Personnel Management

Personnel management can be defined as obtaining, using and maintaining a satisfied workforce. It
is a significant part of management concerned with employees at work and with their relationship
within the organization.
According to Flippo, Personnel management is the planning, organizing, compensation, integration
and maintainance of people for the purpose of contributing to organizational, individual and societal
goals.
According to Brech, Personnel Management is that part which is primarily concerned with human
resource of organization.
Nature of Personnel Management
1. Personnel management includes the function of employment, development and
compensation- These functions are performed primarily by the personnel management in
consultation with other departments.
2. Personnel management is an extension to general management. It is concerned with
promoting and stimulating competent work force to make their fullest contribution to the
concern.
3. Personnel management exist to advice and assist the line managers in personnel matters.
Therefore, personnel department is a staff department of an organization.
4. Personnel management lays emphasize on action rather than making lengthy schedules,
plans, work methods. The problems and grievances of people at work can be solved more
effectively through rationale personnel policies.
5. It is based on human orientation. It tries to help the workers to develop their potential
fully to the concern.
6. It also motivates the employees through its effective incentive plans so that the
employees provide fullest co-operation.
7. Personnel management deals with human resources of a concern. In context to human
resources, it manages both individual as well as blue- collar workers.
Role of Personnel Manager
Personnel manager is the head of personnel department. He performs both managerial and operative
functions of management. His role can be summarized as :

1. Personnel manager provides assistance to top management- The top management are the
people who decide and frame the primary policies of the concern. All kinds of policies
related to personnel or workforce can be framed out effectively by the personnel
manager.
2. He advices the line manager as a staff specialist- Personnel manager acts like a staff
advisor and assists the line managers in dealing with various personnel matters.
3. As a counsellor,- As a counsellor, personnel manager attends problems and grievances of
employees and guides them. He tries to solve them in best of his capacity.
4. Personnel manager acts as a mediator- He is a linking pin between management and
workers.
5. He acts as a spokesman- Since he is in direct contact with the employees, he is required
to act as representative of organization in committees appointed by government. He
represents company in training programmes.
Functions of Personnel Management
Follwoing are the four functions of Personnel Management:
1. Manpower Planning
2. Recruitment
3. Selection
4. Training and Development
Manpower Planning
Manpower Planning which is also called as Human Resource Planning consists of putting right
number of people, right kind of people at the right place, right time, doing the right things for which
they are suited for the achievement of goals of the organization. Human Resource Planning has got
an important place in the arena of industrialization. Human Resource Planning has to be a systems
approach and is carried out in a set procedure. The procedure is as follows:
1. Analysing the current manpower inventory
2. Making future manpower forecasts
3. Developing employment programmes

4. Design training programmes

Steps in Manpower Planning
1. Analysing
the
current
manpower
inventory- Before a manager makes forecast
of future manpower, the current manpower
status has to be analysed. For this the
following things have to be noted

Type of organization

Number of departments

Number and
departments

Employees in these work units

quantity

of

such

Once these factors are registered by a manager,

he goes for the future forecasting.

2. Making future manpower forecasts- Once the factors affecting the future manpower
forecasts are known, planning can be done for the future manpower requirements in
several work units.
The Manpower forecasting techniques commonly employed by the organizations are as
follows:
i.

Expert Forecasts: This includes informal decisions, formal expert surveys and
Delphi technique.

ii.

Trend Analysis: Manpower needs can be projected through extrapolation

(projecting past trends), indexation (using base year as basis), and statistical
analysis (central tendency measure).

iii.

Work Load Analysis: It is dependent upon the nature of work load in a

department, in a branch or in a division.

iv.

Work Force Analysis: Whenever production and time period has to be analysed,
due allowances have to be made for getting net manpower requirements.

v.

Other methods: Several Mathematical models, with the aid of computers are
used to forecast manpower needs, like budget and planning analysis, regression,
new venture analysis.

