh blood into the organization.

Ability of the employees may be judged by written or oral examinations, personal

interviews, and their records of performance.

Limitations of Merit base promotion:

1) Ability criteria ignore the value of experience.
2) Since there is no fool-proof method of judging the ability of an employee, it is
likely to lead to faulty judgment. The judgment varies from individual to
individual.
3) An employee may be considered able and fit for promotion by one rater but not
by the other. It may also lead to abuse of power and favoritism on the part of the
management, which will result in unhealthy employer-employee relationships.

Seniority base Promotion

Seniority may be used as the basis of promotion to overcome difficulties and problems
associated with merit-based promotion. Seniority means length of service put in by an
employee. Seniority is objective and verifiable while merit is subjective and generates
favoritism.

Advantage

The advantages of using seniority as the basis of promotion are listed below:
(1) Promotion will be made as a matter of course and every employee will know his place
in the promotion list.
(b) Respect for elders is a part of cultural value system in several societies. Seniority as
the mode of employee promotion is consistent with such cultural value system of the
society.
(c) There will be no chance of favoritism or dispute regarding promotion. The
measurement of seniority is simple as well as exact.
(d) It will reduce labor turnover as the employees feel secured about their promotion.
(e) It will increase the morale and productivity 6f employees. It will also promote their
loyalty towards the organization.

Promotion based on seniority may have certain adverse effects also.

The beginner will have no incentive to improve his performance because he knows there
is no chance of his promotion until all those seniors to him leave the organization or are
promoted. This will hamper the development of those who have aptitude and capacity to
improve their performance because they will feel that whatever may be their
performance, it will neither reduce the chances of their promotion in the due course nor
help them in securing earlier than due.
Seniority cum Merit. The sound promotion policy should be based on both the
considerations, i.e., seniority and ability. An employee who is best fitted for an
immediate promotion may not necessarily have the greatest long-term potential. That
means, the most deserving candidate now may seem to be a senior employee who can
move only one more step up the promotional ladder, but it may be better to promote a
junior man who may eventually advance to higher management.

Length of service only

After excluding the truly Incompetent, select the
senior
Minimum length of service required before can be
considered for promotion
Select the most meritorious only of 'head &
shoulders'
Above the long service employees
From the most able, select the senior
Merit and ability only
 Figure: Spectrum of Merit and Seniority in Promotion

TRANSFER

According to Dale Yoder, “A transfer involves the shifting of an employee from one
job to another without special reference to changing responsibilities or
compensations”.
Transfer means shifting of an employee from one job to another, one unit to another or
one shift to another and may involve a new geographical location. Transfers may be
initiated by the organization or by the employee with the approval of the organization.
Transfers have several objectives, such as moving employees to positions with a higher
priority in terms of goals, placing employees in positions more appropriate to their
interests or abilities or filling department vacancies with employees from overstaffed
department.
A transfer is a horizontal or lateral movement of an employee from one job to another. As
a result of change in job, pay, status and job conditions of new position or job are almost
the same as that of the old. In case of promotion, the new position has higher pay, status,
and job conditions as compared with the old. A transfer may be associated with a higher
pay, but it is counterbalanced by changes in other conditions. For instance, a person may
be transferred to a hilly area and may be offered hill allowance.

Transfer V5. Promotion

The distinction between transfer and promotion will be further clear by going through the
following points:
(I) Promotion generally implies an upward elevation of an individual in terms of job
responsibilities, pay scale and status. It represents an advancement and going up a step in
the career ladder. It is a case of upward mobility which most of the employees seek for
their career advancement. But transfer refers to a lateral shift of an individual from one
job position to another on the same occupational level and pay scale.
(ii) Promotion represents recognition of and reward for merit, good performance and
behavior, loyal service, or the length of time, and so on. It tends to improve satisfaction
of the person promoted and to induce him to perform better.
Transfer does not have these implications. Considerations of merit and seniority do not
generally enter transfer matters; there may however be some instances where an
employee with good performance is transferred to another unit to utilize his skills more
meaningfully. .
(iii) Promotion involves thoughtful managerial decision, but transfer is a routine
administrative matter.

Purpose and Importance of Transfers

In modern organizations, transfers are made to achieve the following objectives:

(I) Meeting Organizational Needs, A company may transfer employees due to changes
in volume of production, in technology, in schedule, in product line in organization
structure, in market conditions; etc. is filling in of the vacancies which may occur
because of separations or because of the need for suitable adjustments in business
operations. In short, the purpose of transfers is to stabilize employment in the
organization.

(ii) Meeting Employees' Requests Transfers are also done at the request of the
employees. Employee may need transfers to satisfy their desire to work under a different
superior in a department/region where opportunities for advancement are bright, in or
near their native place, doing a job where the work itself is challenging etc. Many
employees seek transfer because of family related issues such as marriage or illness.

(iii) Better Utilization of the Employees An employee may be transferred because the
management feels that he is not performing satisfactorily and adequately and when the
management feels that he may be more useful or suitable elsewhere, where his capacities
would be better utilized.
(iv) Developing All-rounder, the employees may be transferred to different jobs to
widen their knowledge and skills. In some companies, transfers are made as a matter of
policy after an employee has stayed on a job for a specified period. Such rotation from
one job to other serves as a tool of developing versatile workers.

(vi) Manpower Adjustments. The employees may be transferred from a plant where
there is less work to a plant where there is more work. Thus, the employees who have
been in service of an organization are not thrown out of employment but adjusted
elsewhere.
(vi) Avoidance of Conflicts. Where employees find it difficult to get along with
colleagues in a particular section or department, they could be shifted to another place to
reduce conflicts.

(vii) Punishing the Employees. Transfers may be made an indiscipline measure. The
employees indulging in undesirable activities may be transferred to remote, far flung
areas.

