CHAPTER-1

CHALLENGES OF HRM

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 Introduction:-

Globalization is shaping a new system of international

economic relations. Be it the field of investment, production, trade,
finance or technology. The globalization however is very vast as it means
different things to different people. The wider view equals globalization
with the nation of “Vasudhaiv Kutumbakam” (the whole world is one
family) and the narrower economic interpretation with the increasing the
ratio of foreign trade and investment in a country’s output. On a
philosophical plane, India has been a votary of globalization since ages.
It is reflected in hymns like ‘Aa no bhadra rutavo yantu viswatah’ (let
noble thoughts come all over the universe). Globalization however refers
to a process of deepening economic integration, increasing economic
openness and growing economic interdependence between countries in
the world’s economy. This process is driven by the lure of profit and the
threat of competition in the market.

HR professionals play a critical role in the globalization

process by helping companies evaluate the human resource perspectives
and possibilities involved in moving to different regions of the world.
The complexities of operating in different countries and of employing
people of different nationalities are the main issues that differentiate
domestic and international HR management.

The role of the Human Resource Management is evolving with

change in competitive market environment and the realization that
Human Resource Management must play a more strategic role in the
success of an organization. Organizations that do not put their emphasis
on attracting and retaining talents may find themselves in dire
consequences, as their competitors may be outplaying them in the
strategic employment of their human resources.

With the increase in competition, locally or globally,

organizations must become more adaptable, resilient, agile, and
customer-focused to success. And within this change in environment, the
HR professional has to evolve to become a strategic partner, an employee
sponsor or advocate, and a change mentor within the organization. In
order to succeed, HR must be a business driven function with a thorough
understanding of the organization’s big picture and be able to influence
key decisions and policies. In general, the focus of today’s HR Manager
is on Strategic personnel retention and talents development. HR
professionals will be coaches, counselors, mentors, and succession
planners to help motivate organization’s members and their loyalty.

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 Challenges of Human Resource Management:-

 Lack of Motivation:-

Recruitment is considered to be a thankless job. Even if the

organization is achieving results HR department or professionals are
not thanked for recruiting the rigid employees and performers.

 Process Analysis:-

The immediacy and speed of the recruitment process are the

main concerns of the HR in recruitment. The process should be
flexible, adaptive and responsive to the immediate requirements. The
recruitment process should also be cost effective.

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 Strategic Prioritization:-

The emerging new systems are both an opportunity as well as a

challenge for the HR professionals. Therefore, reviewing staffing needs
and prioritizing the tasks to meet the changes in the market has become
a challenge for the recruitment professionals.

 Recruit and Hire the Best:-

Recruiting the best employees for your organization is an

ongoing challenge for every manager, supervisor and Human resource
professional. If you are looking for solid, proven best practices and up-
to-the-minute ideas in recruitment, interviewing and selection, you have
found the right course. Find useful forms and a forum in which to
discuss your hiring challenges.

 Organization and Working Environment:-

How should I interact with my peers and boses? What I do or

don’t? These several questions make starting a new job, a demanding
and stressful experience for most new incumbents. New employees
need support to fully integrate into the organization and its ways as
quickly as possible. And this is where induction plays a big role.

 Why spend money on Induction?

Simply because employees who settle quickly into their new

job will become productive and efficient at an early stage and in turn
will experience feelings of worth and satisfaction. Every penny spent
on induction is worth its weight if you compare the saving in costs on
repeated recruitment, training and staff turnover in the absence of
induction. A well structured induction inculcates belongingness and
pride in new employees.

 When should the Induction Process start?

Induction is an extension of recruitment. The moment the

decision is made to recruit an employee, he should be put through a
structured induction process. Even before the employee joins, the HR
should make proper arrangements for his seating. Obvious as it may
seem, there are several cases where new employees are not allotted
their workstation and computer for at least a week. This does not do
any good to the company’s brand as an employer.

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 How long should the Induction be?

Induction is not a one day introduction to the people in the

department. It needs to be paced over the first three months. GSK is
one organization where induction is an intensive exercise that is
religiously followed in letter and spirit.

 Is it necessary for the company to provide Soft Skill Training

to the employees?

HR today is principal value creators. However, to capitalize

fully on this opportunity, we need to ensure high quality education &
appropriate soft skill sets for HR. Endowed with the vital soft skills;
HR professionals can occupy the centre stage & be the key drivers that
create business value. Although several companies abstain from
providing training to their employees on soft skills, the reality is ‘soft
skills’ has graduated from a ‘nice-to-have’ category to ‘must-have’
category for various sectors.

 Determining the Evaluation:-

Identification of the appraisal criteria is one of the biggest

problems faced by the top management. The performance data to be
considered for evaluation should be carefully selected. For the purpose
of evaluation, the criteria selected should be in quantifiable or
measurable terms.

 Create a Rating Instrument:-

The purpose of the performance appraisal process is to judge

the performance of employees rather than the employees. The focus of
the system should be on the development of the employees of the
organization.

 Lack of Competence:-

Top management should choose the raters or the evaluators

carefully. They should have the required expertise and the knowledge
to decide the criteria accurately. They should have the experience and
the necessary training to carry out the appraisal process objectively.

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 Errors in Rating and Evaluation:-

Many errors based on the personal bias like stereotyping, halo

effect (i.e. one trait influencing the evaluator’s rating for all other traits)
etc. may creep in the appraisal process. Therefore the rater should
exercise objectively and fairness in evaluating and rating the
performance of employees.

 Resistance:-

The appraisal process may face resistance from the employees

and the trade unions for the fear of negative ratings. Therefore, the
employees should be communicated and clearly explained the purpose
as well the process of appraisal. The standards should be clearly
communicated and every employee should be made aware that what
exactly is expected from him/her.

 Skill Based Pay:-

In the traditional job-based pay, employees are paid on the

bases of job they do. In the skill-based system, workers are paid on the
basis of number of jobs they are capable of doing, or on the depth of
their knowledge. The purpose of this system is to motivate employees
to acquire additional skills so that they become more useful to the
organization.

 Pay Reviews:-

Pay, once determined, should not remain constant. It must be

reviewed and changed often, but how often becomes a relevant
question. Pay reviews may be made on predetermined dates,
anniversary dates or there could be flexible reviews. In the fixed-date
reviews, wages and salaries of all employees are reviewed and raised
on a specified date each year. In the anniversary-date review, salaries
may be reviewed at twelve-month intervals from the date of the
employee’s anniversary date of hire. Using variable timing ensures
flexibility. In addition, high-performing employees, who are low on
their salary ranges, can be rewarded more frequently.

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 Pay Secrecy:-

The process by which a remuneration plan is designed and

administered is critical for any organization. One challenge facing
HRM concerns the availability of information about remuneration to
employees. The tendency among most firms is to maintain pay secrecy
as this would help avoid pay comparisons likely to be made by
employees.
The goals of achieving equity and employee satisfaction would
se elm to call for telling employees about pay policies and levels. For
merit pay systems to have a motivating effect, an employee needs to
know how efforts translate into rewards. Information about maximum
and the average raises should be made available each year. Each
employee should be told ‘what the mid point is ‘for his/her job, as well
as the pay range. In addition, the organization should explain how it
arrived at the pay structure; allowing employees to see ‘where their
jobs are located in the wage structure ‘should not create significant
problems for an employer that has a well-designed job evaluation plan.

 Comparable Worth:-

One of the popular principles in employee remuneration is

equal pay for equal work. This principle has been the inspiration behind
the enactment of the Equal Remuneration Act. Under the act, male and
female nurses are to be paid the same if their merit and seniority match,
but a female nurse and a male electrician could be paid different rates.
Beyond the concept of equal wages for equal work, is the idea
of comparable worth which implies that if both a nurse and electrician
receive the same number of points under a point-ranking method of job
evaluation, they have to be paid the same, subject, of course, to
seniority and merit differences.
Any bias in the job-evaluation process is sure to render
comparable worth unworkable. Bias is bound to occur in job
evaluations because of the tendency to assign higher number of points
for jobs traditionally held by women.

 Employee Participation:-

When employees are involved in designing a remuneration

plan, they exhibit little resistance in accepting it. Such a plan is much
more likely to be a successful motivator than the one imposed by the
management.

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 It is appropriate to involve employees in many phases of a
reward system. For example, a wide variety of employees should serve
in job evaluation committees. If a point-ranking method is adopted, it is
reasonable to involve employees in identifying the compensable factors
to be used and the weight to be assigned to each factor. Employees are
also likely to have a good insight in identifying competitor firms that
should be included in a wage survey.
There are several mechanisms for employee involvement. At
the broadest level the employees can be surveyed to learn about their
preferences. Employee task forces can help integrate these preferences
into system. Such groups are usually an excellent way to involve
employees in any decision reward system.

 Wages and Salary Differentials:-

This challenge involves wage settlements and emerging trends

in the dynamics of relationship with respect to executives. There are
varied challenges in the domain of wage and salary administration
especially in public sector enterprises in India. The Bureau of Public
Enterprise issues guidelines to regulate negotiations in public
enterprises which do not remain unknown to even trade unions.

 Adoption to Technological Changes :-

Changes in technology in alerting the nature of work itself. We

are entering the age of the electronic work place. Managers and
workers which will be increasingly subject to technical obsolescence.
Many will also be displaced by the advancing technologies. These
changes are both good and necessary in business are to remain
competitive. However, it would be a serious error to ignore the impact
of these changes on employees. The challenge to the human resource
function is a large one.
There will be unemployment due to modern technology and
this could be corrected by assessing manpower needs and finding
alternate employment. Advanced technology has tended to reduce the
number of jobs that require little skill and to increase the number of
jobs that require considerable skill, a shift we refer to as moving from
touch labor to knowledge work. This displaces some employees and
requires that others be retained. In addition, information systems that
streamlines the processing of data and make employee information
more readily available to managers.

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 Keep Organization Young and Productive :-

There is a challenge task of maintaining a young and

productive organization. Here, effort may be made to task into account
the emerging dimensions relating to the imbalanced age structure of the
human resource in the future. This necessitates adherence to a designed
strategy for renewal of manpower in a phased manner. In recent past a
large number of giant industrial enterprises were set up. These
enterprises recruited large number of young qualified industrial workers
in the same age group of 20 years within a span of 4-6 years of its
inception.
A new dimension relating to the future age structure of the
manpower is important to upkeep the efficiency, capability and
productivity of the organization. In view of this, a designed strategy for
renewal of manpower is important in a phased manner a few years
ahead of mass retirement period is called for. Young blood has to be
inducted to balance the aged work force and revitalize the organization.

 Development of Good Industrial Relations:-

The present industrial relations situation in India is marked by

multiplicity of unions giving rise to barriers in the process of bi-
partisan and collective bargaining. It has become very difficult for the
management to ascertain who the right representative among their
employees is. The unions tend to make irrational and false promises
and adopt erratic and violent measures to compete with the rival unions.
Indeed inter union rivalry stemming from political groupism has caused
violent clashes designed by outside leaders. This problem can be
resolved by evolving a system of recognition of trade unions.

In conduction with the above measure an attempt may be made

to accomplish industrial harmony through workers participation which
has vast potential for the integration of workers with the organization.
However, the practice of this concept must start from top and peculate
downwards to supervisors. The secret of harmonious industrial relation
rests with the improved interpersonal interaction based on trust and
confidence between workers and management.

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 Development of Good Organizational Culture:-

There remains to be accomplished a challenging task of

developing an organizational culture where members have values
conductive to organizational growth, innovation and effectiveness.
Organization growth, innovation and effectiveness are
influenced by the members and their values system. Managerial
behaviors have special impact because of its strong modeling influence.
Such values are essential for institution building so that continuity and
vitality achieved.

 Challenges from Hardly Working Workers:-

There will be some individuals in any organization who are just

not carrying their own weight. They are not considered as an asset at
least for the organization. The causes for such ineffective or non-
performing manpower can be two fold:
(i) Causes due to personal factors of the individual.
(ii) Causes due to under utilization of manpower arising out of
external factors. The task of utilizing non-performers necessitates
development of competence among executives to assist the unutilized
work force by understanding its strengths and weaknesses, providing
feedback on its performance and using counseling to revitalize it.