3. Developing employment programmes- Once the current inventory is compared with

future forecasts, the employment programmes can be framed and developed accordingly,
which will include recruitment, selection procedures and placement plans.
4. Design training programmes- These will be based upon extent of diversification,
expansion plans, development programmes,etc. Training programmes depend upon the
extent of improvement in technology and advancement to take place. It is also done to
improve upon the skills, capabilities, knowledge of the workers.
Importance of Manpower Planning

1. Key to managerial functions- The four managerial functions, i.e., planning, organizing,
directing and controlling are based upon the manpower. Human resources help in the
implementation of all these managerial activities. Therefore, staffing becomes a key to all
managerial functions.
2. Efficient utilization- Efficient management of personnels becomes an important function
in the industrialization world of today. Seting of large scale enterprises require
management of large scale manpower. It can be effectively done through staffing
function.
3. Motivation- Staffing function not only includes putting right men on right job, but it also
comprises of motivational programmes, i.e., incentive plans to be framed for further
participation and employment of employees in a concern. Therefore, all types of
incentive plans becomes an integral part of staffing function.
4. Better human relations- A concern can stabilize itself if human relations develop and
are strong. Human relations become strong trough effective control, clear
communication, effective supervision and leadership in a concern. Staffing function also
looks after training and development of the work force which leads to co-operation and
better human relations.
5. Higher productivity- Productivity level increases when resources are utilized in best
possible manner. higher productivity is a result of minimum wastage of time, money,
efforts and energies. This is possible through the staffing and it's related activities
( Performance appraisal, training and development, remuneration)

Need of Manpower Planning

Manpower Planning is a two-phased process because manpower planning not only analyses the
current human resources but also makes manpower forecasts and thereby draw employment
programmes. Manpower Planning is advantageous to firm in following manner:
1. Shortages and surpluses can be identified so that quick action can be taken wherever
required.
2. All the recruitment and selection programmes are based on manpower planning.
3. It also helps to reduce the labour cost as excess staff can be identified and thereby
overstaffing can be avoided.
4. It also helps to identify the available talents in a concern and accordingly training
programmes can be chalked out to develop those talents.
5. It helps in growth and diversification of business. Through manpower planning, human
resources can be readily available and they can be utilized in best manner.
6. It helps the organization to realize the importance of manpower management which
ultimately helps in the stability of a concern.
Types of Recruitment
Recruitment is of 2 types
1. Internal Recruitment - is a recruitment which takes place within the concern or
organization. Internal sources of recruitment are readily available to an organization.
Internal sources are primarily three - Transfers, promotions and Re-employment of exemployees. Re-employment of ex-employees is one of the internal sources of recruitment
in which employees can be invited and appointed to fill vacancies in the concern. There
are situations when ex-employees provide unsolicited applications also.
Internal recruitment may lead to increase in employees productivity as their motivation
level increases. It also saves time, money and efforts. But a drawback of internal
recruitment is that it refrains the organization from new blood. Also, not all the
manpower requirements can be met through internal recruitment. Hiring from outside has
to be done.
Internal sources are primarily 3
a. Transfers
b. Promotions (through Internal Job Postings) and

c. Re-employment of ex-employees - Re-employment of ex-employees is one of

the internal sources of recruitment in which employees can be invited and
appointed to fill vacancies in the concern. There are situations when exemployees provide unsolicited applications also.
2. External Recruitment - External sources of recruitment have to be solicited from
outside the organization. External sources are external to a concern. But it involves lot of
time and money. The external sources of recruitment include - Employment at factory
gate, advertisements, employment exchanges, employment agencies, educational
institutes, labour contractors, recommendations etc.
a. Employment at Factory Level - This a source of external recruitment in which
the applications for vacancies are presented on bulletin boards outside the Factory
or at the Gate. This kind of recruitment is applicable generally where factory
workers are to be appointed. There are people who keep on soliciting jobs from
one place to another. These applicants are called as unsolicited applicants. These
types of workers apply on their own for their job. For this kind of recruitment
workers have a tendency to shift from one factory to another and therefore they
are called as badli workers.
b. Advertisement - It is an external source which has got an important place in
recruitment procedure. The biggest advantage of advertisement is that it covers a
wide area of market and scattered applicants can get information from
advertisements. Medium used is Newspapers and Television.
c. Employment Exchanges - There are certain Employment exchanges which are
run by government. Most of the government undertakings and concerns employ
people through such exchanges. Now-a-days recruitment in government agencies
has become compulsory through employment exchange.
d. Employment Agencies - There are certain professional organizations which look
towards recruitment and employment of people, i.e. these private agencies run by
private individuals supply required manpower to needy concerns.
e. Educational Institutions - There are certain professional Institutions which
serves as an external source for recruiting fresh graduates from these institutes.
This kind of recruitment done through such educational institutions, is called as
Campus Recruitment. They have special recruitment cells which helps in
providing jobs to fresh candidates.
f. Recommendations - There are certain people who have experience in a particular
area. They enjoy goodwill and a stand in the company. There are certain vacancies
which are filled by recommendations of such people. The biggest drawback of
this source is that the company has to rely totally on such people which can later
on prove to be inefficient.

