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Semester IV Amity University

PREFACE
The text of the Human Resource Management has been written with the basic objective of introducing and familiarizing students with Human Resource managements concepts that help them develop their knowledge base and understand various facets of HRM. This book covers important concepts and information that begins with introducing the subject in the module-1 followed by Module II in which functions of HR Department are elaborated that makes one understand how an employee is selected in an organization by throwing light upon fundamentals of recruitment and selection which also covers areas such as Job Analysis, Job description, Job specification, Recruitment, Selection, Placement and Induction and socialization, Training and Development Training Process & Methodology Need and objectives Training Procedure Methods of Training Tools and Aids Evolution of training Programs. Module III , IV and V discuss various functions of Human Resource Department such as Compensation, Maintenance Integration and Audit & Control. This book discusses various contemporary issues of HR department by focusing on Job evaluation, Merit rating, Methods of wage payment, Incentive Compensation Types, Advantages, perquisites, Wage Policy in India - Minimum Wage, Fair Wage, Living Wage . The Human Resource Management is an ever evolving field and this book alludes various concepts of this field such that students are able to relate to the basics concepts of HRM and get an insight on the role of an HR manager and diverse activities involved in this discipline.

HUMAN RESOURCE MANAGEMENT Course Objective: The Course Aims to introduce the Students to the Fundamentals, Process, Techniques, and Practices of Human Resource Management and Industrial Relations. Course Contents: Module I: Introduction Human resource Management Introduction and Evolution Difference between Personnel Management and HRM .Role of HR Manager and structure of HR Department. Duties and responsibilities of HR Manager.

Module II: Functions of HR Department: Procurement And Development Job Analysis, Job description, Job specification, Recruitment, Selection, Placement and Induction and socialisation Training and Development Training Process & Methodology Need and objectives Training Procedure Methods of Training Tools and Aids Evolution of training Programs. Job change - Career Planning, promotion, Demotion, Transfer, Separations.

Module III: Compensation

Functions

of

HR

Department:

Job evaluation Merit rating Methods of wage payment, Incentive Compensation Types, Advantages, perquisites. Wage Policy in India - Minimum Wage, Fair Wage, Living Wage

Module IV: Functions of Maintenance And Integration

HR

Department:

Welfare& Fringe benefits Administration, Safety & Accident Prevention . Addressing Employee Grievances & their redressal, Administration of discipline. Module V: Functions of HR Department : Audit And Control Performance Appraisal - Purpose, Factors, Methods, Human Resource Information Systems Need, determinants, computer based employee information system.

Brief Table of Contents

Chapter no. Title
CHAPTER 1 HUMAN RESOURCE MANAGEMENTINTRODUCTION CHAPTER 2 JOB ANALYSIS, JOB DESCRIPTION AND JOB SPECIFICATION CHAPTER 3 RECRUITMENT AND SELECTION CHAPTER 4 INDUCTION, SOCILIZATION AND PLACEMENT CHAPTER 5 TRAINING AND DEVELOPMENT CHAPTER 6 DEVELOPMENT CAREER PLANNING AND CAREER

CHAPTER 7 JOB EVALUATION AND COMPENSATION CHAPTER 8 WAGE AND INCENTIVE COMPENSATION SCHEMES CHAPTER 9 EMPLOYEE WELFARE , FRINGE BENEFITS AND

SAFETY & ACCIDENT PREVENTION CHAPTER 10 ADDRESSING EMPLOYEE GRIEVANCE AND DISCIPLINE CHAPTER 11 PERFORMANCE APPRAISAL CHAPTER 12 HUMAN RESOURCE INFORMATION SYSTEM

Chapter-1 Introduction to Human Resource Management After reading this chapter, you will be able to understand: 1. Meaning and evolution of Human Resource Management 2. Objectives and Functions of HRM 3. Difference between HR and Personnel Management 4. Structure of HR department 1.0 Introduction
Every organization is essentially a combination of physical and human resources. Physical resources refer to materials, money and machines pre-arranged by the organization for production or trade. Human resources, on the other hand, refer to the knowledge, education, skills, training and proficiency of the members of the organization. All organizational resources are important for achieving the objectives of an organization. In fact, the effectiveness of an organization lies in the judicious blending of the two resources to achieve optimum competency. However, for a long time, it was felt that the efficient utilization of physical resources was primary for developing organization. This was so because the acquisition of physical resources resulted in a huge outflow of funds and those assets carried a definite value. On the contrary, it was felt that hiring employees never cost anything substantial for a firm and it was also quite easy to replace them. This made human resource less important for employers. But, in the past decade, employers have realized that intellectual capital is critical to business success. The main reasons for this change are due to the understanding that 1. Product innovation and marketing strategy, which are crucial for market survival and growth in a competitive environment, are possible only when a good and creative workforce is present. 2. The challenge, opportunities and even disputes of creating and managing organizations arise mostly from people-centered problems. 3. People are alike and they cannot be treated identically. They differ physically and psychologically. These difference require individual attention in order to achieve the optimum productivity.

1.2 MEANING AND DEFINITION Human Resource Management (HRM) is a management function that managers recruit, select, train and develop members for an organization. HRM is concerned with the peoples dimension in the organizations. We quote three definitions on HRM. But before quoting the definitions, it is useful to point out the essentials which must find their place in any definition. The core points of HRM are: 1. Organizations are not mere bricks, mortar, machineries or inventories. They are people. It is the people who staff and manage organizations. 2. HRM involves the applications of management functions and principles. The functions and principles are applied to acquisitioning, developing and maintaining, and remunerating the employees in the organization. 3. Decisions relating to employees must be integrated. Decisions on different aspects of employees must be consistent with other human resource decisions. 4. Decisions made must influence the effectiveness of the organization. Effectiveness of an organization must result in betterment of the services to the customers in the form of high-quality products supplied at reasonable cost. 5. HRM functions are not confined to business establishments only. They are applicable to non-business organizations too, such as education, health care, recreation, and the like. The following three definitions collectively cover all the five core points: 1. a series of integrated decisions that form the employment relationship; their quality contributes to the ability of the organization and the employees to achieve their objective. 2. . Is concerned with the people dimensions in management. Since every organization is made of people, acquiring their services, developing their skills, motivating them to higher levels performance and ensuring that they continue to maintain their commitment to the organization are essential to achieving the organizational objectives. This is true,

regardless of the type of organization government, business, education, health, recreation, or social action. 3. 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. Thus, HRM refers to a set of programs, functions and activities designed and carried out in order to maximize both employee as well as organizational effectiveness. 1.3 EVOLUTION OF HRM HRM, a relatively new term, engaged during the 1970s. Many people continue to refer to the discipline by its order, more traditional titles, such as personnel management or personnel administration. The trend is changing. The term now days used in industry circles is HRM. Coming to evolution of HRM as a subject, it may be stated that concern for the welfare of workers in the management of business enterprises has been in existence since ages. Kautilyas Arthashastra states that there existed a sound base for systematic management of resources during as early as the 4th century BC. The government then took an active interest in the operation of public and private sector enterprises and provided systematic procedures for regulating employeremployee relationships. Elsewhere, human resources in organizations received the managements attention much earlier. As early as in 1800 BC itself, minimum wages rate and incentive wages plan were included in Babylonian Code of Hammurai. Experts of HRM in our country have tried to chronicle the growth of the subject only since the 1920s. this was the period when state intervention to protect the interests of workers felt necessary because of the difficult conditions which followed the First World War, and the emergence of trade unions. The Royal Commission (1931) recommended the appointments of labour-welfare officers to deal with the selection of workers and to settle their grievances. The Factories Act, 1948, made appointments of welfare officers compulsory in industrial establishments employing 500 or more workers each. The aftermath of the Second World War and the countrys political independence witnessed increased awareness and exceptions of workers. During the 1960s, the

personnel function began to expand the welfare aspects, with labour welfare, IR and personnel administration integrating into the emerging profession called personnel management (PM). Simultaneously, the massive thrust given to the heavy industry in the context of planned economic development, particularly since the Second Five Year Plan and the accelerated growth of public sector in the national economy resulted in a shift in focus towards professionalization of management. In 1990s, a shift in professional values was discernible. It shifted from a concern for welfare to a focus on efficiency. In the 1980s, professionals began to talk about new technologies, HRM challenges and HRD. In the 1990s, the emphasis shifted to human values and productivity through people. Reflecting this trend, the American Society for Personnel Administration (ASPA) was renamed as the Society for Human Resources Management (SHRM). Thus, beginning in 1920s, the subject HRM has grown in to a matured profession. Below table shows the evolution of HRM. 1.4 SCOPE OF HRM The scope of HRM is indeed vast. All major activities in the working of a worker from the time of his or her entry into an organization until he or she leaves come under the preview of HRM. Specifically, the activities included are HR planning, job analysis and design, recruitment and selection, orientation and placement, training and development, performance appraisal and job evaluation, employee and executive remuneration, motivation and communication, welfare, safety and health, industrial relations (IR) and the like. For sake of convenience, we can categorize all these functions into four objectives:

1.5 HRM Objective and Function HRM Objective Supporting Functions

1. Societal Objectives 1. Legal compliance 2. Benefits 3. Union Management Relations

2. Organizational Objectives 1. Human Resource Planning 2. Employee Relations 3. Selection 4. Training and development 5. Appraisal 6. Placement 7. Assessment 3. Functional Objectives 2. Placement 3. Assessment 1. Appraisal

4. Personal Objectives 1. Training and development 2. Appraisal 3. Placement 4. Compensation 5. Assessment 1.6 THE SEMANTICS As in any discipline, there is the problem of semantics in HRM, too. First, we have two terms, namely, personnel management (PM) and HRM. Between these two terms is a basic difference, and it is useful as to what it is. HRM differs from PM both in scope and orientation. HRM views people as an important source or asset to be used for the benefit of organization, employees and the society. It is emerging as a distinct philosophy of management aiming at policies that promote mutuality mutual goals, mutual respect, mutual rewards and mutual responsibilities. The belief is that policies of mutuality will elicit commitment which, in turn, will yield both better economic performance and greater human resource development (HRM). Though a distinct philosophy, HRM cannot be treated in isolation. It is being treated into the overall strategic management of business. Further, HRM represents the latest term in the evolution of the subject. The year 1990 was a turning point in this evolution. The American society for personnel administration (ASPA), the largest professional association in this field of management, changed its name to the society for human resource management (SHRM). Since then, the expression is gradually replacing the hackneyed term personnel management.

1.7 HRM AND PERSONNEL MANAGEMENT The difference between HRM and PM is a subject of discussion amongst HRM experts. They do not hold identical views about similarities and dissimilarities between HRM and PM. According to Lowry, PM and HRM are the successive stages of the same concept without any differences in the concept. In his words, Human Resource Management is just the continuing process of personnel management it is not different.

1.7.1 HR Management vs Personnel Management While digging for the difference between Human Resources Management and Personnel Management, you are most likely going to get very divergent views, depending on which sphere of experts you question. While some strongly affirm that there is no difference between the two, others will recognize the variance, but will still acknowledge the unmistakable similarities. In lay terms however, theres a general tendency to use the terms interchangeably. The difference, when acknowledged, between HR and Personnel, is often depicted as philosophical. Personnel management encompasses more administrative disciplines of payroll issues, employment law compliance and all other related tasks. On the other hand, HR is more concerned with the management of a workforce, as this is one of the key resources that drive the day-to-day operations of a company; hence its success. Whenever a distinction is made between Human Resources and Personnel management, Human Resources is always represented to a broader extent than Personnel management. Human Resources, it is said, embodies and elaborates tasks of Personnel management, and at the same time, creates and develops teams of employees for the advantage of the company. One of HRs primary goals is to provide a suitable environment for employees to fully utilize their skills, and work at maximum efficiency levels. The tasks that are common within Personnel management include the traditional, routine duties; thus, it is generally described as reactive, i.e. only responding to demands as they arise. Human resources, on the other hand, involve continuous innovation and strategizing to manage a companys workforce more efficiently. It is, therefore, generally considered proactive. Theres an ongoing development of

policies, functions and skill assessments all aimed at improving the companys workforce. While performance management is always considered to be influenced by the organizations, HR is generally considers as an integral part of the organizational functions. Personnel Management duties are solely the domain of the personnel department. However, with regard to HR, most of the companys senior level employees (managers) are somehow involved, and key goal may be to engage the managers in the skills development processes needed to accomplish personnel related duties. In terms of performance, motivation and rewards, Personnel Management typically endeavors to reward and motivate employees with salaries, bonuses, compensation and a standard paid annual leave in order to derive employee satisfaction. For HR, the primary motivators are seen as job creativity, work groups and efficient strategies to meet challenges. To summarize, Personnel management is more concerned with payroll and similar tasks, while HR is concerned with the overall management of a companys workforce. Personnel tasks are creative, while HR tasks are generally proactive, and continuous. Personnel Management is considered independent from organizational influence, while HR is dependent on input from some employees, like senior management.

1.7.2 Similarities between HRM and PM

The basic elements common to HRM and PM strategy: Business Strategy Both form the basis for the evolution of HR and PM strategy. Matching People Choosing the right people for the right job and developing them to achieve their maximum level of competence remain the priority of both HRM and PM. Prominence of Line Authority HRM, similar to PM, recognizes that the primary responsibility for managing people stays with line managers. Identical Core Elements Techniques like selection, traning, development, compensation and performance management are common to both HRM and PM.

Emphasis on Communication and Participation HRM and PM provide equal importance to the communication process and workers participation in decision making. 1.8 ORGANISATION OF HR DEPARTMENT Two issues become relevant in a discussion on organization of an HR Department. They are (i) place of the HR Department in the overall set-up and (ii) Composition of the HR department itself. Status of the HR Department in the total organizational structure depends on whether a unit is small or large. In most of the small organizations, there is no separate department to co-ordinate the activities relating to personnel. In fact, there may not be any personnel managers at all. Services of outsiders who specialize in maintaining accounts and records relating to provident fund, pension and other statutory requirements are retained for free. Alternatively, a low places employee may be entrusted with the task of attending to these functions. Figure shows a structure of this type. In Fact, it was this arrangement which was followed in the past, irrespective of the size of the organization. Earlier, personnel departments were called health and happiness departments. The people assigned to deal with personnel issues were often individuals who were past their prime. The personnel department was seems as a place where the lesser productive employees could be places with minimal damage to the organizations ongoing operations. Individuals in the personnel department were perceived as those responsible for planning company picnics, vacation schedules and retirement parties. Personnel, as an activity, were seen as a necessary but unimportant part of the organization. Fortunately, things have changed for the better and the status of the personnel department has improved enormously over the years.

Owner/Manager

Production Manager

Sales Manager

Office Manager

Accountant

Personnel Assistant

Fig. HRM in a small-scale unit A large scale unit will have a manager/director heading the HR department. His or her status will be equal to that of any executive. Figure given below shows this structure. This arrangement holds good when the company has a single unit. Where the company has multiple plans located in different parts of the country, there may be a centralized HR/personnel department at the mail or registered office and each plant will have separate HR/personnel departments. Routine activities relating to each plant are handled by the HR/personnel department attached to the work, whereas the broad policies, matters concerning executives and the like are handled by the central department. This is the case with conglomerates as BHEL, ITI and L&T.
Chairman and Managing Director

Director Production

Director Finance

Director Personnel/HRM

Director Marketing

Director R&D

Fig. HRM in large scale unit Coming to the composition of the HR Department, it may be stated that it depends on the scale of operations and attitude of the top management towards its personnel. However, a typical HR department is headed by a Director, under who are Managers Personnel Manager-Administrative, Manager-HRD and ManagerIndustrial Relations. The department will grow in size and importance when new demands are places on it by the top management.

Owner/Manager

Manager Personnel

Manager Administration

Manager HRD

Manager IR

Human Resource Planning

PR

Appraisal

Hiring

Canteen

Traning and Development

Grivance Handling

Medical

Compensation

Welfare

Transport

Legal

1.9 DUTIES OF HUMAN RESOURCE MANAGERS Basically Human resource manager caries out three distinct functions: 1. A line function: The human resource manager directs the activities of the people in his or her own departments and in related services areas (like the plant cafeteria). In other words, he or she exerts line authority within the HR department. While they generally cant wield line authority outside, they are likely to exert implied authority. This is because line manager know the human resource manager has top managements ear in areas like testing and affirmative action. 2. A coordinative function: Human resource manager also coordinate personnel activities, a duty often referred to as functional authority (or functional control). Here he or she acts as the right arm of the top executive to ensure that line manager are implementing the firms human

resource policies and practices (for example, adhering to its sexual harassment policies). 3. Staff (assist and advise) functions: Assisting and advising line managers is the heart of the human resource managers job. He or she advises the CEO to better understand the personnel aspects of the companys strategic options. HR assists in hiring, training, evaluating, rewarding, counseling, promoting, and firing employees. It administers the various benefit programs (health and accident insurance, retirement, vacation, and so on).

1.10 Quiz
Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. a) b) c) d) Human Resource Management is primarily concerned with Sales Dimensions of people External environment Cost discipline

2. Human Resource Management aims to maximize employees as well as organizational (a) Effectiveness (b) Economy (c) Efficiency (d) Performativity 3. Demand for human resources and management is created by a) Expansion of industry b) Shortage of labor c) Abundance of capital d) Consumer preferences 4. Human Resource Management function does not involve a) Recruitment b) Selection

c) Cost control d) Training 5. Which one of the following becomes a creative factor in production? a) Land b) Capital c) Consumers d) Human Resources 6. Quality- oriented organization primary concern centers around a) Coordination b) Communication c) Human Resources d) Discipline 7. The term ____________ refers to the total knowledge, skills, creative abilities , talents and aptitudes of an organizations workforce as well as the values, attitudes and beliefs of the individuals involved. a) Human resource b) Human resource management c) Human resource planning d) Human relations 8. Which of the given statement reflect the Relationship between HRM & Management? a) Both are same b) Management is one aspect of HRM c) HRM is one aspect of Management d) No relationship exists 9. The functions of Human resource management can be classified into two broad categories. Identify them. i. Managerial functions ii. Planning functions iii. Employment functions iv. Operative functions a) Only i and iii b) Only i and iv

c) Only ii and iii d) Only iii and iv 10.The human resource management functions aim at a) Ensuring that the human resources possess adequate capital, tool, equipment and material to perform the job successfully. b) Helping the organization deal with its employees in different stages of employment. c) Improving an organizations creditworthiness among financial institutions. d) None of the above.

CHAPTER-2- JOB SPECIFICATION

ANALYSIS,

JOB

DESCRIPTION

AND

JOB

Upon Completion of this chapter, you will be able to understand: 1. Meaning, uses and techniques of Job Analysis 2. Meaning and Content of Job Description 3. Job Specification and its components 2.1 JOB ANALYSIS Job Analysis is an essential prerequisite for the effective management of the human resource of an organization. It is about gathering relevant information about a job. It actually specifies the tasks involved and the factors that influence the performance of the job. As a process, it is capable of producing results with great practical relevance for human resource management. Job analysis has applications in almost all the HR activities of an organization. In reality, the job analysis process involves ascertaining what people do and understanding why and how they do it. Job analysis is detailed and systematic study of jobs to know the nature and characteristics of people to be employed for each job. Job Analysis involves gathering dataabout observable job behaviors, and delineating the knowledge, skills, abilities, and other characteristics needed to perform the job - R.J Harvey The process of job analysis is essentially one of the data collection and then analyzing the data. It provides the analyst with basic data pertaining to specific jobs in terms of duties, responsibilities, skills, knowledge, degress of risk etc. This data may be classified as follows: 1. Job identification 2. Nature of the job 3. Operations involved in doing the job

4. Materials and equipments to be used in doing the job 5. Personal attributes required to do the job e.g. education, traing, physical strength and mental capabilities etc. 6. Relation with other jobs. This information relating to a job which is thus classified , if examined carefully, would suggest that some information relates to the job and some concerns the the individual doing the job. The requirements of a job are known as Job Description and the qualities demaned from the job holder are termed as Job Specification.

What job analysis is: It is a systematic method for gathering information It focuses on work behaviors, tasks, and outcomes It identifies the personal qualifications necessary to perform the job and the conditions under which work is performed It reports the job as it exists at the time of analysis; not as it was in the past nor as it exists in another organization What job analysis is not: It is not an analysis of thought processes, attitudes, traits, or aptitudes It is not a time and motion study It is not an analysis of an individual position

2.1.1Uses of Job Analysis

The purpose of Job Analysis is to establish and document the 'job relatedness' of employment procedures. The employer use job analysis information to support several human resource management activities. Recruitment and Selection Job analysis provides information about what the job entails and what human characteristics are required to perform these activities. This information in the form of job description and job specifications, help managers decide what sot of people to recruit and hire. Compensation

Job analysis information is indispensible for estimating the value of each job and its appropriate compensation. Compensation usually depends on the jobs required skill education level, safety hazards, degree of responsibility, and so on all factors you can access through job analysis. Training The job description lists the jobs specific duties and requisite skills- and therefore the training- that the job requires. Performance Appraisal A performance appraisal compares each employees actual performance with his or her performance standards. Doing so requires knowledge of the jobs duties and standards. Managers can use job analysis to find out what these duties and performance standards are. Safety and Health Job analysis can provide exact information about the nature and type of work conditions essential for an accident-free work environment. It can also suggest the safety requirements for the job. The need for the safety training and safety apparatus can also be ascertained with the help of job analysis. Legal Requirements The job description is a vital document for an organization in legally and morally justifying its hiring practices, promotion policies, terminations, disciplinary actions, and grievance redressal procedures. In fact, it is a legal necessity for an organization to keep a job description statement for each position in the organization

2.1.2Techniques of Data Collection in Job Analysis

No matter what the methodology adopted for data collection in job analysis, the focus should be gathering information about the tasks associated with the job and desired human behavior at work. However the characteristics of the job, the purpose of the job, the purpose of the job analysis, and the desired quality of information are the factors that usually influence the decisions involving the selection of techniques for data collection. Data collection for job analysis is usually done at one or more levels. These levels are: (i) individual (ii) group, (iii) organizational and (iv) community. Further, the

decision involving the selection of a specific technique is usually influenced by the factors such as the type of data to be collected, the methods of data collection, the source from which the data will be collected, and the manner of data analysis. The different methods of data collection are: Questionnaire Method Having employees fill out questionnaires to describe their job related duties and responsibilities is a popular way to obtain job analysis information. The major advantage of questionnaire is that it is the easiest and more efficient method to collect information from a large number of employees within a short period. Different types of questionnaire are structured questionnaire, structured checklist method, open ended questionnaire etc. Observation Method In this method, the job analyst closely observes the performance of the employee on the job. He record the various tasks performed by the employee as a part of the job. This method is ideal for gathering first-hand information relating to working conditions, the physical activities involved in the job, and so on. Critical Incident Method A critical incident is a significant event that takes place in the job environment and forces the employee to respond in the form of performance or behavior. Critical incidents are considered as snapshots in the regular course of the job. The aim of this method is to gather relevant and behavior centered description of the job. Interview Method In this method, the job analyst asks the employee questions about t=various dimensions of the job. He then contacts the employees supervisors to get further information and also to verify the correctness of the information collected from the employee. While preparing the questions for interview the analyst must ensure that the questions are uncomplicated and realistic in nature. Dairy Maintenance Method In this method employee is asked to keep a record of all the activities performed by him as apart of the job analysis process. He should record the information in chronological order. Diary maintenance will enable the

employee tom keep track of all the activities. This method ensures continuous and better employee involvement in the job analysis process.

2.2 Job Description

Job description is an organized factual statement of job contents in the form of duties and responsibilities of specific job. It aims at simplifying and standardizing the HR activities of an organization. The preparation of Job description is necessary before a vacancy is advertized. As the title indicated, the documents are descriptive in nature and constitute a record of job facts in an organized way. Job description document discloses what is to be done, how it is to be done and why it is to be done. The contents of job description have been discussed below: 1. Job Title: It is desirable that the job title should be short, definite and suggestive of the nature of the job. It identifies the nature of the job and its position in the organization. 2. Job Location: It is necessary to give the location of the job. By location we mean the name of the department where the job under consideration exists. 3. Job Summary: A short paragraph succinctly summarizing the tasks performed by the employee is helpful for the subsequent convenient identification of the job. 4. Salary Range: List starting salary, mid-range, and high (maximum) salary for the position. It should also include information about how employees may be eligible for additional compensation (i.e., sales commissions, performance bonuses, annual raises, etc.) 5. Duties to be performed: Each task performed should be written out and estimate made of the percentage of the time that is developed to the performance of each task. This is the most important phase of the job description and should be carefully prepared.

6. Machines, tools and materials: The tools, machines, equipments and materials used in the performance of the job should also be included in the job description. It indicates the nature and the complexity of the job. 7. Relation to other jobs: Clear cut relation of the job under consideration with other jobs in the organization will help to understand the nature of the job well 8. Nature of supervision: There are certain jobs, particularly unskilled jobs, which require intensive supervision, while other jobs requie less supervision, because people manning these positions are more committed to the achievement of organization goals. Nature of supervision must be given in the job description. 9. Working environment: The working conditions, hazards and other characteristics of the physical surroundings within the working area should be described to help in subsequent interpretation of job evaluation.

2.3 Job specification

Job specification sets out the education, qualification, training, personal attributes and competencies a job holder requires top perform her or his job satisfactorily. The employee characteristics required for job may include physical, mental, social and behavior characteristics of job holders. The qualifications may include education, experience, skills and other background requirements for a job holder. Important components of job specification are listed below: 1. Education and training A job specification states whether the jobs requires school-or college- level education. It mentions the technical or professional qualification requirements of the job holder. Finally, it specifies the minimum training requirements the job holder must have completed. 2. Work Experience A job specification prescribes the work experience requirements for the job holder. And sometimes also the minimum experiences for effective performances.

3. Skills and Competencies. Under this component head, a job specification states the types of skills necessary for the satisfactory performances of the job. It indicates the nature of skills required like computer skills, communication skills, technical skills, and statistical skills. 4. Physical Strength and Stamina If the job involves physical activities like lifting or moving heavy objects, the job specification also mentions the physical requirements of the job holder. 5. Stress-Coping Ability When the nature of the job requires a lot of stress endurance and involves constant work pressure in the form of deadlines or night shifts, the stress management ability of the candidate should be mentioned. 2.4 QUIZ: Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. A written statement of main duties and responsibilities which a particular job entails is called a) Job Analysis b) Job Specification c) Job description d) Job Evaluation 2. Which of the following is not the component of Job Specificationa) Skills and competences b) Job Location c) Work Experience d) Education and Training 3. Which of the following is not the technique of data collection in job analysis a) Questionnaire Method b) Observation Method c) Ranking method

d)

Interview Method

4. Job Analysis benefits Human Resource Planning, recruitment and selection, compensation management and Performance appraisal. Identify the end results of a job analysis that form the basis for recruitment and selection. a) Job Description and Job Specification b) Job design and Job review c) Job description and job review d) Job design and Job specification 5. Job analysis is the recording of all activities involved in a job and the skill and knowledge requirements of the performance of the job. What is it also known as? a) Job review or Job design b) Job review or Job Classification c) Job specification or Job description d) Job classification or Job specification 6. ____________ is defined as a portrayal of the tasks, responsibilities, duties and functions of a job. a) Job specification b) Job Design c) Job analysis d) Job description 7. ____________ is a complete list of competencies and qualifications required to match the job descriptions a) Job specification b) Job design c) Job analysis d) Job review 8. Which of the following methods are generally used to collect and compile information on Critical incidents as part of job analysis using the critical incident technique? i) Technical Conference ii) Observation iii) Interviews iv) Questionnaires

a) b) c) d)

(i) and (ii) (ii) and ( iii) (iii) and (iv) (i) and (iv)

9. Which one of the following is not a behavioral specification in a job specification? a) Ability to make judgments b) Ability to undertake research c) Ability to interpret data d) Ability to be authoritative 10._____________ involves increasing the length and hence the operating time of each cycle of work for the job holder. It is a modern management technique in which different and continuous small cycles are integrated into one single cycle of operation. a) Job rotation b) Job enlargement c) Job sharing d) Job enrichment

CHAPTER-3 RECRUITMENT AND SELECTION Upon Completion of this chapter, you will be able to understand: 1. Meaning of Recruitment and Selection 2. Importance of Recruitment and Selection 3. Methods of Recruitment 4. Selection Process 3.1 RECRUITMENT The human resources are the most important assets of an organization. The success or failure of an organization is largely dependent on the caliber of the people working therein. Without positive and creative contributions from people, organizations cannot progress and prosper. In order to achieve the goals or the activities of an organization, therefore, they need to recruit people with requisite skills, qualifications and experience. While doing so, they have to keep the present as well as the future requirements of the organization in mind. Recruitment is distinct from Employment and Selection. Once the required number and kind of human resources are determined, the management has to find the places where the required human resources are/will be available and also find the means of attracting them towards the organization before selecting suitable candidates for jobs. All this process is generally known as recruitment. Some people use the term Recruitment for employment. These two are not one and the same. Recruitment is only one of the steps in the entire employment process. Some others use the term recruitment for selection. These are not the same either. Technically speaking, the function of recruitment precedes the selection function and it includes only finding, developing the sources of prospective employees and attracting them to apply for jobs in an organization, whereas the selection is the process of finding out the most suitable candidate to the job out of the candidates attracted (i.e., recruited).Formal definition of recruitment would give clear cut idea about the function of recruitment. 3.1.1DEFINITIONS Recruitment is defined as, a process to discover the sources of manpower to meet the requirements of the staffing schedule and to employ effective measures

for attracting that manpower in adequate numbers to facilitate effective selection of an efficient workforce. Edwin B. Flippo defined recruitment as the process of searching for prospective employees and stimulating them to apply for jobs in the organization. Recruitment is a linking function-joining together those with jobs to fill and those seeking jobs. It is a joining process in that it tries to bring together job seekers and employer with a view to encourage the former to apply for a job with the latter.