(viii) Relief to the Employee. Transfers may be made to give relief to employees who
are overburdened or doing hazardous jobs for long periods. Transfer may also be made to
break the monopoly of the employee. The climate to a place may be unsuitable for an
employee's health. He may request a transfer to another place on health ground.

(ix) Tenure System. In senior administrative services of the Government and in

industries, the employees hold certain jobs for a fixed tenure.

Types of Transfer:

(i) Production Transfers: Such transfers are resorted to when there is shortage
of manpower in one department and there is surplus manpower in the other.
Thus, production transfers are made from one department which is overstaffed
to the department where manpower needs have increased, or vacancies have
 occurred through separations. Such transfers prevent layoffs, from the
overstaffed department.

(ii) Remedial Transfers: In case an employee does not feel comfortable on his
job, he may be transferred to some other job, His initial placement might be
faulty; his health might have gone down, he may not be getting along with his
supervisor or workers, he might have developed personal friction with his
boss or fellow employees. As the name suggests remedial transfer is made to
rectify the situation caused by faulty selection and placement procedures. For
instance, if the initial placement of an individual is faulty or he cannot adjust
on a job, a transfer to another more appropriate job is desirable. This will act
as a follow up measure of selection and placement procedure and will help the
employee.

(iii) Shift Transfers: In case of industrial concerns, there are normally three shifts.
Usually, these shifts are rotating. In case shifts are not rotate some employees
may be transferred from one shift to another.

(iv) Inter-plant transfer: This may be either to oblige a good worker by moving
him to the plant of his choice or to punish a worker moving him to the plant
which may be far away from his residence.

Separation

An employee is said to be separated from the organization when his service agreement
with the organization comes to an end because of one reason or the other. Separation can
arise from
(I) Resignation, (ii) dismissal, (iii) retirement, and (iv) lay-off.

Resignation
When a separation is initiated by the employee himself, it is termed as resignation. There
are resignations which are avoidable and others which are unavoidable. The personnel
manager should investigate the real causes of resignations and try to escape avoidable
resignations because investment in recruitment, selection and training of the employees is
lost due to resignations.
Sometimes, there are unavoidable and amicable resignations such as those for reasons of
marriage (very frequent in case of girls) or for entering a different career. In any case, it
is better to conduct "Exit Interview" to obtain data for analyzing causes of turnover. Such
interviews may be conducted by responsible persons from the personnel department.
These interviews also serve some additional purposes, such as making certain that the
employee leaving the organization has fully handed over the charge to somebody else and
that the employee understands the disposition of his various benefit programmers.

Discharge or Dismissal

Discharge or dismissal involves separating an employee from the payroll for violation of
organization rules or for inadequate performance. Discharge is often labeled capital
punishment for the employees and so is considered a drastic step. It must therefore be
resorted to with great care and must be supported by a just and sufficient cause.
Dismissal can be done on the ground of unsatisfactory performance or misconduct on the
part of the employees. Unsatisfactory performance refers to persistent failure on the part
of the employee to perform his assigned duties as per standards laid down by the
management. Misconduct refers to willful violation of organizational rules and
regulations by the employees. It can reduce indiscipline, insubordination and dishonesty
and so constitutes the major cause of dismissals. Whatever may be the cause of dismissal,
it should be resorted to as a last.

Retirement

Majority of the employees are separated from the organization by way of retirement.
Every organization should have clear-cut rules as to retirement and should help the
employees in adjusting after retirement. Employees, who have rendered services to the
organization for several years, expect the organization to provide for their future, when
they have retired. Retirement may take place in any of the following ways:

a) Compulsory Retirement: An employee must retire compulsorily after attaining the

specified age .In government office the retirement age varies from 55 to 60. But in
case of private organizations, employees may be given extension until they are
suitable to do the work.

b) Premature Retirement: An employee may retire before attaining the specified age
age due to bad health, physical disability, family problem, and etc.He gets the
full benefit of retirement provided the management allows premature retirement.

c) Voluntary Retirement: When an organization wants to cut down its operations or

to close forever, to its employees with a certain minimum service for voluntary
retirement in return for a lump sum payment. This type of retirement is called as
Golden Handshake.

Layoff

The purpose of lay-off is to reduce the financial burden on the organization if the
workforce cannot be utilized profitably. Lay-off involves temporary removal from trey
payroll of the surplus people. According to Section 2 (kkk) of the Industrial Disputes Act,
1947, lay-off means the,” refusal or inability of an employer on account of shortage of
coal, power or raw materials or accumulation of stocks, breakdown of machinery
or by any other reason to give employment to a workman whose name is borne on
the muster rolls”. Thus, the features of a lay-off are as under:
(a) There must be failure or refusal or inability of the employer to continue to employ
workers in his employment.
(b) The workers laid off must be on the muster ro11s of the establishment on the date of
lay-off.
(c) The reasons for lay-off must be shortage of coal. raw material or power or
accumulation of stocks or break down of machine or for other similar reasons.
(d) The emergency leading to employer's inability must be temporary.
(e) Employer and employee relationship does not come to an end but is merely suspended
during the period of emergency.

Lay-off leads to termination of an employee when there is no work in the organization. It

may be temporary or permanent. In case of a temporary layoff, the employee will be
ca11ed back whenever there is work for him. The term 'lay-off' should be distinguished
from the term’s 'suspension' and ' discharge'. Suspension implies disciplinary action taken
against an employee
to penalize him for undesirable behavior.

The duties of the employer as regard lay-off are as follows:

a) The layoff must be for the reasons specified in section 2(kkk)

b) The compensation for lay-off must be at the rate and for the period specified in
specified in section 25-c of the Industrial Disputes Act.
c) The employer must maintain a muster roll of workmen and to provide for the
making of entries therein by workmen who may present themselves for work at
the establishment at the appointed time during normal working hours.