g. Labour Contractors - These are the specialist people who supply manpower to
the Factory or Manufacturing plants. Through these contractors, workers are
appointed on contract basis, i.e. for a particular time period. Under conditions
when these contractors leave the organization, such people who are appointed
have to also leave the concern.
Employee Selection Process
Employee Selection is the process of putting right men on right job. It is a procedure of matching
organizational requirements with the skills and qualifications of people. Effective selection can
be done only when there is effective matching. By selecting best candidate for the required job,
the organization will get quality performance of employees. Moreover, organization will face
less of absenteeism and employee turnover problems. By selecting right candidate for the
required job, organization will also save time and money. Proper screening of candidates takes
place during selection procedure. All the potential candidates who apply for the given job are
tested.
But selection must be differentiated from recruitment, though these are two phases of
employment process. Recruitment is considered to be a positive process as it motivates more of
candidates to apply for the job. It creates a pool of applicants. It is just sourcing of data. While
selection is a negative process as the inappropriate candidates are rejected here. Recruitment
precedes selection in staffing process. Selection involves choosing the best candidate with best
abilities, skills and knowledge for the required job.
The Employee selection Process takes place in following order1. Preliminary Interviews- It is used to eliminate those candidates who do not meet the
minimum eligiblity criteria laid down by the organization. The skills, academic and
family background, competencies and interests of the candidate are examined during
preliminary interview. Preliminary interviews are less formalized and planned than the
final interviews. The candidates are given a brief up about the company and the job
profile; and it is also examined how much the candidate knows about the company.
Preliminary interviews are also called screening interviews.
2. Application blanks- The candidates who clear the preliminary interview are required to
fill application blank. It contains data record of the candidates such as details about age,
qualifications, reason for leaving previous job, experience, etc.
3. Written Tests- Various written tests conducted during selection procedure are aptitude
test, intelligence test, reasoning test, personality test, etc. These tests are used to
objectively assess the potential candidate. They should not be biased.
4. Employment Interviews- It is a one to one interaction between the interviewer and the
potential candidate. It is used to find whether the candidate is best suited for the required
job or not. But such interviews consume time and money both. Moreover the
competencies of the candidate cannot be judged. Such interviews may be biased at times.

Such interviews should be conducted properly. No distractions should be there in room.

There should be an honest communication between candidate and interviewer.
5. Medical examination- Medical tests are conducted to ensure physical fitness of the
potential employee. It will decrease chances of employee absenteeism.
6. Appointment Letter- A reference check is made about the candidate selected and then
finally he is appointed by giving a formal appointment letter.
Training of Employees - Need and Importance of Training
Training of employees takes place after orientation takes place. Training is the process of enhancing
the skills, capabilities and knowledge of employees for doing a particular job. Training process
moulds the thinking of employees and leads to quality performance of employees. It is continuous
and never ending in nature.

Importance of Training
Training is crucial for organizational development and success. It is fruitful to both employers and
employees of an organization. An employee will become more efficient and productive if he is
trained well.
Training is given on four basic grounds:
1. New candidates who join an organization are given training. This training familiarize
them with the organizational mission, vision, rules and regulations and the working
conditions.
2. The existing employees are trained to refresh and enhance their knowledge.
3. If any updations and amendments take place in technology, training is given to cope up
with those changes. For instance, purchasing a new equipment, changes in technique of
production, computer implantment. The employees are trained about use of new
equipments and work methods.
4. When promotion and career growth becomes important. Training is given so that
employees are prepared to share the responsibilities of the higher level job.
The benefits of training can be summed up as:
1. Improves morale of employees- Training helps the employee to get job security and job
satisfaction. The more satisfied the employee is and the greater is his morale, the more he

will contribute to organizational success and the lesser will be employee absenteeism and
turnover.
2. Less supervision- A well trained employee will be well acquainted with the job and will
need less of supervision. Thus, there will be less wastage of time and efforts.
3. Fewer accidents- Errors are likely to occur if the employees lack knowledge and skills
required for doing a particular job. The more trained an employee is, the less are the
chances of committing accidents in job and the more proficient the employee becomes.
4. Chances of promotion- Employees acquire skills and efficiency during training. They
become more eligible for promotion. They become an asset for the organization.
5. Increased productivity- Training improves efficiency and productivity of employees.
Well trained employees show both quantity and quality performance. There is less
wastage of time, money and resources if employees are properly trained.
Ways/Methods of Training
Training is generally imparted in two ways:
1. On the job training- On the job training methods are those which are given to the
employees within the everyday working of a concern. It is a simple and cost-effective
training method. The inproficient as well as semi- proficient employees can be well
trained by using such training method. The employees are trained in actual working
scenario. The motto of such training is learning by doing. Instances of such on-job
training methods are job-rotation, coaching, temporary promotions, etc.
2. Off the job training- Off the job training methods are those in which training is provided
away from the actual working condition. It is generally used in case of new employees.
Instances of off the job training methods are workshops, seminars, conferences, etc. Such
method is costly and is effective if and only if large number of employees have to be
trained within a short time period. Off the job training is also called as vestibule
training,i.e., the employees are trained in a separate area( may be a hall, entrance,
reception area,etc. known as a vestibule) where the actual working conditions are
duplicated.
Elements of Personnel Management
Following are the elements of Personnel Management:
1. Organization- Organization is said to be the framework of many activities taking place
in view of goals available in a concern. An organization can be called as a physical
framework of various interrelated activities. Right from manpower planning to
employees maintainance, all activities take place within this framework. The nature of