3.1.2 PURPOSES AND IMPORTANCE The general purpose of recruitment is to provide a pool of potentially qualified job candidates. The purpose is to:Determine the present and future requirement of the organization in conjunction with it personnel- planning and job analysis activities. Increase the pool of job candidate at minimum cost. Help increases the success rate of the selection process by reducing the number of visibly overqualified job applicants. Help reduce the probably that job applicants, once recruited and selected, will leave the organization only after the short period of time. Meet the organizations legal and social obligations regarding the composition of it workforce. Begin identifying and preparing potential job applicant who will be appropriate candidates. Increases organizational and individual effectiveness in the short term and long term. Evaluate the effectiveness of various recruiting techniques and sources of all type of job applicants. Recruitment represents the first contact that a company makes with potential employees. It is through recruitment that many individuals will come to know a company, and eventually decide whether they wish to work for it. A well-planned and well-managed recruiting effort will result in high-quality applicants, whereas, a haphazard and piecemeal effort will result in mediocre ones. High-quality employees cannot be selected when better candidates do not know of job openings, are not interested in working for the company and do not apply. The recruitment

process should inform qualified individuals about employment opportunities, create a positive image of the company, provide enough information about the jobs so that applicants can make comparisons with their qualifications and interests, and generate enthusiasm among the best candidates so that they will apply for the vacant positions. 3.1.3FACTORS AFFECTING RECRUITMENT The following are the 2 important factors affecting Recruitment:A. INTERNAL FACTORS Recruiting policy Temporary and part-time employees Recruitment of local citizens Engagement of the company in HRP Companys size Cost of recruitment Companys growth and expansion 2) EXTERNAL FACTORS

Supply and Demand factors Unemployment Rate Labour-market conditions Political and legal considerations Social factors Economic factors Technological factors

3.1.4 CENTRALISED V/s DECENTRALISED RECRUITMENT Recruitment practices vary from one organization to another. Some organizations like commercial banks resort to centralized recruitment while some organizations like the Indian Railway resort to decentralized recruitment practices. Personnel department at the central office performs all the functions of recruitment in case of centralised recruitment and personnel departments at unit level/zonal

level perform all the functions of recruitment concerning to the jobs of the respective unit or zone. MERITS OF CENTRALISED RECRUITMENT Average cost of recruitment per candidate/unit should be relatively less due to economies of scale. It would have more expertise available to it. It can ensure broad uniformity among human resources of various units/zones in respect of education, skill, knowledge, talent, etc. It would generally be above malpractices, abuse of powers, favouritism, bias, etc. It would facilitate interchangeability of staff among various units/zones. It enables the line managers of various units and zones to concentrate on their operational activities by relieving them from the recruiting functions. It enables the organization to have centralised selection procedure, promotional and transfer procedure, etc. It ensures the most effective and suitable placement to candidates. It enables centralised training programmes which further brings uniformity and minimizes average cost of staff.

MERITS OF DECENTRALISED RECRUITMENT The unit concerned concentrates only on those sources/places wherein normally gets the suitable candidates. As such the cost of recruitment would be relatively less. The unit gets most suitable candidates as it is well aware of the requirements of the job regarding culture, traditional, family background aspects, local factors, social factors, etc. Units can recruit candidates as and when they are required without any delay. The units would enjoy freedom in finding out, developing the sources, in selecting and employing the techniques to stimulate the candidates. The unit would relatively enjoy advantage about the availability of information, control and feedback and various functions/processes of recruitment. The unit would enjoy better familiarity and control over the employees it recruits rather than on employees selected by the central recruitment agency.

Both the systems of recruitment would suffer from their own demerits. Hence, the management has to weigh both the merits and demerits of each system before making a final decision about centralizing or decentralizing the recruitment.

3.1.5 SOURCES OF RECRUITMENT The sources of recruitment may be broadly divided into two categories: internal sources and external sources. Both have their own merits and demerits. Lets examine these. INTERNAL SOURCES Persons who are already working in an organization constitute the internal sources. Retrenched employees, retired employees, dependents of deceased employees may also constitute the internal sources. Whenever any vacancy arises, someone from within the organization is upgraded, transferred, promoted or even demoted. A. PRESENT EMPLOYEES Promotions and transfer from among the present employee can be good sources of recruitment. Promotion to higher positions has several advantages are:It is good public relations It build morale It encourages competent individuals It improve the probability of a good selection When carefully planned, promoting B. EMPLOYEE REFERRALS This can be good sources of internal recruitment. Employee can develop good prospects for their families and friends by acquainting them with the company, furnishing cards of introduction, and even encouraging them to apply. There are some potential negative factors associated with employee referrals. They include the possibility of inbreeding, manifesting in groups of people quitting one firm and joining another. They carry with them the cultural practices of the previous firm. They from cliques of their own, demand unacceptable privileges and often threaten to quit if demand are not met.

C. FORMER EMPLOYEES Former employee is also an internal source of applicants. Some retired employee may be willing to come back to work on apart time basis or may recommend someone who would be interested in working for the company. An advantage with the sources is that the performance of these people is already known D. PREVIOUS APPLICANTS Although not truly an internal source, those who have previously applied for job can be contacted by mail, a quick and inexpensive way to fill an unexpected opening. Although walk ins are likely to be more suitable for filling unskilled and semi- skilled jobs, some professional opening can be filled by applicants to previous jobs.

EXTERNAL SOURCES External sources lie outside an organization. Here the organization can have the services of : (a) Employees working in other organizations; (b) Jobs aspirants registered with employment exchanges; (c) Students from reputed educational institutions; (d) Candidates referred by unions, friends, relatives and existing employees; (e) Candidates forwarded by search firms and contractors; (f) Candidates responding to the advertisements, issued by the organization; and (g) Unsolicited applications/ walk-ins.

A. PROFESSIONAL OR TRADE ASSOCIATIONS Many associations provide placement service for their member. These services may consist of compiling job seeker list and providing access to member during regional or national conventions. Further many associations publish or sponsor trade journals or magazines for their member. These publications often carry classified advertisement from employer interested in recruiting their members. B. ADVERTISEMENT These constitute a popular method of seeking recruits as many recruiters prefer advertisement because of their wide reach.

A number of factor influence the response rate to advertisement. There are three important variables identification of the organization, labour market conditions, and the degree to which specific recruitments included in the advertisement.

E. EMPLOYMENT EXCHANGES Employment exchanges have been set up all over the country in the deference to the provision of the employment exchange Act. 1959. The Act applies to all industrial establishments having 25 workers or more each. The Act requires the entire industrial establishment to notify the vacancies before they are filled. The major functions of the exchange are to increases the pool of the possible applicants and to do preliminary screening. Thus employment exchanges act as a link between the employers and the prospective employees. These offices are particularly useful in recruiting blue- collar, white- collar, and technical workers

F. CAMPUS RECRUITMENT Collage, university, research laboratories, sports field and institute are fertile ground for recruiters, particularly the institutes. The Indian institute of management and the Indian institute of technology are on the top on list of avenues for recruiters. In fact, in some companies, recruiters are bond to recruit a given number of candidates from these institutes every year. `

G. WALK- INS, WRITE- INS AND TALK- INS The most common and least expensive approach for candidate is direct application in which job seeker submit unsolicited application letter or resumes Direct applications, can also provide a pool of potential employee to meet future need. From employees view point, walk- INS, are preferable methods of recruitment as they are free from the hassles associated with other method of recruitment. H. CONSULTANTS

Ferguson associates, human recourse consultants, head hunter, batliboi and company, annalistic consultancy Bureau, aims management consultants and the search house are some among the numbers recruiting agencies.

I. CONTRACTORS Contractors are used to recruit casual workers. The names of the workers are not entered in the company record and, to this extent, difficulties experienced in maintaining permanent workers are avoided.

J. RADIO AND TELEVISION Radio and television are used but sparingly, and that too, by government department only. Companies in the private sector are hesitant to use the media because the high costs and also because they fear that such advertising will makes the companies look desperate and damage their conservative image.

K. GATE HIRINGS AND CONTRACTORS Gate hiring (where job seekers, generally blue collar employees, present themselves at the factory gate and offer their services on a daily basis), hiring through contractors, recruiting through word-of-mouth publicity are still in use despite the many possibilities for their misuse in the small scale sector in India.

L. UNSOLICITES APPLICATNS/WALK-INS Companies generally receive unsolicited applications from job seekers at various points of time; the number of such applications depends on economic conditions, the image of the company and the job seekers perception of the types of jobs that might be available etc. Such applications are generally kept in a data bank and whenever a suitable vacancy arises, the company would intimate the candidates to apply through a formal channel. One important problem with this

method is that job seekers generally apply to number of organizations and when they are actually required by the organizations, either they are already employed in other organizations or are not simply interested in the position.

3.1.6 RECENT TRENDS IN RECRUITMENT

OUTSOURCING The outsourcing firms help the organization by the initial screening of the candidates according to the needs of the organization and creating a suitable pool of talent for the final selection by the organization. Outsourcing firms develop their human resource pool by employing people for them and make available personnel to various companies as per their needs.

POACHING/RAIDING Buying talent (rather than developing it) is the latest mantra being followed by the organizations today. Poaching means employing a competent and experienced person already working with another reputed company in the same or different industry; the organization might be a competitor in the industry. A company can attract talent from another firm by offering attractive pay packages and other terms and conditions, better than the current employer of the candidate.

E-RECRUITMENT Many big organizations use Internet as a source of recruitment. E- Recruitment is the use of technology to assist the recruitment process The two kinds of e- recruitment that an organization can use is o Job portals i.e. posting the position with the job description and the job specification on the job portal and also searching for the suitable resumes posted on the site corresponding to the opening in the organization.

o Creating a complete online recruitment/application section in the companies own website

3.1.7 RECRUITMENT STRATEGIES OF SOME COMPANIES

HCL Technologies

Internal recruitment: The IT major relies heavily on this model, which also saves huge cost for the company, at the same time ensuring that the talent pool remains intact. Campus hiring: Many of the business unit heads and senior people at HCL have been picked from the campuses of some of the best engineering, management and non-management colleges across the globe. Employee referrals: HCL finds this to be a reliable channel to reach out to its potential employees. Social networking sites: At least 5-7% of its total recruiting is done through websites such as LinkedIn. This primarily includes much of senior-level hiring, and makes it easier for the hiring managers to target candidates with niche skills or for roles based in alien geographies. 3.1.8 MERITS AND DEMERITS OF INTERNAL RECRUITMENT OR RECRUITING PEOPLE FROM WITHIN Merits Demerits

1) Economical: The cost of recruiting internal candidates is minimal. No expenses are incurred on advertising. 2) Suitable: The organization can pick the right candidates having the requisite skills. The candidate can choose a right vacancy where

1) Limited Choice: The organization is forced to select candidates from a limited pool. It may have to sacrifice quality and settle down for less qualified candidates. 2) Inbreeding: It discourages entry for talented people,

their talents can be fully utilized.

3) Reliable: The organization has the knowledge about suitability of a candidate for a position. Known devils are better than unknown angels! 3) Inefficiency: Promotions based on length of service rather than 4) Satisfying: A policy of merit, may prove to be a blessing preferring people from within for inefficient candidate. They do offers regular promotional not work hard and prove their avenues for employees. It worth. motivates them to work hard and earn promotions. They will work with loyalty commitment and enthusiasm. 4) Bone of contention: Recruitment from within may lead to infighting among employees aspiring for limited, higher level positions in an organization. As years roll by, the race for premium positions may end up in a bitter race.

available outside an organization. Existing employees may fail to behave in innovative ways and inject necessary dynamism to enterprise activities.

3.1.9 Merits and Demerits of External sources of Recruitment

Merits

Demerits

Wide Choice: The organization has the freedom to select candidates from a large pool. Persons with requisite qualifications could be picked up.

Expenses: Hiring costs could go up substantially. Tapping multifarious sources of recruitment is not an easy task either.

Infection of fresh blood: People

Time consuming: It takes time to

with special skills and knowledge could be hired to stir up the existing employees and pave the way for innovative ways of working.

advertise, screen, to test and test and to select suitable employees. Where suitable ones are not available, the process has to be repeated.

Motivational force: It helps in motivating internal employees to work hard and compete with external candidates while seeking career growth. Such a competitive atmosphere would help an employee to work to the best of his abilities.

De-motivating: Existing employees who have put in considerable service may resist the process of filling up vacancies from outside. The feeling that their services have not been recognized by the organization, forces then to work with less enthusiasm and motivation.

Long term benefits: Talented people could join the ranks, new ideas could find meaningful expression, a competitive atmosphere would compel people to give out their best and earn rewards, etc.

Uncertainty: There is no guarantee that the organization ultimately will be able to hire the services of suitable candidates. It may end up hiring someone who does not fit and who may not be able to adjust in the new setup.

3.2 SELECTION-MEANING AND DEFINITION Once the applicant pool is prepared, the next step for the HR department is to implement the predetermined selection process in order to select the best candidate for the job. The aim of this process is to finally end with candidates best suited for the vacant jobs. The organization must be able to distinguish the applicants who are most likely to perform well as employees from the others who are less suitable. Selecting the most suitable candidate for a job is never an easy task for an organization, but it becomes all the more difficult when the organization has to screen candidates to fill vacancies that are critical to the organization. This is

because any faulty decision in the selection of employees can have a far reaching impact on the performance and future of the organization.

According to ODonnell Selection is the process of choosing from among the candidates, from within the organization or from the outside, the most suitable person for the current position or for the future position. We may conclude that selection is a systematic process of identifying suitable candidates for the jobs available in the organization from the available applicant pool. 3.2.1 PURPOSE OF SELECTION The basic purpose of selection process is to choose right type of candidates to man various positions in the organization. In order to achieve this purpose, a well organized selection procedure involves many steps and at each step, unsuitable candidates are rejected. DISTINCTIVE FEATURES OF SELECTION 1. Selection means employment of workers or establishing a Contractual relationship between the employer and the worker. 2. Selection is a negative process because it involves rejection of unsuitable candidates. 3. Selection aims at eliminating unsuitable candidates and ensuring most competent people for the vacant job. 4. Selection is a complex process under which each candidate is required to cross a number of hurdles before getting the offer for a job. 3.2.2 SELECTION PROCESS Selection is a long process, commencing from the preliminary interview of the applicants and ending with the contract of employment. The procedure of selection will vary from organization to organization and even from department to department within the same organization according to the kinds of jobs to be filled. Thus every organization will design a selection procedure that suits its requirements. However the main steps could be incorporated are as under: 1. Preliminary interview

2. 3. 4. 5. 6. 7. 8.

Receiving applications or application blanks Screening of application Employment tests Interview Reference checking Medical examination Final Selection The successive stages in the selection process are discussed below:

1.Preliminary Interview The selection programme begins with preliminary interview or screening. The preliminary interview is generally does the job of eliminating the totally unsuitable candidates. The preliminary interview enables the HR specialists to eliminate unqualified job seekers based on the information supplied in their application forms. 2. Receiving Applications or Application Blanks Whenever there is a vacancy, it is advertised or enquires are made from the suitable sources, and applications are received from the candidates. Standard application forms (application blanks) may be drawn up for different jobs supplied to the candidate on requests. The application forms usually involve items such as name, address, age, marital status and dependents, schooling, experience and reference. There may be several other items depending upon the specific requirements of the organization and the job. 3.Screening of Applications After the applications are received, they are screened by a screening committee and a list is prepared of the candidates to be interviewed. Applicants may be called for interview on some specific criteria like sex, desired age group, experience and qualifications. The number of candidates to be called for 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 interview letters are dispatched by registered post or under certificate of post. 4.Employment Tests Individual differ in almost all aspects one can think of .They differ with respect to physical characteristics, capacity, level of mental ability, their

likes and dislikes and also with respect to personality traits. The pattern of physical, mental and personal variables gives rise to thousand and one combinations and the particular pattern makes the individual suitable for several classes of activities, jobs or field of work. Matching of individuals physical, mental and temperamental pattern with the requirements of jobs or filed of training is a difficult task. So before deciding upon the job or jobs suitable for a particular individual, one should know the level of his ability and the knowledge. This will require the use of employment tests which are listed below: a. Intelligence tests: The aim of intelligence test is to measure the general intellectual abilities of a person. The uniqueness of this test is that it measures several abilities of the candidate and derive the intelligence score. Aptitude tests: An aptitude test measures the latent talents of a person that may be crucial to performing the job successfully. This test is normally given to those applicants who have no previous experience in that file Interest tests: A persons mental and physical abilities are not sufficient to achieve a desirable job performance. The aim of the interest test is to know the interest test is to know the interest, aptitude and preference of a person towards a job offered. Personality tests: Personality refers to the sum of the characteristics of a person which reflect on his /her response to a particular situation. The characteristics may include among other things, introversion, interpersonal skills, motivation, stability, self belief, courage, attitude and temperament.

b.

c.

d.

Employment tests are widely used for judging the applicants suitability for the job. 5.EMPLOYMENT INTERVIEW Employment tests provide a lot of valuable information about the candidate. Interview is a formal, in-depth conversation conducted to evaluate the applicants acceptability. An interview can be defined as a selection procedure designed to predict future job performance on the basis of applicants oral response to oral

inquiries or, as a purposeful exchange of ideas, the answering of questions and communication between two or more persons 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 c) To give him an accurate picture of the job with details of terms and conditions and some idea of organizations policies. Employment interview is considered to be an excellent selection device. TYPES OF INTERVIEW (METHODS) a)THE STRUCTURED INTERVIEW: The structured interview has also been called patterned or standardized interview. The interviewer predetermines the questions to be asked. He merely follows the same template to ask the interviewee a series of questions with title or no deviation. This method ensures uniformity in the interview process and facilitates easy comparisons among the candidates. b) THE UNSTRUCTURED INTERVIEW In this type of interview, the interviewer does not pre-plan the questions to be asked. In fact, he decides on the questions as the interview proceeds. The purpose of this method is to allow a free discussion on any topic as it emerges. Interviewers generally avoid asking the same or similar questions. c) IN DEPTH INTERVIEW The purpose of these interviews is to discuss the information concerning the candidate in detail. This method normally covers the subjects of mutual interest like specialization, motivation, qualification and career plan of the candidate on one hand, and the firms offer on the nature of job, pay, perquisites, career opportunities on the other. d) THE GROUP INTERVIEW The group interview method has been devised to assess leadership. Usually a topic is given discussion to a leaderless group of applicants.

This method is provides opportunities to rate various qualities as initiative, poise, adaptability to new situations, social awareness and speaking ability. e) STRESS INTERVIEW The purpose of this interview is to put the candidate in an uncomfortable situation to see his/her ability to handle stress. f) PANEL INTERVIEW In this method, the applicant is interviewed by more than one interviewer. A panel of two or more interviewers is formed to interview the candidate. The interviewers are generally drawn from different fields. The marks awarded by all the interviewers are finally consolidated into a panel score. 6. CHECKING REFRENCES A reference is potentially an important source of information about a candidates ability and personality if he holds a responsible position in some organization or has been the boss or employer of the candidate. Prior to final selection, the prospective employer normally makes an investigation or the reference supplied by the applicant and undertakes more or less through search into the candidates past employment, education, personal reputation, financial condition etc. 7. MEDICAL EXAMINATION The pre employment physical examination or medical test of a candidate is an important step in the selection process. 8. FINAL SELECTION AND APPOINTMENT LETTER The next step in the selection process is job offer to those applicants who have crossed all the previous hurdles. Job offer is made through a letter of appointment. Such a letter generally contains a date by which appointee must report on duty.

3.3QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter

1. In todays rapidly changing business environment, organizations have to respond quickly to requirements for people. Which is the step that starts off the process of acquiring and retaining employees for an organization? a) Selection b) Induction c) Recruitment d) Appointment 2. Edwin B. Flippo defined the process of recruitment as ___________ a) The process of seeking and attracting a pool of people from which qualified candidates for job vacancies can be chosen b) The process of searching for prospective employees and stimulating them to apply for jobs in the organization c) The process of choosing the most suitable candidates from the available candidates d) The process of inspiring people to apply for the jobs in the organization and choosing the most suitable candidate from the available candidates 3. An effective recruitment program aims at __________ a) Aiding the recruiter by making a wide choice of candidates available b) Attracting the best people for the job c) Optimizing the cost and time involved in recruitment d) All of the above 4. The policy of filling job vacancies with candidates from within the company instead of searching for new talent from outside has certain disadvantages. One of the disadvantages of this approach is that____________ a) The return on investment on the workforce decreases for the company b) The organization might miss out on talent that is available in the market c) The cost of recruitment, selection and induction is increased d) It might have a negative effect on the morale of the employees. 5. There are various methods of recruiting from external sources. Some of popular methods are advertisements, campus recruitments, employee referrals, employment exchanges, private placement agencies, etc. Which of the following recruitment sources is likely to have the widest reach? a) Recruitment agencies

b) Campus recruitment c) Advertisements d) Employment exchanges 6. Which of the following is determining the selection of media when advertising for candidates to fill a job vacancy? a) Cost of advertising in the media b) The target audience for the advertisement c) The reach of the advertisement desired d) All of the above 7. Unsolicited application are _________ a) Job applications that are not received by the company b) Job applications that are referred by existing employees c) Job applications that are not in response to any advertisement or announcement of vacancy d) Job applications that are rejected by the company 8. Which one of the following is the most important criteria for determining the success or failure of the recruitment program? a) The cost involved b) The number of candidate hired c) The number of successful placements d) The number of applicants for the job 9. __________ is considered to be a vital step in the employment process, where the organization attempts to identify the right candidate for the right position. a) Recruitment b) Selection c) Placement d) Induction 10._____________ help in assessing an individuals genuine liking for a job. They are generally inventories of the likes and dislikes of candidates in relation to work, occupations, hobbies and recreational activities. a) Personality tests b) Aptitude tests c) Intelligence tests d) Interest tests

11. In the selection process, the main advantage of structures interviews is that ____________ a) It does not require advance planning b) There is no scope of subjectivity c) The interaction between the interviewer and interviewee is formal d) It gives more flexibility to the interviewer 12.__________ help in assessing an individuals value system, emotions, maturity, and other characteristics. These characteristics are expressed in traits like self-confidence, tact, optimism, decisiveness, conformity, objectivity, judgment, dominance or submission and impulsiveness or stability. a) Personality tests b) Aptitude tests c) Interest tests d) Situational tests

CHAPTER-4 INDUCTION, SOCILIZATION AND PLACEMENT Upon Completion of this chapter, you will be able to understand: 1. Meaning of Induction(Orientation) 2. Purpose and Types of Induction 3. Concept of Socialization 4. Significance of Placement

4.1 Orientation (Induction) Employee orientation or induction is a crucial stage in the hiring process of an organization. The newly joining employees get the first impression of the organization through the orientation programmes. It is thus necessary for any organization to have meticulously planned and well executed orientation program to educate the employees about the various aspects of organizations. Orientation programs are useful in making the new employee feel assured, happy and at ease with the new environment. In orientation programmes, employees are usually briefed about the history of the organization, its culture, values and attitude, the expectation of the management, the job and department details, and the product or services information. 4.1.1 PURPOSE OF EMPLOYEE OREINTATION/INDUCTION The changing characteristics of the labour market, the increasing demand for the skilled labour, the availability of simple and appropriate technology for storing and presenting information, and the employees explicit demand for information about the organization have all forced organization to pay serious attention to employee orientation. There is also growing realization among organization that the process of orientation can sustain and improve the new employees initial enthusiasm. We shall now see the important purposes served by employee orientation. Formally Welcoming Employees

Many organizations view orientation programmes as an occasion for the management to welcome new employees formally and procedurally Overcoming Initial Uneasiness and Hesitation The new employees suffer from initial anxiety about the organization. Orientation helps in quickly overcoming the initial nervousness and hesitation. Exchanging Information Orientation provides a platform for the organization to transfer knowledge about the job, department, organization and people to the new employees. The organization, too, gets to know about the employees, their background, and individual career plans. Assessing Employees Although the selection process has already evaluated the training requirement requirements of the employees the orientation provides one more opportunity to do so. Acclimatizing Employees Orientation programmes enable the organization to teach the employees the basics of the job and the satisfy measures to be adopted, and acquaint them with the other facilities available in the premises. Controlling the HR Cost In the absence of orientation programmes, employees are normally left to learn everything on their own, and this might push up their learning cost to the organization in the form of resource wastage and work disturbances. This could also increase the HR cost associated with recruitment and selection. Developing the Team Spirit When the orientation programme is conducted for a group of new employees, it helps in promoting team spirit among the peers. Socializing Employees

Socialization refers to inculcating suitable values, standards and beliefs among the employees so that they integrate themselves not only with the formal organization but also with the informal groups.

4.1.2 Types of Orientation

Based on the number and nature of the new employees and its policy towards orientation, an organization may decide on a specific method of orientation. The important types of orientation pragramme. General-Idea Orientation In this type, some general information about the organization is provided to the employees. For instance attendance and discipline is provided .The organization may entrust the orientation pragramme to the HR department, which would conduct it for all new entrants, irrespective of their departments. Job-Specification Orientation The purpose of this orientation is to inform the employees about the various aspects of the job and other things related to it. For instance, the details of the duties, responsibilities and accountability associated with the job, and specific safety and other measures required in the performance of the job are provided. Traditional and Modern Orientation Based on its purposes and content, orientation may also be classified into traditional orientation and modern orientation. When the organizations employ the general and oft-repeated materials to orient employees, it may be called traditional orientation. In this method, orientation is viewed as a ritual and one-time exercise by the organization. In the case of modern orientation, the organization views it as the beginning of a continuous process to convert an employee into a precious asset.

4.1.3 An Effective Orientation Programme Since the orientation programme is crucial to the management from the employee motivation and retention perspective, every effort must be made to make it effective and successful. The following measures might help the organization achieve the desired effectiveness. Framing Clear-cut Objectives The organization should frame the objectives of its orientation in unambiguous terms. The participations status and information requirements should be considered for determining the objectives are capable of providing a clear direction to the whole orientation programme. Determining the Roles of Departments and Personnel The organization should determine clearly the department and persons responsible for conducting the orientation programme. The responsibility for orientation is assigned to the HR department normally. In some organizations, however, the training departments are assigned the task of conducting orientation programmes. Assessing the New Employees Information Requirements Accurately An effective orientation programme must be able to fully address the first day concerns and general information requirements of the new employees. Its success lies in making the new employees feel assured and positive about their new organization and the job. Selecting Appropriate Methodology, Techniques and Programme Content The organization should also be judicious in designing the content (curriculum) of the orientation programme. It should not attempt to include everything in the programme content. It should decide exactly what the employee should know initially and what information can wait for future presentations. It should never overburden the new employees with information. Thus, it is essential to ensure that the programme content flows from the objectives and also work towards their attainment.