 Importance of Team Work/Multifunction Team:-

Nowadays, companies believe in work together. The

importance of multifunction team is increasing which is made from
different departments of the company. This type of team is known as
cross functional team because the main activity of team workers is his
own department. This cross functional team is on permanent basis or on
ad hock basis.
The vision of an effective team must be clear or perfect
otherwise the team becomes only talking or gossiping club. There is a
free communication in an effective team. In that, each person
participate according to his/her proficiency. There is informality in the
atmosphere of a team. Team workers listen each other quietly. The
leader of team must clarify the role of each team worker.
Teamwork is supplanting individual activity the old emphasis
on individual efficiency (on which the total efficiency of the
organization depended) is being replaced by group synergy. It’s a
matter of multiplying efforts, rather simply adding them. We are used
to individualized, isolated work; we need to change to high –
performance teamwork.

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 Innovation:-

It is not sufficient only to make good and concord relations

with customers. Company makes many innovations to provide good
facilities and more products for customers and make investment in
R&D. Nano car of Tata Motors is the best example.
Because of acute competition of foreign companies, Indian
companies understand that it is most important to make innovations in
products or services than increase daily activities of work or decrease
production cost.
(1)Make the company innovative and create necessary culture
for that.
(2)Encourage break through thoughts.
(3)Improvement in product and search of new markets.
(4)New uses of present things are also called as innovations.

 Boosting Employee Productivity:-

A conventional job would usually mean fixed working hours

everyday with not much flexibility. But now things are changing in the
current workplace scenario. With increasing pressure & competition in
the market, it is getting extremely difficult for employers to keep their
workforce motivated, happy & productive at all times. Maintaining
work life balance has become the need of the hour. Amongst the many
practices that organizations have adopted to help their employees face
the heat & yet perform better, providing flexible working hours has
become the latest trend in India. This provision not only boosts
productivity & morale of employees but also helps employees
contribute towards the bottom-line of the organization.
There should be an understanding between the employee &
his/her manager about the arrangement & the employee should be clear
about the expectations of his/her manager. It is responsibility of an
employer to provide a conductive environment for employees so that
they are motivated to perform more efficiently. Employees really enjoy
this benefit as they get an opportunity to strike a balance in their
personal & professional life.
Flexible work schedule helps people to become more
accountable towards their work which results in high productivity as
people work with a tension free mind. Such practices not only boost
productivity of employees but also add to the success of the
organization.

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  Help your employees adjust to change/Importance of Change
Management:-

Change is an inevitable part of life. Most people find change &

adversity difficult paths to traverse, especially in our work settings
where challenges may abruptly alter the course of one’s career &
lifestyle. Organizations have to keep changing & meet world class
standards. Otherwise, they will gradually fade away. Change comes fro
many reasons and it is the duty of the employer to explain these reasons
in detail with logical solutions.
Helping employees adjust to change becomes much easier if
employees are prevented from resisting change. In order to prevent
employees from resisting change, they need to be informed about the
benefits of the change being introduced, be it in policy or in a system or
process. If change is imposed, employees are unhappy, stressed &
update. In stressful times, change can provoke intense resistance.

 Managing the Vision:-

Vision of the organization provides the direction to business

strategy helps managers to evaluate management practices and make
decision. Vision management becomes the integral part of man
management in future.
Company must have to show an adventure in the development
of vision. e.g. the vision of Tata Motors is being one of the most
courageous. They convert some impossible goals into possible goals.
For e.g. made their position powerful in the Finance, Real Estate and in
Trading. They launched many new products to be global in the field of
fast moving consumer goals. Now, they undertake in the market of
personal care.

 Managing Workplace Diversity:-

The future success of any organizations relies on the ability to

manage a diverse body of talent that can bring innovative ideas,
perspectives and views to their work. The challenge and problems
faced of workplace diversity can be turned into a strategic
organizational asset if an organization is able to capitalize on this
melting pot of diverse talents. With the mixture of talents of diverse
cultural backgrounds, genders, ages and lifestyles, an organization can
respond to business opportunities more rapidly and creatively,
especially in the global arena, which must be one of the important
organizational goals to be attained. More importantly, if the
organizational environment does not support diversity broadly, one

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 risks losing talent to competitors.
This is especially true for multinational companies (MNCs)
who have operations on a global scale and employ people of different
countries, ethical and cultural backgrounds. Thus, a HR manager needs
to be mindful and may employ a ‘Think Global, Act Local’ approach in
most circumstances.
In order to effectively manage workplace diversity, an HR
Manager needs to change from an ethnocentric view ("our way is the
best way") to a culturally relative perspective ("let's take the best of a
variety of ways"). This shift in philosophy has to be ingrained in the
managerial framework of the HR Manager in his/her planning,
organizing, leading and controlling of organizational resources.

 Employee Satisfaction:-

Managers should be aware of techniques to motivate their

employee that their higher level needs can be satisfied.

 HR’s role in developing Human Capital (Knowledge, Skill,

Capabilities):-

In order to “compete through people” organizations have to do

a good of managing human capital - the knowledge, skill and
capabilities that have value to organizations. Managers must develop
strategies for identifying ,recruiting and hiring the best talent available;
developing these employees in ways that are firm-specific; helping
them to generate new ideas and generalize them through the company;
encouraging information sharing and rewarding collaboration and
teamwork.

 Demographic Challenges:-

The workforce is becoming increasingly diverse and

organization is doing more to address employee concerns and to
maximize the benefit of different kinds of employees. Demographic
changes, social and cultural differences and changing attitudes toward
work can provide a rich source of variety for organizations. But to
benefit from diversity, managers need to recognize the potential
concerns of employees and make certain that the exchange between the
organization and employees is mutually beneficial.

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 Stability to Change:-

Static, permanent organizations designed for a stable and

predictable world are giving way to flexible, adaptive organizations
more suited for a new world is of change and transformation. Emphasis
on permanence, tradition and the past is giving way to creativity and
innovation in the search for new solutions, new processes and new
products and services. Maintaining the status quo is less important than
a vision of the future and the organization’s destiny. We are used to
dealing with certainty and predictability. We need to become
accustomed to dealing with uncertainty and ambiguity.

 Muscular to Mental Work:-

Repetitive physical labour that doesn’t add value is increasingly

being replaced by mental creativity. Routine and monotony are giving
way to innovation and a break with tradition. In the past, people were
considered to be merely workers, an old concept that associated people
with things. Now people are considered purveyors of activities and
individual talents. We are used to dealing with physical, repetitive
manual labour; we need to become accustomed to dealing with mental,
creative and innovative work.

 Specialization to Multitasking:-

The traditional division of labour with its consequent

fragmentation of activity is evolving toward more varied and integrated
work. Compartmentalization is changing to a systematic holistic vision,
unified rather than separate. We are used to dealing with division of
labour and task specialization. We need to become accustomed to
working in terms and with holistic organizations. From a focus on
products and services to a customer orientation. In the past, the product
or service was the most important element. Now; the customer to whom
this product or service is targeted has become fundamental. Before, an
internally focused vision for the customer who is going to use that
product or service predominates. In the past, the product/service was
the goal. We are used to working with the products and services we
produce or offer. We need to shift toward looking after the customer’s
needs.

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 Followers of orders to Entrepreneurs:-

The old concept that people are hired workers who hold certain
positions according to focused schedules and following internal rules
and regulations in being supplanted by a new concept that rewards
internal entrepreneurship. In the past performance evaluation
emphasized things like absenteeism punctuality and personal discipline.
Now it focuses on vision goals and results and especially on personal
contributions to organizational objectives. Rather than being
conservative bureaucrats, workers (the networked generation) created
by digital technology is leaving the older generation behind. We are
used to working by following rules and regulations, external controls
and standards; now we need to become goal oriented and mission
driven.

 What will be the trend to invest in HR now? :-

The new hiring will be limited. Companies will have to put up

a situation now where more work can be handled with current or less
number of people requires the existing people to be retooled on newer
& different technologies. So, the HR investments will continue but will
be focused on the existing employees.

 Challenge of Motivation:-

With lay-offs, salary cuts and of course, more works being

assigned to less number of people; it has become all the more
challenging to innovate ideas in order to keep up the motivation level of
employees. The key is to use newer approaches that continually
reinforce the fact that employees’ ideas are welcome, valued and
rewarded. Engaged and motivated employees deliver better
effectiveness and efficiency. Constantly improving and innovating
practices deployed to motivate the employees is a much irrespective of
the market situation.
Motivated employees will always go the extra mile in an
organization. It is essential that employees see that they are major
accomplishment of the organization’s mission.
The philosophy of employers says that if individual goals and
organizational goals are achieved, then careers can be assured. It thus
establishes the close relationship between motivation and
organizational success leading fulfillment of career goals.

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 Motivators provided by the company are as under:-

(1)Work culture:-
Company should provide proper work culture where there is an
existence between company and employees. Company will also respect
with its employees.

(2)Acceptance of opinions:-
Company should respect the opinion of employees and if it
found proper, then company must give reward to follow the opinions of
employees.

(3)Company must keep the work place and all offices with neat
and clean air and modern technologies.

(4)Company should promote the existing employees on the

place of vacant position.

(5)Company must clarify the vision repeatedly. So; employees

feel that they are working for a wide object.

(6)Encouraging cross-functional team.

(7)Other motivators like perks and benefits.

 Managing Knowledge Workers:-

Essentially, here companies looking at different kind of people

who does not obey the principles of management for the traditional
group. This boils down to higher educational qualifications, taking up
responsibilities at a lesser age and experience, high bargaining power
due to the knowledge and skills in hand, high demand for the
knowledge workers, and techno suaveness. The clear shift is seen in
terms of organization career commitment to individualized career
management. Managing this set of people is essential for the growth of
any industry but especially the IT, BPOs and other knowledge based
sectors.

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 Conflict Resolutions:-

Basically, it is the duty of the HR to find ways of resolving

issues between employees on one hand and employees and
Management on the other.
We should note that as long as we have human beings at the
work place there would always be need for arbitration amongst them.
HR is even expected to sense tension between these two groups before
they deteriorate.

It is at this time that HR should use the "grape vine channel" to

its advantage and call officers to a round table for reconciliation and if
it is between workers and Management should ways of brokering
peace.

 Discrimination:-

This could be a very sensitive issue depending on ones

perception and orientation.

Discrimination at the work place could be on the grounds of

gender, race, political/union affiliations, religious, pigmentation colour,
sexual orientation, even at times intellectual persuasions and school of
thoughts.

Again it is the duty of the HR to see to it that all these

differences are played down at the workplace and should try as much as
possible create an environment of peaceful co-existence amongst all
employees.

This could be achieved by deliberately grouping these diverse

opinions into working Committees, social outings, club membership, in
an effort to make them understand themselves leading to general
tolerance of each other.

 Health:-

Ideally HR should seek to implement good health policy for

the generality of the workforce. Beyond the internal arrangements-good
ventilation, illumination, sick-bay, first-aids petal. It is the duty of the
HR to have comprehensive Health Insurance Schemes in which
employees are registered for both preventive and curative medication.
Lately, it is the duty of the HR to fashion out a very friendly policy on

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 HIV/AIDS to suit the workplace demography to avoid discrimination
on this ground.

 Safety:-

In as much as it is the function of the HR to propose policies

and get them approved and implemented Management has a big role to
play when it comes to Safety Issues. HR has to see to it that an
acceptable safety standard is kept in the workplace-safety gears are
provided, fire extinguishers are placed at the right places, multiple
entrances and exists are provided, muster-point/s are made known to
the workforce and possible fire/safety drills are conducted once in a
while.

 UnionRelations:-

This yet another sensitive issue, it should be noted that in as

much as Human Beings have the right of Association some employers
of labour have deliberately deleted this from their Employee Handbook
making workers "apolitical by internal legislation".
However the above is not the general rule in places where Unionization
is permitted it is function of HR to mediate between Union and
Management whenever the need arises-most times on the grounds of
Collective Bargain Approach.