Compensation for lay-off:

According to section 25 c of the Industrial Disputes Act , a workman who is laid-off is

entitled to compensation equivalent to 50 percent of the total basic wages and dearness
allowance for the period of lay-off.

(1) He is not a badli worker or a casual workman.

(2) His name should be born on the muster rolls of the establishment
(3) He should have completed not less than one year of continuous service under the
employer.

When is workman not entitled to lay-off Compensation?

The provision of section 25-E provide certain exceptions to the general rule for the
payment of layoff compensation. In the following cases, a worker is laid –off will not be
entitled to claim compensation.

1.If a laid off workmen refuses to accept refusal to accept alternative employment
provided that such alternative employment is in the same establishment from which he
has been laid-off, in any other establishment belonging to the same employer situated in
the town or village within a radius of five miles and it carries the same wages etc.

2. Absence from the establishment

If the workman does not present himself at the appointed time during normal working
hours at least once a day.

3. Strike or go slow
If lay off is due to strike or slowing down the production on the part of the workman in
another part of the establishment.

Retrenchment

Definition: It means permanent termination of an employee’s service for economic

reasons in going concerned, i.e., running industrial unit.

Termination of the employee on account of disciplinary action, or prolonged illness

or retirement and superannuation, or expiry of agreement or on disclosure of the
establishment does not constitute retrenchment.

RETRENCHMENT IS TERMINATION DUE TO REDUNDANCY OF

WORKFORCE

The Industrial Dispute Act lays down the following conditions for retrenchment:
 1) one month notice should be given to employee in writing with reason of
retrenchment
2) employee must be paid compensation equal to 30days’ wages for every
completed year of service
3) Notice to appropriate government authority
4) Fresh employee should be given preference for retrenchment
5) Retrenched workers should be given preference in future
6) Three months’ notice should be given to seek prior approval of the government
(establishment employing 100 or more workers)

Unit-3
TRAINING AND DEVELOPMENT

Human resource development has in recent years become the focus of attention of
planner’s policy makers and administrators. Human resource development may be
defined as the process of increasing the knowledge, skills, and capacities of people. It is
important not only for an enterprise but for a nation to develop its human resources. A
country can develop only when its human resources are developed through health,
nutrition, education, training, and research. At the enterprise level, employee training and
executive development are main areas of human resource development.

Concept of Training

Training is the process of increasing the knowledge and skills for doing a particular job.
It is an organised procedure by which people learn knowledge and skill for a definite
purpose. The purpose of training is basically to bridge the gap between job requirement
and present competence of an employee. Training is aimed at improving the behaviour
and performance of a person. It is a never ending or continuous process. Training is
closely related witheducation and development but needs to be differentiated from these
terms.Training and Education. Training should be distinguished from education."Training
is any process by which the aptitudes, skills -and abilities ofemployees to perform
specific jobs are increased. On the other hand, education is the process of increasing the
general knowledge and understanding ofemployees".Thus, education is wider in scope
and more general in purposethan training. Training is job-oriented or occupational having
an immediate impact.

The utilitarian objective and the major burden of training falls upon the employers.
Training is vocational whereas education is general and major burden of education falls
on the Government. Education is person-oriented while training is joo-oriented. Training
is essentially practical consisting of knowledge and skills required to perform specific
tasks. On the contrary, education is theoretical consisting of concepts aimed at
stimulating analytical and creative faculties of the individual.
Education generally refers to formal instruction in a school or college, whereas training is
often imparted at the workplace. However, it is difficult in practice to differentiate
between education and training because in many cases both occur simultaneously. There
is some education in all training and in all education, there is sornetraining. The two are
complementary and both involve development of talent and human potential.
Employee training is distinct from management development. Training is a short-term
process utilising a systematic and organised procedure by which non-managerial
personnel learn technical knowledge and skills for a definite purpose. It refers to
instructions in technical and mechanical operations like operation of a machine. It is
designed primarily for non-managers. It is for a short duration and for a specific job-
related purpose.

On the other hand, development is a long-term educational process utilising a systematic

and organised procedure by which managerial personnel learn conceptual and theoretical
knowledge for general purpose. It involves philosophical and theoretical educational
concepts, and it is designed for managers. It involves broader education, and its purpose
is long-term development.
In the words of Compbell, "training courses are typically designed for a short-term, stated
set purpose, such as the operation of some piece(s) of machinery while development
involves a broader education for long-term purposes.
Training involves helping an individual learn how to perform his present job
satisfactorily. Development involves preparing the individual for a future job and growth
of the individual in all respects, Development complements training because human
resources can exert their full potential only when the learning process goes far beyond
simple routine.

Training Development

1. Training means learning skills and Development means the growth of an

knowledge for doing a particular employee in all respects. It shapes attitude.
job. It increases job skills.

2. The term ‘training’ is generally used The term ‘development’ is associated with
to denote imparting specific skills the overall growth of the executive
among operative workers and
employees.
Executive Development seeks to develop
3. Training is concerned with competence and skills for future
maintaining and improving current performance. Thus, it has a long-term
job performance. Thus, it has a perspective
short-term perspective.

Development is career centred in nature

4. Training is job-centred in nature.

5. The role of trainer or supervisor is All development is’self-development’. The

very important in training. executive must be internally motivated for
self-development.

Training is required on account of the following reasons:-

1. Job Requirements: Employees selected for a job might lack the qualitications
required to perform the job effectively. New and inexperienced employees require
detailed instruction for effective performance on the job. In some cases, the
experience, attitudes, and behaviour patterns of experienced personnel might be
inappropriate to the new organisation. Remedial training should be given to such
people to match the needs of the organisation. New employees need to provided
orientation training to make them familiar with the job and the organisation

2. Technological Changes: Technology is changing very fast. Now automation and

mechanisation have are being increasingly applied in offices and service sector.
Increasing use of fast changing techniques requires training into new technology.
For instance, staff in public sector bank is being trained due to computerisation of
banking operations. No organisation can take advantage of latest technology
without well-trained personnel. New jobs require new skills. Thus, both new and
old employees require training.