 Creating a Positive Environment for New Employees The organization should strive to create a positive environment for its new employees. Even before the beginning of the orientation sessions ,arrangements must be made to receive these employees and guide them to their predetermined places. The whole orientation programme must be designed in such a way that the participants completely enjoy their participation in it. Providing Continuous Review and Effective Feedback As employee orientation is a continuous process in an organization, it is necessary to develop appropriate instruments to evaluate the effectiveness of such programmes. Evaluation techniques should measure the extent of learning achieved through orientation programmes.

4.2 SOCIALISATION Socialization is the process of introducing or integrating the new employees into the organizational culture. In simpler terms, it is the process by which the new employees learn the organizational culture. Socialization is a much longer process than orientation. Inspire of the comparatively long period of socialization required for achieving the results desired, some organization have developed an excellent socialization process for improving the performance and loyalty of the employees. For instance, firms like PROCTER and GAMBLE and IBM have achieved excellence in the socialization process. Facilitating the employees to share the organizational values and culture is the core of socialization programmes. The definitions highlight the different interpretations of socialization Socialization is the ongoing process of instilling in all employees the prevailing attitudes , standards , values , and the patterns of behavior that are expected by the organization and its departments-

GARY DESSLER

4.2.1 The Socialization Process

The process of socialization of employees takes place in two phases. These are socialization by organization and personalization by individuals. In the first phase, the organization makes efforts for the socialization of the new employees. This is done through orientation and training programmes. In the second phase, new employees do their best to personalize their relationship with the organization. The organizational socialization process usually comprises three stages these are:

1. Anticipatory socialization This is the first stage in the socialization process but is normally completed even before the actual entry of the employees into the organization .It refers to the values, attitude and other behaviors already acquired by the new employees before their entry into the organization. The organization attempts to find out these behaviors of the employees through the selection process. 2. Organizational socialization In this stage, the organization undertakes the necessary efforts to gradually expose the new employees to the prevailing organizational culture. This is done by facilitating the employees to learn the relevant values, beliefs and attitude. When the pre-acquired values of the employee and the organizational culture are similar, the socialization process becomes simple as it can easily help the employees assimilate the organizational culture and value. Organization may employ a formal or an informal socialization process or both to educate the employees about the organizational culture. 3. Socialization outcomes The final stage of the socialization process is the achieving of the objectives of the socialization efforts. Since it is difficult to measure attitude, behavior, commitment, motivation and values, as the abstract terms, the organization may keep its objectives in terms of productivity, performance and other measurable

terms. When the outcomes are positive, the socialization process is normally viewed as effective.

4.3 PLACEMENT Placement is the process of finding an appropriate fit between the people and the positions in an organization. It is actually the determination of the job which an accepted candidate is to be assigned to, and his assignment to that job. When the organization chooses an exact number of candidates for the specific vacancies available in the organization, placement is simple and easy. Once the employees complete the stipulated orientation the next step is his placement in the job. Based on the employees work performance and behaviour in the orientation programme, organizations choose not only the appropriate jobs but also the appropriate supervisors for placing the employees On many occasions, organization utilizes the orientation programmed for identifying the behaviour, knowledge and attitude of the new employees. This information is then used to choose the appropriate placement for the employees. Similarly, organization also use long and extensive training programmes for identifying the aptitude of the employees before placing them in suitable positions, especially in the case of managerial placements. Placement is usually the last stage in the recruitment and selection process of an organization. The process of job placement is involves reassigning the jobs among the existing employees.

4.3.1 CHALLENGES IN PLACEMENTS Though placement appears to be a simple function for an organization, it is not so in reality. Quite a few issues can cause the placement efforts to fail in the organization. CULTURAL AND BEHAVIOURAL INCOMPATIBILITY:

Sometimes, the organizations do not consider the behavioral compatibility between the superiors and the freshly joining subordinates. They do not ensure the fitness of the whole man for the job but his skill alone. Therefore cultural compatibility should also be considered in placement. This is because the culture differs within the organization and also from department to department

NATURE OF JOB: Nature of job can also cause problems in placements. The organization should consider many factors before placing employee in these jobs. For instance, the skills of socializations and leadership should also be taken into considerations to determine the match between the job and the employees.

LEVEL OF ADAPTABILITY: When the employees exhibit a high degree of flexibility and openness, it can facilitate the process of placement. In contrast placements become difficult when the employees exhibit stiffness.

4.4 QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. When an employee joins an organization he has to adapt to the new work culture, work activities, co-workers and boss, etc. This process of adaptation is known as ___________. a) Employment b) Recruitment c) Placement d) Induction

2. The process of induction is also known as a) Introduction b) Orientation c) Adaptation d) Probation 3. Which of the following is not true about the process of socialization? a) Socialization has an influence on employee performance b) Proper implementation of the socialization process ensures organizational stability c) Socialization is the sole responsibility the HR department and the immediate supervisor d) Socialization ensures that a new employee fits well into the organization 4. Different parties need to be involved in the process of socialization, if it is to proceed smoothly. These include a) Co-workers b) Supervisors c) Clients d) All of the above 5. Which of the following is not a part of the socialization process in an organization? a) Training employee in soft skills b) Participating in trade fairs c) Providing technical training d) Providing on-the-job training

CHAPTER-5 TRAINING AND DEVELOPMENT After reading of this chapter, you will be able to understand: 1. The Nature and Importance of Training and Development 2. The Scope and Importance of Training. 3. Assessing Training Needs 4. The training Process

5. Methods of Training 6. Management Development

5.1 INTRODUCTION Training is, essentially, a value-addition activity undertaken by an organization to enrich the value of its core assets, namely, its people. It plays a vital role in enhancing the efficiency, productivity and performance of the employees. It is a learning process that helps employees acquire new knowledge and the skills required to perform their present jobs efficiently. Rapid technological developments and the resultant changes in the production process have compelled the management of various companies to treat training as a continuous process of the organization. Training typically comprises predetermined programmes to achieve the desired performance efficiency at various levels-individual, group and organizational. In simple terms, training is all about making a difference between where the worker stands at present and where he will be after some point of time. Training is usually a short-term skill development exercise meant for nonmanagerial employees either to learn a job or to overcome their deficiency in the performance of the present job. The success of any training programme lies in recognizing the training needs within the organization and then designing and

implementing training programme based on those needs in order to carry out a continuous up gradation of knowledge, skills and employee attitudes. In fact, sustained training efforts by an organization usually lead to the creation of a highly competent and motivated workforce that is all set to take on the challenges of performance and productivity. Undeniably, organizations can think of achieving success in the globalized market only when they can ensure that their employees perform to their fullest potential. Training is the creation of an environment where employees may acquire or learn specific, job related behavior, knowledge, skills, abilities and attitudes. -Terry L. Leap To sum up, we can say that training is the process by which an employee acquires the necessary knowledge and skills to perform the job.

5.1 SIGNIFICANCE OF EMPLOYEE TRAINING Today, Indian organizations have realized the importance of training as a tool to achieve their strategic goals. It is not viewed by the organization as a cot any longer but as an investment on one of its most dynamic assets, namely, employees. Many organizations consider training as a strategic employee retention tool. It helps the organization create a smarter force capable of meeting any situation and challenges. We shall now discuss the significance of training in detail. Enlargement of Skills and Competency Training helps in enhancing the technical knowledge and skills of the employees at every level of the organization. In fact, the improvement of skills is no longer optional for the organization but a matter of compulsion, due to the growth in technology and improved processes. Effective Utilization of the Existing Human Resources Training results in improved performance, which in turn, facilities optimum utilization of the available human resources. It also enables the employees to accomplish the organization goals as well as their personal goals effectively.

 Enhancement of Customer Satisfaction Almost everywhere, organizations are compelled to ensure superior quality, lower costs, and better services to their customers. To meet these challenges, they must enhance their overall performance continuously. The training of employees helps in improving helps in improving upon the quality of work and in controlling costs. Enhancing Competitive Advantage One of the important competitive advantages of an organization in a competitive environment is its workforce. It can retain its core workforce competency and skills through continuous and systematic training of its labour force. Enrichment of Team Spirit Generally, training helps in the promotion of team spirit and inter-team cooperation among the employees. In fact, it enhances the spirit of a group and makes the members work harder to succeed as a group. Ensuring Personal Growth Training is an investment in people. It is emerging as an important technique to retain people. The process of skills acquisition helps not only the organization in achieving its goal but also the employees in ensuring their personal growth. Obviously, employees prefer those organizations that expose them to modern technologies and help them upgrade their skills and knowledge. Enabling a Learning Culture Training helps in creating a learning culture within the organization. Successful organizations recognize that well-structured and significant employee learning programmes connect well with their long-term strategic success. Establishing a Positive Organizational Climate Training enhances the interaction and understanding between the employers and the employees. It helps build a good labour-management relationship

and ensures that the individuals goals align well with the organizational goal. Thus, it aids in creating a positive perception and feeling about the organization. The collective feeling of the employees about their organization is called the organizational climate. Encouraging Better Health and Safety Measures Training helps in improving the health and safety of the employees. Safety training teaches the employees about the safety measures to be followed and also the best and secure way of performing a job. It minimizes the problems of industrial accidents and sickness. Thus, it assists in the development of a healthy working environment. Ensuring Organizational Growth and Development Training aids in organizational development since it helps in developing since it helps in developing leadership skills, motivation, loyalty, communication and other aspects required for successful employees. It facilitates the establishment of effective decision-making and problemsolving processes.

5.2 Assessing Training Needs

The assessment of training needs is an important job for the HR department. It is usually done at two levels. At the first level, the training needs of the individual employees are assessed. At the second, training needs are assessed for different groups in the organization. The training needs assessed at group levels are usually referred to as the organizational-need assessment. Normally, the employee skills inventory is prepared to identify the likely skills shortage in the organization. Skills inventory is an estimation of the kind of skills possessed by the employees while skills shortage is the situation where the required skills are more than the available skills in fact, skills shortage is an indication of the need for training at the organizational level. The individual employees training needs can be assessed by comparing the actual performance of the employee with the standard performance. The deficit in performance will indicate the nature and extent of the need for his/her training

programmes. The individual employee may also require training at the time of transfer and/or promotion in order to learn the new job. To determine the training needs of its employees, an organization should involve as many sources as possible and then decide on the best one that can provide reliable information. We shall now discuss each of these sources. Performance Evaluation Performance evaluation reports help in assessing the training needs at the individual levels. The current performance of an employee is an important indicator of his training requirements. In addition, an organization may review productivity reports, performance scores, absenteeism records and attrition reports to assess the actual performance of the employees. Job Analysis Job description report and job specification can be examined to decide the skills, abilities and knowledge required to perform the job effectively. They may form the basis for determining the training requirements of the job holders. Attitude Survey Attitude survey is a process of gathering information from the employees about the various aspects of the organization. The information about the attitude of workers towards their work environment, their level of awareness, and their views on the relevance of the existing training programmes and future training requirements can be ascertained. Advisory Panel An organization may constitute panels comprising the representatives of the management and those of the employees to decide on the training needs. The panel has to assess the existing skills requirement before deciding on the number and nature of the training programmes required for a specific period. Ability Test Score An organization can give ability tests to its employees to identify their existing levels of skills and abilities. The results can then be compared with

the standard skills requirements to determine the need for and extent of the training programmes. Feedback The feedback from the customers, the employees and all others who are important to the business can help in determining the training needs. Similarly, the employees who quit can provide vital clues to the weakness of the organization in general and its training programmes in particular at the time of exit interview.

5.3 Scope of Training

The reach-out of training programmes is far and wide. Depending upon the nature, duration and purpose of the training programmes, the trainees may acquire attributes like skills, knowledge, and analytical acumen, concepts, attitudes and ethical values. Let us see these attributes briefly. Knowledge The basic purpose of any training programme is to provide the participants with the requisite knowledge to achieve the goals of the job. Knowledge is generally developed through the processes of perception, learning and reasoning. For instance, when the organization finds the existing skills and knowledge of the staff inadequate to achieve the strategic goals and objectives, training is considered. Training imparts job-related knowledge to the participants and enables them to understand what they must do in their job and how they should do it. Skills Acquisition Skill is defined as an ability to produce solutions in some problem domain. It is developed progressively by persistent training and other practices. Employees may require one or more skills like intellectual skills, management skills, social skills, motor skills, mental skills, technical skills and perceptual skills.

 Attitude Formation Attitude is the mental state of an individual concerning his beliefs, feelings, values and tendencies that influence him to behave in one way or the other. A negative attitude may cause suspicion and mistrust in the action of the organization and make the employees resist changes with all their might. Employee training programmes can bring about the desired changes in their attitude and instill in them a sense of cooperation, motivation, commitment and satisfaction. Ethical Values Ethics are principles of right and wrong that are accepted by an individual or a social group. The management of human resources often calls for decisions involving ethics, fair treatment and justice. Organization should supplement those policies with the necessary training on ethical practices. These trainings can help employees understand the presence of ethical codes to settle problems involving ethical dilemmas in a fair and just manner and lastly, ensure the adoption of ethical values in every aspect of their dealing with the people. Analytical Reasoning Analytical reasoning refers to the systematic way of thinking to comprehend the problems, develop alternative plans of action, choose the best course of action and implement the selected plan to successfully resolve the problems. Continuous training programmes provide the necessary impetus to sharpen the analytical reasoning and problem-solving skills of employees.

5.4 Steps in an Employee Training Process

Changes in the internal and external situations are inevitable and, thus, training becomes a continuous process. The general purpose of any training process is to train employees to be able to look for and respond to changes in a successful way. The training process has been described in the given diagram. These steps have been briefly explained a follows.

Determine the needs

F e e d b a c k

Develop the objectives

Choose the techniques

Identify the Trainer

Implement the Programme

Evaluate the effectiveness

Steps in the Training Process

1. Determination of the Training Needs
The first step in a training process is to identify the specific operational skills to be developed for performing a job. A methodical approach to identify the real needs must be undertaken. Generally, to recognize the training needs of the employees, an analysis at one or more of the following three levels is undertaken. a.Organizational Analysis

This focuses on identifying areas in the organization where training is needed. The aim is to connect the training needs to the achievement of the organizational goals. At this level, the strategic mission and vision, corporate goals and plans of the organization are examined carefully and then compared with the existing manpower inventory to determine the training needs. b. Operation Analysis This involves the proper examination of the work to be performed after training. It focuses on the tasks that are required to be performed to accomplish the organizational goals. It also involves the collection of information about the competencies required for effective job performance. An examination of the operating problems like customer grievances, downtime reports, and quality issues along with the performance evaluation and the interview of the employees can offer information for the determination of the training needs. c. Individual Analysis This focuses on deciding about the individual training needs. The difference between the actual performance and the standard performance of an individual indicates the training needs. Actually, individual analysis deals with questions like who should be trained and what should be taught. It involves asking pointed questions to find out exactly what job knowledge and skills the person must have in order to perform well.

2. Development of the Training Objectives

Once the training goals have been established, the next step is to determine the specific objectives of the training programmes. Each programme can have its own objectives. However, these objectives must be directly related to the assessed training needs and should also focus on satisfying those needs. It is absolutely essential to have concrete and measurable goals; otherwise it would be difficult to evaluate the effectiveness of the training programmes.

3. Selection of the Training Techniques

The next step involves decisions regarding the training techniques to be used in the programme. Based on the training needs and goals, an appropriate training method should be chosen to achieve the desired results. Though there are several techniques available to train the participants, each technique is unique and there are definite differences existing among these techniques about how well each one serves the various objectives. Broadly there are two categories. These are: on-thejob training methods and off-the- job training methods. On-the-job training means imparting real-time training at the work spot, even while doing the actual job. Offthe-job training means training at a place away from the work spot and in formal classrooms.

4. Identifying the Trainer

Once the training method has been decided, the next important step is selecting and training the trainers for the programme. This is a critical step because the success of the whole training effort relies greatly upon the competency and ability of the trainers. They must be adequately competent, knowledge and mature people with effective communication skills. They must also be familiar with the companys philosophy, objectives, structure, culture and specific purpose of the training programme.

5. Implementing the Training Programme

Once the training methods and trainers have been decided, the next step is the actual implementation of the training programme. For successful implementation, some of the prerequisites are the convenience of location, the comfortableness of the training facilities, the quality and adequacy of the provided materials, and the timing and duration of the programme. Similarly, frequent interaction between the trainers and trainees can also be encouraged to ensure their involvement in the training process. However, the implementation stage is often fraught with a lot of practical difficulties. For instance, training is often viewed as a process to effect change and hence viewed with mistrust and suspicion by the employees. Another difficulty in the execution of the training programme is keeping appropriate records. Unless proper records of the performances of the employees are kept before and after the

training programme respectively, it would be difficult to determine the net gains of the employees achieved through the programme.

6. Evaluation of the Training Programme

This is the final step in an employee training process. Hamblin(1974) defines Evaluation as any attempt to obtain information (feedback) on the effects of a training programme, and to assess the value of the training in the light of that information. Training evaluation is of vital importance because monitoring the training function and its activities is necessary in order to establish its social and financial benefits and costs. For an effective evaluation, it is essential to pre-assess the attributes to be emphasized in the training programme. Understandably, an evaluation of these attributes after training will facilitate a meaningful comparison to determine the effectiveness of the training programme. The absence of such facilities for comparison will make it difficult to evaluate the utility of the training programme for the trainees. Hence, it is imperative that the training efforts be documented to demonstrate that training provides a valuable service. It is important to understand the purpose of evaluation before planning it and choosing methods to do it. Evaluation feedback assists in improving efficiency and effectiveness of: Training content and methods Use of organizational budget, staff, and other resources Employee Performance Organizational productivity Through evaluation, trainers: Recognize the need for improvement in their training skills Are given suggestions from trainees for improving future training Can determine if training matches workplace needs According to Hamblin, there are five levels at which evaluation can take place: 1. Reactions of trainees to the training experience itself 2. Learning evaluation requires the measurement of what trainees have learned as a result of their training

3. Job behavior evaluations concerned with measuring the extent to which trained have applied their learning on the job 4. Organizational unit evaluation attempts to measure the effect of changes in the job behavior of trainees on the functioning of the part of the organization in which they are employed 5. Ultimate value addition aims to measure how the organization as a whole has benefited from the training in terms of greater profitability, survival or growth

5.5 Methods of Training

A broad range of training methods is available to an organization to deliver training to its employees. Based on the training goals and need assessments, an appropriate method may be chosen. There are two options available to an organization while deciding on a training programme. It can either design its own programme or get an externally available package and make modifications in it to suit the purpose and requirements of its training programmes. We shall now discuss these training methods in detail. 5.5.1 ON-THE-JOB TRAINING METHODS These methods are generally applied on the workplace while employees are actually working. The basic idea behind the adoption of this kind of training is to transfer the skills and knowledge from a highly competent and experienced employee to a new one, while sustaining the productivity of both. To be successful, the training should be done according to a structured programme that uses task lists, job breakdowns, and performance standards as a lesson plan. Following are the on-the-job methods. 1. Job Rotation In this method, usually employees are placed on different jobs turn by turn where they learn all sorts of jobs of various departments. The objective is to furnish a comprehensive awareness about the jobs of different departments. Job rotation aids the employees in comprehending a variety of jobs and in acquiring multi-skills to manage these jobs comfortably. It also presents the organization with wide options to effect personnel changes to achieve the desired productivity and strategic goals.

3.Job Coaching An experienced employee can give a verbal presentation to explain the nittygrittys of the job. 3. Job Instruction It may comprise of an instruction or directions to perform a particular task or a function. It may be in the form of orders or steps to perform a task. Under this method, all the necessary steps in the job, together with brief write-ups about each step, are complied sequentially. Each step would have a corresponding self-explanatory note. Each note would explain what needs to be done in that step, why it has to be done and how it has to be done. In this way, the job instruction training sheet for each job can be prepared and provided to the trainees. 4. Apprenticeships Generally fresh graduates are put under the experienced employee to learn the functions of job. An apprenticeship is a formal agreement between an individual who wants to learn a skill and an employer who needs a skilled worker. Apprenticeship training is an earning while learning arrangement for a required term. Several organizations practice this method to impart skills to employees it is commonly used to train people for various crafts jobs like those of an electrician, a fitter, a turner, a plumber, a carpenter, a machinist and a printer. In this method, the superior, who is usually a highly skilled employee, becomes the instructor and imparts knowledge to the trainee (called an apprentice) at the work spot. These programmes can last for a few months to several years, depending on the nature and complexity of the jobs. The main motivating factor for the trainees here is the awareness that they are acquiring the exact knowledge needed to perform their jobs. 5. Internships and Assistantships An intern or an assistant are recruited to execute a specific time bound jobs or projects during their education. It may consist of a part of their educational courses. In fact, it is a unique kind of recruitment-cum-training that calls for positioning a student in a temporary job without any obligation for the company to hire him permanently after training. Internship is usually beneficial to both the parties. For instance, the interns help the organization do the needed tasks and in turn, gain hands-on experience with the job and first-hand knowledge about the prevailing business practices. The best

feature of an internship is that it lets the employers try out future prior to making a job offer. Advantages of On-the-Job Training: It is directly in the context of job It is often informal It is most effective because it is learning by experience It is least expensive Trainees are highly motivated It is free from artificial classroom situations Disadvantages of On-the-Job Training: Trainer may not be experienced enough to train It is not systematically organized Poorly conducted programs may create safety hazards

5.5.2 OFF THE JOB TRAININGS It is method in which workers are imparted training at a place away from their usual workplace. These methods can be taught effectively in a step-by-step manner. These are used away from work places while employees are not working like classroom trainings, seminars etc. these methods are ideal for teaching the theoretical aspects of the jobs. They become critical when on-thejob training involves potential risk to the trainees and others. Following are the off-the-job methods:

1. Classroom Lectures It is a verbal lecture presentation by an instructor to a large audience. This method of training uses the trainers oratory skills to provide knowledge and skills to the employees through intensive study materials. It involves programmed instruction material, which is to be learned, is presented in small, sequential steps with self instruction. Communication is primarily one way: from the instructor to the learner. It provides a great deal of information quickly to a large group of trainees.

However this method is least effective for retaining and applying information and the trainees looses attention easily. 2. Audio-Visual It can be done using Films, Televisions, Video, and Presentations etc. The advantage of this method are wide range of realistic examples, quality is control possible. One-way communication, No feedback mechanism and No flexibility for different audience are the disadvantages of this method. 3. Simulation Creating a real life situation for decision-making and understanding the actual job conditions. Trainees participate in a reality-based, interactive activity where they imitate actions required on the job. It is useful for skill development. Following are some of the simulation methods of trainings 1. Case Studies: It is a written description of an actual situation and trainer is supposed to analyze and give his conclusions in writing. The cases are generally based on actual organizational situations. Its a story with a practical message. The trainees recommend solutions based on the content provided. It works well with any size group. It is an ideal method to promote decision-making abilities within the constraints of limited data. 2. Role Plays: Here trainees assume the part of the specific personalities in a case study and enact it in front of the audience. Trainees can learn possible results of certain behaviors in a classroom situation. It is more emotional orientation and improves interpersonal relationships. Attitudinal change is another result. These are generally used in MDP. 3. Sensitivity Trainings: This is more from the point of view of behavioral assessment, under different circumstances how an individual will behave himself and towards others. There is no preplanned agenda and it is instant. Advantages of this type training are increased ability to empathize, listening skills, openness, tolerance, and conflict resolution skills and disadvantages include participants may resort to their old habits after the training. It is also time consuming. 4. In- Basket Exercise Training: In this method of training, trainees are given in tray of a manager containing various kinds of mails and correspondence, which requires decision making. Trainees go through each mails and gives his decision. This is good method to

develop analytical thinking and decision making capabilities of of the trainees. 4. Programmed Instructions: Provided in the form of blocks either in book or a teaching machine using questions and Feedbacks without the intervention of trainer. Courses conducted online; flexible timetable; can be done at own pace; requires self-discipline on trainees to achieve training objective. However, clarifying individual doubts can pose problems in this method. 5. Vestibule Training: This method combines the benefits of the classroom with the benefits of on the job training. The classroom is located as close as conditions allowed to the departments for which the employees are being trained. It is furnished with the same machines as used in production. The employees are trained as if on the job, but it did not interfere with the more vital task of production. Transfer of skills and knowledge to the workplace is not required since the classroom is a model of the working environment. Advantages of Off-the-Job Training: Trainers are usually experienced enough to train It is systematically organized Efficiently created programs may add lot of value Disadvantages of Off-the-Job Training: It is not directly in the context of job It is often formal It is not based on experience It is least expensive Trainees may not be highly motivated It is more artificial in nature

5.6 DEVELOPMENT
An organizations conscious effort to provide its manager (and potential managers) with opportunities to learn ,grow and change, in hopes of producing

over the long term cadre of managers with the skills necessary to function effectively in that organization. (DeSimone et al: 2002) Management development is the process by which managers acquire not only skills and competency in their present jobs but also capabilities for future managerial tasks of increasing difficulty and scope. Edwin B. Flippo The management and leadership development process is flexible and continuous, linking an individuals development to the goals of the job and the organization. Management development programmes provides the opportunity to develop a broad base of skills and knowledge that can be applied to many jobs in the organization. Management development curriculum is changing. The overarching goal is a comprehensive curriculum for managers to develop the necessary core competencies to become excellent leaders. Expanding management core competencies will enable managers to keep pace with the demands of a changing organization. 5.7OBJECTIVES OF MANAGEMENT DEVELOPMENT The main objectives of management development are : 1. To provide effective managerial resources to the business at all levels now and in the future as well as to provide opportunities for self-development and career growth. 2. To develop a set of personal attributes which are required to understand customers present and future needs 3. To develop a managerial talent necessary for meeting present as well as future organizational manpower needs, especially at top positions 4. To attract and retain best professionals in the organization 5. To enable managers to develop management skills and competencies needed to achieve excellent levels of performance in both present and future jobs 6. To develop intrapreneurship and facilitate transfer of skills and learning to other employees of the organization such as new joinees 5.8 PRINCIPLES OF MANAGEMNT DEVELOPMENT

The principles of management development are: 1. Encouraging growth and career development of employees as per the philosophy of human resource management 2. Improving skills and knowledge that can be immediately applied at work 3. Increasing motivation and job satisfaction of managerial personnel 4. Creating a network of colleagues for problem solving and support 5. Promoting communication and planning throughout the organization and department networks 5.9 STRATEGIES TO SUPPORT MANAGEMENT DEVELOPMENT The following strategies are noteworthy: 1. Modeling and encouraging the desired behaviour that fits well with the organizations mission, vision, values, objectives and culture. 2. Discussing and creating a development plan during the performanceplanning cycle 3. Endorsing employees attending classes and activities that support developmeny plans and goals. 4. Discussing what the employee learned in the classes and support integrating new ideas/methods to workplace issues 5. Providing timely behaviour feedback on performance and discussing ways to improve and develop further. 6. Providing opportunities for employees to develop through mentoring , cross training, internships, professional associations, committee and task force assignments, skill assessment programmes , and university extension programs.