 Challenge to work with Contract Labour:-

According to Contract Labour (regulation and habilitation) act-

1970, Labour commission has recommended the use of contract Labour
for conduct of non-core activities and for sporadic and seasonal
demands it should be permissible even for core activities. However, the
2nd NCL has taken care to look after the welfare of the workers and
accordingly, has recommended that the contract labour should be paid
at the same rate as the regular worker, following the principle of ‘equal
pay for equal work’. In the event of default by the contractor, the
principal employer shall be held responsible. While, the most trade
unions are against relaxation of these provisions, the employers are not
happy with equating the wages of the regular workers with the contract
workers.

The central government and state governments have set up

tripartite Advisory Boards to advise the appropriate government on
these matters and during the last three decades, these boards have met
at regular intervals and have recommended abolition of contract labour

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in several processes and operations in a large number of industrial
establishments. However, there is no provision in the act to compel the
employers to regularize those workers who were earlier on contract.

The current thinking is that this provision is not in tune with the
requirement of the Indian industry facing severe competition in a
globalize word. Most employers feel that section 10 should be repealed,
whereas most trade unions are opposed by the Group Of Ministers
(GOM) constituted by the NDA government, a reference to which has
been made earlier in this chapter.

In the fast changing scenario, new types of industries are

coming up; certain old industries are getting closed. The industrialists
cannot be expected to engage permanent workers to meet such
contingencies. It is found that only specialized workforce can handle
certain items of work which do not require permanent workmen.

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 CHAPTER-2

REVIEW OF LITERATURE

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 HUMAN RESOURCE MANAGEMENT

CHAPTER 2.1:- HISTORY

During 1990’s, there was emergence of a new human resource

management, especially as a result of the globalization and liberalization
of the economy.
The economy and the policy of India were fast changing in the
wake of the liberalization policies mooted by Rajiv Gandhi Government
and formalized by the Narsinha Rao Government. Consequently the form
and the concept of capitalist relations between the various factors of
production are undergoing a change. What has emerged is a new era in
human resource management. As a result of the liberalization, industrial
relations and human resource management (HRM) have acquired
strategic importance. The success of new policies depends to a large
extent on the introduction of new industrial relation and human resource
policies at national and enterprise levels. Some pressure for change has
already been witnessed in the IR and HRM areas. The actors of the
system now realize that neither the economy nor the industrial enterprise
can survive by clinging to their rigid postures.

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 Indian industrial scenario is passing through a turbulent phase
at present. The liberalization of economy is beginning to make wide
ranging and far-reaching impact on how we manage our resources,
technology and people.

As we enter into the age of stiff competition from global giants,

quality of product and customer satisfaction become prime factor in
organizational success. To get the best performance from the people, one
needs to recruit well, place appropriately, train and develop consistently,
compensate adequately and create and maintain an organizational culture
which motivates innovation and enterprise. Truly speaking in the coming
years the human resource specialist will be at a premium.

CHAPTER 2.2:- INTRODUCTION TO

HUMAN RESOURCE MANAGEMENT

HRM is the utilization of human resources to achieve

organizational objectives. Consequently, all managers at every level must
concern themselves with human resource management. Basically,
managers get things done through the efforts of others; this requires
effective human resource management.
Today’s human resource problems & opportunities are
enormous & appear to be expanding. Individuals dealing with human
resource matters face a multitude of challenges, ranging from a
constantly changing workforce to the ever-present scores of government
regulations & a major technological revolution.
Human Resource Management has to change as the business
environment changes. It has to do this as a mixture of responding to
changes in that environment and if predicting such changes and making
proactive decisions about the nature of HRM.The future are
unpredictable and it is hard to determine what it will bring. It is
important to be flexible and to acquire as much knowledge as possible to
help cope with these uncertainties. HR managers need to synthesize
issues relating to their core personnel functions with the general
economic and business issues, whilst remaining in touch with
technological development. Successful HR managers and departments
have a significant strategic impact on their organization.
If an organization is to achieve its goals, it must not only have
the required resources, it must also use them effectively. The resources
available to a manager the human, financial, physical and informational.

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While Human Resources (HR) have always been critical to the success of
any organization, they have assumed an increasingly greater importance
that is being recognized inside and outside work organizations.
The role of HR is changing with the globalization of business
that began in earnest in the late1980s.The increasing recognition of HR
as a legitimate business unit has made it highly strategic in nature and
more critical to achieving corporate objectives.
To succeed, HR executives must “understand the complex
organizational design and be able to determine the capabilities of the
company’s workforce, both today and in the future.” HR involvement in
strategy is necessary to ensure that human resources support the firm’s
mission.

CHAPTER 2.3:- DEFINITION

“Human Resource Management is the planning, organizing,

directing of the procurement, development, compensation, integration,
maintenance and suppuration of human resources to the end that
individual, organizational and social objectives are accomplished.”
(Edwin Flippo)

“Human Resource Management is a process in which all the

processes come which helps to improve the productivity of an employee.
Also we can say that it involves lot of activities and processes like
recruitment, selection, performance management system, grievance,
handling, employee retention etc.”

“Human Resources Management can be defined as the process

of accomplishing organizational objectives by acquiring, retaining,
termination, developing and properly using the human resources in an
organization.”
(Ivancevich)

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 CHAPTER 2.4:- FUNCTIONS OF H.R.M.
Functions of HRM

Managerial Functions Operative Functions

1) Planning 1) Procurement of personnel
2) Organizing 2) Development of personnel
3) Directing 3) Compensation to personnel
4) Controlling 4) Employee’s benefit schemes
5) Maintaining good industrial
relations
6) Record keeping
7) Personnel planning and
evaluation
8) Personnel research and audit

 Managerial Functions:-

1) Planning:-
Planning is the main function of management. In the context of
personnel management, it is concerned with manpower planning, studying
labour turnover rate, forecasting the future requirement of personnel and
planning for selection and training procedures, etc.

2) Organizing:-
Organizing involves the establishment of interrelationships
within organization. It provides a structure for the company by identifying
the various sub-groups created by individuals in managerial jobs as well as
operative jobs.

3) Directing:-
Personnel management is directly concerned with direction
function also. It includes issuing instructions to the workers, developing
communication network, interpreting various industrial laws and
integrating workers.

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 4) Controlling:-
Personnel department helps in controlling also. It provides basic
data for establishing standards, making job analysis and performance
appraisal etc.These all techniques assist in effective control of the quality,
time and efforts of workers.

 Operative Functions:-

1. Procurement of Personnel:-
The first operative function of personnel management is
concerned with the obtaining of the proper kind and number of personnel
necessary to accomplish organizational goals. It deals specifically with
such subjects as the determination of manpower requirements, their
recruitment, selection, placement and orientation etc.

2. Development of Personnel:-
After personnel have been obtained, they must, to some degree,
be developed before going to work. Development has to do with the
increase of skill through training. Different training methods are used in
this process in order to develop the employees. Framing a sound
promotion policy determination of the basis of promotion and making
performance appraisal are the basis of personnel development functions.

3. Compensation to Personnel:-
Compensation means, determination of adequate and equitable
remuneration of personnel for their contribution to organizational
objectives. It is one of the most difficult and important functions of the
personnel management to determine the monetary compensation for
various jobs. For choosing a suitable compensation policy a number of
decisions are taken into the function viz, job evaluation, remuneration
policy, incentive and premium plans, bonus policy and co-partnership etc.
In addition to this, it also assists the organization for adopting the suitable
wage and salary policy and payment of wages and salaries at the right
time.

4. Maintaining Good Industrial Relations:-

It is one of the most essential functions of the personnel manager
to create the harmonious relations between management and labour. It
covers a wide field and is intended to reduce strikes, promote industrial
peace, provide fair deal to workers and establish industrial democracy. If
the personnel manager is unable to make harmonies relation between the
two, it will be very harmful to the organization. The industrial understand
will take place and millions of man-days will be lost. The moral and

- 25
 physical condition of the employee will suffer if labour management
relations are not good. It is the duty of personnel manager to make
harmonious relation with the help of efficient communication system and
co-partnership.

5. Record Keeping:-
Record-keeping is also an important function of personnel
manager. In this system, personnel manager collects and maintains
information, which is concerned with the staff of the organization.
Recording is essential for every organization because it assist the
management in decision-making e.g. for promotions.

6. Personnel Planning and Evaluation:-

Under this system different types of activities are evaluated such
as evaluation of performance, personnel policy of an organization and its
practices, personnel audit, moral survey and performance appraisal etc.

7. Personnel Research and Audit:-

It is also an important function of personnel management. This
function is concerned with the research in newer motivational techniques
an auditing its effect on the workers of the organization etc.

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 CHAPTER 2.5:- WHY STUDY H.R.M.?

Anyone who embarks on a course of specialized study typically

wonders about its relevance to his or her interests and goals. The answer
to the question “Why study HRM?” should become apparent as we
explore the importance of HRM and examine the contributions it can
make to an organization. What you are working in the HRM function of
your organization or as a staff professional or line manager, you will
definitely need to be aware of the various roles and responsibilities in
dealing with employers in your organization.

CHAPTER 2.6:- IMPORTANCE OF H.R.M.

For many decades such responsibilities as selection, training

and compensation were considered basic functions of the area
historically referred to as personnel management. These functions were
performed without much regard for how they related to each other. From
this narrow view we have seen the emergence of what is now known as
human resource management.
Human resource management (HRM), as it is currently
perceived, represents the extension rather than the rejection of the
traditional requirements for managing personnel effectively. An
understanding of human behavior and skill in applying that
understanding are still required. Also required are knowledge and
understanding of the personnel functions performed in managing human
resources, as well as the ability to perform those functions in accordance
with organizational objectives. An awareness of existing economic,
social, and legal constraints upon the performance of these functions is
also essential.
HRM, as it is practiced today, recognized the dynamic
interaction of personnel functions with each other and with objectives of
the organization. Most important it recognizes that HR planning must be
coordinated closely with the organization strategic and related planning
function. As a result, efforts in HRM are directed toward providing more
support for the achievement of the organization’s goals whether it is a
profit not for profit, or government organization.

- 27
CHAPTER-3

PROCESS

- 28
 CHAPTER 3.1:- HUMAN RESOURCE PLANNING

 Definition:-

“Human Resource Planning is the process of systematically

reviewing human requirements to ensure that the required number of
employees, with the required skills, is available when they are needed.”
Human resource planning involves matching the internal and
external supply of people with job openings anticipated in the organization
over a specified period of time. However, there is a growing mismatch
between emerging jobs and qualified people available to fill them. The
labor pool is changing as U.S.companies try to cope with rapid
technological shifts and increasing globalization of the economy. The
adequacy of the labor pool is vital to the success of the global
organization. If global employees are to be developed properly, they must
be technologically and cross-culturally trained to help broaden their
perspectives and relationships, preparing them to deal effectively with
organizational changes.

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 Process of Human Resource Planning:-

External Environment

Internal Environment

Human Resource Planning

Forecasting Human Comparing Requirements Forecasting Human

Resource Requirements & availability Resource
Availability

Demand Surplus Shortage

= of of
Supply Workers Workers

No Action Restricted Hiring, Recruitment

Reduced Hours, Early
Retirement, Lay-off Selection

1. Forecasting Human Resource Requirements:-

A requirements forecast is an estimate of the numbers and kinds
of employees the organization will need at future dates to realize its state
goals. Before human resource requirements can be projected demand for
the firm’s goods or services must first be forecast is then converted into
people requirements for the activities necessary to meet these demands.
For a firm that manufactures personal computers, activities might be
started in terms of the number of units to be produced, number of sales
call be started in terms of the vouchers to be processed or a variety of
other activity.

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2. Forecasting Human Resource Availability:-
Forecasting Requirement provides managers with means of
estimating how many and what types of employees will be required. But
there is an other side to the coin, as this example illustrates:
A large manufacturing firm on the west cost was preparing to
begin operations in a new plant. Analysts had already determined that
there was a large, long term demand for the new product. Financing was
available and equipment was in place. But production did not begin for
two years! Management had made a critical mistake: it had studied the
demand side of human resources but not the supply side. There were not
enough qualified workers in the local labour market to operate the new
plant. New workers had to receive extensive training before they could
move into the newly created jobs.