3. Organisational Viability: To survive and grow an organisation must continually

adopt itself to the changing environment. With increasing economic liberalisation
and globalisation in India, business firms are experiencing expansion, growth, and
diversification. To face international competition, the firms must upgrade their
capabilities. Existing employees need refresher training to keep them abreast of
new knowledge. Training programmes foster the initiative and creativity of
employees and help to prevent obsolescence of skills. An organisation can build
up a second line of command through training to meet its future needs for human
resources. Trained staff is the most asset of a company.

4. Internal Mobility: Training becomes necessary when an employee moves from

one job to another due to promotion and transfer. Employees chosen for higher
level jobs need to be trained before they are asked to perform the higher
responsibilities. Training is widely used to prepare employees for higher level
jobs. Thus, there is an ever-present need for training people so that new and
 changed techniques may be taken advantage and improvements in old methods
are affected. Need for training has increased due to growing complexity of jobs,
increasing professionalisation of management, growing uncertainities in the
environment, global competition, growing aspirations, vast untaped human
potential, ever-increasing gap between plans and results and suboptimal
performance levels.

Importance of Training

A well planned and well executed training programme can provide the following
advantages:

1. Higher Productivity: Training helps to improve the level of performance.

Trained employees perform better by using better method of work. Improvements
in manpower productivity in developed nations can be attributed in no small
measure to their educational and industrial training programmes.

2. Better Quality of Work: In formal training, the best methods are standardised
and taught to employees. Uniformity of work methods and procedures helps to
improve the quality of product or service. Trained employees are less likely to
make operational mistakes.

3. Less Learning Period: A systematic training programme helps to reduce the time
and cost involved in learning. Employees can more quickly reach the acceptable
level of performance. They need not waste their time and efforts in learning
through trial and error.

4. Cost Reduction: Trained employees make more economical use of materials and
machinery. Reduction in wastage and spoilage together with increase in
productivity help to minimise cost of operations per unit. Maintenance cost in also
reduced due to fewer machine breakdowns and better handling of equipments.
Plant capacity can be put to the optimum use.
5. Reduced Supervision: Well-trained employees tend to be self-reliant and
motivated. They need less guidance and control. Therefore, supervisory burden is
reduced and the span of supervison can be enlarged.

6. Low Accident Rate: Trained personnel adopt the right work methods and make
use of the prescribed safety devices. Therefore, the frequency of accidents is
reduced. Health and safety of employees can be improved.

7. High Morale: Proper training can develop positive attitudes among employees.
Job satisfaction and morale are improved due to a rise in the earnings and job
security of employees. Training reduces employee grievances because
opportunities for internal promotion are available to well trained personnel.

8. Personal Growth: Training enlarges the knowledge and skills of the

participants. Therefore, well trained personnel can grow faster in their career:
Training prevents obsolescence of knowledge and skills. Trained employees are a
more asset to any organisation. Training helps to develop people for promotion to
higher posts and to develop future managers.

9. Organisational Climate: A sound training programme helps to improve the

climate of an organisation. Industrial relations and discipline are improved.
Therefore, decentralisation of authority and participative management can be
introduced. Resistance to change is reduced. Organisations having regular training
programmes can fulfil their future needs for personnel from internal sources.
Organisational stability is enhanced'because training helps to reduce employee
turnover and absenteeism. Training is an investment in people and, therefore,
systematic training is a sound business investment. In fact, "no organisation can
choose whether or not to train employees ,.the only choice left to management is
whether training shall be haphazard, casual and possibly misdirected or whether it
 shall be made a carefully planned part of an integrated programme of personnel
administration".

Benefits of Training to Employees

Training is useful to employees in the following ways:

• Self-confidence: Training helps to improve the self-confidence of an employee. It

enables him to approach and perform his job with enthusiasm.

• Higher Earnings: Trained employees can perform better and thereby earn more.

• Safety: Training helps an employee to use various safety devices. He can handle
the machines safely and becomes less prone to accidents.

• Adaptability: Training enables an employee to adopt to changes in work

procedures and methods.

• Promotion: Through training employee can develop himself and earn quick
promotions.

• New Skills: Training develops new knowledge and skills among employees. The
new skills are an asset of an employee and remain permanently with him.

Types of Training

Training is required for several purposes. Accordingly training programmes may be of

the following types:

Orientation training: Induction or orientation training seeks to adjust newly appointed

employees to the work environment. Every new employee needs to be made fully
familiar with his job, his superiors, and subordinates and with the rules and regulations of
the organisation. Induction training creates self-confidence in the employees. It is also
known as pre-job training.
It is brief and informative.
Job training: It refers to the training provided with a view to increase the knowledge and
skills of an employee for improving performance on the job. Employees may be taught
the correct methods of handling equipment and machines used in a job. Such training
helps to reduce accidents, waste, and inefficiency in the performance of the job.

Safety training: Training provided to minimise accidents and damage to machinery is

known as safety training. It involves instruction in the use of safety devices and in safety
consciousness.

Promotional training: It involves training of existing employees to enable them to

perform higher level jobs. Employees with potential are selected and they are given
training before their promotion, so that they do not find it difficult to shoulder the higher
responsibilities of the new positions to which they are promoted.

Refresher training: When existing techniques become obsolete due to the development
of better techniques, employees must be trained in the use of new methods and
techniques. With the passage of time employees may forget some of the methods of
doing work. Refresher training is designed to revive and refresh the knowledge and to
update the skills of the existing employees. Short-term refresher courses have become
popular on account of rapid changes in technology and work methods. Refresher or re-
training programmes are conducted to avoid obsolescence of knowledge and skills.