5.10 Quiz
Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter

1. Every organization, irrespective of its size or nature of operations, need to provide training to its employees at various stages of their career. Identify the man objective of training

i. ii. iii. iv. a) b) c) d)

Updating employee skills and improving employee performance Preparing for promotion and managing succession Retaining and motivating employees Avoiding managerial obsolescence and creating an effective efficient organization Only i, ii, iii Only ii, iii, iv Only iii, iv, i i, ii, iii, iv

2. ____________ is/are widely used for helping the employees understand the rules, regulation, procedures, and policies of the organization. a) Job rotation b) Apprenticeship c) Classroom Lectures d) Vestibule training 3. ____________ is a form of off-the-job training, where the trainee is exposed to an artificial work situation that closely resembles the actual work situation. a) Classroom lecture b) Simulation exercise c) Job rotation d) Job instruction training 4. ____________is described as a method of human interaction involving realistic behaviour in imaginary situations. a) Experimental exercise b) Role playing c) Vestibule training d) Apprenticeship 5. A benefit of the programmed instruction method of off-the-job training is that a) Helps in improving the communicational skills of the trainee b) Helps in improving the people management skills of the trainee c) Promotes continuous interaction between the trainer and the trainee and facilitates learning d) Helps in improving the relationship management skills of the trainee

6. The skills that a management development program aims to develop include: a) Technical and People skills b) Technical and communication skills c) Technical and managerial skills d) Intellectual and managerial skills 7. ___________ can be used to identify the development needs of the managers. They assess a managers ability to perform a job, and identifying the areas requiring development a) Assessment Centers b) Training centers c) HR departments d) Test Centers 8. In the ____________ method of management development, each employee is given a written account usually of a real-life situation occurring in a certain organization. The employee analyzes the situation, identifies the problems and their probable causes, and suggests solutions from the perspective of a person who has to tackle the situation in actuality. a) In-basket b) Incident c) Role Playing d) Case Study 9. Job rotation plays an important role in developing the skill set of a manager. Which of the following may be considered to be the advantages of job rotation in management development? i. Stimulates the development of new and creative ideas ii. Reduces monotony of work iii. Interaction with employees of different departments providing enriching experience of various day to day problems iv. Increase productivity by promoting competition between departments a) Only i, ii, iii b) Only ii, iii, iv c) Only iii,, iv, i d) i, ii, iii, iv 10. Which of the following statements can be considered to be incorrect, with respect to the basic prerequisites for a successful management development program?

a) Management development should take place only when a manager feels it is necessary b) Managers must take up the responsibility of developing their subordinates for greater responsibilities c) Management development must match the needs of the organization and the individual d) Managers must be motivated to invest time I their own development and that of their subordinates, using special reward systems

CHAPTER-6 CAREER PLANNING AND CAREER DEVELOPMENT After reading of this chapter, you will be able to understand: 1. Meaning and Importance of Career Planning and Development 2. Steps in Career Planning 3. Meaning and relevance of Promotion and Demotion 4. Meaning and Type of Transfer and Separation

6.1 CAREER PLANNING-INTRODUCTION

Career planning is a subset of career management. Career planning applies the concepts of Strategic planning and Marketing to taking charge of one's professional future. Career planning is the process of establishing career objectives and determining appropriate educational and developmental programs to further develop the skills required to achieve short- or long-term career objectives. The term career is used to refer to an individual's entire work Life. It can be defined in a narrow sense, to be the succession of jobs and/or ranks held by a person in a particular organization. An individual's career begins with placement in a job and ends with departure from the organization which may be through retirement resignation or death. Career planning and development are concepts which include all those events either happening to or initiated by individuals which affect a person's progress or Promotion, higher widening and/or changing employment possibilities and acquiring a different and normally higher status, better conditions of service or increased satisfaction with the job. Career planning refers to planned and systemized progression of events and development in the field of work or vocation of individuals during the employable periods of their life. The basic character of career development is futuristic in the sense that its policies and programmers are devoted to tomorrow. The following classification system with minor variations is widely used: a) Development of overall goals and objectives,

b) Development of a strategy (a general means to accomplish the selected goals/objectives), c) Development of the specific means (policies, rules, procedures and activities) to implement the strategy, and d) Systematic evaluation of the progress toward the achievement of the selected goals/objectives to modify the strategy, if necessary.

6.2 IMPORTANCE OF CAREER PLANNING AND DEVELOPMENT: Career planning and development is required and hence has to be designed to fulfill the following basic objectives: a) To secure the right person at the right time, in the right place. It assures the adequate availability of qualified personnel in the organization for future openings. This has two facets: positively, to make succession-planning timely and smooth; negatively, to avoid a "square peg-in-a round-hole" in the organization. b) To ensure that the road to the top is open for all. c) To facilitate effective development of available talent. d) To impart to the employee maximum satisfaction, consistent with their qualifications, experience, competence, performance as well as individualistic needs and expectations, leading to a harmonious balance between personal and organizational objectives. Individuals who see that their personal development needs are met tend to be more satisfied with their jobs and the organization. e) To strengthen the organizations manpower retention programmers based on adequacy of career compensation, motivation management. It seeks to improve the organizations ability to attract and retain high talent personnel, since outstanding employees always are scarce and they usually find considerable degree of competition to secure their services. Such people may give preference to employers who demonstrate a concern for their employees' future. Proper career planning and development would insure against any possible dislocation, discontinuity and turnover of manpower. To fulfill such a broad agenda of objectives, the organization must analyze the strength and weaknesses of the existing infrastructure, its internal support system.

6.3 STEPS IN CAREER PLANNING

1. Self Assessment The first and foremost step in career planning is to know and assess yourself. You need to collect information about yourself while deciding about a particular career option.You must analyze your interests, abilities, aptitudes, desired lifestyle, and personal traits and then study the relationship between the career opted for and self. 2. Goal Setting Set your goals according to your academic qualification, work experience, priorities and expectations in life. Once your goal is identified, then you determine the feasible ways and objectives how to realize it. 3. Academic/Career Options Narrow your general occupational direction to a particular one by an informatory decision making process. Analyze the career option by keeping in mind your present educational qualification and what more academic degrees you need to acquire for it. 4. Plan of Action Recognize those industries and particular companies where you want to get into. Make the plan a detailed one so that you can determine for how many years you are going to work in a company in order to achieve maximum success, and then switch to another. Decide where you would like to see yourself after five years and in which position. 5. Catch Hold of Opportunities Opportunity comes but once. So, whenever you get any opportunity to prove yourself and get into your desired career, try to convert it in every way for suiting your purpose. Remember, a successful professional is also quite opportunistic in his moves, examining every opening to turn to his favor.

6.4 PROMOTIONS
Promotion can be defined as the advancement of an employee from one position to another, resulting in his financial benefit. It is certainly a good and effective motivator for employee. Organizations employee promotion as a tool to recognize and reward the merit and sincerity of the employees. Internal promotion, as compared to external hiring, for filling the job vacancies in the organization can increase the loyalty and moral of the employees. Promotions, which are normally accompanies by financial incentives, also fulfill the economic needs of the employees, in addition to fulfilling the social need of attaining increased status in the society. Advancement in the career of the employee is the essence of the definitions of promotions. Promotion is the permanent movement of a staff member from a position in job class to a position in another job class of increased responsibility and complexity of duties and in a higher salary range. -The Policy manual, University of North Texas 6.4.1 CHARACTERISTICS OF PROMOTION The characteristics of promotion are identified as follows: A promotion normally involves movement of an employee from one position to another within an organization. A promotion is normally accompanied by an increase in authority, responsibility and compensation, and demands more skills. Normally a promotion involves the permanent movement of employees to the higher positions in the organization. Moving an employee to higher position on a temporary basis without any increase in compensation is usually viewed as promotion. The promotion of an employee is an administrative act as the management has every right to decide on the matters pertaining to promotion. The promotion of an employee to the next level is normally decided on the basis of merit and seniority or both. A simple addition of duties to the existing positions or a hike in the financial compensation at the existing position cannot become a promotion automatically.

6.4.2 CRITERIA FOR PROMOTION Promotion is one of the highly sensitive tasks of the HR managers, especially when it involves selection from a pool of prospective candidates. A good promotion decision requires an objective evaluation of the relevant competences of the perspective candidates. Depending upon the overall promotion policy, the organization must evolve a procedure of determining the promotions of its employees. We shall now see the general promotion criteria of organization. Merit Merit as a basis for promotion means fulfilling the job positions in a organization with the most talented person available within the organization for those positions. In this category of promotion, merit is given an appropriate consideration while the other factor like seniority becomes the insignificant in the promotion decision. In such cases, the candidates identification, evaluation, and selection for promotion will be based only on job related criteria. Seniority In the case of seniority based promotions, the length of the service of the employees is considered for promotion, while other factors like competence and commitment are overlooked. As such, the job positions are available within the organization are filled with persons who have maximum years of service in the organization. The length of service in the organization or in the present position becomes the sole criterion in promotion decisions. The seniority based system is normally followed in public sector organizations. In organizations where seniority is the sole basis, promotions are time bound and also a formality. Seniority-Cum-Merit-based Promotions In this method and organization considers both merit and seniority for determining the promotion of an employee. The primary purpose of this method is to include the positive features of both the promotion criterion. The organization may decide the weights for merit and seniority on the bases of its HR and promotion policies. For instance, an organization may decide to have the proportion of merit and seniority in the ratio of 70 and 30 in order to evaluate and potential candidates.

It is important to note that current competence of individuals cannot alone be the basis for elevation but certain relevant traits are required like growth-potentiality, capacity to take on higher responsibilities, risk-bearing dynamism, a vision and a perception for total organizational progress. Indeed, if rewards are not commensurate with demonstrated accomplishments, the organization is bound to suffer. Career planning, must include not only the very best and brilliant achievers in the organization, but also those who are senior, averagely competent and Adequate and who have rendered long service by growing with the organization. The whole system of promotion, owes its rationale to two important factors: a Personnel factors connected with the reward for longevity, loyalty and good work; motivation for better performance, urge for recognition; search for job satisfaction and goal of self actualization or fulfillments a Organizational factors connected with accomplishment of its objectives through obtaining of right persons at the right time within its own jurisdiction, generation and availability of such requisite skills and specialized knowledge specific to the relevant tasks and programmers.

6.5 DEMOTION
A demotion is a reduction in an employee's rank or job title within the organizational hierarchy of a company, public service department, or other body. A demotion may also lead to the loss of other privileges associated with a more senior rank and/or a reduction in salary or benefits. An employee may be demoted for violating the rules of the organization by a behavior such as excessive lateness, misconduct, or negligence. In some cases, though, an employee may be demoted as an alternative to being laid off, if the company is facing a financial crisis. A move to a position at the same rank or level elsewhere in the organization is called a lateral move or deployment. The opposite of a demotion is a promotion. Within the continuum of disciplinary options available within most organizations, a demotion falls in the middle range of severity. Minor violations of rules or the first violation of a rule will typically result in a verbal or written warning or a suspension without pay. At the other extreme, for severe violations of the rules, such as embezzlement or sabotage, an employee will typically be fired and the company will file criminal or civil charges. In sports leagues, when teams are transferred between divisions, the worst-ranked teams in the higher division are relegated to the lower division. 6.5.1 REASONS FOR DEMOTION

An employee may be demoted for several reasons including administrative convenience and punishment. Following are the important reasons for demotion: Administrative Convenience Due to external developments and/or internal restructuring, an organization may be forced to abolish certain categories of jobs or merge the jobs for administrative purposes. Inefficiency Employees can me moved out of the existing position to some lower level for consistence failure to meet the performance goals of the organization. Disciplinary Action An organization may impose demotion as a punishment for any serious violation of code of conduct. Demotion is considered as less severe punishment than dismissal or discharge of employees from the job. Voluntary Demotion It is also called demotion on request. It involves shifting an employee to a lower designation upon his request or concurrence. Employee may request a voluntary demotion when they are not wiling or able to perform the existing duties any longer or shoulder the responsibilities of current positions properly.

6.6 TRANSFER
A horizontal shifting of employs from one job to another without any job related increase in the pay, benefits and status of the employee is called transfer. It can broadly be classified into two categories, namely, imposed transfer and requested transfer. In case of the former, an employee is transferred for administrative convenience with or without his concurrence. For instance an organization may carry out transfers for better utilization of skills and knowledge of the employees. Transfers may also be used to see whether an employee is fit for permanent placement in that position as a part of promotion. In case of requested transfers, an

employee is transferred to another job or place because he has requested the transfer. Transfers are often requested by the employee for personal reasons. The lateral movement of employees from the existing job to another with comparable duties responsibilities and pay range is the essence of the definitions of transfer. We can define transfer as an employees lateral mobility in the organization structure without any significant change in the authority, responsibility, compensation and social status. 6.6.1 OBJECTIVES OF TRANSFER Transfers can serve several purposes for both the organization and employee. We will now discuss the major purposes of transfer: Optimum utilization of skills Organization may transfer employee through from places where there is underutilizations due to labour surplus to other places within the organization that suffer from skills shortages. Training of employees Many organization transfer employee as a toll to train the employee in different jobs of the organization Disciplinary Action As part of disciplinary action, employees may be transferred to the least preferred jobs or destination without any change in the job authority, responsibility, and compensation packages. Employee Request Organizations may order a transfer to fulfill the request of an employee for it. Employee may cite health, family or other personal problems for seeking voluntary transfers. They may also seek transfers for job related reasons like difficulties and high level of stress Transfer can be done on the request of employee due to personal reason like family problem or health problem.

Due to HR policy which states that one employee can work in department or place for specific time period. Transfers are common in the organizations where the work load varies timely. If an employee is not able to do the work or job assigned effectively he can be transferred to the other job where he can use his skills properly according to his interest and abilities. Departmental vacancies can be filled with transfer of employees from overstaffed department. Employees can be transferred to the position or department with the higher priority workload. 6.6.2 TYPES OF TRANSFER Transfers may take place due to variety of reasons and for that there are different types of transfers: Production Transfer When the transfers are being made for filling the position in such departments having lack of staff, from the departments having surplus manpower it is called production transfer. It prevents the layoffs form the organization. Also it is good to adjust existing staff rather than to hire the new one. Remedial Transfer Remedial transfer refers to rectification of wrong selection or placement of employees. If the employee can adjust himself in the given job he can be transferred to the job where he can use his skills and abilities accordingly. Versatility Transfer Such transfers are done to increase the versatility in the employees so that he can work different kind of jobs. This is done by transferring employee to different jobs closely related in same department or process line.. This is used as a training device. It helps employee to develop him and he is equipped for the high responsibility jobs as he is having knowledge of the whole process. Shift Transfer

In many multi-shifts jobs such as Call centers employees are transferred from one shift to another due to their personal reasons like health problem or evening college for higher studies or any family problems.

6.7 SEPARATION
Employee Separation is one of the very important and crucial function / process of HR Department. This process, if not handled in an efficient manner, can lead to various legal complications. The relation of an employer and employee has a beginning; they stay together for a while and then they separate. Beginning of the relation is called as recruitment process or talent acquisition that passes through selection phase and followed by induction. Staying together in the relation comprises the various phases such has performance management; career management; professional growth; development and etc. And the final stage of the relation is the separation.

6.7.1 Types of Separation

Depending upon the reason, an organization may initiate voluntary or involuntary separation of employees by adopting any one of the mentioned forms: Resignation This is the most common way of separation. Employee leaves his job and employment with his employer to pursue better opportunities; a better position at a better compensation package in a branded company (or better known company) in a same city and country or in a different city or different country. So, an employee resigns for: 1) Better compensation and benefits 2) Higher position / level 3) Challenging role 4) To move from an unknown or lowly branded company to a highly branded and reputed company (Top 10 or 25 companies in the world etc) 5) For foreign or international assignments Termination Usually, this process is perceived negatively by employees. In termination, an employer uses his right to terminate the contract of an employment. There

can be many reasons for an employer to terminate the contract of employment but some of the common reasons are: 1) Non-Performance 2) Indiscipline 3) Misconduct 4) Insubordination 5) Theft and etc Absconding This is one of the most unethical, unexpected and unprofessional way to terminate the contract of an employment. In this, on one fine day an employee decides not to go to work. He does not care to hand-over his stuff. In case an employee decides to abscond (or run-away), it becomes very important to understand his motives and intentions. Employees can abscond in either or all of the below mentioned circumstances / situations: 1. After stealing the confidential information or documents or database from the company. 2. If the intentions of an individual is to commit a crime. 3. If there is a work-pressure and stress and the individual is not able to cope-up with it (as it happens in call-centers, BPO and other high-stress industries). 4. If the employee has committed any crime outside the office and after working hours (such as murder or getting involved in terrorist activities or theft or any other civil crime). 5. Then, when priorities are different. Employee has asked for leave due to some urgency at his home (or might be he is trying to escape from his work responsibilities) and at the same time his team also needs him in the office and his leaves are not approved. 6. If he has got some exceptionally good opportunity that requires him to join immediately and he feels that the process of separation in his company is a bit too complicated. He assumes few things and do not really try to face the challenge. 7. Lastly, it is a personality issue. Employees that abscond have different personalities. They are low in confidence. They are too weak to face the reality and challenges of life. They feel that running away from the problem is as good as solving the problem. They are cowards to take the problems head-on.

 Retirement This is most common form of separation of employees from the organization. Depending upon its retirement policy, an organization would initiate the necessary steps to separate the employees upon attaining the specific age. The age of retirement from government services in India differs from one state to another within the range of 55 to 65 years. However private organizations can have their own retirement policies. Retrenchment Retrenchment is a kind of involuntary separation which an organization adopts to downsize it labour force. The purpose of retrenchment is to reduce the expenditure of the business and raise the profitability, especially during the difficult times of organization. The need for retrenchment may arise due to the closure of unprofitable business operations, the automation of operations, and shifting business from one region or country to another Layoff A layoff is similar to retrenchment except that it is a temporary separation of employees from the organization. Organizations usually resort to layoffs to overcome the problems of business slowdown and other temporary business interruptions. Since a layoff is a temporary separation, the employees would be called back once the business fortunes revive and get stabilized. 6.7 QUIZ

Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. In which of the following activity the employee is no longer associated with the organization a) Transfer b) Separation c) Promotion d) Demotion

2. It is the process of establishing career objectives and determining appropriate educational and developmental programs to further develop the skills required to achieve short- or long-term career objectives a) Promotion b) Career Planning c) Job Rotation d) Training 3. Which of the following is not considered as a type of separation a) Resignation b) Termination c) Demotion d) Absconding 4. Successful career planning and development requires action froma) The organization, his employees immediate manager and the employee b) The employee and his/her immediate manager c) A variety of sources both internal and external to the organization d) The employee with some assistance/guidance from his/her immediate manager. 5. A/An _____________ can be defined as a sequence of positions, roles or jobs by one person over a relative long time span. a) Work b) Profession c) Occupation d) Career 6. ____________ can be defined as logical progressions between jobs, or from one job to a target position. a) Need analysis b) Career Counseling c) Career path d) Opportunity analysis

7. ________________ is the horizontal movement of an employee from one job to another job at the same level in the organizational hierarchy. a) Promotion b) Career development c) Transfer d) Vacancy-based promotion 8. In _______________ promotion, when a vacancy arises for a position, employees at the next lower level are assessed based on their performance and service, and the best performer is promoted to the vacant position. a) Seniority based b) Merit based c) Time bound d) Vacancy based 9. Which of the following alternatives might result lead to job vacancies in an organization? i. Employee turnover ii. Promotions iii. Recruitment iv. Demotions and Terminations a) i, ii,iii b) i, iii, iv c) i, ii, iv d) i, ii, iii, iv 10. Paul Pigors and Charles Myers define __________ as advancement of employees to a better job- better in terms of job responsibility, more prestige or status, greater skill and especially increased rate of pay or salary. a) Career development b) Self assessment c) Promotion d) Transfer

CHAPTER 7 JOB EVALUATION AND COMPENSATION After reading this chapter, you will be able to understand: 1. Meaning, characteristics and objectives of Job Evaluation 2. Job Evaluation Process and methods 3. Job Specification and its components 4. Merit rating and Job Evaluation

7.1 JOB EVALUATION Job evaluation as a management technique was developed around 1900. It became one of the tools with which managers understood and directed organizations. Frederick W. Taylor, through his interest in improving the efficiency of work, made studying the job one of his principles of scientific management. Early organization theorists were interested in how jobs fit into organizations: they focused on the purpose of the job. But this early interest in job evaluation disappeared as the human relations movement focused on other issues. It was not until the 1960s that psychologists and other behavioral scientists rediscovered jobs as a focus of study in organizations. Job evaluation is the process of systematically determining a relative internal value of a job in an organization. In all cases the idea is to evaluate the job, not the person doing it. Job evaluation is the process of determining the worth of one job in relation to that of the other jobs in a company so that a fair and equitable wage and salary system can be established. Job evaluation may be defined simply as an attempt to determine and compare the demands which the normal performance of particular jobs makes on normal

workers without taking into account of the individual abilities or performance of the workers concerned. -International Labour Organization Job evaluation represents an effort to determine the relative value of every job in a plant and to determine what the fair basic wage for such a job should be. -Kimball and Kimball

7.1.1 Characteristics of Job Evaluation

Based on these definitions, job evaluation has the following characteristics:Job evaluation is primarily concerned with the determination of the worth of the job within an organization. It is not concerned with the external worth of the job, i.e., the worth of the job in the labour market. It is non-personal in approach as it does not consider the abilities and skills of the job holders while evaluating a job. Job characterises like duties, responsibilities and accountability often from the basis for the determination of the relative worth of the job. In Job evaluation, jobs are allocated to grades or levels, depeding upon their performance or scores in the job evaluation process. Determination of fair and equitable pay scales for jobs is the driving force behind the job evaluation process.

7.2 Objectives of Job Evaluation

The following are the objectives of the job evaluation exercise in an organization: To rank the jobs in the order of importance based on the job duties, responsibilities and other relevant factors To develop job grades and pay grades for facilitating simple and efficient wage and salary administration To institutionalize the system of pay scale fixation in order to ensure consistency and uniformity To determine the pay scales of the employees in a systematic and scientific manner based on the relative worth of the jobs

To avoid or eliminate the employees grievances against the bias and prejudices in the determination of the pay scales of the employees To enhance the ability of the organization in attracting and retaining the best talents.

7.3 Principles of Job Evaluation

Clearly defined and identifiable jobs must exist. These jobs will be accurately described in an agreed job description. All jobs in an organisation will be evaluated using an agreed job evaluation scheme. Job evaluators will need to gain a thorough understanding of the job Job evaluation is concerned with jobs, not people. It is not the person that is being evaluated. The job is assessed as if it were being carried out in a fully competent and acceptable manner. Job evaluation is based on judgement and is not scientific. However if applied correctly it can enable objective judgements to be made. It is possible to make a judgement about a job's contribution relative to other jobs in an organisation. The real test of the evaluation results is their acceptability to all participants. Job evaluation can aid organisational problem solving as it highlights duplication of tasks and gaps between jobs and functions

7.4 Benefits of Job Evaluation

1. Reduction in inequalities in salary structure It is found that people and their motivation is dependent upon how well they are being paid. Therefore the main objective of job evaluation is to have external and internal consistency in salary structure so that inequalities in salaries are reduced. 2. Specialization For the reason, division of labour and thereby specialization, a large number of enterprises have got hundred jobs and many employees to perform them. Therefore, an attempt should be made to define a job and thereby fix salaries for it. This is possible only through job evaluation. 3. Helps in selection of employees

The job evaluation information can be helpful at the time of selection of candidates. The factors that are determined for job evaluation can be taken into account while selecting the employees. 4. Harmonious relationship between employees and manager Through job evaluation, harmonious and congenial relations can be maintained between employees and management, so that all kinds of salaries controversies can be minimized. 5. Standardization The process of determining the salary differentials for different jobs become standardized through job evaluation. This helps in bringing uniformity into salary structure. 6. Relevance of new jobs Through job evaluation, one can understand the relative value of new jobs in a concern. 7. Basis for Training Need Identification As job evaluation studies the job characteristics and job demands in terms of the efforts and skills required, it can also be used to determine the training and development requirements of the job holders. 8. Basis for Career Planning and Development Since job evaluation considers the behavioural, motivational and personality requirements of a job in addition to the job characteristics, it provides the basis for determining the career plans and succession plans of the organization.

7.5 JOB EVALUATION PROCESS It is essential for an organization to develop a systematic and objective evaluation process to gain the confidence of the employees in the process. An organization can have its own process of conducting job evaluation. Generally the process of job evaluation involves the following steps:1. Identification of the jobs to be evaluated

First Step is the determination of jobs to be covered under the evaluation process. It is very difficult to evaluate all the jobs of an organization. It, therefore chooses a few key jobs which represent a group of similar jobs for job evaluation purpose. 2. Gathering Relevant Information about the Job The next phase is of job evaluation process is the collection of necessary information about the jobs being evaluated. For this the evaluator may adopt data collection techniques like interviews, questionnaires and observations besides job description statement, for gathering relevant information. Then, the evaluators should do a thorough analysis of all the information available with them. 3. Determination of Job Ranking After analysis all the information related to the jobs, the evaluator assesses the extent of the presence of the chosen factors in the jobs. Based on the results of such an assessment, the evaluator determines the rating for each job. Since similar factors are assessed in the evaluation process, the rating reflect the relative worth of a job in comparison to other jobs in the organization. 4. Selection of Benchmark Jobs To ascertain the comparative pay scales of all the jobs in the organization, the evaluators may select a few jobs which are normally found in every organization and are comparable in nature. These jobs are usually called benchmark jobs and served as yardsticks for determining the pay scale of all other jobs in the organization. 5. Wage and Salary Surveys At this stage, an organization conducts a survey of pay scales of the benchmark, jobs in other organization. Based on several surveys, the monetary value of each job is determined. 6. Periodic Review and Feedback Developments in the external environment influence the organizations continuously and also cause change in the internal factors.Consequently,

organizations are forced to review the jobs at periodic intervals to determine their worth in the changed context.

7.6 Methods of Job Evaluation

The more difficult the job, the more is its worth. The more scarce the labour supply and higher the demand, the more a job is worth. The more skills, education and responsibility required in a job, the more it is worth. These generalizations usually hold true for most jobs and serve as indicators of what the level of pay should be, but they are so general that they are of little use in translating specific jobs into rates of monitory compensation. Therefore several systems of job evaluation have been developed which take into account the above mentioned factors either directly or indirectly. There are four types of job evaluation methods, as mentioned below: Job Ranking The job ranking method is the simplest and easiest job evaluation method; jobs and the employees who perform those jobs are ranked from highest to lowest depending on their quality and value to the organization. In this each successive job is higher or below than the previous one in sequence and all the jobs is arranged as per their requirement. Usually this technique is used to rank jobs according to the whole job rather than number of compensable factors. Job Grading method In this method, jobs are grouped on the basis of similarities found in their characteristics and value. The characteristics may include the problemsolving skills required, the communication and persuasion abilities needed, demand for creativity, the physical or mental efforts required, and the difficulty or stress involved in the job. Generally, jobs within each job group or class are eligible for the same pay scale or grade. Point Method

It is one of the quantitative methods in job evaluation. In this the worth of a job is determined on the basis of the extent of the presence of some defined factors in that job. Maximum point values are assigned to each of the job factors required to be considered. Then each job is awarded points scored by it. A job factor is a specific requirement levied upon the job holder which he must contribute, assume and endure. The major factors are skill, effort, responsibility and working conditions. These factors or points are later converted into money value. Factor Comparison Method This method determines the relative rank of the jobs to be evaluated in relation to monitory scale. It is often used for evaluating white collar, professional and managerial position, although it is equably suitable for grading other jobs as well. It is essentially a combination of the ranking and point systems. I n this method , five factors are generally evaluated for each job: Mental Requirements Skills Physical Requirements Responsibilities Working Conditions The factor comparison method is more scientific and complex than any other method.

7.7 MERIT RATING Merit-rating is associated with performance appraisal of an employee. This is a systematic approach for evaluating the performance of an employee on the job, which he performs. This is also called as personnel rating and employee evaluation. Merit rating aims at evaluating the relative worth of employees in the organisation before awarding them appropriately. In this the organisation links the part of the employees wages to their actual performance in comparison with the standards set by it. These standards may be in terms of critical job factors like competency, initiative, attitude, safety records, punctuality, regularity records, health,

dynamism, behaviour, reliability and adaptability. Depending upon the importance of these factors to the job, the organisation may assign points to each of these factors. The employees overall performance in the job is then evaluated to determine their aggregate scores, which, in turn, decide the incentive payable to them. Merit-rating is a formal, objective procedure for evaluating personality, contributions and potentials of employees in a working organization. 7.7.1 JOB EVALUATION VS MERIT RATING Job-evaluation and merit-rating are compared in the following ways: Job Evaluation vs Merit Rating Job Evaluation (1) It evaluated a job or work Merit Rating (1) It evaluated a worker

(2) It is for the purpose of fixing a (2) It is for the purpose of deciding base-wage for a job. reward for exceptional merit of worker. (3) It is independent of operator or (3) It is independent of job. It is worker. It is impersonal in nature. impersonal in nature. for decision regarding promotion,

(4) Useful for decision regarding wage (4) Useful and salary administration, skill match, etc. (5) It considers requirement of job. training,

placement,

counselling, etc. (5) It considers ability and

performance of individual.