3. Internal Sources of Supply:-

Many of the workers that will be needed for future positions
may already work for the firm. If the firm is small, management probably
knows all the workers sufficiently well to match their skill and
aspirations with the company’s needs. Suppose the firm is creating a new
sales position; common knowledge in the company may be that Mary
Garcia, a five-year employee, has both the skills and the desire to take
over the new job. This unplanned process of matching people and
positions may be sufficient for smaller firms. As organizations grow,
however, the matching process becomes increasingly difficult. Both
skills and management inventories are being used by organizations that
take human resources seriously. Also, succession planning helps ensure
an internal supply of highly qualified management personnel.

4. External Sources of Supply:-

Unless a firm is experiencing declining, it will have to recruit
some employees from out side the organization. However finding and
hiring new employees capable of performing immediately is usually quite
difficult. The best source of supply various by industry firm and
geographic location. Some organizations find that their best sources of
potential employees are colleges and universities. Other gets excellent
result from vocational schools, competitors or even unsolicited
applications.
If the company has information revealing where its present
employees were required it can develop statistics and project the best
sources. A firm may discover that graduates from a particular colleges or
university adept well to the firm’s environment and culture. One large firm

- 31
 equipment manufacturer had achieved excellent success in requiting from
regional
schools located in rural areas. Manager in this firm believe that because
many students come from a farming environment they can adept more
quickly to the firm’s method of operation. Pepsi often requites from
second tier schools because graduates of top business are seldom willing
out in menial job.
Other firms many discover from past records that the majority of
their more successful employees grew up no more then 20 miles from their
place of work. This information may suggest concentrated recruiting
efforts in that particular geographic area.

 Surplus of Employees:-

A comparison of requirement and availability may indicate a

worker surplus in the making with this knowledge restricted hiring
reduced hours early retirements and layoff may be required to correct the
situation. Downsizing one result of worker surpluses is disuses later in the
chapter as a separate topic.

1. Restricted Hiring:-
When a firm implements a restricted hiring policy it reduces the
workforce by not replacing employees who leave. New workers are hired
only when the overall performance of the organization may be affected if
static jobs are not filled. For instance if a quality control department that
consisted of four inspectors lost one to a competitor this individual
probably would not be replaced. However if the firm lost all its inspectors
it would probably replaced at least some of them to ensure continued
operation.

2. Reduced Hours:-
A company can also react to a reduced work lode requirement by
reducing the total number of hours employee work. Instead of continuing a
40 hours week management may decide to cut each employee’s time to 30
hours.
This cut bakes normally appli8es only to hourly employees
because management and other professional typically are salaried.

3. Early Requirement:-
Early requirement of some present employees another way to
reduce the number of works. Some employees will be delighted to retire
but others will be some what reluctant. The latter may be willing to accept
early retirement if the total requirement packaged is made sufficiently
attractive. A key point to remember is that because of the age

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discrimination in employment act as amended retirement can no longer be
mandated by age.

4. Layoffs:-
At times, a firm no choice but to layoff part of its workforce. A
layoff is not the same as a firing, but it has the same basic effect. The
worker is no longer employed. When the firm is unionized, layoff
procedures are usually stated clearly in the labour management agreement.
Typically, workers with the least seniority are laid off first. If the
organization is union free, it may base layoff on a combination of factors,
such as seniority and productivity level. When managers and other
professionals are laid off, the decision is likely to be based on ability,
although internal politics may be a factor.

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 CHAPTER 3.2:- RECRUITMENT

 Introduction:-
Recruitment is the process of attracting individuals on a timely
basis, in sufficient numbers, and with appropriate qualifications and
encouraging them to apply for jobs with an organization. Finding the
appropriate way of encouraging qualified candidates to apply for
employment is extremely important when a firm needs to hire
employees. Tapping productive sources of applicants and using suitable
recruitment methods are essential for the greatest recruiting efficiency
and effectiveness. Some firms however, may prefer options other than
recruitment.

 Meaning:-
“Recruitment is a process to discover the sources of manpower
to meet the requirement of the staffing schedule and to employ effective
measure for attracting the manpower in adequate number to facilitate
effective selection of an efficient working force.”
“Recruitment is the process of attracting individuals on a timely

- 34
 basis in sufficient number and with appropriate qualifications and
encouraging them to apply for jobs with an organization.”

 Process of Recruitment:-
Recruitment is the process of searching capable people and
inducing them to apply or seek employment in the organization. It is
seeking potential candidates for jobs in the organization and involves
publishing information about the jobs with a purpose to attract and invite
the prospective candidates to apply for the dame and seek employment in
the organization. It finds capable people who are interested in applying
for a job.

External Environment
Internal Environment

Human Resource Planning

Alternatives to Recruitment

Recruitment

Internal Sources External Sources

Internal Methods External Methods

Recruited Individuals

 Alternatives to Recruitment:-
HRP indicate a needs for additional or replacement employees

- 35
 a firm may decide against increasing the size of its work force,
recruitment and selection cost are not insignificant. The search process
interviewing agency fee payment and relocation and processing of the
new employee. Selection decision are not irreversible employee are
placed on the pay roll the may be difficult to remove even if their
performance is marginal.

 Sources of Recruitment:-
Recruitment sources are the location where qualified individuals
can be found.

 Internal Sources of Recruitment:-

1. Present Employees:-
Promotions and transfers from among the present employees
can be a good source of (i) recruitment. It is good public relations (ii) it
builds morale (iii) it encourages competent individuals who are
ambitious (iv) it improves the probability of a good selection (v) it is
cheaper than going outside to recruit. However, promotion can be
dysfunctional to the organization as the advantage of hiring outsiders
who may be better qualified and skilled is denied. It may also help to
track persons who have the potential for further training or those who
have the right background for the vacant positions. Some companies
develop skill banks that list current employees who have specific skills.
2. Employee Referrals:-
This can be a good source of internal recruitment. Employees
can develop good prospects for their families and friends by acquainting
them with the advantages of a job with the company, furnishing cards of
introduction, and even encouraging them to apply. This source is usually
one of most effective methods of recruiting because many qualified
people are reached at a very low cost to the company. In an organization
with a large number of employees, this approach can provide quite a
large pool of potential organizational members.
3. Former Employees:-
Former employees are also an internal source of applicants.
Some retired employees may be willing to come back to work on a part –
time basis or may recommended someone who would be interested in
working for the company. Sometimes, people who have left the company
for some reason or the other are willing to come back and work.

- 36
 Individuals, who left for other jobs, might be willing to come back for
higher emolutions. An advantage with this source is that the performance
of these people is already known.

 External Sources of Recruitment:-

1. Professional or Trade Associations:-

Many associations provide placement services for their
members. These services may consist of compiling job seekers’ lists and
providing access to members during regional or national conventions.
Further, many associations publish or sponsor trade journals or
magazines for their members. These publications often carry classified
advertisements from employers interested in recruiting their members.
1. Advertisements:-
These constitute a popular method of seeking recruit as many
recruiters prefer advertisements because of their wide reach. Want ads
describe the job and the benefits, identify the employer, and tell those
who are interested and how to apply. They are the most familiar from of
employment advertising. For highly specialized recruits, advertisement
may be placed in professional/business journals. Newspaper is the most
common medium. Many organizations place what is referred to as blind
ads, one in which there is no identification of the organization.
Respondents are asked to replay to a post box number or to a consulting
firm that is retained by the organization. Large organizations with
national reputation will seldom use blind ads to fill lower level positions.
3. Employment Exchanges:-
Employment Exchanges have been set up all the country in
deference to the provisions of the Employment Exchanges (Compulsory
Notification of Vacancies) Act, 1959.The Act applies to all industrial
establishments having 25 workers or more each. The Act requires all the
industrial establishments to notify the vacancies before they are filled.
The major functions of the exchanges are to increase the pool of possible
applicants and to do preliminary screening. Thus, employment
exchanges act as a link between the employers and the prospective
employees.
2. Campus Recruitment:-
Colleges, universities, research laboratories, sports fields and
institutes are fertile ground for recruiters, particularly the institutes. The
Indian Institutes of Management (IIMs) and the Indian Institutes of

- 37
 Technology (IITs) are on the top of the list of avenues for recruiters. In
fact, in some companies, recruiters are bound to recruit a given number
of candidates from these institutes every year. The IIMs are an important
source for recruiting management trainees.

3. Walk-ins, Write-ins and Talk-ins:-

The most common and least expensive approach for candidates
is direct applications, in which job seekers submit unsolicited
application letters or resumes.
Direct applications can also provide a pool of potential
employees to meet future needs. From employees’ viewpoint, walk-ins
are preferable as they are free from the hassles associated with other
methods of recruitment.
While direct applications are particularly effective in filling
entry –level and unskilled vacancies, some organizations compile pools
of potential employees from direct applications for skilled positions.
Write-ins are those who send written enquiries. These
jobseekers are asked to complete application forms for further
processing.
Talk-ins is becoming popular nowadays. Job aspirants are
required to meet the recruiter (on an appropriated date) for detailed talks.
No application is required to be submitted to the recruiter.
4. Consultants:-
ABC Consultants, Ferguson Associates, Human Resource
Consultants, Head Hunters, Batliboi and Co. Analytic Consultancy
Bureau, Aims Management Consultants and The Search House are some
among the numerous recruiting agencies. These and other agencies in
the profession are retained by organizations fro recruiting and selecting
managerial and executive personnel. Consultants are useful in as much
they have nation-wide contacts and lend professionalism to the hiring
process. They also keep prospective employer and the employee
anonymous. But; the cost can be deterrent factor. Most consultants
charge fees ranging from 20 to 50 percent of the first year salaries of the
individuals placed.
5. Contractors:-
Contractors are used to recruit casual workers. The names of
the workers are not entered in the company records and, to this extent;
difficulties experienced in maintaining permanent workers are avoided.
6. Displaced Persons:-

- 38
 Sitting and implementation of a project in an area would result
in displacement of several hundred inhibitants. Rehabilitating the
displaced people is a social responsibility of business. Such people are a
source of recruitment, not only for the project, which caused the
displacement, but also for other companies located elsewhere.
7. Radio and Television:-
Government departments use radio and television but sparingly,
and that too only. Companies in the private sector are hesitant to use the
media because of high costs and also because they fear that such
advertising will make the companies look desperate and damage their
conservative image.
Radio and television can be used to reach certain types of job
applicants such as skilled workers.
8. Acquisitions and Mergers:-
Another method of staffing organizations is a result of the
merger or acquisition process. When organizations combine into one,
they have to handle a large pool of employees, some of whom may no
longer be necessary in the new organization.Consequently,the new
organization has, in effect, a pool of qualified job applicants (although
they are current employees).
9. Competitors:-
Rival firms can be a source of recruitment. Popularly called
‘poaching’ or ‘raiding’, this method involves identifying the right people
in rival companies, offering them better terms and luring them away. For
instance, several executives of HMT left to join Titan Watch Company,
so also from BEL to BPL.There are legal and ethical issues involved in
raiding rival for potential candidates. From the legal point of view, an
employee is expected to join a new organization only after obtaining a
‘no objection certificate from his/her present employer, Violating this
requirement shall bind the employee to pay a few months’ salary to
his/her present employer as a punishment.

 Methods in Internal Recruitment:-

Management should be able to identify current employees who

are capable of filling position as they become available. Helpful tools
used for internal recruitment include skills and management inventories
permit organization to determine whether current employees possess the
qualification for filling open position.

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1. Job Posting:-
A procedure for communicating to company employees the
fact that a job opening exists. Some firms provide employees with an up
to date computer list of job opening they may post opening on the
company’s intents.
2. Job Bidding:-
A technique that permit individuals in an organization who
believe that they possess the required qualification to apply for a posted
job.

 Methods in External Recruitment:-

This includes according to one executive the passive job seekers

those are the best qualified but who are not presently looking for a job.
Impressive results using the internet for requirement are not achieved by
simply posting jobs and waiting for applicants to e-mail resumes. This
site has many jazzy graphic and games and a benefit page that describes
what the company has to offer. In addition a college connection has to
resume builder a list of job fairs and an explanation of the company
philosophy and culture.

- 40
 SELECTION

 Introduction:-
Selection is a long process, commencing from the preliminary
interview of the applicants and ending with the contract of employment.
In practice, the process differs among organizations and between two
different jobs within the same organization. Selection procedure for
senior managers will be long-drawn and rigorous, but it is simple and
short while hiring shop floor workers.

 Definition:-
“Selection is the process of choosing from a group of applicants
those individuals best suited for a particular position and an
organization.”