the organization is dependent upon its goal. The business concern goal being profitmaking. Clubs, hospitals, schools,etc. their goal being service. The objective of
consultancy being providing sound advice. Therefore, it is organizational structure on
which the achievement of goals of an enterprise depends upon. In personnel management,
a manager has therefore to understand the importance of organizational structure.
2. Job- The second element, i.e., jobs tell us the activities to be performed in the
organization. It is said that the goals of an enterprise can be achieved only through the
functional department in it. Therefore, seeing the size of organization today, the nature of
activities are changing. In addition to the three primary departments, personnel and
research department are new additions. Various types of jobs available are :
a. Physical jobs
b. Creative jobs
c. Proficiency jobs
d. Intellectual jobs
e. Consultancy jobs
f. Technical jobs
3. People- The last and foremost element in personnel management is people. In a
organizational structure, where the main aim is to achieve the goals, the presence of
manpower becomes vital. Therefore, in order to achieve departmental goals, different
kinds of people with different skills are appointed. People form the most important
element because :
a. The organizational structure is meaningless without it.
b. It helps to achieve the goals of the enterprise.
c. It helps in manning the functional areas.
d. It helps in achieving the functional departmental goals.
e. They make a concern operational.
f. They give life to a physical organization.
The different types of people which are generally required in a concern are :
g. Physically fit people

h. Creative people
i. Intellectuals
j. Technical people
k. Proficient and skilled people
In personnel management, a personnel manager has to understand the relationship of the three
elements and their importance in organization. He has to understand basically three
relationships:i.

Relationship between organization and job

ii.

Relationship between job and people

iii.

Relationship between people and organization.

Relationship between organization and job helps making a job effective and significant.
Relationship between job and people makes the job itself important. Relationship between
people and organization gives due importance to organizational structure and the role of people
in it.
Human Resource Management (HRM) - Definition and Concept
We often hear the term Human Resource Management,Employee Relations and Personnel
Management used in the popular press as well as by Industry experts. Whenever we hear these
terms, we conjure images of efficient managers busily going about their work in glitzy offices. In
this article, we look at the question what is HRM ? by giving a broad overview of the topic and
introducing the readers to the practice of HRM in contemporary organizations. Though as with
all popular perceptions, the above imagery has some validity, the fact remains that there is much
more to the field of HRM and despite popular depictions of the same, the art and science of
HRM is indeed complex. We have chosen the term art and science as HRM is both the art of
managing people by recourse to creative and innovative approaches; it is a science as well
because of the precision and rigorous application of theory that is required.
As outlined above, the process of defining HRM leads us to two different definitions. The first
definition of HRM is that it is the process of managing people in organizations in a
structured and thorough manner. This covers the fields of staffing (hiring people), retention of
people, pay and perks setting and management, performance management, change management
and taking care of exits from the company to round off the activities. This is the traditional
definition of HRM which leads some experts to define it as a modern version of the Personnel
Management function that was used earlier.

The second definition of HRM encompasses the management of people in organizations