7.8 QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. ____________ is a systematic process of analyzing and assessing jobs to determine the relative worth of each job in an organization and forms the basis for designing the compensation management system in the organization. a) Job Grading b) Job evaluation c) Job analysis d) Performance Appraisal 2. Several quantitative and non quantitative techniques are used for comparing jobs in an organization in order to classify them and attach monetary values to them. Among the alternatives listed below, identify the non-quantitative technique(s). i. Ranking ii. Point ranking method iii. Factor comparison method iv. Job grading a) Only i and ii b) Only ii and iii c) All except i d) Only iv 3. In the __________ method of evaluating jobs, a key job is identified and its worth is determined. Subsequently, the importance of each job in comparison with representative job is determined and then the job is ranked. a) Paired Comparison b) Job Grading c) Single Factor Ranking d) Relative Ranking

4. The factor comparison method is a quantitative job evaluation technique. It is based on the principle of two other methods used for job evaluation. The two methods on which the factor comparison method is based are ___________ a) Ranking and Point ranking b) Job classification and job grading c) Job grading and ranking d) Decision band and point rating 5. The main objective of job evaluation is to determine the relative worth of different jobs in the organization and provide the basis for compensation management system. However, job evaluation fulfils some other objectives as well. Identify statement which is not one of these objectives. a) Avoidance of discrimination of any kind in wage determination b) Determination of the position and place of a job in the organizational hierarchy c) Updating the employees skills d) Ensuring employee satisfaction with respect to compensation 6. The point rating method is a quantitative technique of job evaluation. What is/are the advantage(s) of this method? i. The system is accurate and dependable ii. Wage differentials are likely to be systematic and in accordance with the content of each job iii. It is quickly and inexpensive method of job evaluation iv. It is a simple technique a) Only iii b) Only i and ii c) Only iii and iv d) Only ii and iv

CHAPTER-8 WAGE AND INCENTIVE COMPENSATION SCHEMES After reading this chapter, you will be able to understand: 1. Wages and wage system in India 2. Methods of wage payment 3. Incentive compensation- nature and importance 4. Prerequisite for effective incentive scheme 5. Types of Incentive schemes

8.1 WAGES AND WAGE SYSTEM IN INDIA Wages refers to the total pay package which an employee receives on a periodic basis. A healthy, competent and devoted work force is the most precious asset of a successful organization. In order to obtain, retain and develop such workforce or employees, it is necessary that they are suitably rewarded for their services. A remunerative wage structure is the dominating force, which motivates employees to contribute their maximum worth to the enterprise The term wages in broad sense means any economic compensation paid by the employer under some contract to his employer for the services rendered by them. The basic wage is the remuneration by way of basic salary paid to the employee. Allowances on the other hand are paid in addition to the basic wage to maintain the value of the basic wage over a period of time. Such allowances include holiday pay, bonus, and social security benefits. Under the Payment of Wages Act, 1936, Section 2 (VI), any award of settlement and production bonus, if paid, constitutes wages. Minimum Wage, Living Wage, and Fair Wage Money is often looked upon as a means of fulfilling the basic needs of man. Food, Clothing, transportation, education, and security are possible because of money. Promotions, monetary benefits, and other allowances act as motivators. In India

in1948, a committee was set up to brig out a report on minimum wage, fair wage, and living wage.

8.1.1 MINIMUM WAGE A minimum Wage is defined by the committee as the wage which must provide not only bare sustenance of life but also preserve the efficiency of the worker. Minimum wage may be tied by an agreement between the management and the workers, but it is usually determined through legislation. In any even the minimum wage must be paid irrespective of the extent of profits, the financial condition of the establishment or the availability of workmen at lower wages. The 15th Indian labour conference (1957) formally qualified the term minimum wage thus: In calculating the minimum wage, the standard working class family should be taken to comprise three consumption units for one earner, the earnings of women, children, and adolescents being disregarded. Minimum food requirements should be calculated on the basis of a set intake of calories as recommended by Dr. Aykroyd for an average Indian adult of moderate activity. Clothing requirements should be estimated on the basis of a per capita consumption of 18 yards per annum, which would give for the average workers family of four a total of 72 yards In respect of housing, the rent corresponding to the minimum area provided for under the Government Industrial Housing Schemes should be taken into consideration in fixing the minimum wage. Fuel, lighting and other miscellaneous items of expenditure should constitute 20 % of the total minimum wage.

8.1.2 LIVING WAGE

The living wage as defined by the committee is one which should enable the earner to provide for himself and his family food, clothing, shelter, and also education and medical needs, social needs, and a measure of insurance. Such a wage was determined keeping in view the national income and the capacity to pay. The living wage may be somewhere between the lowest level of the minimum wage and the highest limit of the living wage , depending upon the bargaining power of labour, the capacity of the industry to pay, the level of the national income, the general effect of the wage rise on neighbouring industries, the productivity of labour, the place of industry in the economy of the country, and the prevailing rates of wages in the same or similar occupations in neighbouring localities. Living wage is that which workers can maintain the health and decency, a measure of comfort and some insurance against the more important misfortune of lie. A living wage must be fixed considering the general economic conditions of the country. The concept of living wage, therefore, varies from country to country.

8.1.3 FAIR WAGE According to the committee on fair wages, it is the wage, which is above the minimum wage but below the living wage. The lower limit of fair wage is the minimum wage and the upper limit is the capacity of the industry to pay. Hence a fair wage may depend upon such factors as productivity of labour, prevailing rates of waging, level of national income, the place of industry in the economy, and so on. It is fixed only by comparing with an accepted rate. Such a standard can be determined with reference to those industries where labour is well organised and has been able to bargain with the employees. The wages must be fair, i.e. sufficiently high to provide standard family with , food, shelter, clothing, medical care and education of children appropriate to the workmen.

8.2 FACTORS DETERMINING WAGES

The most important being the bargaining capacity of the employer and employees.

Standing of the particular organization and its financial capacity to pay higher wages. The prevailing rates of wages for similar type of work in the market (i.e. level of competition) as well as the prevailing condition of the economy. If a job requires specialised skills and training,wages should be accordingly higher. The nature and type of the work done by the workers. For example, higher wage rates should be paid for complicated and hazardous jobs. Productivity of workers like workers who are more efficient and experienced should get higher wages.

8.3 WAGE POLICY IN INDIA Wage policy refers to all systematic effotrts of the government in relation to national wage and salary system. It includes orders , legislation, and son on to regulate the levels or structutres of wages and salareswith a view to achieveving economic and social objectives of the government. Specifically the objectives of wage policy are 1. To obtain for the workers a just share of the fruits of e conomic development 2. To set minimum wages for workers whose bargaining position is week 3. To bring about a more efficient allocation and utilization of human resources through wage and salary differentials 4. To abolish mal practices and abuses in wage and salary payments. The first step towards the evolution of wage policy was the enactment of the Payment of Wages Act, 1936. The main objective of the Act is to prohibit any delay of withholding of wages legitimately due to the employees. The next step was the passing of the Industrial Disputes Act, 1947, authorising all the state governments to set up industrial tribunals which would look into disputes relating to remuneration. Another note able development that led to the evolution of wage policy was the enactment of the Minimum Wages Act, 1948.

The purpose of the Act is the fixation of minimum rates of the wages to workers in sweated industries such as woollen, carpet making, flour mills, tobacco manufacturing, oil mills, plantations, quarrying, mica, agriculture, and the like. The Act was amended several times to make it applicable to more and more industries. Then came the Equal Remuneration Act, 1976, which prohibits discrimination in matters relating to remuneration on the basis of religion, region or sex. The constitution of India committed the government to evolve a wage policy. Successive five year plans have also devoted necessary attention to the need for a wage policy. Following the recommendation of the First and Second Plans, the Government of India constituted wage boards for the important industries in the country. A wage board is a tripartite body comprising representations from the government, owners, and employees. Technically speaking, a wage board can only make recommendations, and wage policies are normally implemented through persuasion. In spit of legislations, tribunals, and Boards, disparities in wages and salaries still persist. Some of the disparities are: 1. Employees of MNCs are paid much more than their counterparts in host countries for identical work. 2. Different industries have different have wage and salary structures resulting in disparities in remuneration for identical work. 3. Wide gaps exist between different wages and salaries of employees in the organized stores and of those in the unorganized, the latter earning much less than the former. 4. Differences exist between earnings of employees in the government sector and those in the private sector. 5. Within the government sector, salary differences exist among the employees of different departments. The disparities are glaring. If an illiterate supervisor in a leather processing unit can earn Rs. 12000 plus per moth and a half-yearly bonus, how much can a universe professor can earn? Rs 10,000 and no bonus? If auto driver can earn Rs 3000 per month, how much should a

temporary lecturer in a college earn? Rs 1200 per month? And remain temporary forever. A sweeper in L&T is an income tax assessee but a BE or an MBBS degree holder works for Rs 800 per month in a small-scale unit or Rs 1200 in a private nursing home, respectively. There are clerks in Mumbai who get nearly twice as much as a labour tribunal judge- the man who arbitrate everyones wages and salaries. And a head clerk in LIC gets, at the maximum of his grade, more than half of the salary of a high court judge, not less. In order to correct such disparities, the government of India appointed a committee headed by Mr. Bhootalingam in 1979. The brief given to the committee was to suggest rational and integrated wage policy covering all sectors of the economy. Soon after the committee submitted its report, there was hue and cry raised against the recommendations. It was criticized as anti-labour and impracticable. The report was promptly and predictably shot down.

8.4 METHODS OF WAGE PAYMENT There are two methods of wage payment. One method relates to the hours the employee is at work, regardless of his output (time rate system). The other method is related to the production or output, regardless of the time taken for production (piece rate system). The other methods-incentive schemes-are only a variation of the two or combined with time and piece rate systems.

1) TIME WAGE SYSTEM In this system the worker is paid on the basis of time spent on the work irrespective of the amount of work done. The basis of this time may be hour, day, week or month. This is the oldest system of wage payment. Suitability Quality of work is more important that the volume.

Measurement of work is not convenient (indirect labour) Production involves delay and interruption due to uncontrollable factors. Where the work requires a high degree of skill and dexterity. Where work is of nature that efficiency can be measured by close supervision. Merits It is simple to understand or operate. Workers are assured of guaranteed minimum wages irrespective of the output. Suitable to beginners and learners. For precision work (pattern making, tool making) where care is more significant than speed, the time rate systems will help maintain the quality of products. It is favoured by trade unions. Demerits It makes no distinction between efficient and inefficient workers. It offers very little to capable and efficient workers in the form of incentive to increased production. Management is made to spend more on assuring close supervision and there by prevent wastage of time. Workers try to make the work as long as possible so that they can earn more. Thus, labour cost per unit is increased. The system is unfair since wages and productivity are not correlated.

2) PIECE RATE SYSTEM Under piece rate system, the workers are paid at a stipulated rate per piece or unit of output. Here speed is the basis of payment, instead of time. In the system, the rate is fixed per piece of work and the worker is paid according to the number of pieces completed or the volume of work done by him, irrespective of time taken by him in completing that work. Efficiency is, thus recognised in this system. Suitability

Quality of work is not important. Work is of a repetitive nature Job rate can be fixed satisfactorily. There is sufficient demand for output to guarantee continuous work. The job is a standardised one. Merits It provides encouragement for higher production by rewarding efficient workers in a suitable way. In their bid to earn more, workers will try to adapt better and more efficient methods and thereby increase production. As a result the general dexterity and skill of the workers are enhanced. As wage rate is fixed per unit, it is easy to prepare quotations, estimates and budgets. Idle time will be reduced to the minimum, as workers are not paid for wasted time on the job. Workers take great care in maintaining machines and tools properly because their breakdown would cause work stoppages and reduce their earnings. Cost of supervision is less, as workers do not require supervisors to oversee their efforts. Demerits Under the straight piece wage plan, no minimum remuneration is guaranteed. Beginners and average workers will not be able to earn reasonable wages because of their inability to complete the work as fast as their experienced counter-parts do. Quantity will be over emphasised at the cost of quality unless close supervision is maintained. Piece rate are unsuitable in circumstances where work is intermittent and job cannot be standardised. Since wages are linked with output, there will be a tendency among workers to labour hard and overstrain themselves to record higher and higher output to get increased wages thereof overwork affects the health of workers.

8.5 NATURE OF INCENTIVE PAYMENTS

Besides wages and salary employees are paid incentives upon their performance. Incentives payments are quite substantial and are paid as regularly as wages and salaries. Incentives are the monetary benefits paid to workmen in recognition of their outstanding performance. They are defined as variable rewards granted according to variations in the achievement of specific results. The international Labour Officer refers to incentives as payment by results. Unlike wages and salaries which are relatively fixed, incentives generally vary from individual to individual, and from period to period for the same individual. 8.5.1 FEATURES OF INCENTIVE PLANS The characteristics of these plans are as follows: 1. Minimum wages are guaranteed to all workers 2. Incentives by way of bonus, etc. are offered to efficient workers for the time saved. 3. A standard time is fixed and the worker is expected to perform the given work within the standard time. The standard time is set after making the time studies for the performance of a specific job. 8.5.2 IMPORTANCE OF INCENTIVES The primary advantage of incentives is the inducement and motivation of workers for higher efficiency and greater output. Earnings of employees would be enhanced due to incentives. There will be reduction in the total as well as unit cost of production, through incentives. Production capacity is also likely to increase. It leads to reduction in supervision, better utilisation of equipment, reduced scrap, reduced lost time, reduced absenteeism and turnover and increased output. Incentive packages are a very attractive proposition for managements because they do not affect employers contribution to the provident fund and other employee-retirement benefits. 8.5.3 DISADVANTAGES OF INCENTIVE

There is tendency for the quality of products to deteriorate unless steps are taken to ensure maintenance of quality through checking and inspection. Difficulties may arise over the introduction of new machines and methods. Workers may oppose such introduction for fear that new piece or bonus rates set, when the job is restudied at intervals of time, may yield lower earnings, or when the new machines are introduced, they may slacken their rate of work in order to avoid rising output to a level which would make a restudy of the job necessary. Workers tend, moreover, to regard their highest earnings as normal and may, therefore, press for a considerably higher minimum wage when they are paid by results than when they are paid by the hour. There is evidence that some workers paid by results have disregarded security regulations in order to achieve high output, thus, increasing the danger of accidents. Another disadvantage is that jealousies may arise among workers because some are able to earn more than others. One of the greatest difficulties with the incentive systems is in the setting of piece or bonus rates. Rate fixing involves delicate problems of judgement in which there is always a risk of error. Difficulty also arises in determining the standard performance. Preparing incentives schemes is such a complex business, management usually outwit their employees.

8.6 PRE-REQUISITES FOR AN EFFECTIVE INCENTIVE SYSTEM. All things considered, it may be concluded that in many industries or undertakings and for a large group of operations, well designed systems for payment by results shall yield advantages to all concerned. Many of these advantages will be realised provided sufficient safeguards are provided. Such pre-requisites are: 1. The co-operation of workers in the implementation of an incentive scheme is essential because the employees somehow devise, if they do not like a scheme, ingenious ways of evading or sabotaging the plan, often with the tactic connivance of the supervisor or foreman. 2. The scheme must be based on scientific work measurement. The standards set must be realistic and must motivate workers to put in better performance. Workers must be provided with necessary tools, equipment and materials so as to enable them reach their standards.

3. Indirect workers, such as supervisors, foreman, charge hands, helpers, crane operators, canteen staff, store keepers and clerical staff should also be covered by incentive schemes. 4. There should be management commitment to the cost and time necessary to administer incentive schemes properly, and these must be carefully assessed before embarking on an incentive programme. 5. There is greater need for planning. Many incentive schemes, started hurriedly, planned carelessly, and implemented in differently have failed and have created more problems for the organisation than they have tried to solve. 6. The other safeguards areThe incentive scheme should be appropriate to the type of work carried out and the workers employed. The reward should be clearly and closely linked to the efforts of the individual or group. Individuals or groups should be ale to calculate the reward they get at each of the levels of output they are capable of achieving. The scheme should operate by means of a well- defined and easily understood formula. The scheme should be properly installed and maintained. Provisions should be made for controlling the amounts paid, to ensure that they are proportionate to effort. Provisions should be made for amending rates in defined circumstances. Create incentives for performance and disincentives for non performance. Set and review specific objectives for each employee periodically. 8.6.1 ESSENTIALS OF A SOUND INCENTIVE PLAN Guarantee Minimum Wages It must guarantee minimum wages irrespective of the performance of the worker. Simple It must be simple to operate and easy to understand Equitable All workers should get an equal opportunity to earn the incentive pay. Equal pay for equal work should be the rule Economical

The incentive plan should not be a costly affair. The benefits must exceed the costs. Flexible It must be reasonably flexible so as to take care of changes in technology, demand for and supply of skills, competitive rates in the industry, etc. Support The incentive plan should take workers and unions into confidence. It should be implemented after consulting the workers and the union. It should be the outcome of mutual trust and understanding between management and workers. Motivating The incentives should be large enough to motivate the worker to superior performance. At the same time, there should be checks and balances to ensure that the workers does not exert himself to painful levels, affecting the quality. Prompt There should be very little time gap between performance and payment. As soon as the job is finished, the worker should get his (incentive) earnings promptly.

8.7 TYPES OF INCENTIVE SCHEMES (PRODUCTIVITY LINKED INCENTIVE COMPENSATION) Incentive schemes are many and varied. The international labour organisation (ILO) classifies all the schemes of payment by results into four categories. They are: 1. 2. 3. 4. Schemes where the workers earnings vary in the same proportion as output. Where earnings vary less proportionately than output. Where earnings vary proportionately more than output. Where earnings differ at different levels of output.

Incentive Schemes

Earnings Vary In The Same Prop. As Output.

Earnings Vary Less Prop. Than Output.

Earnings Vary Prop. More Than Output.

Earnings Differ At Diff. Levels Of Output.

Straight Piece Work.

Halsey Plan.

High Piece Rate.

Taylor's Differential Piece Rate.

Standard Hour.

Rowan Plan.

High Standard Hour.

Merrick Differential Piece Rate.

Barth Plan.

Gantt Task System.

Bedaux Plan.

Emerson's Efficiency Plan.

1. THE INCENTIVE METHODS WHERE INCOMES VARYING IN SAME PROPORTION TO OUTPUT The chief characteristics of the schemes where incomes vary in proportion to output is that any gains or losses resulting directly from a workers output accrue to him or her(leaving to the employer any gains or losses in overheads costs per unit of output). In contrast, when the worker is paid by the hour, day or month, all gains or losses resulting from changes in his or her output accrue to the employer. The straight piece-work and the standard hour systems are the two popular incentive schemes which come under the first category. Straight piece-work method is the simplest, oldest and the most commonly used method. Here, the rate per unit of output is fixed, and the total earnings of a worker are arrived at by multiplying the total output(measured in terms of units) by the rate per unit. For example, if the rate per unit is 10 paise and the total output of an employee is 100 units, his or her earnings will be 100 x 0.10 =Rs. 10 In the standard hour system (also called 100 per cent gains-sharing), standard time in terms of hours is fixed for the completion of a job. The rate per job is then determined. A worker is paid for a standard time at his or her time-rate if he or she completes the job in the standard time or less. He or she is paid the same wages if he or she takes more than the standard time, unless he or she is guaranteed time wages. The following example illustrates the method: Standard time = 10 hrs Rate per hour = Rs. 1 Case 1 Time taken = 8 hrs

Earnings =10 X 1= Rs. 10.00 Case 2 Time taken = 12hrs (a) Earnings if time wages are not guaranteed = 10 X 1= Rs10 (b) Earnings if time wages are guaranteed= 12 X 1=Rs 12

2. EARNINGS VARYING PROPORTIONATELY LESS THAN OUTPUT Four allied but different system come in this group, namely halsey, rowan,barth and bedaux. The common feature of all these is that time is used as the measure of output and bonus is paid on the time saved, that is, the difference between the standard time set for the job and the time actually taken. These schemes are called gain-sharing schemes as both the employer as well as the employee shares the gains resulting from the saved time. The worker may be paid for half (or any other fraction) of the time saved, the employer getting the balance. a) HALSEY SYSTEM Under the halsey system, standard time is fixed for the completion of a job and the rate per hour is also determined. If the worker takes the standard time or more to complete the job, he or she gets paid at the time rate. In other words, time wages are guaranteed even if the output of the worker is below standard. Where the work is done in les than the standard time, he or she gets paid for the actual time, at the time-rate plus a bonus which is calculated at or as a specified %age of saved time. The percentage varies from 30-70 percent. The usual share is 50%, the remaining going to the employer. The following example illustrates the scheme: Standard time= 10 hrs Rate per hour= re 1

Case 1 Time taken=10 hrs Earnings= 10 X 1= Rs10. Case 2 Time taken =12hrs Earnings=12 X 1= Rs12. Case 3 Time taken=8hrs Earnings: Time wages=8 X 1=rs8. Bonus =50 % X 2 X 1=Rs1.

Total Earning = 8+ 1 = Rs 9

b) ROWAN SYSTEM Under the rowan system too, standard time and rate per hour are fixed. If the time taken to complete the job is equal to or exceeds the standard time, the employee is paid for the time taken at the rate per hour. If the time taken is less than the standard time, the employee is entitled to bonus, in addition to the time wages. The bonus takes the form of a percentage of the workers time rate. This percentage is equal to the proportion of the saved time, to the standard time. Rowan system operates on the following lines: Standard time =10 hrs Rate per hour = Re1 Case 1

Time taken=10 hrs Earnings Case 2 Time taken=10 hrs Earnings =12 X 1= Rs 12. Case 3 Time taken =8hrs Earnings=8 X 1=Rs 8 Bonus=2/10 X 8= Rs 1.60 Total Earnings = 8+1.60 = Rs 9.6 = 10 X 1= Rs 10.

c) BARTH SCHEME Unlike the halsey and rowan systems, the barth variable sharing system does not guarantee the time-rate. The workers pay is ascertained by multiplying the standard hour by the number of hours actually taken to do the job, taking the square root of the product and multiplying it by the workers hourly rate. Pay = Rate per hour X standard hour X number of hours actually taken For example: Standard time =10 hrs Rate per hour = Re 1 Case 1 Time taken = 10hrs Earnings = 1 X 12 X 10 =10.95 X 1

= Rs 10.95 Case 2 Time taken =10 hrs Earnings = 1 X 10 X 10 = 10 X 1 = Rs 10.00 Case 3 Time taken =8 hrs Earnings = 1 X 8 X 10 =8.94 X1 = Rs 8.94

d) BEDAUX SCHEME Under the bedaux scheme, the standard time for a job is determined. Each minute of the allowed time is called a point or B. Thus, there are 60Bs in one hour. Each job has a standard number of Bs. The rate per hour is also determined. The worker receives, in addition to his or her hourly rate, a bonus which under the original plan is equal to 75 percent of the number of points earned, in excess of 60 per hour, multiplied by one-sixtieth of the workers hourly rate. If a worker does not reach his or her standard, he or she is paid at the time-rate of the workers hourly rate. If a worker does not reach his or her An example to illustrate the bedaux system is as follows: Standard time =10 hrs Rate per hour = Re1 Case 1

Actual time =12 hrs Earnings Case 2 Actual time = 8 hrs Earnings = time wages= 8 X 1= Rs 8 Bonus Standard Bs =10 X 60 =600 Actual bonus =8 X 60 =480 Bs saved =120 =12 X 1= Rs 12

Bonus=75/100 X 120 X 1/60= Rs 1.50 Total earnings= 8+1.50 = Rs 9.50

3. EARNINGS VARYING PROPORTIONATELY MORE THAN OUTPUT This category includes two methods (i) the high piece rate and (ii) the high standard hour system. Under the former, the earnings of the worker are in proportion to his or her output, as in straight piece work, but the increment in earnings for each unit of output above the standard is greater. For example, For each one percent increase in output above the standard, there may be a 4/3 times increase in earnings as compared to one percent increase in earnings under

the straight piece rate system. The higher rates start applying after the standards have been reached. Similar logic applies to the high standard hour system. The main feature of these two schemes is that since is that since direct labour costs per unit increase for levels of output above the standard, the worker also shares the earnings the earnings in overhead costs which results from an increased output. The amount of this share depends on the size of the increments in earnings which are payable at different levels of output. If these increments were large enough and increased progressively with output, the workers obviously could obtain all the savings in overhead costs. This is not, of course, the case where the increment in, earnings remains the same for each successive increase in output. 4. EARNINGS DIFFERING AT DIFFERENT LEVELS OF OUTPUT This group includes several schemes. These system can be best explained by describing how earning vary from minimum to maximum at different levels of output. Earnings for one part of the range may vary proportionately less than output and for another part proportionately more, or more usually in the same proportion as the output. The Taylors Differential Piece Rate System, the Merrick Differential Piece Rate System, the Gantt task system and the Emersons Efficiency System fall under the category where earnings differ at different levels of output.

a) TAYLORS DIFFERENTIAL PIECE-RATE SYSTEM Under this the (developed by F.W.Taylor in 1880) there is a low rate for output below the standard, and a higher piece-rate for output above the standard with a large bonus of 50% of the time-rate when the standard output is attained. To illustrate the Taylors piece rate system, we take the following: Standard output = 100 units Rate per unit = 10 paise

Differentials to be applied:

120 % of piece-rate at or above the standard 80 % of piece-rate when below the standard Case 1 Output = 120units Earnings =120 X 120/100 X 0.10 = Rs 14.40 Case 2 Output = 90 units Earnings = 90 X 80/100 X 0.10 = Rs 7.20

b) MERRICK DIFFERENTIAL PIECE-RATE SYSTEM This is a modification of the Taylor system with three instead of two rates. One large step is broken into two, so as to encourage new and average workers. Straight piece-rates are paid up to 83% of the standard output, at which a bonus of 10 % of the time rate is payable, with a further 10 % bonus on reaching the standard output. For outputs above the standard, high piece-rates are paid. The Merrick system can be illustrated as follows: Standard output = 100 units Piece-rate Case 1 Output = 80 units Efficiency =80/100 X 100 =80% =10 paise

Earnings As the efficiency is less than 83 %, only the base piece-rate applies. Case 2 Output = 90 units Efficiency = 90/100 X 100 = 90 % Earnings; As the efficiency is more than 83% but less than 100% of the base piece-rate applies: 90 X 110/100 X 0.10= Rs 9.90 Case 3 Output =110 units Efficiency =110/100 X 100 =110%

As the efficiency exceeds 100%, 120%of the piece-rate applies: 110 X 120/100 X 0.10 = Rs 13.20 c) GANTT TASK SYSTEM Under this system, the worker is guaranteed his or her time-rate for output below the standard. On reaching the standard output or task, which is set at a high level, the worker is entitled to a bonus of 20% of the time wages. For outputs above the task, high piece rates are paid. The Gantt task system operates as follows: Rate per hour = Rs 0.50

High Piece-rate = Rs 0.10 Standard output = 80 units Time Taken = 8 Hrs

Case 1 Output = 70 units As the output is less than the standard only time wages are paid to the worker. Earnings = 8 X 0.50= Rs 4 Case 2 Output = 80 units Earnings As the output is equal to the standard, the worker is entitled to time wage plus 20% of time wages as bonus. Time wages = 8 X 0.50 = Rs 4.00 Bonus =20/100 X 4 = Rs 4.80 Case 3 Output earnings =110 units As the output is more than the standard, the worker is entitled to a high piece-rate. 110 X 0.10 = Rs 11

d) Emersons plan

Under this, a standard time is set for each job, and the efficiency of each worker is determined by dividing the time taken by the standard time. Up to 67% of efficiency, the worker is paid by time-rate. Thereafter, a graduated bonus, which amounts to a 20% bonus at 100% efficiency, is paid to the worker; thereafter, an additional bonus of 1% is added for each additional 1% efficiency. The following example illustrates the method: Standard output in 10 hrs =100 units. Rate per hour = Rs 1