- 41
 Process of Selection:-

External Environment
Internal Environment

Preliminary Interview

Selection Tests

Rejected Applicants
Employment Interview

Reference & Background Analysis

Selection Decision

Physical Examination

Job Offer

Employment Contract
Evaluation

 Environmental Factors Affecting Selection:-

Selections influenced by several factors. More Prominent
among them are supply and demand of specific skills in the labour

- 42
 market, unemployment rate, labour-market conditions, legal and
political consideration, company’s image, company’s policy, HRP and
cost of hiring.

Preliminary Interview:-
The applications received from job seekers would be subject to
scrutiny so as to eliminate unqualified applicants. This is usually
followed by a preliminary interview the purpose of which is more or less
the same as scrutiny of applications that is elimination of unqualified
applications. Scrutiny enables the HR specialists to eliminate
unqualified job seekers based on the information supplied in their
application forms.
Preliminary interview, on the other hand, helps reject misfits
for reasons, which did not appear in the application forms. Besides,
preliminary interview, often called ‘courtesy interview’ is good public
relations exercise.
Selection Tests:-
Job seekers who pass the screening and the preliminary
interview are called for tests. Different types of tests may be
administered, depending on the job and the company. Generally; tests
are used to determine the applicant’s ability, aptitude and personality.
Ability Tests are (also called achievement tests) assist in
determining how well an individual can perform tasks related to the job.
Personality Tests are given to measure a prospective
employee’s motivation to function in a particular working environment.
Interest Tests are used to measure an individual’s activity
preferences. These tests are particularly useful for students considering
many careers or employees deciding upon career changes.
Graphology Test is designed to analyze the handwriting of an
individual. It has been said that an individual’s handwriting can suggest
the degree to energy, inhibitions and spontaneity, as well disclose the
idiosyncrasies, and elements of balance and control.
Polygraph Test (polygraph is a lie detector) are designed to
ensure accuracy of the information given in the applications.
Departmental stores, banks, treasury officers and jewellery shops that
are those highly vulnerable to theft or swindling may find polygraph
tests useful.

- 43
 Medical Tests reveal physical fitness of a candidate. With the
development of technology, medical tests have become diversified.
Drug Tests help to measure the presence of illegal or
performance affecting drugs. Genetic screening identifies genetic
predispositions to specific medical problems.

3. Employment Interview:-
Interview is a formal, in depth conversation conducted to
evaluate the applicant’s acceptability. It is considered to be an excellent
selection device. Its popularity stems from its flexibility. Interview can
be adapted to unskilled, skilled, managerial and professional employees.
The employment interview can be (i) one-to-one (ii) sequential
(iii) panel; in the one-to-one interview, there are only two participants-
the interviewer and the interviewee. This can be the same as the
preliminary interview discussed earlier.
The sequential interview takes the one-to-one a step further and
involves a series of interviews, usually utilizing the strength and
knowledge –base of each interviewer, so that each interviewer can ask
questions in relation to his or her subject is of each candidate, as the
candidate moves from room to room.
The panel interview consists of two or more interviewers and
the figure may go up to as many as 15.Any panel interview is less
intimate and more formal that the one-to-one, but if handled and
organized well, it can provide a wealth of information.
4. Reference and Background Checks:-
Many employers request names, addresses and telephone
numbers or references for the purpose of verifying information and
perhaps, gaining additional background information on an applicant.
Although listed on the application form, references are not
usually checked until an applicant has successfully reached the fourth
stage of a sequential selection process. When the labour market is very
tight, organizations sometimes hire applicants before checking
references.
Previous employers known public figures, university
professors, neighbors or friends can act as references. Previous
employers are preferable because they are already aware of the
applicant’s performance.
5. Selection Decision:-

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 After obtaining information through the preceding steps,
selection decision-the most critical of all the steps-must be made. The
other stages in the process have been used to narrow the number of
candidates. The final decisions have to be made from the pool
individuals who pass the tests, interviews and reference checks. The
views of the line manager will be generally considered in the final
selection because it is he/she who is responsible for the performance of
the new employee.
6. Physical Examination:-
After the selection decision and before the job after offer is
made, the candidate is required to undergo a physical fitness test. A job
offer is, often, contingent upon the candidate being declared fit after the
physical examination. The results of the medical fitness test ate recorded
in a statement and are preserved in the personnel records. One reason for
a physical test is to detect if the individual carries any infectious diseases.
Secondly, the test assists in determining whether an applicant is
physically fit to perform the work. Third, the physical examination
information may be used to determine if there are certain physical
capabilities, which differentiate successful and less successful
employees. Fourth, medical check-up protects applicants with health
defects from undertaking work that could be detrimental to themselves or
might otherwise endanger the employer’s property. Finally, such an
examination will protect the employer from workers’ compensation
claims that are not valid because the injuries or illnesses were present
when the employee was hired.
7. Job Offer:-
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 the appointee must report on duty. The appointee must be
given reasonable time for reporting. This is particularly necessary when
he or she is already in employment, in which case the appointee is
required to obtain a relieving certificate from the previous employer.
Again, a new job may require to another city, which means considerable
preparation, and movement of property.
8. Employment Contracts:-
After the job offer has been made and the candidates accept the
offer, certain document need to be executed by the employer and the
candidate. One such document is the attestation form. This form
contains certain vital details about the candidates, which are
authenticated and attested by him/her. Attestation form will be a valid
record for future reference. There is also a need for preparing a contract

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 of employment. The basic information that should be included in a
written contract of employment will very according to the level of the
job. Most employers insist on agreements being signed by newly hired
employees. But high employee turnover sectors such as software,
advertising and media are more prone to use such contracts.

9. Concluding the Selection Process:-

Contrary to popular perception, the selection process will not
end with executing the employment contract. There is another step – a
more sensitive one-reassuring those candidates who have not been
selected. Such candidates must be told that they were not selected, not
because of any serious deficiencies in their personalities, but because
their profiles did not match the requirements of the organization. They
must be told that those who were selected were done purely on relative
merit.
10. Evaluation of Selection Programme:-
The board test of the effectiveness of the selection process is
the quality of the personnel hired. An organization must have competent
and committed personnel. The selection process, if properly done, will
ensure availability of such employees. How to evaluate the effectiveness
of a selection programme? A periodic audit is the answer. The people
who work independent of the HR department must conduct audit.

 Types of Interview:-

Unstructured Interview:-
Unstructured Interviews are unpatterned interviews in which
questions, which are to be asked, are not predetermined prior to the
interview. Employment specialist develops the questions as the
interview goes on. The responses of the applicants often lead to the
development of questions. In such an interview, different questions are
put to different candidates .This may take the form of depth interview of
the candidate’s work experience; interest etc. The atmosphere is usually
informal and conversational. The method is not reliable and may
overlook the candidate’s strengths and weaknesses.
Systematic or Structured Interview:-
It is just reverse type of the unsystematic interviews. It is a
directed or formal interview. In such interview, set questions are asked

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 to the candidates. Job specifications and job descriptions provide a lot of
questions for such type of interviews. Such interviews are helpful in
selection of persons for routine types of work and where a large number
of people are to be selected.

Semi-Structured Interview:-
The semi-structured interview involves planning on the part of
the interviewer but also allows flexibility in precisely what the
interviewer asks candidates.
4. Stress Interview:-
The system prevails in interview in which firmness and
patience is needed more. Hence in, interviewer asks questions
continuously to the candidate so that his brain will not remain vacant
and force him to quick decisions. The system is prevalent for such posts
where mental equilibrium is very necessary. In India this method is used
by the businessmen for selection of efficient salesmen.
5. Group Interview:-
In such system, candidates are collectively given a problem. All
candidates discuss oven them. Interviewer sits at the back and hears the
discussions and learns about the leader of the group and how others are
influenced by him and how others accept his views. This process is
followed for the posts of leadership. This is not recognized more.
6. Board Interview:-
This system is against group interview. Hence, interviewers are
in group. They ask the distinct questions to the applicant. In the board,
every member is a specialist. In this way, every specialist evaluates the
ability of the candidate. The system is mostly prevalent in India
especially for higher posts.
7. Problem Solving Interview:-
In these interviews, hypothetical problems are set for the
applicants. They are required to show how they would tackle those
problems and situations. The applicant is assessed on the basis of his
answers and approach to solve the problem given to him.
8. Exit Interview:-
This interview is taken of the candidates who are leaving the
concern. The main objective of this is to improve in future the drawback

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 of the concern. As is evident this type of interview has noting to do with
the selection. However various shortcomings can be corrected with the
observations of such interviews.

CHAPTER 3.3:- ORIENTATION

 Introduction:-
The initial T&D effort designed for employees is orientation.
Orientation is the guide adjustment of new employees to the company,
the job, and the work group.

In a typical orientation program, company policies and rules are

spelled out along with the mechanics of promotion, demotion, transfer,
resignation, Discharge, layoff, and retirement.

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 To perform effectively, new employees need information that
not only permits them to do their jobs but also provides information that
will help them understand their co-workers’ behavioral patterns.

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 Purpose of Orientation:-
Orientation formats are unique to each Firm.

1. The Employment Situation:-

A basic purpose from the firm’s view point is to have the new
employee become productive as quickly as possible. Therefore, Specific
information about performing the job may be provided at an early point
in time. Knowledge of how the job fits in to the departmental goals and
goals of the company tend to illustrate its importance and provide
meaning to the work.

2. Company Policies and Rules:-

Every job with an organization must be performed within the

guidelines and constraints provided by policies and rules. Employees
must understand these to have a smooth transition to the workplace. This
information may be quit detailed, so common practice is to include it in
the form of an employee handbook.

3. Compensation and Benefits:-

Employees will have a special interest in obtaining information

about the reward system. This information is usually provided during the
recruitment and selection process, but a review of the data is appropriate
during orientation.

4. Team Membership:-

A new employee’s ability and willingness to work in terms is

most likely determined before he or she is hired. In orientation, the
importance of becoming a valued member of the company team may be
emphasized. Even though the individual is now and will always be
important to organizations, many processes can be more effectively
accomplished through teams.

5. Employee Development:-

Employee development has become essentially a-do-it yourself

process. However, some firms provide assistance in this area. Employees
should know exactly what is expected of them and what is required by

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 the firm for advancement in the job or for promotion. An individual’s
employment security is increasingly becoming dependent upon his or her
ability to acquire needed knowledge and skills that are constantly
changing. Thus, employees should be kept aware of company. Sponsored
developmental programs and those available externally and they should
receive encouragement to take advantage of any appropriate
opportunities.

6. Dealing with Change:-

The significance of change was discussed at the beginning of

this chapter. Simply put, employees at all levels must learn to deal
effectively with change to survive in their jobs. The best way individuals
can be prepared for change is to develop and expand their skills
continually. It is mutually advantageous for both employee and employer
for this to occur as it provides security for the employee and a more
valuable performer for the firm.

7. Socialization:-

To reduce the anxiety that new employees may experience,

attempts should be made to integrate the person into the informal
organization. Many years ago, Texas Instruments conducted research that
clearly revealed the important of this purpose. Employees in the
socialization program proved to be significantly superior on all measures
to those in the traditional group. Although orientation programs are
typically conducted for new employees, programs designed for those
who have been on the payroll for a longer period of time may also be
needed.

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 CHAPTER 3.4:- EMPLOYEE DEVELOPMENT

 Introduction:-
Training & Development is planned, continuous efforts by
management to improve employee competency levels & organizational
performance.
Training is designed to provide learners with the knowledge &
skills needed for their present jobs. Development involves learning that
looks beyond the knowledge & skill needed for a present job.
Training is for improvement in the existing skills. For lack of
skills &ability to perform a job and task to improve the performance of
an employee.

 Definition:-
Training:-
“According to Michel Armstrong, “Training is systematic
modification of behavior through learning which occurs as a result of
education, instruction, development & planned experience.”

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 Development:-
“Development is a going to leering process which helps for
growth in terms of knowledge, skills, ability &capabilities throughout
this work (So T & D).”
So, training prepares people to perform their present job more
effectively. Now the development is a long term procedure. It represents
all those activities/ programmes of teaching skills, knowledge or attitude
that increase employees position & prepare them for future position.