Remedial training: Such training is arranged to overcome the shortcomings in the

behaviour and performance of old employees. Some of the experienced employees might
have picked up appropriate methods and styles of working. Such employees are
identified, and correct work methods and procedures are taught to them. Remedial
training should be conducted by psychological experts.

DIAGRAM
Identification of Training Needs
• Organizational Analysis
• Task Analysis
• Human Resource
Analysis
~

Setting Training Objectives

Organization of Training
Programme
• Trainee and Instructor
• Period of Training
• Training Methods and
Material

Evaluation of Training Needs

Identifying Training Needs

All training activities must be related to the specific needs of the organisation and the
individual employees. A training programme should be launched only after the training
needs are assessed clearly and specifically. The effectiveness of a training programme
can be judged only with the help of training needs identified in advance. To identify
training needs, the gap between the existing and required levels of knowledge, skills,
performance, and aptitudes 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.

1. Organisational Analysis: It involves a study of the entire organisation in terms of its

objectives, its resources, resource allocation and utilisation, growth potential and its
 environment. Its purpose is to determine where training emphasis should be placed
within the organisation. Organisational analysis consists of the following elements:

(a) Analysis of objectives: The long term and short-term objectives and their relative
priorities are analysed. Specific goals and strategies for various departments and sections
should be stated as a means for achieving the overall organisational objectives. General
objectives need to be translated into specific and detailed operational targets. It is also
necessary to continuously review and revise the objectives in the light of the changing
environment.

(b) Resource Utilisation Analysis: The allocation of human and physical resources and
their efficient utilisation in meeting the operational targets are analysed. In order to
examine in detail, the inputs and outputs of the organisation, efficiency indices may be
developed. These indices will help to determine the adequacy of specific workflowsas
wellas the contribution ofhuman resources.
(c) Organisation Climate Analysis: The prevailing climate of an organisation reflects
the members attitudes. It also represents management's attitude towards employee
development. Without adequate management support, and appropriate supervisory styles
a training programme cannot be successful. Analysis of organisation climate can reveal
the strengths and weaknesses also.
(d) Environmental Scanning: The economic, political, technological, and socio-cultural
environment of the organisation is examined. This is necessary to identify the
environmental factors which the organisation can influence and the constraints which it
cannot control.

2. Task or Role Analysis: It is a systematic and detailed analysis of jobs to identify job
contents, the knowledge, skills, and aptitudes required and the work behaviour. On the
part of the job holder particular attention should be paid to the tasks to be performed, the
methods to be used, the way employees have learnt these methods and the performance
standards required of employees. Also called operations analysis, its purpose is to decide
what should be taught. Questionnaire, interviews, personnel records, reports, tests,
observation and other methods can be used to collect information about jobs in the
organisation.
3. Manpower Analysis: In this analysis the persons to be trained and the changes
required in the knowledge, skills and aptitudes of an employee are determined. First of
all, it is necessary to decide whether performance of an individual is substandard, and
training is needed. Secondly, it is determined whether the employee is capable of being
trained. Thirdly, the specific areas in which the individual requires training are
determined. Lastly, whether training will improve the employee's performance or not is
determined. Other alternatives to training e.g., modifications in the job, new equipments
or processes, etc., should also be considered. Personal observation, supervisory
evaluation, work samples, diagnostic tests and performace reports provide the
information needed to choose from these alternatives. Training can be relevant and viable
if the three 'types of analysis given above are carried on continuously. Moreover, these
analyses should be integrated in a carefully designed and executed programme.

Training Objectives

Once the training needs are identified, the next step is to set training objectives in
concrete terms and to decide the strategies to be adopted to achieve these objectives. The
overall aim of a training programme is to fill in the gap between the existing and the
desired pool of knowledge, skills, and aptitudes. Objectives of training express the gap
between the present and the desired performance levels. Definition of training objectives
in both quantitative and qualitative terms will help to evaluate and monitor the
effectiveness of training. Involvement of top management is necessary to integrate the
training objectives with the organisational objectives.

The main objectives of training may be defined as follows:

• to impart to new entrants the basic knowledge and skills required for efficient
performance of definite tasks.
• to assist the employees to function more effectively in their present positions by
exposing them to the latest concepts, information and techniques and developing
the skills they would require in their particular fields.
 • (e) to build up a second line of competent officers and prepare them to occupy
more responsible positions.
• to broaden the minds of senior managers through interchange of experience
within and outside to correct the narrow outlook caused due to over specialisation.

The above objectives may be classified in terms of learning levels e.g., motor skills,
adaptation level, interpersonal understanding, and values. These may alternatively be
classified into status quo objectives, corrective objectives, problem solving objectives,
and innovative objectives. According to Harris, "training of any kind should have as its
objective the redirection or improvement of behaviour so that the performance of the
trainee becomes more useful and productive for himself and for the organisation of which
he is a part". In other words, training objectives should be stated in terms of changes
required in behaviour and performance. While setting training objectives, the following
criteria may be used:

• Nature and size of the group to be trained

• Roles and tasks to be coined out by the target group
• Relevance, applicability, and compatibility of training to the work situation
• Identification of the behaviour where change is required
• Existing and desired behaviour defined in terms ratio, frequency quality of
interaction, repetitiveness, innovations, supervision, etc.
• Operational results to be achieved through training e.g., productivity, cost,
down time, creativity, turnover, etc.
• Indicators to be used in determining changes from existing to the desired level
in terms of ratio and frequency.

Designing a Training Programme

To achieve the training objectives, an appropriate training policy is necessary. A training

policy represents the commitment of top management to employee training. It consists to
rules and procedures concerning training. A training policy is required
 • to indicate the company's intention to develop its employees.
• to guide the design and implementation of training programmes.
• to identify the critical areas where training is to be given on a prioritybasis; and
• to provide appropriate opportunities to employees for their own betterment.