Case 1 Output in 10 hrs = 50 units Earnings: Efficiency = 50% As the efficiency is below 67% the worker is entitled to time wages only. 10 X 1 = Rs 10 Case 2 Output in 10 hrs = 100 units Efficiency = 100%

The worker is entitled to time wages plus 20% of time wages as bonus. Time wage = 10 X 1 = Rs 10 Bonus =20/100 X 10 = Rs 2 Earnings = (10+2) = Rs 12

Case 3 Output in 10 hrs =130 units Efficiency =130%

At the rate of 20% at 100% efficiency and 1%for everyone percent increase in efficiency, the worker is eligible for 50%of the time wage as bonus. Time wages =10 X 12 = Rs10 Bonus =50/100 X 10 = Rs 5

Earnings = (10 + 5) = Rs 15

8.8 Summary Employees are paid incentives in addition to wages and salaries. Incentives are linked to performance. This leads to better motivation among employees. Reduced cost, reduced supervision, reduced scrap and the like are the other benefits of incentives. There are problems, nevertheless. Quality of the products is likely to decline. Introduction of an incentive scheme is difficult, too. Jealousies creep in among workers. Problems associated with incentive may be overcome and the plans may be made to serve their purpose, provided several safeguards are taken. Consultation and co-operation of workers are only examples of such pre-requisites. 8.9 QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. A ____________ wage should enable the male earner to provide for himself and his family, not only the bare essentials of food, clothing and shelter, but also a measure of frugal comfort including education for the children,

protection against ill-health, requirements of essential social needs, and a measure of insurance against the more important misfortunes including old age. a) Minimum b) Good c) Living d) Generous 2. Which, among the following types of wages, is likely to be the highest in terms of value? a) Fair Wage b) Minimum Wage c) Living Wage d) Base Wage

3. ___________ are the rewards an employee receives for his/her employment and position in the organization. They include scholarship for employees children, reimbursement of medical expenses incurred by the employee and family, or paid vacations for the employee with his family. a) Intrinsic Rewards b) Non-Financial Rewards c) Incentives d) Benefits 4. Among the short term incentive plans, the ____________ tries to eliminate the limitations of time and piece rate systems while trying to combine their merits. a) Rowan Plan b) Halsey Plan c) Barth Plan d) Progressive Bonus 5. Calculate the extra earnings for a worker according to the Rowan Plan, given that the standard time for a job is 8 hours and the hourly rate is Rs 4. He completes the job in 5 hours.

a) b) c) d)

Rs. 7.50 Rs. 7.00 Rs. 8.00 Rs. 7.75

6. An effective way to motivate employees is to give them non- monetary incentives for their performance and contribution to the organization. Among the following ____________ is not a non monetary incentive. a) A holiday for two at Singapore b) Awards for exceptional performance c) Giving additional responsibility to the good performer d) Increasing the employees annual bonus 7. Living wages should enable a male earner to provide for himself and his family, the bare necessities for survival , a measure for of fugal comfort and also a measure of insurance against misfortunes like old age. The first central pay commission introduced the principle of living wage for _______________. a) Government Employees b) Private sector employees c) Agricultural Workers d) Journalists 8. Helix creative works gives more importance to the quality of work done by its employees rather than the quantity. The nature of work in the company is such that it cannot be easily standardized. A basic wage plan that would be appropriate for the company is a/an _____________. a) Time Wage Plan b) Output based incentive plan c) Production based pay plan d) Piece wage plan 9. The Government of India conducts different surveys at various times in order to determine the way the wages are to be fixed at different levels. Which of the following is one such survey conducted by the government?

a) b) c) d)

Working class family income and expenditure survey Top executive Compensation survey Annual Survey of the highest paid executives in India B-schools salary survey

10. The ______________ of incentive payment is generally used for groups. The emphasis here is on team work and coordination. a) Point rate system b) Progressive bonus c) Task bonus system d) Barth System

CHAPTER -9 EMPLOYEE WELFARE , FRINGE BENEFITS AND SAFETY & ACCIDENT PREVENTION

After reading this chapter, you will be able to understand: 1. Meaning, objectives and types of Employee Welfare 2. Employee Welfare Measures 3. Fringe Benefits Need and Type 4. Safety Measures and Accident Prevention

9.1 INTRODUCTION TO EMPLOYEE WELFARE Employee welfare measures are one of the key inputs to bring about the desired level of employee satisfaction, motivation and productivity in the organization. The basic objective of welfare measures is to ensure the physical and mental wellbeing of the employee. An organization must view employee welfare measures as an investment rather than an expense. This is because the profitability of an organization is directly linked to the productivity of its workforce. Definition Employee labor welfare means anything done for the comfort and improvement, intellectual or social, of the employees over and above the wages paid which is not a necessity of the industry. -Arthur James Todd Labor welfare is understood to include such services, facilities, and amenities as may be established in or inside the vicinity of undertakings to enable the persons employed therein to perform their work in healthy, congenial surroundings, and to provide them with amenities conducive to good health and high morale. -ILO at ARC 9.1.1 Features of Employee Welfare

 Employee welfare is provided voluntarily by the organization to express its interest in the general well-being of the employees. It is usually provided over and above the statutory and contractual obligations of the organization towards workforce compensation. Since employee welfare measures are not linked to the performance of the employees, they have a direct and proportionate impact on the profits of the organization. Employee welfare measures look to enhance the mental, physical, intellectual and moral well-being of the employees. Employee welfare is an ongoing process and not a one-time activity of the organization. Employees, employers, trade unions and the government are the stakeholders of employee welfare measures. 9.1.2 Objectives of Employee Welfare The primary purpose of employee welfare measures is to improve the employeremployee relationship within an organization. However, an organization can also have multiple objectives while developing employee welfare measures. These objectives could be: Employee welfare aims at creating a motivational environment, which facilitates better cooperation from the employee for the plans and proposals of the organization. It focuses on retaining the talented employees within the organization for a long time. Organizations look to obtain high employee involvement, commitment and satisfaction through welfare measures. The long-term aim of welfare measures is to achieve a desired level of productivity, performance and efficiency among the employees. Organizations attempt to create goodwill for themselves in the labor market through welfare measures, which would, in turn, help them attract the best talents with ease. Employee welfare strives to create a strong bond between the organization and the employees.

9.2 TYPES OF WELFARE MEASURES

The welfare measures undertaken to improve the well-being of the employees can be classified broadly into two categories. These are: STATUTORY WELFARE FACILITIES In this welfare facilities are undertaken as per the requirements of the laws. These are facilities offered by the organizations in the compliance with the central and state government regulations. The central government has enacted several acts to protect the interests of the employees. Acts under Statutory Welfare Facilities Factories Act, 1948: It is a central act enforced by the state governments and is applicable to all the factories engaged in manufacturing activities. Under this act there are various sections which governs employee welfare measures like: Health and safety of the employee Clean and tidy working place should be provided to the employees. Canteen facilities must be available in every factory. Contract Labor ( Regulation and Abolition) Act, 1970: this deals with provisions like: In factories where work-related night-staying by contract employees is necessary, restroom facilities must be provided. The contractor must provide a sufficient number of drinking water, toilet and washing facilities. etc NON- STATUTORY WELFARE FACILITIES Non-statutory facilities may include the facilities offered by the employers voluntarily and also those created by the employees themselves through their unions and other agencies. The objective behind this is improving the general well-being of the employees and to improve their cooperation for the present and future activities of the organization. Facilities under Non- Statutory Welfare Facilities Transport Facilities: These are provided by an organization to carry its employees to and from their homes. This facilities help the

employees save time and energy and avoid inconvenience. With the help of this facilities the problem of distance are easily overcome Housing Facilities: The purpose of offering housing facilities is to improve the standard of living of the employees. It enables the employers to get the services of their employees quickly and reliably. Education Facilities: Many organizations encourage their employees to pursue their studies in different forms. This may be in the form of skill development through training programmes or sponsoring formal education in external educational institutes. Canteen Facilities: many organizations provide subsidized food to their employees through canteen facilities. These canteens may be located inside or outside the factory premises. Likewise there are many facilities like Recreation facilities, Insurance facilities, E-Commuting and Flexi-Time facilities, Intra-Mural Facilities, Extra-Mural Facilities. 9.3 EMPLOYEE WELFARE RESPONSIBILITY In India, the responsibility for employee welfare facilities rests not only with the employers but also with the central and state governments, trade unions and other voluntary agencies. Employers: Employers have the first and direct responsibility to provide welfare facilities to the employees. Their active involvement in the employee welfare facilities is crucial to the success of the welfare programmes. They usually provide these facilities to attract and retain the talented employees. In fact, the welfare of the employees is one of the comprehensive responsibilities of the employers. Central Government: it is empowered to make rules to protect the health, safety and welfare of the employees working in factory premises. It enacts and amends laws from time to time to ensure that the employees are provided with the basic welfare facilities in their work spot.

 State Government: These are normally the enforcing authority for the laws enacted by the central government from time to time. They can also create their own laws to regulate the conditions of employment and protect the welfare of the employees working in various employments. Trade Unions: In recent times, trade unions have taken an active role in offering welfare facilities to the employee in order to improve their well-being. Merits of Welfare Measures High Employee Retention Improve Productivity and Efficiency Better Focus on Job Preserve Physical and Mental Health Improve the Standard of living Cordiality in Labor-Management Relations.

Limitations of Welfare Measures High Labor cost Absence of Measurement Tool Lack of Justification for Expenditure Risk of Executing Statutory Welfare under Duress.

9.4 FRINGE BENEFITS

The term fringe benefits refer to the extra benefits provided to employees in addition to the normal compensation paid in the form of wage and salary. These benefits are referred to as fringe benefits because many years ago, they were small, relatively inconspicuous, or fringe components of compensation. Buy along with times, they have also grown. Now days these benefits have became important part of a comprehensive compensation package offered by employers to employees.

9.4.1 Features of Fringe Benefits

They are supplementary forms of compensation.

They are paid to all employees based on their membership in the organization. They are indirect compensation because they are usually extended as a condition of employment and are not directly related to performance. They help raise the living conditions of employees. They may be statutory or voluntary. Provident Fund is a statutory benefits where as transport is a voluntary benefit.

9.4.2 Need for Fringe Benefits

Employee Demands: Employees demand more and varied types of fringe benefits rather than pay hike because of reduction in tax burden on the part of employees and in view of the galloping price index and cost of living. Trade Union Demands: Trade unions compete with each other for getting more and new variety of fringe benefits to their members. If one union succeeds in getting one benefit, the other union persuades management to provide a new one. Employers Preference: Employers also prefer fringe benefits to pay-hike, as fringe benefits motivate the employees to give their best to the organization. It improves morale and works as an effective advertisement. As a Social Security: It is a security that society furnishes through appropriate organization against certain risks like accidents and occupational diseases to which its members are exposed. Benefits like safety measure, medical facilities, are included in it with a view to provide security to his employees against various contingencies. To Improve Human Relations: Human Relations are maintained when the employees are satisfied economically, socially, and psychologically. Fringe benefits satisfy the workers economic, social and psychological needs.

9.5 OBJECTIVE OF FRINGE BENEFITS

Originally fringe benefits systems purported to develop a climate for healthy employer employee relationships minimize excessive labour turnover costs and provide a feeling of individual security against hazards and problems of life with a view to eventually enhancing employee loyalty to the company and improving productivity. Some of the objectives are as mentioned below: To create and improve sound industrial relations.

To motivate the employees by identifying and satisfying their unsatisfied needs. To provide security to the employees against social risks like old age benefits and maternity benefits. To protect the health of the employees and to provide safety to the employees against accidents. To promote employees welfare. To create a sense of belongingness among employees and to retain them. Hence, fringe benefits are called golden handcuffs. To meet the requirements of various legislations relating to fringe benefits.

9.5.1 TYPES OF FRINGE BENEFITS

There are mainly five categories that are being offered in Indian Organization. 1. Payment for time not worked: This category includes; hours of work, paid holidays, holiday pay, and paid vacations. 2. Employee Security: Physical and job security to the employee should also be provided with a view to ensure security to the employee and his family members. When the employees services get confirmed, his job becomes secure. Further, a minimum and continuous wage or salary gives a sense of security to the life. 3. Safety and Health: Employees safety and health should be taken care of in order to protect the employee against accidents, unhealthy working conditions and to protect the workers productive capacity. 4. Workmens Compensation: This is intended to meet the contingency of invalidity and death of a worker due to an employment injury or an occupational disease specified under the Workmens Compensation Act, 1923 at the sole responsibility of the employer. 5. Health Benefits: Today various medical services like hospital, clinical and dispensary facilities are provided by organizations not only to employees but also to their family members. Benefits under this Act include; sickness benefit, maternity benefit, disablement benefit, dependants benefit, medical benefit, etc.

6. Voluntary Arrangements: However, most of the large organizations provide health services over and above the legal requirements to their employees free of cost by setting up hospitals, clinics, dispensaries and homeopathic dispensaries. 7. Welfare and Recreational Facilities: This includes benefits like canteen, consumer societies, credit societies, housing, legal aid, employee counseling, welfare organizations, holiday homes, educational facilities, transportation, parties and picnics and miscellaneous facilities. 8. Old age and retirements benefits: Industrial life generally breaks join family system. The saving capacity of the employee is very low due to lower wages, high living cost and increasing aspirations of the employee and the family members. These benefits include (a) provident fund, (b) pension, (c) deposit linked insurance, (d) gratuity and (e) medical benefit.

9.6 THE FUTURE OF FRINGE BENEFITS Current benefit packages have evolved over the years from the plans that addressed the basic needs of the workers and provided minimum benefited to the individuals. Today, we see a much mire complex pattern of plans with enhanced flexibility, tailored to meet the needs of individuals and costing public sector and private sector organizations dearly in terms of rupees. Employees in general are more educated, more sophisticated and more demanding of remuneration including fringe benefits. Employers are, therefore, required to devise newer benefits to attract and retain competent personnel, keeping a watch on the benefits costs. 9.7 SAFETY MEASURES AND HEALTHY ENVIRONMENT

9.7.1 SAFETY
Safety refers to the absence of accidents. Stated differently, safety refers to the protection of workers from the danger of accidents. Safety, in simple terms, means freedom from the occurrence or risk of injury or loss. Industrial safety or Employee safety refers to the protection of workers from the danger of industrial accidents. 9.7.2 ACCIDENTS

An accident is an unplanned and uncontrolled event in which an action or reaction of an object, a substance, a person, or a radiation results in personal injuries. TYPES OF ACCIDENTS: There are various types of accidents which can be classified as major and minor categories.
Accidents Internal External Minor

Major Fatal Temporary Partial Total Disability

Permanent
Partial Total

9.7.3 NEED FOR SAFETY: An accident-free plant enjoys certain benefits these can be categorized as under: Cost Saving: Two types of cost are incurred by the management when an accident occurs. There are the direct costs, in the form of compensation payable to the dependents of the victim if the accident is fatal, and medical expenses incurred in treating the patient if the accident is non-fatal. More serious than the direct costs are the indirect or hidden costs which the management cannot avoid. The indirect costs are three to four times higher than the direct costs, these includes, loss on account of down-time of operators, slowed-up production rate of other workers, damages to equipment etc. Increased Productivity: Safety plants are efficient plants. To a large extent, safety promotes productivity. Employees in safe plants can devote more time

to improving the quality and the quantity of their output and spend less time worrying about their safety and well being. Moral: Safety is important on humane grounds too. Managers must undertake accident prevention measures to minimize the pain and suffering the injured worker and his/her family is often exposed to as a result of the accident. Legal: There are legal reasons too for undertaking safety measures. There are laws covering occupational health and safety, and penalties for noncompliance have become quite severe. The responsibility extends to the safety and health of the surrounding community, too.

9.7.4 SAFETY PROGRAMME: Safety programme deals with the prevention of accidents and with minimizing the resulting loss and damage to person and property. Five basic principles must govern the safety programme of an organization. The five principles are: 1. Industrial accidents result from a multiplicity of factors. But these have to be traced to their root causes, which are usually faults in the management system arising from poor leadership from the top, inadequate supervision, insufficient attention to the design of safety into the system, an unsystematic approach to the identification, analysis and elimination of hazards, and poor training facilities. 2. The most important function of safety programmes is to identify potential hazards, provide effective safety facilities and equipment and to make prompt remedial action. This is possible only if there are: Comprehensive and effective systems for reporting all accidents causing damage or injury; Adequate accidents records and statistics; Systematic procedures for carrying out safety checks, inspection and investigations; Methods of ensuring that safety equipment is maintained and used; and

Proper means available for persuading managers, supervisors and workers to pay more attention to safety matters. 3. The safety policies of the organization should be determined by the top management and it must be continuously involved in monitoring safety performance and in ensuring that corrective action is taken when necessary. 4. The management and the supervision must be made fully accountable for safety performance in working areas they control. 5. All employees should be given thorough training in safe methods of work and they should receive continuing education and guidance on eliminating safety hazards and preventions of accidents.
Strategic choice Development of Safety Policy

Evaluation of Effectiveness

Organization for Safety

Implementation of the programme

Analysis of causes for accidents

Fig: SAFETY PROCESS 9.7.5 CAUSES FOR ACCIDENTS The causes for accidents can be classified into two groups;

 Human Failure: This leads to an accident when the employee ignores safety precautions and commits an unsafe act. Majority of accidents occur because of human failure. Machine Failure: This refers to faulty mechanical or physical conditions leading to accidents.

9.7.6 ACCIDENT RATES Accidents are described in terms of frequency, severity and incidence. Organizations generally maintain frequency, severity and incidence records. Mathematical formulae are used to calculate accident rates. Thus, for calculating the incidence rate the formula is:

Incidence rate = Number of recordable injuries1million Number of employee exposure hours

9.8 REMEDIES The methods and devices for the prevention of accidents are now available in plenty. There are few principles or measures that are applicable to all industrial establishments, irrespective of their size and age. These principles are: The methods most valued in accident prevention are analogous to the methods required for the control of quality, cost and quantity of production. Safety incentive programs should focus on processes rather than outcomes. The supervisor or the foreman is the key person in industrial accident prevention. His/her application of the art of supervision to the control of worker performance is a factor which exerts the greatest influence in successful accident prevention. Four basic methods are available for the prevention of accidents engineering revision, persuasion and appeal, personal adjustment and discipline.

9.9 QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. With respect to the accidents, the _____________ states that it is an occurrence in an industrial establishment causing bodily injury to a person, which makes him unfit to resume his duties in next 48 hours. a) Explosive Act, 1884 b) Factories Act, 1948 c) Mines Act, 1952 d) Dangerous Machines (Regulation) Act, 1983 2. An unsafe working atmosphere in an organization results in accidents, causing harm to the health and well being of the employees. Which of the following is not a cause behind such accidents? a) Technical Errors b) Occupational hazards and Risks c) Human errors d) Absence of Proper Legislation 3. Some employees in an organization are highly susceptible to human errors and tend to make a lot of mistakes. These mistakes at times may result in injuries and can sometimes prove to be fatal. What are these employees known as? a) Accident prone employees b) Careless employees c) Casual employees d) Sloppy Employees 4. What is the full form of ILO? a) International Labor Organization b) International Legal Organization c) Indian Labor Organization d) Indian Legal Organization 5. ___________ is concerned with providing immediate job knowledge, skills and methods of work, besides instructing the employee about the course of

his/her work in a particular department or a job and training him/her on how to prevent accidents and handle an accident situation, if it unfortunately occurs a) Safety Engineering b) Safety Training c) Environment Management d) Root cause analysis

CHAPTER-10 ADDRESSING EMPLOYEE GRIEVANCE AND DISCIPLINE After reading this chapter, you will be able to understand: 1. Meaning, characteristics and forms of Grievances 2. Effects of Grievances 3. Techniques for Grievance Identification and Grievance Procedure 4. Discipline
10.1 INTRODUCTION

A grievance is a type of discontent which must always be expressed. It can be valid or ridiculous but must grow out of something connected with companys operations or policy. It must involve an interpretation or application of the provisions of the labour contract. Edwin B. Flippo The complaints affecting one or more individual workers in respect of wages payments, overtime, leave, transfer, promotions, seniority, work assignment and discharge constitute grievances- The National Commission on Labour. 10.1.1 CHARACTERISTICS OF GRIEVANCES On the basis of these definitions, we can make out the following characteristics of grievances: Grievances arise out of the perceived injustice or fair treatment felt by the aggrieved employee. It is the state or feeling of discontent or dissatisfaction about any aspect of an organization. The cause of a grievance may be real or imaginary, serious or inconsequential, genuine or fake, legitimate or irrational.

A grievance may be voiced or unvoiced. But it should be expressed in some form. It is normally expressed in a written form. It must arise only out of the job of the employee in the company and not out of family or personal problems. 10.2 FORMS OF GRIEVANCES A grievance may take any of the following forms: a) factual, b) imaginary, c) disguised. a) Factual: A factual grievance arises when legitimate needs of employees remain unfulfilled, e.g. wage hike has been agreed but not implemented citing various reasons. b) Imaginary: when an employees dissatisfaction is not because of any valid reason but because of a wrong perception, wrong attitude or wrong information he has. Such a situation may create an imaginary grievance. Though management is not at fault in such instances, still it has to clear the fog immediately. c) Disguised: An employee may have dissatisfaction for reasons that are unknown to him. If he/she is under pressure from family, friends, relatives, neighbors, he/she may reach the work spot with a heavy heart. If a new recruit gets a new table and almirah, this may become an eyesore to other employees who have not been treated likewise previously. Grievances generally arise from the following sources: Contract terms, which are too general, contradictory, or ambiguous. Working conditions and pay arrangements, which are in some manner unsatisfactory to the employees. Supervisors who fail to properly abide by and administer the contract. Employees who fail to live up to the conditions set by the management or who neglect adhering to the terms of the contract. 10.3 EFFECTS OF GRIEVANCES Grievances, if they are not identified and redressed, may adversely affect, workers, managers, and the organization as a whole. The effects are: i. On production includes: Low quality of production. Low quality of production and productivity. Increase in the wastage of material, spoilage/breakage of machinery.

Increase in the cost of production per unit. ii. On the employees: Increase the rate of absenteeism and turnover. Reduces the level of commitment, sincerity and punctuality. Increases the incidents of accidents. Reduces the level of employee morale. On the managers: Strains the superior-subordinate relations. Increase the degree of supervision, control and follow up. Increase in indiscipline cases. Increase in unrest and thereby machinery to maintain industrial peace.

iii.

10.4 NEED FOR A GRIEVANCE PROCEDURE Thus, grievances affect not only the employees and managers but also the organization as a whole. In view of these adverse effects, the management has to identify and redress the grievances in a prompt manner. If the individual grievances are left ignored and unattended, there is a danger that these grievances may result in collective disputes. They affect the employee morale adversely. Hence, it is essential to have a proper grievance handling procedure for the smooth functioning of the organization. 10.4.1 ADVANTAGES OF HAVING A GRIEVANCE HANDLING PROCEDURE THE FOLLowing are some of the distinct advantages of having a grievances handling procedure: a) The management can know the employees feelings and opinions about the companys policies and practices. It can feel the pulse of the employees. b) With the existence of a grievance handling procedure, the employee gets a chance to ventilate his feelings. He can let off steam through an official channel. Certain problems of workers cannot be solved by first line supervisors, for these supervisors lack the expertise that the top management has, by virtue of their professional knowledge and experience. c) It keeps a check on the supervisors attitude and behaviour towards their subordinates. They are compelled to listen to subordinates patiently and sympathetically.

d) The morale of the employees will be high with the existence of proper grievance handling procedure. Employee can get their grievance redressed in a just manner. 10.5 TECHNIQUES OF GRIEVANCE IDENTIFICATION A good organization must have the ability to detect, analyze and correct the causes of potential employee dissatisfaction before these become grievances. The calls for a proactive rather than a reactive approach of waiting for the grievance to reach it formally. For this, the organization must perfect a system to identify the simmering trouble in advance and solve it before it gets out of control. It may adopt any one of the methods to identify employee dissatisfaction. a) EXIT INTERVIEW When employee quit an organization for any reason, an exit interview mat be conducted to obtain information about job-related matters. If the manager tries sincerely through an exit interview, he might be able to find out the real reason why X is leaving the organization. To elicit valuable information, the manager must encourage the employees to give the correct picture so as to rectify the mistakes promptly. If the employees is not providing fearless answers, he may be given a questionnaire to fill up and post the same after getting all his dues cleared from the organization where he is currently employed. b) GRIPE- BOX SYSTEM Under this system employees can drop their written complaints in the boxes kept by the organization. The purpose of this system is to provide an outlet to the employees to secretly express their complaints without the fear of being victimized. Gripe box are usually kept at prominent places in the office for receiving anonymous complaints pertaining to any aspect of work. This method is more effective than suggestion box, if the complaints are serious and sensitive in nature. c) OPINION SURVEY While a gripe box is an impersonal means of receiving complaints , an opinion survey is direct and personal means of gathering information from

the employees about their existing grievance. Group meetings, periodical interviews, snap meetings and collective bargaining sessions are the various forums available for the employees to get to know the employees state of mind. d) OPEN- DOOR POLICY This is the progressive style of gathering complaints from the employees. In this system, the workers are encouraged to call on the relevant manager at any time, to freely share their opinions, feelings and complaints with him. This method will be effective only when there is mutual trust in the relationship among the managers, the supervisors and the employees. e) OBSERVATION A manager/ supervisor can usually track the behaviors of people working under him. If a particular employee is not getting along with the people, spoiling material due to carelessness or recklessness, showing indifferences to commands, reporting late for work or is remaining absent the signal are fairly obvious. Since the supervisor is close to the scene of action, he can always find out such unusual behaviors and report promptly. 10.6 THE GRIEVANCE PROCEDURE The best way to handle grievance is to prevent it from arising in the first instance by creating a positive work environment; the next way is to have an effective mechanism to handle the reported grievance in a mutually satisfactory and expeditious manner. Each organization can develop and practice its own procedure to redress the grievance of the employees, for example, large organization may have a well established system for a grievance procedure while small ones ,ay follow an ad hoc approach to grievance handling. Nevertheless, grievance procedures are the keystones of industrial relations because of their ability to resolve disputed issues while work continues without litigation, strikes and other radical disputes. The three fundamental principles governing any grievance settlement procedure are: 1. Settlement at the lowest level 2. Settlement as expeditiously as possible, and

3. Settlement to the satisfaction of the aggrieved. There are five stages but it is not necessary that each grievance must pass through all these stages. We shall now discuss these stages ion detail. STAGE 1 In the first stage, the aggrieved employee, also called, a grievant, makes a written/oral submission to his immediate supervisor about his grievance. Union representative may or may not accompany the aggrieved employees to the supervisor. After ascertaining the facts of the complaint , the supervisor takes the necessary action to settle the issue and informs the employee of his decision. When the employee is satisfied, the matter ends there; otherwise the aggrieved employee proceeds with the next course of action. STAGE 2 Now, the aggrieved employee goes to the higher authorities like the sectional/departmental head or any other competent person for the settlement of his grievance. At this point, the employee is normally accompanied by the middlelevel union leaders. After analyzing the grievance in detail and seeking relevant explanations, the concerned supervisor arrives at a decision and communicates it to the aggrieved employee. If the employer is not satisfied yet, he would request his union to process the grievance and adopt it as a union grievance. STAGE 3 At this stage, the employee grievance becomes the union grievance and it is referred to the grievance committee consisting of members representing both the management and the labour union. The committee would discuss the issue in detail and reach a decision for settling the grievance. It is also possible to that the committee may refer the matter to higher level, if it could resolve it. STAGE 4 If the grievance still defines solution, the stage is set for referring the issue to the arbitrator for third-party meditation. Usually, the arbitrator is chosen jointly by the management and the union. Now, the concerned supervisors in consultation with the higher level union leaders write the issue to be arbitrator.