 Process:-
External Environment

Internal Environment

Organization Objectives and

Strategies

Assessment of Training Need

Establishment of Training
Goals

Designing Training Programme

Implementation of Training
Programme

Evaluation of Result

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 1. Organizational Objectives and Strategies:-

The first step in the training process in an organization is the

assessment of its objectives and strategies. It is only after answering these
and other related questions that the organization must assess the strengths
and weakness of its human resources.

2. Needs Assessment:-

Needs assessment diagnoses present problems and future

challenges to be met through training and development. Organizations
spend vast sums of money (usually as a percentage on turnover) on
training and development. Before committing such huge resources,
organizations would do well to assess the training needs of their
employees. Organizations that implement training programs without
conducting needs assessment may be making errors. For example, a
needs assessment exercise might reveal that less costly interventions.
Needs assessment occurs at two levels-group and individual. An
individual obviously needs training when his or her performance falls
short of standards, that is, when there is performance deficiency.

 Benefits of Needs Assessment:-

Trainers may be informed about the broader needs of the

training group and their sponsoring organizations.

 The sponsoring organizations are able to reduce the

perception gap between the participant and his or her boss about
their needs and expectations from the training programme.

 Trainers are able to pitch their course inputs closer to the specific
needs of the participations.

3. Training and Development Objectives:-

Once training needs are assessed, training and development

goals must be established. Without clearly – set goals, it is not possible to
design a training and development programme and, after it has been
implemented, there will be no way of measuring its effectiveness.

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 Goals must be tangible, verifiable, and measurable. This is easy
where skill training is involved. For example, the successful trainee will
be expected to type 55 words per minute with two or three errors per
page.

Nevertheless, clear behavioral standards of expected results are

necessary so that the program can be effectively designed and results can
be evaluated.

Designing Training and Development Programme:-

Every training and development program must address certain

vital issues-

 Who participates in the program?

 Who are the trainers?

 What methods and techniques are to be training?

 What should be the level of training?

 What learning principles are needed?

 Where is the program conducted?

 WHO ARE THE TRAINEES?

Trainees should be selected on the basis of self nomination,

recommendations of supervisors or by the HR department itself.

Whatever is the basis, it is advisable to have two or more target

audiences.

 WHO ARE THE TRAINERS?

Training and development programmes may be conducted by

several people, including the following:

1. Immediate supervisors

2. Co-workers, as in buddy systems

3. Members of the parts of the company

4. Specialists in other parts of the company

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 5. Outside consultants

6. Industry associations

7. Faculty members at universities

4. Implementation of Training Prgramme:-

Once the training programme has designed, it needs to be

implemented. Implementation is beset with certain problems. In the first
page, most managers are action-oriented and frequently say they are too
busy to engage in training efforts.

Secondly, availability of trainers is a problem, In addition to

possessing communication skills, the trainers must know the company’s
philosophy, its objectives, its formal and informal organizations, and the
goals of the training programme.

Training and development requires a higher degree of creativity

than, perhaps, any other personnel specialty. Overall implementation
involves action and the following lines.

1. Deciding the location and organizing training and other facilities.

2. Scheduling the training programme.

3. Conducting the programme.

4. Monitoring progress of trainees.

5. Evaluation of Training Programme:-

The last stage in the training and development process is the

evaluation of results. Since huge sums of money are spent on training and
development, how far the programme has been useful must be
judged/determined.

Evaluation helps determine the results to the training and

development programme.

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 Methods of Training and Development:-
Often, learning at the same time they are performing jobs is not
feasible for employees. Thus, although a large portion of training and
development takes place on the job, many T&D programs occur away
from the work setting. These methods are discussed next.

1. Coaching: -
Coaching is an on-the-job approach in which a manager
provides instruction on a one-to-one basis. The trainee, in addition to
having the opportunity to observe, is assigned significant tasks requiring
decision-making skills. The experiences provided must teach the
individual to be flexible and adaptive and to have a board perspective.

To be effective, coach-counselor managers must have a

thorough knowledge of the job and how it related to the firm’s goals. For
this reason, some organizations are institutionalizing coaching as T&D
method.

2. Mentoring:-

Mentoring is an approach to T&D in which the trainee is given

the opportunity to learn on a one-to-one basis from more experienced
organizational members, the mentor is usually an older, executive who
serves as a host, friend, confidant, and advisor to a new firm member.
The mentor can be located anywhere in the organization. Mentoring has
received considerable attention, most of which has emphasized its
advantages. Mentoring is necessary for an individual to make it to the top
and that lack of it is the reason women and minorities have encountered
the glass ceiling.

3. Business Games:-

Simulations that represent actual business situations are

referred to as business games. Business games involve two or more
hypothetical organizations competing in a given product market. The
participants are assigned roles, such as president, controller, and
marketing vice president. They make decisions affecting price levels,
production volumes, and inventory levels. Their decisions are
manipulated by a computer program, with the results simulating those of

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 an actual business situation. Participants are able to see how their
decisions affect other groups and vice versa.

4. Case Study:-

The case study is a training method in which trainees solve

simulated business problems the individual is expected to study the
information given in the case and make decisions based on the situation.
Typically, the case study method is used in the classroom with an
instructor who serves as a facilitator.

5. Videotapes:-

The use of videotapes continues to be a popular training

method may be especially appealing to small businesses that cannot
afford more expensive approaches. In addition, videotapes provide the
flexibility that is desired by any firm.

An illustration of the use of videotapes is provided by behavior

modeling.Behavior modeling has long been a successful training
approach that managers function in various situations. Behavior
modeling has been used successfully to train supervisors in such tasks as
conducting performance appraisal reviews, correcting unacceptable
performance, delegating work, improving safety habits, handling
discrimination complaints, overcoming resistance to change, orienting
new employees, and mediating between individuals or groups in conflict.

6. In-Basket Training:-

In-basket training is a simulation in which the participant is

given a number of business papers such as memoranda, reports, and
telephone messages that would typically cross a manager’s or team
leader’s desk. In this method, the trainee assigns a priority to each
particular situation before making the decisions called for by each one.

7. Internships:-

An internship program is a recruitment method typically

involving university students who divide their time between attending
classes and working for an effective training method. Internships also
provide advantages for students. The experience they obtain through

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 working enables them to integrate theory learned in the classroom with
the practice of management.

8. Role Playing:-

In role playing, participants are required to respond to specific

problems they may actually encounter in their jobs. Rather than hearing
about how a problem might be handled or even discussing it, they learn
by doing. Role playing is often used to teach such skills as interviewing,
grievance handling, performance appraisal, conference leadership, team
problem solving, effective skills section at the end of each chapter is a
role- playing exercise that demonstrates the benefits of this training
approach.

9. Job Rotation:-

In job rotation, employees move from one job to another to

broaden their experience. This breadth of knowledge is often needed for
performing higher level tasks. Rotational training programs help new
employees understand a variety of jobs and their interrelationships. Job
rotation has much potential as a T&D method, but it also has some
potential problem.

In addition, employees who observe or have to work with an

individual rotating through their department may resent having to help a
fast-track employee who may in time become their boss.

10. Programmed Instruction:-

A teaching method that provides instruction without the

intervention of an instructor is called programmed instruction. With this
teaching method, information is broken down into small portions
(frames). The learner reads each frame in sequence and responds to
questions, receiving immediate feedback on response accuracy. If
correct, the learner proceeds to the next frame. If not, the learner repeats
the frame. Primary features of this approach are immediate reinforcement
and the ability of learners to proceed at their own pace.

11. Computer-Based Training:-

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 Computer-based training takes advantage of the speed,
memory, and data manipulation capabilities of the computer for greater
flexibility of instruction. The increased speed of presentation and
decreased dependence on an instructor are advantages of this training
approach. Computer-based training may also utilize multimedia.

12. Cyber Learning:-

As we move rapidly toward just-in-time delivery of

information. Training and development professional must have the
expertise to develop strategies that optimize a firm’s technological
capability. Cyber learning is a term used to identify this high-tech
training method, some of which are discussed next. The Internets and
Just-In-Time Training. E-mail on the internet may be used for
distributing course material and sharing information. Interactive tutorials
on the internet and intranet also permit trainees to take courses On-Line.

Internets, proprietary electronic networks, permit delivery of

programs that have been developed specifically for an organization’s
particular learning needs.

Just-In-Time training becomes feasible with computers and the

internet or intranets.

13. Virtual Reality:-

Using virtual reality, trainees can view objects from a

perspective otherwise impractical or impossible.

14. Distance Hearing and Video Conferencing:-

For the past decade, a number of firms in United States have

used video conferencing and satellite classrooms for training. This
approach to training is now going interactive and appears to offer the
flexibility and spontaneity of a traditional classroom. A great deal of a
training is beginning to take place using this technology, offering the
prospect of increasing the number of trainees and at the same time
saving a lot of money for the company.

Global companies in particular can benefit from this new

technology. With Far-Flung operations, Travel is getting more frequent

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 and expensive distance learning. Videoconferencing and similar
technology can be used to increase. Employee’s access to training,
ensure consistency of instruction and reduce the cost of delivering
.Training and development programs.

15. Classroom Programs:-

Classroom programs continue to be effective for certain types

of employee training. One advantage of classroom programs is that the
instructor may convey a great deal of information in relatively short
period of time. Time effectiveness of classroom programs can be
improved when groups are small enough to permit discussion, when the
instructor is able to capture the imagination of the class, and when
multimedia can be used in an appropriate manner.

16. Corporate Universities:-

A decade ago, there were about 400 corporate training

institutions in the United States. The rapid growth of these institutions is
tied to the need for gaining a competitive advantage and to relate
learning to more specific organizational goals. Firms often partner with
universities or other organizations with training expertise such as the
American Management Association.

17. Training in Community Colleges:-

Some employers, including giant general motors, have

discovered that community colleges can provide certain types of training
better and more cost effectively than alternatives. Rapid technological
changes and corporate restructuring have created a new demand by
industry for community college training resources.

18. On-The-Job Training:-

On-The-Job Training is an informal approach to training that

permits an employee to learn job tasks by actually performing to
training and development. Individuals may also be more highly

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 motivated to learn because they see clearly that they are acquiring the
knowledge they need to perform their jobs.

19. Apprenticeship Training:-

Apprenticeship training combines classroom instruction with

On-The-Job Training such training is traditionally used in craft jobs,
Such as those of plumber, barber, carpenter, mechanic and painter The
high school Student work at Siemens three hours a day, twice a week
community college students work out at Siemens three hours a day,
twice a week, Community college students complete a two and half year
curriculum while working 20 hours a week.

20. Simulators:-

Simulators are training devices of verifying degrees of

complexity that model the real word. They range from simple paper
mock-ups of mechanical devices to computerized simulations of total
environments training and development specialists may use simulated
sales counters, auto mobiles and airplanes.

21. Vestibule Training:-

Vestibule training takes place away from the production area

on equipment that closely resembles equipment actually used on the job.
A primary advantage of vestibule training is that it removes the employee
from the pressure having to produce while learning the job.

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 CHAPTER 3.5 :- PERFORMANCE APPRAISAL

 Definition:-
Performance Appraisal is a system of review & evaluation of
an individual’s or team’s job performance.

Performance Management:-
Performance Management is a process that significantly affects
organizational success by having managers and employees work together
to set expectations, review results, and reward performance. It has been
described as a three – step process.
1) Performance planning, by managers and employees for determining
performance expectations.

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 2) Performance coaching, which is an ongoing process throughout the
appraisal period.
3) Performance review, a formal step that results in the individual and /
or team evaluation.
Performance appraisal is only one technique designed to
enhance performance management.

 Process of Performance Appraisal:-

External Environment
Internal Environment

Identify Specific
Performance Appraisal Goals

Establish Job Expectations

(Job Analysis)

Examine Work
Performed

Appraise
Performance

Discuss Appraisal
with Employee

 Methods of Performance Appraisal:-

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 Managers may choose from among several appraisal methods.
The type of performance appraisal system used depends on its purpose.