A sound training policy clearly defines the following issues:

• The results expected to be achieved through training

• The responsibility for the training function
• The priorities for training
• The type of training required
• The time and place of training
• The payments to be made to employees during the training period
• The outside agencies to be associated with the training
• Relationship of training to the company's labour policy.

Once training objectives and policy are decided, an appropriate training programme can
be designed and conducted. Decisions on the following itemsare required for this
purpose.

Responsibility for Training: Training is quite a strenuous task which cannot be

undertaken by one single department. The responsibility for training must be shared
among

• The top management who should frame and authorise the basic training policy,
review and approve the training plans and programmes, andapprove training
budgets.
• The personnel department which should plan establish and evaluate instructional
programmes.
• The line supervisor who should implement and apply the various developmental
plans.
 • The employees who should provide feedback, revision, and suggestions for
improvements in the programme.

To be effective, a training programme should be properly organised. But good

organisation alone is not adequate, proper planning and training is equally important.

Selecting and Motivating the Target Group: It is necessary to decide who is to be

trained - new or old employees; unskilled or semiskilled workers, supervisors, or
executives. The type and methods to be used will depend upon the type of persons to be
trained. It is also necessary to create a desire for learning. The employees will be
interested in training if they believe that it will benefit them personally. Trainees will
change their behaviour if they become aware of better ways of performing and gain
experience in the new pattern of behaviour so that it becomes their normal manner of
operation. A climate conducive to leaving can also be created through physical and
psychological environment. Physically an appropriate location, adequate space, proper
lighting and ventilation, adequate furniture, and audio-visual aids are necessarv.
Psychological environment consists of involvement and participation, freedom of social
interaction, open communication, friendly and helpful trainers, provision for measuring
learner's progress, etc.

Preparing the Trainers: The success of a training programme depends to a great extent
upon the instructors or the resource persons. The trainer must know both the job to be
taught and how to teach it. He should have an aptitude for teaching and should employ
the right training techniques.

Developing Training Package: This step involves deciding the content of training,
designing support material for training, and choosing the appropriate training methods.
Training courses may involve specific instructions in the procedures of doing a job. A
training course may cover time periods ranging from one week to a few months. In
addition to deciding the contents, methods and time required, it is advisable to workout
budget for alternative training packages to facilitate choice. Such a training package
should also contain a detailed syllabus with proper sequencing of contents, and an
appropriate mix of training methods. Support material for training may include study
notes, case studies, pamphlets, charts, brochures, manuals, movie' slides etc.

Presentation: This is the action phase of training. Here the trainer tells, demonstrates,
and illustrates to put over the new knowledge and operations. However, before it, the
learnier should be put at ease. It is necessary to explain why he is being taught to develop
his interest in training. The learner should be told of the sequence of the entire job, the
need for each
step in the job, the relationship of the job to the total workflow, etc. Instructions should
be clear and complete. Key points should be stressed upon and one point should be
explained at a time. Audio-visual aids should be used to demonstrate and illustrate, and
the trainee should be asked to repeat the operations. He should also be encouraged to ask
questions to ensure that he really knows and understands the job.

Performance Tryout: The trainee is asked to do the job several times slowly. His
mistakes are corrected and if necessary, the complicated steps are explained again. As
soon as the trainee demonstrates that he can do the job sightly, he is put on his own and
the training is over.

Followup: In this step, the effectiveness of the training programme is assessed. The
feedback generated through follow up will help to reveal weaknesses or errors if any.
Necessary corrective action can be taken. If necessary, Instruction may be repeated, until
the trainer learns whatever has been taught to him. Follow up action reinforces the
learning process. It also helps in designing future training programmes.

Training Methods and Techniques: The methods employed for training of operatives
may be described as under:

On-the-job Training (OJT): In this method the trainee is placed on a regular job and
taught the skills necessary to perform it. The trainee learns under the guidance and
supervision the superior or an instructor. The trainee learns by observing and handling the
job. Therefore, it is called learning by doing. Several mehtods are used to provide on the
job training e.g., coaching, job rotation, committee assignments, etc. A popular form of
on-the-job training is Job Instruction Training (JIT) or step by step learning. It is widely
used in the United States to prepare supervisors. It is appropriate for acquisition or
improvement of motor skills and routine and repetitive operations. The JIT involves the
following steps:

• Preparing the trainee for instruction. This involves putting the trainee at ease,
securing his interest and attention, stressing the importance of the job; etc.
• Presenting the job operations or instructions in terms of what the trainee is
required to do. The trainee is put at work site and each step of the job is
explained to him clearly.
• Applying and trying out the instructions to judge how far the trainee has
understood the instructions.
• Following up the training to identifyand correct the deficiencies, if any.

JIT method provides immediate feedback, permits quick correction of errors, and
provides extra practice when required. But it needs skilled trainers and preparation in
advance.

Merits: The main advantage of OJT is that the trainee learns on the actual machine in use
and in the real environment of the job. He gets a feel of the actual job. Therefore, he is
better motivated to learn and there is no problem of transfer of training skills to the job.
Secondly, this method is very economical because no additional space, equipment,
personnel, or other facilities are required for training. The trainee produces while he
learns.' Thirdly, the trainee learns the rules regulations and procedures by observing their
day-to-day applications. Fourthly, this is the most suitable method for teaching
knowledge and skills which can be acquired through personal observation in a relatively
short time. It is widely used for unskilled and semi-skilled jobs e.g., machinist, clerical,
and sales jobs. Fifthly, line supervisors take an active part in training their subordinates.