STAGE 5 Grievance arbitrator is the final stage of the grievance procedure. The arbitration hearings are quasi-judicial proceedings. The arbitrators decision is final, compulsory and binding on both the management and the union. However, in the absence of any formal grievance procedure, the non-unionized and/ or smaller organizations normally adopt a simple, two-stage procedure for settling the grievances of the employees. These stages are: Stage I: The aggrieved employee makes a written or oral representation to the frontline supervisor, seeking settlement of his grievance, and if the redressal efforts fail, the issue goes to the next stage. Stage II: In this stage, the labour officer is involved in the process. He acts as a mediator between the aggrieved employee and the supervisor in arriving at a settlement. Higher levels of management may get involved in the grievance redressal procedure, depending on the nature and magnitude of the grievance and other situational necessities. Generally, the grievance redressal method adopted in smaller organizations is to allow the aggrieved employees to discuss their grievances openly with the management and get their grievances redressed, if found genuine

10.6.1 ESSENTIAL PRE-REQUISITES OF GRIEVANCE PROCEDURES Every organization must have a systematic grievance procedure in order to redress the grievance effectively. Unattended grievance may culminate in the form of violent conflicts later on. The grievance procedure, to be sound and effective should possess certain pre-requisites. a. Conformity with statutory provisions: Due consideration must be given to the prevailing legislation while designing the grievance handling procedure. b. Unambiguity: every aspect of the grievance handling procedure must be clear and unambiguous. All employees should know whom to approach first when they have a grievance, whether the compliant should be written or oral, the maximum in which the redressal is assured, etc. The redressing officer must also know the limits with which he can take the required action.

c. Simplicity: The grievance handling procedure must be simple and short. If the process is complicated then it may discourage employees and they may fail to make use of it in a proper manner. d. Promptness: The grievance of the employee should be promptly handled and necessary action must be taken immediately. This is good for both the employees and the management, because if the wrong doer is punished late, it may effect the morale of other employees as well. e. Training: The supervisors and the union representatives should be properly trained in all aspect of grievance handling beforehand or else it will complicate the problem. f. Follow- up: The personnel department should keep track of effectiveness and the functioning of grievance handling procedure and make necessary changes to improve it from time to time. 10.6.2 STEPS IN THE GRIEVANCE PROCEDURE a. Identify Grievance: employee dissatisfaction and grievance should be identified by the management if they are not expressed. If they are ventilated, management has to promptly acknowledge them. b. Define Correctly: The management has to define the problems properly and accurately after it has been identified/ acknowledged. c. Collect data: complete information must be collected form all the parties relating to the grievance. Information should be classified as facts, data, opinions, etc. d. Analyze and solve: The information should be anlaysed, alternative solution to the problem should be developed and the best solution must be selected. e. Prompt Redressal: the grievance must be redressed by implementing the solution. f. Implement and Follow-up: Implementation of the solution must be followed up at every stage in order to ensure effective and speedy implementation.

10.6.3 ESSENTIALS OF A GOOD GRIEVANCE PROCEDURE A good grievance procedure must fulfill the following conditions: Legally Sustainable It should be ensured by the organization that its grievance procedure is in conformity with the existing law of nation. The procedure cannot violate any

of the rights of the employees guaranteed by law. In case of disagreement between the grievance procedure and the legal provision on may matter, the latter is supreme and binding. Mutually Acceptable In order to be effective, the grievance procedure must enjoy the confidence of all the relevant parties, namely, the management ant the employees ant their unions. The grievance procedure should not be viewed or used as a battleground by a party to defeat the other. Easily Understandable The grievance procedure must be reasonably simple and easily understandable. It should be known to all the employees of the organization of the organization. If all the employees has a grievance on hand, he must know what is to be done and who is to be contacted. Highly Flexible The grievance procedure must be highly flexible enough to respond to the reported grievance quickly. It should not get bogged down in any procedural delay. As far as possible, the number of stages ib grievance procedure should be kept to the minimum. There should also be a time limit at each stage to redress the grievance. In fact, promptness in grievance settlement indicates the efficiency of the system. To the extent possible, the grievance should be settled at the earliest stage to redress the grievance. Sufficiently Knowledgeable The managers, supervisors, union leaders and others dealing with employee grievance must be well-trained in the grievance handling procedure. They should have sufficient knowledge and a good exposure to the techniques of grievance redressal. 10.6.4 BENEFITS OF THE GRIEVANCE REDRESSAL PROCEDURE A sound grievance procedure offers the following benefits to an organization:

Enables the management to know the pulse of its employees by learning about their feelings and opinions about the policies and practices of the organization. Provides a channel to the aggrieved employees to express their grievance about various aspects of their jobs formally. Provides clues about the behavior and attitude of the managers and supervisors towards their subordinates. Gives an assurance to the employees about the existence of a mechanism for the prompt redressal of their grievance. Keeps up the morale of the employees by ensuring that their grievance will be redressed in a fair and transparent manner. 10.7 ADMINISTRATION OF DISCIPLINE Discipline is a force that prompts an individuals or a group to observe the rules, regulations and procedures, which are deemed to be necessary to the attainment of an objective. William R. Spriegel and Edward Schultz Discipline is the state of employee self-control and orderly conduct that indicates the extent of genuine teamwork within an organization. R. Wayne Mondy Disciplinary action refers to the punishing the employees who fail to meet those standards of behaviour. Many organizations maintain a disciplinary policy or system to regulate the behaviour of the employees and deal with the acts of discipline. Some organization s even conduct discipline management training for their supervisors and managers to help them understand the tactics of managing discipline among the employees effectively. 10.7.1 CHARACTERISTICS OF EMPLOYEE DISCIPLINE Employee discipline as a concept must have a few necessary characteristics. The necessary characteristics of discipline derived from these definitions are: Standard Behaviour

Discipline involves setting a standard behaviour for the employees to follow in the organization. An organization must express the standard behaviour in the form of a code of conduct for its employees. Driving Force Discipline is a force that derives the employees of an organization to observe the code of conduct in the organization. Positive or negative in nature The force may be positive or negative. A positive force rewards the employees who observe the rules of the organization while a negative force punishes those who violate such rules and regulations. Voluntary or Imposed Discipline may be voluntary or imposed. In the case of voluntary discipline, an employee develops a discipline on his own, which is called selfdiscipline. In the case of the imposed discipline, the employees observe rules and regulations out of external force or threat. A right of the Management Imposing discipline in the form of rules and regulations is an inalienable right of the management. The employees or unions can challenge this right only when these rules are not fair, just, reasonable or consistent. An Element of Control Process Discipline is an element of management control process. As such, it is an aspect of standard behaviour in the control process. An evaluation of the actual behaviour of employees would show the observance or inobservance of standard behaviour, i.e. the discipline of the employee.

10.8 OBJECTIVES OF DISCIPLINE Traditionally, the purpose of discipline is to punish the employees for the violation of rules and regulations. In those days, to impose discipline, organization depended predominantly on the threat of punitive action. In modern times, discipline aims at encouraging employees to observe self-discipline in behaviour and performance so that both the employees and the employers benefit out of it. At present, organizations accord a high priority to developing self-discipline among the employees through necessary training and counseling. We shall now see the objectives of the contemporary discipline system.

 Goal Accomplishment Achieving the corporate objectives is an important aim of employee discipline. In fact, al efforts directed towards the maintenance of discipline must end up with the accomplishment of organizational goals; otherwise the imposition of discipline will be of no use. Developing a Responsive Workplace Organizations utilize discipline to make the employees conform to the standards they have set. This obviously facilitates the employees in avoiding reckless and insubordinate behaviour and keeps them responsive and disciplined. Changing Employee Behaviour Organizations aim at bringing in the desired behaviour among the employees through discipline. The presence of the discipline policy can help the employees check their behaviour against the standards and cause changes in their behaviour, if necessary. For instance, discipline may caution the low performers of the organization and can compel them to alter their behaviour to meet the performance standards. Improving Morale and Motivation Organization attempt to enhance employee motivation and morale through a fair discipline system. When the employees perceive the discipline policy of their organization to be fair and legitimate, they may be willing to work hard to avoid any disciplinary action against them. Similarly, when they see an act of indiscipline getting a fair and quick punishment, they feel proud of their disciplined behaviour. This feeling provides a sense of satisfaction, motivation and commitment to the employees. Eventually, it improves their morale. Exercising Consistency in Action Discipline aims at supplementing the efforts of managers and supervisors to exercise effective control over subordinates. Since the authority to take disciplinary action is normally vested with the supervisors, it evokes fear in the minds of the employees and forces them to comply with the instructions of their supervisors. Ensuring Consistency in Action

Organizations strive to ensure consistency in the disciplinary actions of different managers while dealing with acts of indiscipline of similar nature and intensity. They also aim at ensuring consistency in the disciplinary actions of the supervisors in different periods of time. Promoting industrial Relations One of the objectives of discipline is to foster good industrial relations in the organization. Discipline issues often cause lot of strain in the unionmanagement relations. However, through objective and transparent disciplinary process, organization can convince the unions about the fairness of the process and get their continued cooperation in the future. Substituting Personal Supervision Another objective of discipline is to reduce the need for close supervision in the organizations. Discipline system and policies develop self-discipline among the employees, which, in turn, eliminate the necessity of closely supervising the performance and behaviour of the employees. Thus, through discipline, organizations can aim at reducing the cost of supervision without compromising on its quality. 10.9 TYPES OF DISCIPLINE The general purpose of discipline is to bring about positive changes in an employees performance, attendance or behaviour. There are many disciplinary systems available for an organization to fulfill the objectives of discipline goals. Depending upon its management philosophy, HR policies and other characteristics, an organization may settle for a particular type of discipline. 10.9.1 POSITIVE DISCIPLINE Positive discipline, which is called self-discipline, as well as preventive discipline, aims at seeking the willing cooperation of employees in observing the discipline code of the organization. The two inherent aspects of positive discipline are: Personal responsibility of employees for maintaining discipline; and Independent decision making by them to eliminate their unsuitable and undesirable behaviour. In this method, the responsibility of the organization is to create a positive environment that gently prompts the employees to comply with the organizational i. ii.

code of conduct. Besides, the management must provide unambiguous instructions to the employees and relevant and timely feedback about the performance and its behaviour expectations. In the event of indiscipline, remind rather than reprimand is the approach in positive discipline. The employees are reminded about the rules, and the desired changes in behaviour occurs. Thus, when performance or behaviour indiscipline is reported against employees, the first requirement for them, in this method, is to rededicate and recommit themselves to the job and the organization. The prerequisite for implementing positive discipline are: An excellent communication network A well- defined line of authority Appropriate working conditions Sufficient discipline training Although an organization needs to devote considerable time and resources to developing positive discipline among its employees, its efforts would certainly pay it rich dividends in the long term. The benefits of positive discipline are cordiality in labour- management relations, improved employee motivation and morale, minimum use of formal authority, effective goal accomplishment and positive image for the organization in the labour market. 10.9.2 NEGATIVE DISCIPLINE It is a traditional form of discipline followed by an orthodox management. In this method, fear is the key to the maintenance of discipline. For instance, the fear of punishment for the acts of indiscipline will be the driving force for the employees to avoiding misconduct. It also forces them to obey the rules and regulations of the organization. This form of discipline is also known by names like punitive discipline and enforced discipline. It never seeks the willing cooperation of the employees in ensuring discipline within the organization. Besides, employees working under a negative environment view discipline as a restraint on their freedom of behaviour. The prime aim of the employees in this method is escaping punishment and not cooperating with the management. For instance, when the management threatens the employees with dire consequences if they do not report for duty at 10 a.m. and remain till 5 p.m., their response would be to ensure that they remain in the office during the stipulated office hours but not reach earlier or leave later than that time.

The intention here is evading threat of punishment and not extending cooperation or performing to the potential. The consequences of negative discipline are: Distrust in industrial relations and mutual antagonism. Low morale and motivation High labour turnover Work-to-rule approach Lack of self-belief 10.9.3 PROGRESSIVE DISCIPLINE It is popular form of discipline adopted successfully by many organizations in maintaining discipline among their employees. This method of discipline has found wide acceptance even among the unions. Progressive discipline requires an organization to adopt a step-by-step approach in dealing with the indiscipline problems of an employee. While dealing with the discipline issues concerning the employees, this method suggests that the organization begin the discipline issues concerning the employees, this method suggests that the organization begin the disciplinary action process with a modest disciplinary action, then increase the degree of severity gradually and finally end up with the most severe punishment if the successive stages of punishment do not yield the desired change in the behaviour of the employees. For instance, the disciplinary process may end up in his dismissal, if all the efforts to correct his behaviour fail. A progressive disciplining of an employee may begin with the hiring of an employee and can continue through his entire work life in the organization. It may even lead to his suspension and ultimate dismissal. Progressive discipline may be defined as any employee discipline system that provide a graduated range of responses to employee performance or conduct problems. Although progressive discipline is similar to positive discipline, it differs on one basic aspect, which is the gradually growing and proportionate punishment to the employees. The extent of punishment depends on the frequency and severity of the performance and behaviour problem and the length of service of the employee.

SIGNIFICANCE OF PROGRESSIVE DISCIPLINE Since the disciplinary actions for misconduct move from mild to severe punishment gradually, this method assumes greater significance from the organizational point of view. It provides adequate opportunities to the employees to correct their behaviour and performance. It enables the managers to intervene in the disciplinary issues involving the employees at the first available opportunity. It facilitates the managers in getting involved in the disciplinary matters without worrying about the prospects of losing the employees friendship. This is because the employees are let off with mild punishments in the initial stages of disciplinary actions. Progressive discipline helps the management avoid time-consuming and costly litigation because this method rarely resorts to extreme punishment. As a matter of fact, the serious disciplinary actions are almost always challenged in the court. A proper compilation of the several discipline violations indulged in by the employees and the series of actions initiated by the management through the progressive discipline policy can help the management prepare a legally defensible case against the employees in the event of their suspension or dismissal. In the event of dismissal or discharge of employees as a result of disciplinary action, the organization may have to incur high staffing cost for finding the right replacement for the separated employee. In this method, extreme punishments like dismissal are rare as the management provides an adequate number of opportunities to the employees to discipline themselves by changing their behaviour and continue in the job. 10.10 CAUSES OF INDISCIPLINE Indiscipline simply means unacceptable behavior of an employee in the organization. The unacceptable behaviour may occur in the foem of unsatisfavtoeyr performance or undesirable conduct. The important factors responsible for undisciplined behaviour are: Conventional management practices Unfair Treatment Absence of an effective code of conduct

Absence of a proper grievance-handling mechanism Ineffective HR policies and practices Absence of an efficient communication system Negative attitude of the employees and their unions Organizational culture 10.10 TYPES OF DISCIPLINARY ACTION The outcomes of indiscipline in normal circumstance are disciplinary actions in the form of punishments. The different type of punishments are normally awarded for different kinds of offences. Oral Reprimand It is an oral warning issued to an employee by a manager for the performance or behavior misconduct reported against that employee. Its purpose is to caution the employee against the continuance of the same misconduct in the future. Written Warning When an oral warning to the employee does not produce the desired result, the manger may issue a written warning to the employee. The written warnings are usually legal documents and may have to be presented in the court at a later stage Denial of Increments, Promotions and Pay hikes On some occasions, the management may refuse promotions, increments or pay hike by blacklisting the employee for specified period of time. These are usually punishments of a temporary nature. Pay Reductions and disciplinary Demotions This is usually more severe than the denial of pay hikes and promotions because the employee loses part of even the existing benefits and privileges hitherto received by him. In case of demotion, the employee loses social status too in addition to the monetary loss Suspension Depending upon the nature of the misconduct committed by the employee, the immediate supervisor or manger may demand the suspension of the employee accused of misconduct. Once the investigation is over, the

suspension may be converted into dismissal or into some other less severe punishment or simply revoked. Discharge or Dismissal This is the severest punishment of all. In this, employee is permanently removed from service. Dismissal or discharge must be done in accordance with the relevant provisions of the law. In case of dismissal, the employee is not entitled to any separation benefits. In contrast, the employee is eligible for his provident fund and other retirement benefits in the event of his discharge from his job. 10.11 QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. In the first stage of most grievance redressal procedures, the grievance is verbally conveyed by the employee to the ______________. a) HR representative or the arbitrator b) HR representative or the designated officer c) Supervisor or the arbitrator d) Supervisor or the designated officer 2. In a unionized organization if the grievance committee, constituted by members from both the ___________ and _______, is not able to resolve the matter ,the grievance is referred to the arbitrator who takes the final decision. a) Government, Management b) Union, department c) Employees, Government d) Union, management 3. Developing mutual respect for each other and for the organization rules and procedures among employees happens when they undertand and believe that these rule and procedures will contribute to the achievement of both organization goals and their personal goals. Positive discipline is also known as ___________ discipline. a) Imposed b) Cooperative c) Enforced

d) None of the above 4. ____________ related problems, one of the major types of problems encountered in organizational, related to misuse of leave facilities, tardiness, and absenteeism. a) On the job behaviour b) Attendance c) Dishonesty d) Incongruence 5. Sunil Kumar works as a chartered accountant in an MNC. Although he is very efficient, he is absent from work for at least six to seven days in a month. Which of the following could be the reasons for such attendancerelated problems? i. Attitude towards work ii. Ensured job security leading to a relaxed approach and lack of interest in job iii. Congruence between employee goals and organizational goals iv. Unpleasant relationships with supervisors a) Only i. ii, and iii b) Only i, ii, and iv c) Only i, iii, and iv d) i, ii, iii, and iv

CHAPTER-11 PERFORMANCE APPRAISAL After reading this chapter, you will be able to understand: 1. The nature and purpose of Performance Appraisal 2. Process of Performance appraisal and Methods of Performance Appraisal 3. Factor affecting performance appraisals 4. Rating errors in Performance Appraisal

11.1 INTRODUCTIONS -PERFORMANCE APPRAISAL

Human resources a term used to describe the individuals who comprise the workforce of an organization, although it is also applied in labor economics to, for example, business sectors or even whole nations. Human resource Development is the process by which corporate management stimulates the motivation of employees to perform productivity. Therefore organization have to create conditions where skill will and resources the three important ingredients for performance are matched appropriately as depicted below. Performance appraisal is a part of Performance management. Performance appraisals of Employees are necessary to understand each employees abilities, competencies and relative merit and worth for the organization. Performance appraisal rates the employees in terms of their performance. Performance appraisals are widely used in the society. Performance appraisal takes into account the past performance of the employees and focuses on the improvement of the future performance of the employees. Performance appraisal is necessary to measure the performance of the employees and the organization to check the progress towards the desired goals and aims. Definitions:

Performance Appraisal may be defined as evaluating individual job performance as a basis for making objective personnel decisions. (Robert Kreitner:2004) Performance Appraisal is a process of systematic evaluating performance and providing feedback upon which performance adjustments can be made:. (Nelson:2004) 11.2 PURPOSE OF PERFORMANCE APPRAISAL Purpose of performance appraisal includes elements as follows: 1. Career Development This provides an opportunity for discussion of career objectives, and creation of a strategy designed to maximize career potential, To provide an opportunity for career counseling, To help in succession planning, To assess training needs To plan for career development To assess and develop individual abilities To provide an objective basis on which to base decisions about training and promotion 2. Feedback As well, feedback is encouraged in both directions: as such, employees are encouraged to prepare ratings of their supervisors. To provide constructive feedback to the individual regarding how their performance is seen This provides a structured format for the discussion of performance issues on a regular basis. Feedback either reinforces performance strengths, or provides the opportunity to discuss resolution of performance deficiencies. 3. Administrative Uses of Performance appraisal Salary Promotion

Retention/termination Recognition of performance Layoffs Identification of poor performers 4. Performance History This provides a performance history which is not dependent upon human memory, and which may be useful in the full range of personnel decisions, including compensation decision-making. To review past and present performance, identifying strengths and weaknesses. 5. Organizational Goals To clarify, for the individual, organizational expectations. This provides an opportunity to view ones performance in the context of broader organizational goals. To assess future promotion prospects and potential. To set objectives for the next period 6. Job Standards This provides an opportunity for clearer articulation and definition of performance expectations. 7. Documentation use of Performance appraisal Documentation for HR decisions Helping to meet legal requirements

11.3 OBJECTIVES OF PERFORMANCE APPRAISAL The main objective of performance is to improve the performance of the organization through improved employee performance. The goal of performance appraisal is to allow the employee the opportunity to progress to their full potential in order to meet the organizational needs and his personal development goals.

Through this process, true teamwork and maximum performance can be achieved. The foundation of the performance appraisal is improved communication between the employee and the manager. Some of the Objectives of Performance Appraisal are: 1. To increase motivation and productivity Performance appraisal helps employees to set plan work and identify skills in order to achieve them. Employee is motivated as there is clarity of what he is required to do in a given period. Increased clarity brings greater focus on job related activities, which in turns facilitates better performance, efficiency and commitment. This increases the productivity of the individual employees and the organization stands benefited out of improved performance of employees. 2. To enhance transparency Setting of performance targets /objectives, agreement on measurement criteria and organizations expectations of desired performance level brings to transparency to the appraisal process. 3. To retain top talent Performance appraisal helps organization in taking people related decisions such as career planning, career development, promotions, training and development opportunities, and succession planning. Meritorious employees are rewarded better with increased compensation, promotions, leadership grooming opportunities, job rotations, etc. and help retain top talents in the organization by satisfying their growth and development needs. 4. To increase commitment Employees involvement in planning of work and identification of skills helps to bring greater self-awareness and increases his commitment to the objectives of performance appraisal activities. Performance appraisal provides an opportunity to communicate performance feedback, review the job description, plan upcoming goals and objectives and develop an individual development

plan.

5. To develop employees Performance appraisal accord an opportunity to develop an employee through the identification of gaps in skills and competencies. Once deficiencies in skills and competencies has identified, suitable training and development programmes can be established for rectifying the gaps/deficiency. This results in personal and professional development of employees. 6. To ensure accountability and ownership Performance appraisal casts high responsibility on the individual employees to accomplish his work objectives effectively. It induces employees to put his heart and head to into improving his performance for which is accountable to his manager. Since he is clear of performance goal and requirements, therefore owns the appraisal as a good way to improve his career prospects in his organization. The brief summary of the objectives is: 1. 2. 3. 4. 5. 6. 7. 8. 9. To review the performance of the employees over a given period of time. To judge the gap between the actual and the desired performance. To help the management in exercising organizational control. Helps to strengthen the relationship and communication between superior subordinates and management employees. To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future. To provide feedback to the employees regarding their past performance. Provide information to assist in the other personal decisions in the organization. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.

10.To reduce the grievances of the employees.

11.4 PROCESS OF PERFORMANCE APPRAISAL:

1.

ESTABLISHING PERFORMANCE STANDARDS

The first step in the process of performance appraisal is the setting up of the standards which will be used as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards.
2.

COMMUNICATING THE STANDARDS The employees should be informed and the standards should be clearly explained to them. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators. MEASURING THE ACTUAL PERFORMANCE The most difficult part of the Performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work.

3.

4.

COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative

deviation in the organizational performance. It includes recalling, evaluating and analysis of data related to the employees performance.
5.

DISCUSSING RESULTS The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better. DECISION MAKING The last step of the process is to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.

6.

11.5 Performance Appraisal Methods:

Rating Methods
Checklists

Comparative Methods
Straight Ranking

Narrative Methods
Critical Incidents

Behavioral Methods
MBO

Graphic Rating Scale

Paired Comparison

Essay

BARS

Grading

Field Review

Human Resource Accounting Assessment Centers

Forced Distribution

Confidential Reports

Forced Choice

360 Degree

There are many methods can be used when doing performance appraisals. Now performance appraisals are used to determine a lot of things with employer. Here are some of those things listed below. Deciding promotions Determining transfers Deciding of future employment Determine training employees need Finding out skill and competency deficit. Deciding who gets rewards There are various methods of performance appraisal depending on the size and nature of the organization. Broadly speaking, the methods of performance appraisal may be divided into four as depicted in the figure above.

11.5.1 RATING METHODS

These methods rely on putting employees on certain pre-defined scale to access their performance. Two rating methods are: a. Checklists: Another simple type of individual evaluation method is the checklist. A checklist represents, in its simplest form, a set of objectives or descriptive statements about the employee and his behavior. If the rater believes strongly that the employee possesses a particular listed trait, he checks the item; otherwise, he leaves the item blank. A more recent variation of the checklist method is the weighted list. Under this, the value of each question may be weighted equally or certain questions may be weighted more heavily than others. The following are some of the sample questions in the checklist. A rating score from the checklist helps the manager in evaluation of the performance of the employee. The checklist method has a serious limitation. The rater may be biased in distinguishing the positive and negative questions. He may assign biased weights to the questions. Another limitation could be that this method is expensive and time consuming. Finally, it becomes difficult for the manager to assemble, analyze and weigh a number of statements about the employees characteristics, contributions and behaviors. In spite of these limitations, the checklist method is most frequently used in the employees performance evaluation. b. Graphic rating scale Perhaps the most commonly used method of performance evaluation is the graphic rating scale. Of course, it is also one of the oldest methods of evaluation in use. Under this method, a printed form, as shown below, is used to evaluate the performance of an employee. A variety of traits may be used in these types of rating devices, the most common being the quantity and quality of work. The rating scales can also be adapted by including traits that the company considers important for effectiveness on the job. A model of a graphic rating scale is given below.

11.5.2COMPARISON METHOD
These methods rely of relative comparison and ranking of employee performance based on certain criteria or characteristics of performance. Five comparative methods are: a. Ranking Ranking methods compare one employee to another, resulting in an ordering of employees in relation to one another. Rankings often result in overall assessments of employees, rather than in specific judgments about a number of job components. b. Paired Comparison: A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings. c. Grading: The manager is given a list of categories to be assessed. This is done by selecting a grade which matches the employee's performance. The different grades of performance are determined in advance such as excellent, very good, good, satisfactory and poor. d. Forced Distribution: In this method, the employees are appraised according to the pattern of a normal curve (bell shaped) in order to check tendency of appraisers to rate most of the employees around high points. This method forces the appraisers to spread their employee evaluations in a prescribed distribution. The distribution in general is as under: 20% of employees = excellent performers 60 % of employees = average performers 20 % of employees = poor performers

Forced distribution is primarily used to eliminate rating errors such as leniency and central tendency, but the method itself can cause rating errors because it forces discriminations between employees even where job performance is quite similar. For example, even if all employees in a unit are doing a good job, the forced distribution approach dictates that a certain number be placed at the bottom of a graded continuum. For this reason, raters and ratees do not readily accept this method, especially in small groups or when group members are all of high ability. e. Forced Choice This approach is known as the forced choice method because the rater is forced to select statements, which are readymade. In this the rater is asked to choose from the among groups of statements those which best fir the individual being rated and those which least fit him. The advantage of this method is the absence of personal bias in rating. The disadvantage is that the statements may not be properly framed they may not be precisely descriptive of the ratees traits.

11.5.3 NARRATIVE METHOD

These methods rely on written statements to indicate the performance level of employees and involve great deal of linguistic skills of the appraisal designer. Four narrative methods are: a. Critical incidents In this method of performance appraisal, the evaluator rates the employee on the basis of critical events and how the employee behaved during those incidents. It includes both negative and positive points. The drawback of this method is that the supervisor has to note down the critical incidents and the employee behavior as and when they occur. b. Essay Appraisal This traditional form of appraisal, also known as Free Form method involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. A major drawback of the method is the inseparability of the bias of the evaluator.

c. Field review In this method, a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. A major drawback of this method is that it is a very time consuming method. But this method helps to reduce the superiors personal bias. d. Confidential Reports Manager prepares confidential reports for each subordinate who reports to him. In these reports, he talks of the highs and lows of the employee's performance. The drawback here is that the employee does not get the chance to make improvements on his performance as this report is kept confidential.