Rating Scales:-
A widely used appraisal method, which rates employees
according to defined factors, is called the rating scales method. Using
this approach, judgments about performance are recorded on a scale. The
scale is divided in to categories- normally 5 to 7 in number that are often
defined by adjectives, such as out standing, average, or unsatisfactory.
Many rating scale performance appraisal forms also provide for
an assessment of the employee’s growth potential.
2. Computerized Rating Scales:-
HR tasks such as performance appraisal may seem too personal
to relegate to machines. However, software programs are available to
assist raters in this chore, which may be time – consuming and often a
pleasant for instance; the expert system might begin by notifying the
supervisor when reviews for employees are scheduled. They can assist in
recording performance data relevant to employee performance through
out the rating period to they can easily be inserted in final appraisal
report.

3. Critical Incidents:-
The critical incident method a performance appraisal technique
that requires a written record of highly favorable and highly unfavorable
employee work behavior.

Essay:-
In the essay method, A performance appraisal method in which
the rater writers a brief narratives describing an employee’s performance.
This method tends to focus on extreme behavior in the employee’s work
rather than routine day-to-day performance.

Work Standards:-
The work standards method, a performance appraisal method
that compares each employee’s performance to a predetermined standard
or expected level of output.

6. Ranking:-
In using the ranking method, the raters simply places all
employees from a group in rank order of overall performance. A job
evaluation method in which the rater examines the description of each
job being evaluated and arranges the jobs in order according to their
value to the company, also a performance appraisal method in which the

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 rater places all employees in a given group in rank order on the basis of
their over-all performance.

Forced Distribution:-
An appraisal approach in which the rater is required to assign
individuals in a work group to a limited number of categories similar to a
normal frequency distribution.

8. Forced- choice and weighted checklist Performance

Reports:-
The forced-choice performance report requires that the
appraiser choose from a series of statements about an individual those
that are most or least descriptive of the employee.
Using the weighted checklist performance report, the rater
completes a form similar to the forced-choice performance report, but the
various responses have been assigned different weights. As with forced-
choice performance reports, the weighted checklist is expensive to
design. Both methods strive for objectivity, but the evaluator does not
know which items contribute most too successful performance.

9. Behaviorally Anchored Rating Scales:-

The behaviorally anchored rating scale (BARS) method
combines elements of the traditional scale and critical incidents of the
traditional scale and critical incidents methods. Using BARS, job
behaviors derived from critical incidents- effective and ineffective
behavior are described more objectively. In BARS, various performance
levels are shown along a scale and described in terms of an employee’s
specific job behavior.

10. Objective-oriented Aproaches:-

In an objective-oriented system, the superior and the
subordinate jointly agree on objectives for the next appraisal period.
Objective – oriented appraisals are most often used to evaluate managers
not workers.

 Characteristics of an Effective Appraisal System:-

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 The basic purpose of a performance appraisal system is to
improve performance of individuals, teams, and the entire organization.
The system is to improve performance of individuals, teams, and the
entire organization. The system may also serve to assist in making
administrative decision such as pay increases. In addition, the appraisal
system must be legally defensible. Although a perfect system should
possess certain characteristics.

1. Job – Related Criteria:-

The criteria used for appraising employee performance must be
job related. The uniform Guidelines and court decisions are quite clear
on this point. More specifically, job information should be determined
through job analysis. Subjective factors, such as Initiative, enthusiasm,
loyalty, and cooperation, are obviously important, on less they can be
clearly shown to be job related, however they should not be used.

2. Performance Expectations:-
Managers and subordinates must agree on performance
expectations in advance of the appraisal period. Evaluating employees
using criteria that they know nothing about is not reasonable. The
establishment of highly objective work standards is relatively simple in
many areas, such as manufacturing, assembly and sales. For numerous
other types of jobs, however elusive, should be defined in understandable
terms.

3. Standardization:-
Employees in the same job category under the same supervisor
should be appraised using the same supervisor should be appraised using
the same evaluation instrument. Also important is that appraisals be
conducted regularly for all employees and that they cover similar periods
of time. Although annual evaluations are most common, employees are
evaluated more frequently by many successful firms. A legal aspect of
standardization is formal documentation. Employees should sign their
evaluations.

4. Trained Appraisers:-
Responsibility for evaluating employee performance should be
assigned to the individual or individuals who directly observe at least a
representative sample of the worker’s job performance. Usually, this
person is the employee’s immediate supervisor. However, as previously
discussed, other approached are gaining in popularity. This method,
along with self-directed work teams, requires employees as well as
supervisors to be trained in performance appraisal. Training in
performance appraisal should be an on going process to ensure

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 consistency. The training should cover how to rate employees and
conduct appraisal interviews.

5. Open Communication:-
Most employees have a strong need to know how well they are
performing. A good appraisal system provides highly desired feedback
on a continuing basis. A worthwhile goal is to avoid surprises during the
appraisal interview. Even though the interview presents an excellent
opportunity for both parties to exchange ideas, it should never serve as a
substitute for day-to-day communication and coaching required by
performance management.

6. Employee access to Results:-

For the many appraisal systems that are designed to improve
performance, with holding appraisal results would be unthinkable.
Employees would be severely handicapped in their developmental efforts
if defined access to this information. Also, employees’ review of
appraisal results allows them to detect any errors that may have been
made. An employee may simply disagree with the evaluation and may
want to challenge it. Employees will not trust a system they do not
understand. Secrecy will invariably breed suspicion and there by thwart
efforts to obtain employee participation.

7. Due Process:-
Ensuring due process is vital. If a formal policy does not exist,
one should be developed to permit employees to appeal appraisal results
they consider inaccurate or unfair. They must have a procedure for
pursuing their grievances and having them addressed objectively.

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CHAPTER 3.6:-REMUNERATION MANAGEMENT

Compensation is the total of all rewards provided to

employees in return for their services.

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 Components of Remuneration Management:-

External Environment

Internal Environment.

Compensation

Financial Non-financial

Direct Indirect The Job Job Environment

Wages Legally required Skill variety Sound policies

Salary Social security Task Identify Competent
Commission Unemployment Task Significance employees.
Bonus insurance. Autonomy Congenial co-
Workers Appropriate workers.
compensation Feedback Status Symbol
Family & Medical Comfortable Workplace
leave working flexibility.
Voluntary condition. Flextime
Payment for time Compressed

not worked. (Vacation, work week.

sick pay/well pay) Job sharing
Health benefits (Health, Flexible

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 dental & vision) compensation.
Security benefits (retirement, Telecommuting.
disability, life insurance)
Employee services
Premium pay (hazard pay,
shift differentials)

 Factors influencing Employee Remuneration:-

A number of factors influence the remuneration payable to

employees. They can be categorized into:
i) External Factors
ii) Internal Factors

I) External Factors:-
External Factors to an organization are:

1. Labour Market:-
Demand and supply of labour influence wage and salary
fixation. A low wage may be fixed when the supply of labour exceeds
the demand fir it. A higher wage will have to be paid when the demand
exceeds supply, as in the case of skilled labour. While unskilled labour is
available in plenty, there is a shortage of technicians, computer
specialists and professional managers. High remuneration to skilled
labour is necessary to attract and retain it.

Cost of Living:-
Next in importance to labour market is the cost of living. This
criterion matters during periods of rising prices, and is forgotten when
prices are stable or falling. The justification for cost of living as a
criterion for wage fixation is that the real wages of workers should not be
allowed to be whittled down by price increases. A rise in the cost of
living is sought to be compensated by payment of dearness allowance,
basic pay to remain undisturbed. Many companies include an escalatory
clause in their wage agreements in terms of which dearness allowance
increases or decreases depending upon the movement of consumer price
index (CPI).

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Labour Unions:-
The presence or absence of labour organizations often
determine the quantum of wages paid to employees, Employers in non-
unionized factories enjoy the freedom to fix wages and salaries as they
please. Because of large-scale unemployment, these employers hire
workers at little or even less than I minimum wages. An individual non-
unionized company may be willing to pay more to its employees if to
discourage them from forming one, but will buckle under the combined
pressure from the other n unionized organizations. The employees of
strongly unionized companies too, have no freedom in wage salary
fixation. They are forced to yield to the pressure of labour representatives
in determining and revising pay scales.

4. Labour Laws:-
Payment of Wages Act,1936,Minimum Wages Act,1948;The
Payment of Bonus Act,1965;Equal Remuneration Act,1976;and the
payment of Gratuity Act,1972.The Payment of Wages Act was passed to
regulate payment of wages to certain c of persons employed in the
industry. It also seeks to protect workers against irregularities in payment
wages and unauthorized deductions by the employers. In addition to legal
enactments, there are wages boards, tribunals and fair wages committees,
which aim at providing a decent standard of, living to workers.

Society:-
Remuneration paid to employees is reflected in the prices fixed
by an organization for its goods and services. For this reason, the
consuming public is interested in remuneration decisions.

Economy:-
The last external factor that has its impact on wage and salary
fixation is the stat of the while it is possible for some organizations to
thrive in a recession, there is no question that the economy affects
remuneration decisions. For example, a depressed economy will
probably increase the labour supply. This, in turn, should serve to lower
the going wage rate. In most cases, the cost of living will rise in an
expanding economy. Since the cost of living is used as a pay standard,
the economy’s health experts a major impact upon pay decisions. Labour
unions, the government, and society are all less likely to press for pay
increases in a depressed economy.

II) Internal Factors:-

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 Among the internal factors which have an impact on pay structure are the
company’s strategy, job evaluation, performance appraisal and the
worker himself or herself.

1. Business Strategy:-
The overall strategy which a company pursues should
determine the remuneration to its employees. Where the strategy of the
enterprise is to achieve rapid growth, remuneration should be higher than
what competitors pay. Where the strategy is to maintain and protect
current earnings, because of the declining fortunes of the company,
remuneration level needs to be average or even below average.

2. Job Evaluation and Performance Appraisal:-

Job evaluation helps establish satisfactory wage differentials
among jobs. Performance appraisal helps award pay increases to
employees who show improved performance.

3. The Employee:-
Several employees related factors interact to determine his/her
remuneration. These include performance, seniority, experience,
potential, and even sheer luck.
Performance is always rewarded with a pay increase.
Rewarding performance motivates the employee to do better.
Managements prefer performance to affect pay increases but unions view
seniority as the most objective criterion for pay increases. Experience
makes an employee gain valuable insights and should therefore be
rewarded. Potential is useless if it is never realized. Yet, organizations do
pay some individuals based on their potential. Young managers are paid
more because of their potential to perform even if they are short of
experience. Some people have luck to be at the right place at the right
time.

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 CHAPTER-4

ABOUT ONGC AND ITS HR SYSTEM

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 CHAPTER 4.1:- VISION & MISSION OF THE
COMPANY

OUR VISION
To be a world class Oil & Gas company integrated in energy
business with dominant Indian leadership and global presence

OUR MISSION
World Class

- Dedicated to excellence by leveraging competitive advantages in R&D

and technology with involved people.

- Imbibe high standards of business ethics and organization values.

- Abiding commitment to health, safety and environment to enrich

quality of community life.

- Foster a culture of trust, openness and mutual concern to make working

a stimulating & challenging experience for our people.

- Strive for customer delight through quality products and services.

Integrated in Energy Business

- Focus on domestic and international oil & gas exploration and

production business opportunities.

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 - Provide value linkages in other sectors of energy business.

- Create growth opportunities and maximize shareholder value.

Dominant Indian Leadership

- Retain dominant position in Indian Petroleum sector and enhance

India’s energy availability.

CHAPTER 4.2:- ORGANOGRAM – ONGC

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CHAPTER 4.3:- VISION & MISSION OF HR
HR VISION

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 To attain organizational excellence by developing and inspiring
the true potential of company’s human capital and providing
opportunities for growth, well being and enrichment.
HR MISSION

To create a value and knowledge based organization by

inculcating a culture of learning, innovation and team working and
aligning business priorities with aspiration of employees leading to a
development of an empowered, responsive and competent human capital.

HR OBJECTIVES

- To develop and sustain core values.

- To develop business leaders for tomorrow.

- To provide job contentment through empowerment, accountability and

responsibility.

- To build and upgrade competencies through virtual learning,

opportunities for growth and providing challenges in the job.

- To foster a climate of creativity, innovation and enthusiasm.

- To enhance the quality of life of employees and their families.

- To inculcate higher understanding of ‘Service’ to a greater cause.