Demerits: In on the job training, the learner finds it difficult to concentrate due to noise
of the actual workplace. Secondly, this method is often haphazard and unorganised. The
superior or experienced employee may not be a good trainer. Thirdly, in this method the
trainee may cause damage to costly equipment and materials. On the job training is,
however, the most widely used and accepted method of training. It is suitable for all
levels of employees, workers, supervisors, and executives. It is appropriate for teaching
knowledge and skills which can be learnt in a relatively short period of time and where
only a few persons are to be trained on the job.

To make on the job training successful, some conditions must be satisfied. (a) what and
how to teach should be carefully decided, (b) the instructor should be carefully selected
and trained, and (c) a definite followup schedule should be used to judge the results of
training.

2. Vestibule Training. In this method a training centre called vestibule is set up and
actual job conditions are duplicated or simulated in it. Expert trainers are employed to
provide training with the help of equipment and machines which are identical with
those in used at the workplace. Merits: The main advantage of vestibule training is
that the trainee can concentrate'on learning without disturbance of the workplace
noise. Secondly, the interest and motivation of the trainee are high as the real job
conditions are duplicated. Thirdly, this method is essential in cases where on the job
training might result in a serious injury, a costly event, or the destruction of valuable
equipment and material e.g., aeronautical industry. Fourthly, correct method can be
taught effectively by the trained instructor who knows how to teach. Fifthly, it
permits the trainee to practice without the fear of being observed and indicribed by
the superior/co-worker. Lastly, it is a very efficient method of training many
employees of the same kind of work at the same time. This method is also useful
when it is not advisable to put the burden of training online supervisors and when a
special coaching is needed. It is often used to train clerks, bank tellers, inspectors,
inactive operators, testers, typists, etc.

Demerits: Vestibule training is the most expensive method because of additional

investment in classroom, equipment, and expert trainers. Secondly, the training situations
is somewhat artificial, and the trainee does not get a feel of the real job. Thirdly,
separation of training from the supervisory responsibilities may lead to problems in the
organisation.
Apprenticeship Training: In this method, theoretical instruction and practical learning
are provided to trainees in training institutes. In India, the Government has established
Industrial Training Institute (ITIs) for this purpose. Undr the Apprenticeship Act 1962
employers in specified industries are required to train the prescribed number of persons in
'designated trades'. The aim is to develop allround craftsmen. Generally, a stipend is paid
during the training period. Thus, it is an "earn when you learn" scheme.

Merits: The main advantage of this method is that it combines theory and practice.
Secondly, the trainee acquires skills which are valuable in the job market. Thirdly,
apprenticeship programmes provide skilled workforce to industry.

Demerits: Apprenticeship training is time consuming and expensive. Many persons leave
the training programme midway as the training period ranges from one year to five years.
Apprenticeship training is the oldest method of traning.It is particularly suitable for
scanning crafts and technical trades wherever job proficiency is the result of a relatively
long training period. Draughtsman, machinist, printer, tool maker, pattern designer,
mechanic, carpenter, weaver, fitter, jeweler, engraver, electrician, etc are examples of
such areas.

Classroom Training. Under this method, training is provided in company classrooms or

in educational institutions. Lectures, case studies, group discussions, and audio-visual
aids are used to explain knowledge and skills to the trainees. Classroom training is
suitable for teaching concepts and problem-solving skills. It is also useful for orientations
and safety training programmes. Some companies maintain their own training institutes
or schools. Special training courses are designed e.g., management course for foremen,
computer course for typists, etc. Courses in retraining and upgrading may also be
conducted. Small firms depend on outside schools and courses.

Internship Training: It is a joint programme of training in which educational

institutions and business firms cooperate. Selected candidates carry on regular studies for
the prescribed period. They also work in some factory or office to acquire practical
knowledge and skills. This method helps to provide a good balance between theory and
practice. But it involves a long time due to slow process. This method of training is used
in professional work e.g., MBBS, CA, ICWA, Company Secretaries, etc. 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. Evaluation enables an organization to
monitor the training programme and to update or modify in future programmes of
training. The evaluation of training also provides useful data based on 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 and 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.

Evaluation Criteria: Evaluation of training effectiveness is the process of obtain ing

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. Training effectiveness can be measured in terms of the following
criteria:

• Reactions: A training programme can be evaluated in terms of the trainees' reactions

to the objectives, contents, and methods of training. In case the trainees considered
the programme worthwhile and liked it, the training can be considered effective.
• Learning: The extent to which the trainees have learnt the desired knowledge and
skills during the training period is useful basis of evaluating training effectiveness.
• Behaviour: Improvement in the job behaviour of the trainees reflects the manner and
extent to which the learning has been applied to the job.
 • Results: The 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.

Methods of Evaluation: Several methods can be employed to collect data on the

outcomes of training. Some of these are:-

1. The opinions and judgments 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 career development charts of trainees,
8. Measuring levels of productivity, wastage, costs, absenteeism, and employee turnover
after training,
9. Trainees comments and reactions during the training period, and
10. Cost benefits analysis of the training programme.

Feedback: After the evaluation, the situation should be analyzed 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
programmer is as to avoid these causes. The outcomes of a training programme should
justify the time, money and efforts invested by the organization 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.

Preparing the Instructor: The instructor or trainer 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
organization.

Feedback: Trainees should be provided information on how much they have learnt and
how will they be doing. Every trainee should know what aspect of his
behaviour/performance is not up to 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.

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

Appropriate Techniques: The methods and processes of training should be related

directly to the needs and objectives of the organization. It should be conducted as far as
possible in the actual job environment to be meaningful. To be effective training should
be based on the tested principles of learning.

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 organization. Such programmes are designed to avoid
obsolescence of a person in terms of job requirements. Retraining is required on account
of the following factors:

• Some employees concentrate on a narrow task and lack all round knowledge and
skills. Training is required to wider their knowledge and attitudes.
• Employees who are called back to work after layoff are given training to handle
highly skilled jobs.
• Due to technological changes some jobs may become unnecessary. Employees
working on such jobs are retrained for other jobs.
What is Management/Executive Development?