11.5.4 Behavioural Method

Behavioural methods of performance appraisal are based on the following propositions: i) ii) Evaluations are not conducted for raises, promotions, or bonuses instead for development and communication Most important aspect in all is multilateral communication between employees, managers, and others, rather than one-way communication. Six behavioural methods are: a. Management By Objective The principle behind Management by Objectives (MBO) is to create empowered employees who have clarity of the roles and responsibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals. The focus is on future rather than on past. Goals and standards are set for the performance for the future with periodic reviews and feedback. Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment. Frequent reviews and interactions between superiors and subordinates helps

to maintain harmonious relationships within the enterprise and also solve many problems faced during the period. b. Behavioral anchored rating scales: (BARS) Basically means that it rates performance factors, instead of personality factors like the trait rating scale. This scale uses a job analysis to determine what it takes to do the job, after it does that it rates the employee against that and determines how well you do. These scales are very time consuming and expensive to do. The negatives with this way of doing it are that it makes the employees try to outdo all the other employees, making it a non cooperative environment.It measures past performance and not present performance, does not motivate people. c. Human resource Accounting Human resource accounting method tries to find the relative worth of these assets in the terms of money. In this method the performance of the employees is judged in terms of cost and contribution of the employees. The cost of employees include all the expenses incurred on them like their compensation, recruitment and selection costs, induction and training costs etc whereas their contribution includes the total value added (in monetary terms). The difference between the cost and the contribution will be the performance of the employees. Ideally, the contribution of the employees should be greater than the cost incurred on them. d. Assessment Centers Technique Assessment centre refers to a method to objectively observe and assess the people in action by experts or HR professionals with the help of various assessment tools and instruments. Assessment centers simulate the employees on the job environment and facilitate the assessment of their on the job performance. The following are the common features of all assessment centers: The final results is based on the pass/fail criteria

All the activities are carried out to fill the targeted job. Each session lasts from 1 to 5 days. The results are based on the assessment of the assessors with less emphasis on self-assessment Immediate review or feedback are not provided to the employees. The main tools used in assessment center are: In-basket exercises, in which participants respond to a series of administrative problems that simulate typical managerial tasks Leaderless group discussions, in which a group of participants without an assigned leader must arrive at a group solution to a specified problem within a given time period Role-plays, in which participants are involved in a simulation of a situation that could occur on the job Interviews, in which participants typically are questioned about how they have handled particular work situations in the past and how they would respond to specific work situations in the future Management games, in which participants must work cooperatively to meet mental or physical challenges. e. 360 Degree Performance Appraisals 360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees performance comes from all the sources that come in contact with the employee on his job. 360 degree appraisal has four integral components: 1. Self appraisal 2. Superiors appraisal 3. Subordinates appraisal 4. Peer appraisal a. Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his achievements, and judge his own performance. b. Superiors appraisal forms the traditional part of the 360 degree performance appraisal where the employees responsibilities and actual performance is rated by the superior.

c. Subordinates appraisal gives a chance to judge the employee on the parameters like communication and motivating abilities, superiors ability to delegate the work, leadership qualities etc. d. Peer appraisal, also known as internal customers, the correct feedback given by peers can help to find employees abilities to work in a team, co-operation and sensitivity towards others. f. Balanced Scorecard An approach given by Kaplan and Norton provides a framework of various measures to ensure the complete and balanced view of the performance of the employees. Balanced scorecard focuses on the measures that drive performance. The benefits of the balanced scorecard approach in measuring performance are: Gives the complete picture of the employee as well as the organizational performance. It guides users in determining the critical success factors and performance indicators. Strategic review or analysis of the organizational capabilities and performance. Focusing the whole organization on the few key things needed to create breakthrough performance. Integrating and directing the performance and efforts from the lowest levels in the organization to achieve excellent overall performance. Components of balanced scorecard: Learning & Growth Perspective: This perspective focuses on how an organisation is improving its ability to innovate, improve and learn in order to support success with the critical operations and processes defined in the Internal Process Perspective. This may include employee training and corporate culture attitudes. In the modern management philosophy, it is increasingly becoming important for the organizations to develop a culture of learning where the employees constantly learn and share the knowledge to facilitate growth. The onthe-job training and mentoring is also an essential component of the perspective. Business Process Perspective: This component focuses on what an organisation must be doing well to meet the customer needs defined in the Customer

Perspective. It also lets managers know how well their business is running and how well the internal processes are designed to meet the objectives. Customer Perspective: This area focuses on what must be done and what's most important, from the customer's perspective, to achieve the mission.. The objectives, measures, targets and, eventually activities are therefore planned to implement strategy regarding the customer satisfaction. Financial Perspective: The importance of financial considerations is paramount in most situations and in most organizations. For any strategic choice, therefore, the timely and accurately presented funding data is critical and the sources of funding and budgeting must be done. Another key consideration is the prospects of sustainability of funding for the initiative required to implement the strategy. This component of the Balanced Scorecard therefore looks at the projects from a financial perspective and discusses financial considerations.

11.6 THE FACTORS AFFECTING PERFORMANCE:

There are a number of factors which may be affecting the employees performance. Each employee may have different effect from different things at workplace. Their attitude and behavior can play a vital role in their performance. The project will identify the root of employee behavior and how it relates to low productivity so that you can establish strategies for improving employee performance. There are many factors that can affect the performance of employees in an organization. It is the responsibility of the administrators of the organization to create a good working environment for the employees. 1. Knowledge and skills: For an employee to work and function well in an organization, the employee should have adequate knowledge and skills. The employee must have proper attitude with the skills necessary to be efficient in work. 2. Family: Usually all employees in any organization will have family problems at one point in their life. Some people may have frequent problems. These problems at home may also affect their work. These problems can affect the work adversely.

The employers should be able to show adequate compassion on these workers to help the worker function effectively. 3. Support from superiors: Superiors have to understand the needs of the employees for the employee to work efficiently. Sometimes frequent fault finding of the employees work may also lead to deficiency in work. Employee effectiveness is also lost if there is no proper guidance or planning in an organization. 4. Adaptability: Some employees may not be able to cope with the changes that occur at work. Equipments may change or the type of work can change in an organization. This can make the employee unable to adapt. Adequate training is necessary to help the employee to cope and be able to perform better. 5. Social values: The type of work in an organization may also involve a sense of compassion. This is especially true when the organization deals with people. People who tend to be aggressive by nature may find conflicts in the situation. Good performance may be affected, not because of lack of ability or interest, but by conflict of values. 6. Health: Employees must be physically and mentally healthy to perform better in an organization. Chronic illnesses in the family can also affect the performance of the employee. In course of time, it can lead to conflicts and non performance. Adequate health cover as part of the employee benefits will help a little in improving the efficiency of the person at work. 7. Workplace: Some people are highly sensitive to the environment and also climate. These should be conducive for work; otherwise even good performers can also become poor performers. The work situation and environment should be adequately modified to help the employees have better working conditions. 8. Ethics: Work ethics is very important for the performance of an employee. Good morals and ethics can help a person to improve their performance. Otherwise, it can lead to poor performance and can also demotivate the other employees.

11.7 RATING ERRORS IN PERFORMANCE APPRAISAL

 Halo Effect Occurs when a rater attaches too much significance to a single factor of performance and gives similar ratings on other performance elements. E.g. A manager rates a worker very high on quality because of her immaculate attention to details and lack of defects in her work. Then assuming the individual to be an overall high performer based on the quality of her work output, the manager rates her very high on efficiency, responsibility, punctuality, etc. without taking an objective look at her performance in these areas Horn Effect Rating an employee unsatisfactory in one quality, which in turn influences the rater to give a similar rating or a lower than deserved rating on other qualities Recency Bias Occurs when recent events tend to overshadow the overall performance. E.g. - People do have first impression & memory errors. Thus a person who has worked very hard & excelled throughout the year, but for some inadvertent reasons had faced performance issues in the last weeks or month may at times get a poor appraisal from the supervisor, showing a recency bias & we remember what we see either first or last Contrast Effect When supervisors rate employees one after another, rating of an exceptional performer or a very poor performer could affect the subsequent ratings of other individuals. E.g. - Let's suppose that a supervisor has just rated an outstanding performer & is now evaluating an individual who is also a good performer but there seems to be a contrasting difference b/w the abilities & output of the two individuals. This significant difference in performance or employee competencies could lead the supervisor to rating the second individual as an average performer Personal Bias Personal beliefs, attitudes, assumptions, experiences, preferences and lack of understanding about a person, class or a phenomenon can lead to an unfair evaluation. E.g. - Bias against a race, ethnicity, religion, age, sex, or assuming that certain class of people are not suitable to perform a specific job or function etc. If you believe for instance, that women are emotional & men are rational, then chances are that you would not employ a female

worker for a role that involves making objective decisions. Similarly, that young workers are faster & more efficient than old workers would make it more probable to give a higher efficiency rating to a younger worker than an old worker. First impression The tendency of a rater to make an initial favorable or unfavorable judgment about an employee Same As Me Rating an employee higher than deserved because the person has qualities or characteristics similar to those of the rater (or similar to those held in high esteem) Different From Me Rating an employee lower than deserved because the person has qualities or characteristics dissimilar to the rater (or similar to those held in low esteem) Spillover Effect Allowing past performance appraisal ratings to unjustly influence current ratings Status Effect Over-rating employees in higher-level jobs or jobs held in high esteem & underrating employees in lower level jobs or jobs held in low esteem Central Tendency Providing a rating of average or around the midpoint for all qualities. Since many employees do perform somewhere around average, it is an easily rationalized escape from making a more meaningful appraisal Strict Rating Rating consistently lower than the expected norm or average; being constantly harsh in rating performance qualities Lenient Rating Rating consistently higher than the expected norm or average, being overly generous in rating performance qualities. This is probably the most common form of rating error. A major reason for this error is to avoid conflict. It provides a path of least resistance

 Stereotyping If we consider a certain group of people as hard working, then we may tend to rate anyone in that group as being highly productive, even if they are not Glass Ceiling Effect The supervisor may sometimes decide when an employee has reached their peak performance & stop challenging the employee to continue to improve Self-fulfilling Prophecy Managers who hire employees usually want them to succeed. It is a good reflection on the good mgr. At the same time, mgrs may not expect success from an employee that someone else selected. It is also easy to put too much credence in what others have told you about this employee. We look for performance that supports our beliefs & disregard performance that is contrary to our beliefs. This is also called the Pygmalian Effect

11.8 QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. Performance Appraisal can be defined as the process of ______________. a) Evaluating the qualifications of an employee and rewarding him/her suitability b) Evaluating the performance of an employee and communicating the results of the evaluation to him/her for the purpose of rewarding or developing the employee c) Detailing the various aspects of a job like the tasks involved, the responsibilities of the job and the deliverables, and finding suitable employees to do the job. d) Determining and recording all the pertinent information about specific job, including the responsibilities attached to the job and the abilities required to perform the job successfully

2. Peer evaluation is a very sensitive area as it may lead to false and unhealthy appraisals due to _____________. a) Competition among supervisors b) Competition between supervisors c) Competition among peers d) None of the above 3. There are various traditional and modern methods of performance appraisal. Which of the following is not a traditional method of appraisal? a) Checklist appraisal b) Management by Objective c) Team appraisal d) Essay Appraisal 4. MBO is also called the goal-setting approach. How are the goals set in the Management by Objective method? a) Goals are developed by the employees himself/herself b) Goals are developed with the active participation of the employee and his/her supervisor. c) Goals are set by the employees immediate supervisor d) Goals are set by the headquarters of the organization 5. In the ____________ method of performance appraisal, the appraiser makes a note of all the significant incidents that reflect the performance or behaviour of the employee during the appraisal period a) Critical Incident b) Significant happening c) Balanced Scorecard d) Memorable Performance 6. Paired comparison ranking method is more suitable in situations where________ a) A large number of employees have to be appraised b) The employees to be appraised are shop floor workers c) Only a few employees have to appraised d) The organization structure is highly complex 7. In _____________ performance appraisal, the employees performance is evaluated by his supervisor, his peers , his internal/external customers, his internal/external suppliers and his subordinates.

a) b) c) d)

Total 180 degree All round 360 degree

8. In the ______________ method of performance appraisal, the rater responds yes or No to a set of questions which assess the employees performance and behavior a) Ranking b) Checklist c) Alternation d) Paired Comparison 9. In the context of performance appraisals, the leniency effect refers to ______________ a) The situation when an appraiser allows a single characteristics of an appraisee to dominate his judgment of employee performance b) The tendency of an appraiser to rate most of the appraisees in the middle of the performance scale c) The situation when the appraiser tends to give high ratings and only positive feedback to an appraise irrespective of his/her performance d) Judging an appraisee based on the group to which he belongs and appraisers perception of the group. 10.Apart from evaluating the performance of the employees for rewards/punishments and development, a good performance appraisal system serves many other purposes. These include: a) Determining the training and development needs of the employees b) Forming the basis of transfers, promotions, and other career planning activities c) Helping in succession planning d) All of the above

CHAPTER-12 HUMAN RESOURCE INFORMATION SYSTEM After reading this chapter, you will be able to understand: 1. Meaning and objectives Human Resource Information System 2. Application of Human Resource Information System 3. Steps in implementing HRIS 4. Benefits and limitations of HRIS

12.1 INTRODUCTION HUMAN RESOURCE INFORMATION SYSTEM

Human resource departments. The quality of personnel management departments contribution largely depends upon the quality of information held by it. Many personnel activities and much effort by personnel professionals are devoted to obtain and refine departments data base. Information requirements may include: Duties and responsibilities of every job in the organization Skills possessed by every employee Organizations future human resource needs Current productivity of human resources Identification of training needs Acquisition, storage and retrieval of information present a significant challenge to the management. However, once the database is created, maintenance becomes a much easier task provided data security and privacy of employees can be safeguarded. HRIS is defined as systematic procedure for collecting, storing, maintaining, retrieving, and validating data needed by an organization about its human resources, personnel activities, and organization unit characteristics. -K.A. Kovach and C.E. Cathcart,Jr

System which seeks to merge the activities associated with human resource management (HRM) and information technology (IT) into one common database through the use of enterprise resource planning (ERP) software. The goal of HRIS is to merge the different parts of human resources, including payroll, labor productivity, and benefit management into a less capital-intensive system than the mainframes used to manage activities in the past. Information is needed for internal control, feedback and corrective actions, and for statutory obligation. HRIS is utilized basically for the following four process: Storing information and data for each individual employee for future reference. Providing a basis for planning, organizing, decision making, controlling and a host of other human resource function. Meeting daily transactional requirements such as marking present/ absent, and granting leave. Supplying data and submitting returns to government and other statutory agencies. Originally, HR departments used to share hardware and files with other departments. Later, companies began to develop information system devoted exclusively to human resource applications. These system came to be known as human resource information systems. A HR information system should be designed around a database consisting of employees and position records. The access to the database could be in batch mode or through online transactions, with ad hoc enquiries being satisfied by a report writer. A number of standard reports, such as age analysis, absence reports, salary review reports and employee profiles could be used to facilitate the functions described in succeeding paragraphs. 12 .2 OBJECTIVE OF HUMAN RESOURCE INFORMATION SYSTEM The primary purpose of an HRIS is the application of technology for enhancing the efficiency of human resource management. As the years progressed, the applications and utility of an HRIS increased manifold, and now, there is a broad-

based and self-contained HRIS available with numerous rich features. The presentday advanced HRIS can do several more functions with the features and options available in it. The objectives of an HRIS are: To enhance the ability of human resource management to leverage an absorb new and emerging opportunities and challenges in the business horizons To ensure efficient collection, storage and distribution of HR related information in a paper less work environment To create a HR information hub for the whole organization this facilitates effective people to people and people to information contacts. To establish an integrated system for achieving an efficient and purposeful integration of various human resource functions and effective deployment of strategic human resources To facilitate faster processing of information and more effective decision making, to make the optimum use of the available human resources To enable the HR managers to devote more time to strategic issues by relieving then from routine operations through the employee self service system. The ESS in the HRIS lets the employees have direct access to select information without disturbing the HR manager To facilitate employees direct and online access to information on training, payroll and relevant matters. To maximize the accuracy, reliability and validity of workforce records and eliminate the cost and wastages associated with the manual maintenance of HR records

12.3 APPLICATIONS OF HRIS

Some of the applications which could be computerized and the nature/ type of information that can be recorded and stored are described below. 1. Personnel administration: It will encompass information about each employee, such as name, address, date of birth, date of joining the organization, and information about next of kin and family. The facility should allow the user to maintain a number of address records such as permanent home address, local postal address, and the address of next of kin. 2. Salary administration: Salary review procedures are an important function of the human resources department. A good human resource information system must be able to perform what if analysis and present the proposed increases in a report suitable for distribution to various departments. The report should give the details of present salary, last increase, and the proposed increase. A global update feature which will require a minimum of operator intervention should be available to effect pay increase for employees. 3. Leave/absence recording: An essential requirement of HRIS is to provide a comprehensive and accurate method of controlling leave/absences. A fundamental aspect of leave management is to maintain a complete leave history for each employee with the ability to increase entitlement according to leave rules. Every employee can be issued with an identity card with an employee token number coded on it. The identity card of the employee entering/ leaving the gate will be swiped through and timing loggedin/logged-out. This will avoid manual effort in recording data, and calculating wages for employees with any possibility of errors by oversight/ malpractice.

4. Skill inventory: Human resource information system is used to record acquired skills and monitor a skill database at both employee and organizational level. This will provide the opportunity to identify employees with the necessary skills for certain positions or job functions.

5. Medical History: The HRIS may be used to record occupational health data required for industrial safety purposes, accident monitoring, exposure to potentially hazardous materials, and so on. For example, hearing loss in certain work areas may be monitored using audiometric tests and results recorded on HRIS. The records of periodical medical examinations may also be maintained. 6. Accident monitoring: The system should record the details of the accidents for the injured employees. This can be used to highlight accident-prone areas or accident prone times within the organization.

7. Performance appraisal: The system should record individual employee performance appraisal data such as the due date of the appraisal, scores for each performance criteria, potential for promotion, and other information to form a comprehensive overview of each employee. The textual data relating to appraisals can be retained in paper form and can be combined with the overview obtained from the human resource information system for training transfer and promotion purpose. 8. Training and development: The system should consider the training and development needs of employees, with the ability to record and enquire on courses completed, those underway, and any projected courses. This will enable any gaps in training to be identified and also allow training costs to be monitored at the organizational level. The system could also be used for recording the details of training imparted to various employees. 9. HR Planning: An organization hires people because it has a need to fill a position to ensure that it continues to operate efficiently and within the budget restraints. Therefore, a fundamental aspect of a HRIS should be to record details of the organizational requirements in terms of positions. A HRIS can be used to connect employees to required positions and keep track of their movements. This philosophy provides the user with a means of identifying vacancies and establishing staff numbers, using either reports or on line enquires. A logical progression path and the steps required for

advancement can be identified by HRIS after which the individual progress can be monitored. 10.Recruitment: An essential function of any personnel department is recruitment. Recording details of recruitment activity such as the cost and method of recruitment, and the time taken to fill the position can be used to provide a picture of the cost of recruitment in terms of time as well as rupee value. 11.Career Planning: HRIS could record projected positional moves. The system must be capable of providing succession plans to identify which employees have been earmarked for which positions. 12.Collective bargaining: A computer terminal can be positioned in the conference room and linked to the main database. This will expedite negotiations by readily providing up to date data and also facilitating what if analysis. This will provide the means for discussions based on facts and figures and not feelings and fictions. The system can be also be made accessible through telephone lines and modems to all employees to fire personnel queries.

12.4 NECESSARY CAPABILITIES OF A HRIS: INPUT FUNCTION: The input function provides the capabilities needed to get the human resources information into HRIS. Some of the first things must be established that are the procedures and processes required to gather the necessary data. In other words, where, when, and how will the data collected? After collection, data must be entered into the system after codification. Once the data has been fed, it must be validated to ensure that it is correct. The system should have the capability of easily updating and changing the validation table.

Database

Input activities Data collection Procedure Entry Edit Validation

Acceptable data to data maintenance function

Message table

Acceptance or error notification

Edit/validation criteria

Edit/validation table values

Direct user access

DATA MAINTENANCE FUNCTION: The data maintenance function is responsible for the actual updating of the data stored in the storage devices. As changes occur in human resource information, these should be incorporated into the system. As new data is brought into the system, it is often desirable to maintain the old data for posterity. The components of data maintenance function are shown

Data maintenance activities Update Create Derive

Database

Transaction from function Input function

to output

Reports

OUTPUT FUNCTION: The output function of an HRIS is the most familiar one because the majority of HRIS users are not involved with collecting, editing/validating and updating data, but they are concerned with the information and reports produced by the system. Most human resource information system consists of selecting a segment of the total population and providing a report containing specific information regarding the selected population and / or the calculation of results. The demands on the output function are the major factors that influence the particular type of software to be used. The components of output report function are shown.

Disk

Turn around reports Output Activities

Output Request procedures Procedures

Select Process Report

Output dissemination

Ad hoc reporting

Report library

Data

12.5 STEPS IN IMPLEMENTING AN HRIS The following steps should be followed in setting up an HRIS 1. Inception of idea: Idea must originate somewhere. The originator should make a preliminary report justifying the need for an HRIS. The most critical part of this step is to clearly illustrate how an HRIS can assist management in making certain decisions. 2. Feasibility study: The present system should be studied to highlight the problem areas and the likely benefit of an HRIS. It should carry out a cost benefit analysis of the HRIS in terms of labour and material as also the intangible savings, such as increased accuracy and fewer errors. 3. Vendor analysis: The purpose of this step is to determine what hardware and software are available that will best meet the organizations needs at the least price. This is a difficult task. This involves discussions with help in making a decision of going to the off the shelf package or to develop the system internally. 4. Contract negotiations: The contract stipulating the price delivery, vendors responsibilities with regard to installation, service maintenance, training to organization employees etc may be negotiated. 5. Training: Project team members may first be trained to use the system and then they could train all users from other departments. 6. Tailoring the system: It involves making changes to the system to best fit the organizational needs. 7. Collecting data: Data is collected and fed into the system. 8. Testing the system: Purpose of the testing is to verify output of HRIS and make sure that it is doing what it is supposed to do. All reports need to be critically analyzed. 9. Starting up: Even after testing, often some additional errors surfaces during the start up. These need to be sorted out. 10.Maintenance: It normally takes several months for the HR people to get acquainted with HRIS 11.Audit: After a year or so, the project team should audit the performance of HRIS and if required, corrective actions should be taken.

12.6 BENEFITS OF HRIS: Effective use of Human resources The chief benefit of an HRIS is the optimum and strategic use of human resources in an organization. Since there is a complete visibility in all the activities performed by the employees, it prevents duplication in the employees, it prevents duplication in the employee efforts by tracking people as they move through the system. Ability to manage voluminous Data The inherent ability of an HRIS is its capacity to store, manipulate, retrieve and distribute large volumes of data within the shortest possible time. It is certainly unmatched in analysis complex, voluminous and heterogeneous data and in guiding their interaction and reporting. An HRIS can handle large data. This requires reconciliation with high speed and great accuracy, which is very difficult to accomplish in any manual operation. Reduction in labour cost An HRIS has the ability to reduce the labour requirement in the HR department significantly. When there is a decrease in the labour requirement, the labour cost, which is requiring cost to the organization, is kept down. For instance, automating the HR processes, like hiring through the applicant tracking system, lowers the time-to-hire and cost-per-hire considerably. Faster and effective HR Decisions Since the decision support system of an HRIS is capable of generating as many alternatives decisions as possible for solving problem, the managers can make the best decisions quickly and precisely. Certainly, a timely decision enables the organization to capitalize quickly on the opportunities rising in the business environment. Better Supervision and Control over Human Resources

The effectiveness of supervision and control exercised by the managers over the employees is certainly superior in an HRIS environment as compared to that in a manual environment. This is because all the activities of the employees are monitored round the clock on a real time basis through HRIS. Optimum Security and Confidentiality Preserving the security and confidentiality of the employee data is a major problem for many organizations. They can keep their employees record safer through an HRIS by limiting access to such information. They can use password and other authorization requirements to prevent any unauthorized access to valuable and sensitivity information about the employees. Anytime, Anywhere Access HRIS enables its users to have anytime, anywhere access with multiple channels for task performance and reporting. It removes the need for the users to be within the premisies to have access to the information available in the HRIS. Email, web, window forms, SMS and voice are some of the forms used prominently for accessing an HRIS in normal circumstances. Better Focus on Strategic Activities by Managers The automation of HR mangers routine administrative activities like attendance tracking, work scheduling, etc., allows them to devote more time to strategic planning tasks. HRIS enables HR managers to perform from the top levels of the management by involving themselves in strategic decision making process. Better Statutory Compliances Since all statutory provisions are usually incorporated in an HRIS, it ensures that these provisions are strictly adhered to. When employees overlook any of the regulatory provisions even unintentionally while performing HR activities, it may invite legal troubles for the organization. This can be completely avoided when employees perform through the HRIS. Meeting the future challenges and Changes of HRM

The role of HR managers has received an increased status in organization when compared to earlier years. Thus, the HR mangers should be prepared to perform more complex administrative operations in future for which they should inevitably depend on the sophisticated HRIS. 12 .7 LIMITATIONS OF HRIS While the computerized HRIS, described earlier, has many benefits, it also has many problems which need to be addressed to before it can really be useful. Some of them are described below. It can be expensive in terms of finance and manpower requirements. It can be threatening and inconvenient to those who are not comfortable with computers. For computerized information to be useful at all levels, there is an urgent need for large scale computer literacy. Often the personnel designing HRIS do not have a through understanding of what constitutes quality information for the users. Thus, the user managers do not get exactly the reports which they want. Producing information that is of quality to the users requires an investment in time, effort and communication on the part of HRIS managers. Computers cannot substitute human being. Human intervention will always be necessary. Computers can at best aid the human effort. The quality of response is dependent upon the accuracy of data input and queries fired. The garbage-in and garbage-out (GIGO) is the key expression in any computerized system. In many organizations, the system is operated in batch mode with the records being updated once a week. Online facility in multi user environment needs to be developed so that the reports generated are not of phase with the realities. In many a situation, the state information is as good as no information. Conclusion: Information is a vital ingredient to management. Accurate, timely and relevant information is necessary for decision making. Being key to the employee productivity, competitive strength, and corporate excellence, information is

being recognized as the fifth organizational resource. A well designed and comprehensive HRIS provides the needed information within the shortest period and at reduced cost. This is why computerized HRIS is being increasingly used. 12.8 QUIZ Complete all the review questions listed here to test your understanding of the topics and concepts in this chapter 1. The automation of attendance keeping, payroll preparation and application tracking are some of the activities carried out at the ____________ level. a) Management Information System b) Decision Support System c) Electronic data processing d) None of the above 2. The simulation of a situation is the uniqueness of the _______ model. a) Management Information System b) Decision support system c) Electronic data processing d) None of the above

3. Which of the following is not an advantage of the Human Resource

Information System? a) A reduction in labour cost b) The ability to manage voluminous data c) Better supervision and control over human resources d) None of the above 4. Which of the following is not normally an essential condition for an effective HRIS? a) Ensuring clarity of HRIS goals b) Strengthening the infrastructure and other supporting systems c) Changing the HR manager d) Sustained enhancement of the HRIS capabilities

5. Which of the following is/are the sub-system(s) of HRIS? a) Position control and budgeting system b) Compensation Management system c) Performance management system d) All of the above

KEY TO END CHAPTER QUIZES

Chapter 1 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. b a a c d c a c b b

Chapter 2 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. c b c a b d a c c d

Chapter 3 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. c b d b c d c c b d b a

Chapter- 4

1. 2. 3. 4. 5.

d b c d b

Chapter -5 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. d c b b c d a b a a

Chapter 6 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. b b c a d c c d c c

Chapter 7 1. 2. 3. 4. 5. 6. b a d a c b

Chapter 8 1. c 2. c 3. d

4. 5. 6. 7. 8. 9. 10.

b a d a a a a

Chapter 9 1. 2. 3. 4. 5. b d a a b

Chapter 10 1. 2. 3. 4. 5. d d b b b

Chapter 11 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. b c c b a c d d c d

Chapter 12 1. 2. 3. 4. 5. c b d c d

References
1. Durai Pravin, Human Resource Management, Pearson Education, 2010 2. Deb Tapomoy, Human Resource Development, Ane Books India, 2006 3. Jyothi.p and Venkatesh D. N, Human resorce Management , oxford university press, 2006 4. Dwivedi R. S., Managing Human Resources Personnel Management in Indian enterprises, galgotia publishing Company, 2006 5. Aswathappa k, Huam Resource management, Tata McGraw-Hill, 2008