CHAPTER 4.4:- ORGANOGRAM – HR

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RECRUITMENT & SELECTION PROCESS
OF ONGC

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1. The Corporation shall cause all vacancies to be filled by Direct
recruitment to be notified to the Employment Exchange in accordance
with the provisions of the Employment Exchange (Compulsory
Notification of Vacancies) Act, 1959 (31 of 1959) and/ or in house
circular and / or to be advertised in daily news papers having circulation
in major parts of the country and in such daily newspapers in the
regional languages as the corporation may consider suitable.

2. All particulars of the applicants received in response to the notification

of vacancies to the Employment Exchange, in house circular and/ or to
the advertisement shall be registered by the concerned section.

3. All applications for direct recruitment shall be scrutinized by the

appointing authority who shall reject such applications of the candidates
who do not fulfill the laid down criteria and submit the list of candidates
who fulfill the said criteria for consideration for direct recruitment by a
selection committee constituted by the corporation in this behalf and
such selection committee shall consist of not less than three members:

Provided further that the number of candidates to be considered for such

vacancies shall be five times the vacancies to be filled and where the
number of such candidates are less than five times the vacancies to be
filled,

All the eligible candidates shall be considered by the selection

committee.

4. Where a candidate who fulfills the said criteria is not considered by the
selection committee, it shall record in writing the reasons for not
considering such candidate.

5. The selection committee shall adjudge the suitability of a candidate on

the basis of written examination, practical test or interview or any
combination of these. However, there will be written examination for all
induction level posts of unionized category and at E-1 level of the
executive cadre.

TRAINING & DEVELOPMENT PROCESS

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 OF ONGC

 Objectives:-
The objectives of training and development are as follows:

1. To develop entrepreneurship and expertise par excellence through

training and retraining.

2. To prepare executives to meet the strategic business goals in the fast

changing environment.

3. To create a learning environment in order to achieve a competitive

edge through leveraging human resource.

4. To develop training tools and techniques to facilitate effective

learning.

5. To organize interactive workshops in upstream industry areas.

6. To strive for continuous improvement in all aspects of E&P activities

through training in the emerging technologies.

7. To inculcate quality consciousness.

8. To promote IT as an instruments of organizational transformation.

9. To cultivate creative and innovative thinking.

10.Reducing gap between current and expected level of performance

through systematic environment of knowledge, skills and attitudes.

11.Developing multi-craft skills.

12.Preparing executives for career advancement.

13.To impart training to all employees to motivate them towards

actualization of their potential.

 Induction Training:-

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 The fresh incumbents of the organization are exposed to wide
gamut of technology of petroleum industry through synergic approach
covering multi-disciplinary theoretical and practical aspects with
emphasis upon on the job training.

Thus, a newly recruited executive undergoes an intensive

classroom training interspersed with field exposure to effectively
specialize him in the organization. The specialized modules of training
on the advanced hydrocarbon exploration technology are inculcated in
the newly recruited officer before he is put on the job training for hands-
on-experience.

 Management Training:-
One of the most important aspects of executive development is
“Man-Management”; suitable programs are being organized with special
emphasis on appreciation of roles played by various disciplines in the
company. Environment and public enterprises, principles of
management, Corporate planning, project management, management of
change, management of technology, man-management, team building
and conflict resolution, management of R&D, personal effectiveness
including oral and written communication, presentation skills, managing
stress etc. are wider areas covered through various training modules.

For the personnel already engaged in different disciplines, a

career linked training plan is drawn to impart advance training in
management.

The executives of E-4 and above levels are exposed to General

Management Training at reputed Institutions in India including ASCI’s
& IIM’s to achieve the perfection in development. Thus the training
system in ONGC ensures overall development of the officers.

Besides this, specialized programs are also developed for the

executives of E-7 and above level based on the requirement. Would not
include Directors or any of the other person appointed by the president of
India, for any of the offices in ONGC or its subsidiaries and associated
offices.

PERFORMNACE APPRAISAL PROCESS

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 OF ONGC
 Appraisal Year:-
The appraisal period is 12 months of financial year between 1st
April of a year to 31st March of succeeding year.

 Appraisee:-

a) An appraise is an executive who has worked under the direct control

and supervision of another executive for a minimum period of 4
months within the time span of 1st April – 31st March (12 months) in
an appraisal year;

b) Seconded appraise is an executive who belongs to a professional

group but works under the direct control of different group.

 Appraisers:-

 There are two levels of appraisers. The first appraisers also called
reporting authority, means an executive under whose direct
control and supervision the Appraise operates. In case of
seconded appraise, immediate functional senior executive (who
may be equal in status to the 1st appraiser) could be the joint
Appraiser with the reporting authority, and he would only record,
whether or not agrees with the observations of the first appraiser.

 The second appraiser also called reviewing authority means a

senior executive who oversees the activities of the Appraise and
who offers professional advice to, or controls, the first appraiser.
Normally, the assessment of performance of an appraise is
considered in detail by these two appraisers and they should
briefly explain the rationale for the grade specific observation
must be recorded for very high or low grading in comments
column.

 Co-Reviewing Officer:-

Senior officer (E-5 and E-6) located in the projects take professional
guidance from their professional seniors posted in the regional office but
the overall control of project activities is vested in the project head, who

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 has to review the PARs before their transmission. ED/RD/Head of
Institute may like to associate the functional head of the office before he
records final observation and assigns a grade. In such cases the ED/RD
may like to secure comments only (no grades) of the professional group
head as co-reviewing officer in the space provided in the form on page 4.

 Appraisal for Part-Period:-

 The minimum period of 4 months of linkage between the

appraise and appraisers (reporting authority, reviewing authority,
reviewing authority and accepting authority) may be disturbed
due to transfers etc. in some cases. The guiding principle for
ensuring fair assessment in the event of loss of linkage
(minimum 4 months) in such cases would be as under:

 A minimum of 4 months of linkage between the appraisee and

the first appraiser. In case this is not so, the second appraiser
would make his comments on the performance of the appraisee.
In case he had the opportunity of overseeing activities of the
executive for a minimum of 4 months during the appraisal period
in consultation with the existing new reporting authority, i.e.,
first appraiser.

 In case there is less than 4 months interaction between the

appraise and the second appraiser, necessity of having second
appraiser would be waived, and the final assessment will be
made by the accepting authority on the basis of the report
( formal or informal) of either first or second level appraiser or
both.

 In case of an appraisee’s transfer when he has worked for less

than 4 months period with the reporting authority, the erstwhile
reporting authority will forward part-period with the reporting
authority will forward part- period report about the appraisee’s
performance to the appropriate authority (in this case the new
reporting authority). This report will be attached to the PAR
format when the appraisal procedure is initiated for the executive
for current year. The new reporting authority / reviewing
authority may consider the part-report for assessing the

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 Appraisee’s performance for the total year, and refer to this in his
assessment.

 The reviewing authority would also be subjected to the limitation

of 4 month’s period of inter-action between the appraisee and
him (appraiser). In case this condition is not satisfied the
concerned accepting authority will finally record his assessment
in consultation with the first and or second appraiser who have
known the appraiser while assigning final grade to the appraise.

 Appraisal in Special Cases:-

In case an executive who has worked in a number of short

duration during 12 month period, the assessment will be made by the
reviewing authority/ accepting authority currently associated with the
appraise. In case none of the above mentioned employees has the benefit
of assessing the performance for the prescribed minimum period of 4
months, this may be duly recorded, and the authority should complete the
PAR.

1. Employee on Study Leave:-

The reporting officer/PAR officer is to initiate action to secure

a report from the head of institute where the Appraise has been placed for
advanced learning/training without waiting for the appraise to fill the
personal details etc. the appraiser would prepare summary report about
his performance on the basis of the report received from the institutional
head. In the event of the non-compliance on the part of the institution to
send a report, appraise be advised to send a report of his studies to the
appraiser through the institutional head.

2. Employee on Long Leave:-

In case an Appraisee is on medical leave (for 4 month or more),

the reporting officer in this case would record the nature of medical
problem/reasons for long medical leave. The medical report, if available
is attached with the PAR.

3. Employees on Suspension for alleged misconduct:-

The reporting officer will initiate action without waiting for the
appraise to fill in personal data etc. he will record his observations about
the appraise which may not deal with his performance as an employee

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 but make reference of his conduct, during the period of suspension, if so
desired.

4. Erring Appraisee:-

In case where an appraise deliberately does not fill in the

personal data or record job parameters/ achievements within the
prescribed time limit, this deliberate delinquency, may be recorded by
the reporting officer. The appraiser would initiate action on other aspects
of performance appraisal as per rules.

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CHAPTER-6
ANALYSIS

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 Every organization wants its employees to possess the passion
and zeal of an entrepreneur. It could be a vision of an organization where
employees work with the passion of an entrepreneur, where they feel that
they own the organization, are self-motivated and have a great sense of
pride in belonging to the company. Developing an ownership culture at
the workplace is a tough task for any employer, but it is the only way to
ensure employee loyalty, and bridge the gap between employer and
employee. If nurtured, this feeling not only optimizes productivity and
excellence beyond expectations, but also helps in combating attrition.

Interesting, the ratio of ownership differs from person to person

at different positions within the organization. While it is the top
management, which should spearhead the effort by clearly
communicating the organizational vision and the responsibility of each
individual, it is the immediate boss who is directly responsible for
grooming the sense of ownership among his or her team members.
Ownership reduces problems of employee alienation and attrition.
Employees are more attached to an organization which helps in better
organizational management. Work performance improves and growth in
job satisfaction is seen at all levels. Furthermore, employees are more
open to put forth their ideas and talents. The ownership culture enforces
the fundamental law of entrepreneurs that what is good for the business
is good for me.

HOW CAN AN ORGANISATION INCULCATE OWNERSHIP

CULTURE AMONGST EMPLOYEES?

Right to Equity:-

The Employee Stock Options Programme (ESOP) is one of the

important ways of organizing the employee-employer relationship.
Employees would perform better at work because of the financial interest
that they share with the organization.

Right to Influence:-

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 Employee opinions and concerns should always be addressed.
And, if necessary, certain organizational policies must be changed to
better suit their requirements. The organization should create confidence
amongst its employees that their opinion can influence its policies.

Right to Control:-

Certain decisions at times must be left to employees at all

levels rather than the management forcing their judgment. This would
also help employees in sharpening their decision-making skills, and help
them grow up the corporate ladder.

Empowerment:-

When employees know that their ability to take decisions and

commensurate actions is being rewarded by being given an opportunity
to exercise the same, they are more likely to take ownership of project,
events, philosophies and eventually the cultures.

HOW THE SENSE OF OWNERSHIP CULMINATES INTO

COMMITMENT?

According to Towers-Perrin 2007 Global Workforce Study, it

is found that 79% of the workforce is disengaged and 38% are actively
disengaged.

Employee engagement and commitment is currently one of the

hottest topics in HR. Companies have long believed that motivated and
committed employees are good for business. Employee engagement is
about creating three things in your people; `will’, `skill’ and
`commitment’.

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1. Creating a `will’ is all about inspiring and exciting people. It is about
creating a belief in the values of the organization, a desire to contribute
to its success, and a willingness to `go the extra mile’. It is about helping
people understand the `bigger picture’ and communicating those visions
in relevant and convincing ways so that employees choose to engage
with them.

2. But `will’ without `skill’ is meaningless. Once inspired, employees

must be equipped with the tools and skills they need to achieve those
visions. Creating `skill’ is about training, education and personal
development – not just amongst employees themselves, but critically
amongst first line managers and leaders, who need to be equipped with
their own set of skills to management and maintain engagement amongst
their teams.

3. The final strand of Employee Engagement is creating `commitment’.

Here, the emphasis is on keeping employees informed about personal and
company progress, and ensuring they remain engaged through
appropriate reward, incentive and recognition schemes.

4. Effective engagement strategies require instilling a mix of

understanding, capability and ownership amongst employees in order to
generate the desired blend of will, skill and commitment.

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 CHAPTER-7
BIBLIOGRAPHY

 Books:-

 Managing Human Resources

(Leonard R Sayles George Strauss)

 Human Resource Management

(Lan Beardwell Len Holden)

 Human Resource Management

(Gary Dessler)

 Websites:-

 ZeroMillion.com

 citehr.com

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 allexperts.com

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