Executive or management development consists of all activities by executives learn to

improve their behaviour and performance. It is designed to improve the effectiveness of
managers in their present jobs and to prepare them for higher in future. According to
Chhabra, Ahuja and Jain Management development is a process by which managers
acquire not only skills and competencies in their present jobs but also capabilities for
future managerial tasks of increasing difficulty and scope", thus, executive development
denotes planned efforts to improve current and future performance of the organization.
Management or executive development includes "all those activities and programs which
have substantial influence on changing the capacity of the individual to perform his
present assignment better and in so doing are likely to increase his potential for
management assignment".2 Management development is a planned, systematic
continuous process of learning and growth designed to induce behavioral change in
individuals by cultivating their mental abilities and inherent qualities through acquisition,
understanding and use of new knowledge, insights and skills as they needed for effective
managing. This learning process involves the implication that will be changed behaviour
on the part of the individuals given the adequate training education.
Development of managers takes place not only by participating in formal courses of
instruction drawn by the organization, but also through actual job experience in the
organization. It should be recognized that it is for the organization to provide
development opportunities for its managers and other employees. But an equal, perhaps
more important, counterpart to the efforts of the organization are those individuals. Self-
development is an important concept in the whole program of management development.
The participants must have the capacity and motivation learn and develop them.

Nature of Executive Development

The broad features of management development are as follows:-

Educational Process: Development is more akin of education than it is to train in skills.
Thus, a manager cannot be developed only by taking a course, attending lectures and
conferences, job rotation assignments and the like. The process of learning on an
executive's part must be accepted as a discipline of self-education. Management
development implies development of people of different aptitudes talents, aspirations,
needs and motivation. Because of the individual differences among them, they should be
provided an effective organizational climate to develop themselves.

Behavioral Change: Executive or management development is a planned process of

learning and growth designed to bring behavioral change among the executives. It
implies that there will be a change in knowledge and behaviour of individuals undergoing
development program. The individual will be able to perform present assignment better
and will increase his potential for future assignment.

Self-Development: Managers develop themselves by participating in training courses

organized by the organization. They also make use of actual job experience in learning
new behaviors. The organization can merely provide facilities for development, but. the
real urge of development should arise from within ,the individuals. That is why, it is often
said all development is self-development which implies that the individuals must be
motivated to learn and develop their competencies.

Continuous Process: Executive development is an ongoing or never-ending exercise

rather than a 'one shot' affair. It continues throughout an executive's career because there
is no end to learning. It is a long-term process as managerial skills cannot be developed
overnight.

Responsibility of Executive Development

It is often said that it is the duty of all managers to train those immediately below them
and that on-the-job experience is a vital ingredient of management development. It is
believed that an employee's immediate superior in the organization is an important key to
influence his development. But while it is a part of every manager's job to guide his
subordinates in their development, the 'spark' and drive must come' from the individual
himself. He and he alone know where the shoe pinches, and just how hard he is working
at any time. He may of course not realize his weak points and he may have certain blind
spots. A wise manager will help him by counseling him, seeking to develop his strengths,
and tactfully indicating his blind spots. He may give him special assignments to help him
recognise these and to improve his performance. But, again, the interest of the manager to
develop an individual will depend upon the latter's inner urge and motivation. Self-
development is an important principle of management development. The organization
can only provide for the environment for development or advancement. The initiative for
development must be taken by the individual himself. Unless he has the required
potential, a person cannot be considered fit for development. No doubt, he can be given
the necessary guidance to help him face the problems with the present job or to prepare
him for the higher job.

Objectives of Executive Development

The objectives of management or executive development program of any business

concern are:
• to increase the overall knowledge and conceptual and decision-making skills of
executives.
• to improve the performance of managers in their present positions.
• to ensure an adequate reserve of capable well-trained managers for future needs.
• to influence the behavior of workers through the executives.
• to introduce change in theorganization by developing executives into change
agents or facilitators.
• To provide opportunities to the managers for their career advancement; and
• To prevent obsolescence of executives by providing them opportunities for
updating their knowledge and skills.

Why is Executive Development Necessary?

There is a great need of executive or management development programs in modern

organizations. The achievement of objectives of an organization depends to a great extent
on the quality of its managers. Companies with similar raw materials, equipment’s and
technical know-how show different results because of the quality of their executives.
Quality of management explains the difference in price policy, inventory policy,
production policy, marketing policy and labor policy of the organization. Thus, better the
management, better are the results of the organization. Executive development, therefore,
is of paramount importance to have an effective and desired managerial manpower to
meet the organization’s demands and to maintain and raise the level of managerial
competence in the organization. The need of executive development in the modern times
arises because of the following factors:-

• There is a rapid pace of technological change. Many automatic machines and

equipment’s have been introduced in modern organizations’ manager must have
working knowledge of the use of new technology.

• Social-cultural environment is changing at a fast speed. The manager must have

up-to-date knowledge of the socio-cultural environment to understand the
behavior of people in a proper perspective.

• There is tough competition in the market and the consumers have become
conscious of their rights. It is no longer easy to misguide the consumers. To
understand and meet the needs of the consumers properly, executive development
can be of great help.

• Increased recognition of social responsibility by modern business houses has

increased the need of executive development.

• To-day's worker is educated and socially aware. The workers ask for their
participation in management, better wages and better working conditions.

• To satisfy them and to motivate them to contribute to the achievement of

organizational objectives, development of executives is necessary.

• Frequent labor-management conflicts need trained managers to bring industrial

peace in the enterprise.

• Management development can be used to impart knowledge to managerial

personnel in the latest management concepts, principles techniques and practices.