from a macro perspective i.e. managing people in the form of a collective relationship between
management and employees. This approach focuses on the objectives and outcomes of the HRM
function. What this means is that the HR function in contemporary organizations is concerned
with the notions of people enabling, people development and a focus on making the
employment relationship fulfilling for both the management and employees.
These definitions emphasize the difference between Personnel Management as defined in the
second paragraph and human resource management as described in the third paragraph. To put it
in one sentence,personnel management is essentially workforce centered whereas human
resource management is resource centered. The key difference is HRM in recent times is
about fulfilling management objectives of providing and deploying people and a greater
emphasis on planning, monitoring and control.
Whatever the definition we use the answer to the question as to what is HRM? is that it is all
about people in organizations. No wonder that some MNCs (Multinationals) call the HR
managers as People Managers, People Enablers and the practice as people management. In the
21st century organizations, the HR manager or the people manager is no longer seen as someone
who takes care of the activities described in the traditional way. In fact, most organizations have
different departments dealing with Staffing, Payroll, and Retention etc. Instead, the HR manager
is responsible for managing employee expectations vis--vis the management objectives and
reconciling both to ensure employee fulfillment and realization of management objectives.
In conclusion, this article has briefly touched upon the topic of HRM and served as an
introduction to HRM. We shall touch upon the other topics that this field covers in other articles.
Following are the important concepts of Human Resource Management:
Importance of HRM
Scope of HRM
Various Processes in HRM
What is Human Resource Planning ?
The HRM Function

Functions of a Human Resource Manager

Staffing Role of the HR Manager
Role of HRM in Leadership Development
Role of HR in People Empowerment
Talent Management and HRM
Performance Management as a HR Management Concept
Hiring Strategies
Retention Strategies

Difference between Personnel Management & HRM

Many students of management and laypeople often hear the term HRM or Human Resource
Management and wonder about the difference between HRM and the traditional term Personnel
Management. In earlier times, the Personnel Manager of a factory or firm was the person in charge
of ensuring employee welfare and interceding between the management and the employees. In
recent times, the term has been replaced with HR manager. This article looks at the differences in
usage and scope of functions as well as the underlying theory behind these nomenclatures. In the
section on introducing HRM, we briefly looked at the main differences. We shall look into them in
more detail here.
Personnel Management
Traditionally the term personnel management was used to refer to the set of activities concerning the
workforce which included staffing, payroll, contractual obligations and other administrative tasks. In
this respect, personnel management encompasses the range of activities that are to do with managing
the workforce rather than resources. Personnel Management is more administrative in nature and the
Personnel Managers main job is to ensure that the needs of the workforce as they pertain to their
immediate concerns are taken care of. Further, personnel managers typically played the role of

mediators between the management and the employees and hence there was always the feeling that
personnel management was not in tune with the objectives of the management.
Human Resource Management
With the advent of resource centric organizations in recent decades, it has become imperative to put
people first as well as secure management objectives of maximizing the ROI (Return on
Investment) on the resources. This has led to the development of the modern HRM function which is
primarily concerned with ensuring the fulfillment of management objectives and at the same time
ensuring that the needs of the resources are taken care of. In this way, HRM differs from personnel
management not only in its broader scope but also in the way in which its mission is defined. HRM
goes beyond the administrative tasks of personnel management and encompasses a broad vision of
how management would like the resources to contribute to the success of the organization.
Personnel Management and HRM: A Paradigm Shift ?
Cynics might point to the fact that whatever term we use, it is finally about managing people. The
answer to this would be that the way in which people are managed says a lot about the approach that
the firm is taking. For instance, traditional manufacturing units had personnel managers whereas the
services firms have HR managers. While it is tempting to view Personnel Management as archaic
and HRM as modern, we have to recognize the fact that each serves or served the purpose for which
they were instituted. Personnel Management was effective in the smokestack era and HRM is
effective in the 21st century and this definitely reflects a paradigm shift in the practice of managing
people.
Conclusion
It is clear from the above paragraphs that HRM denotes a shift in focus and strategy and is in tune
with the needs of the modern organization. HRM concentrates on the planning, monitoring and
control aspects of resources whereas Personnel Management was largely about mediating between
the management and employees. Many experts view Personnel Management as being workforce
centered whereas HRM is resource centered. In conclusion, the differences between these two terms
have to be viewed through the prism of people management through the times and in context of the
industry that is being studied.
Job Analysis - Job Description and Job Specification
Job analysis is primary tool in personnel management. In this method, a personnel manager tries to
gather, synthesize and implement the information available regarding the workforce in the concern.
A personnel manager has to undertake job analysis so as to put right man on right job.
There are two outcomes of job analysis :
1. Job description

2. Job specification
The information collected under job analysis is :
1. Nature of jobs required in a concern.
2. Nature/ size of organizational structure.
3. Type of people required to fit that structure.
4. The relationship of the job with other jobs in the concern.
5. Kind of qualifications and academic background required for jobs.
6. Provision of physical condition to support the activities of the concern. For exampleseparate cabins for managers, special cabins for the supervisors, healthy condition for
workers, adequate store room for store keeper.
Advantages of Job Analysis
1. Job analysis helps the personnel manager at the time of recruitment and selection of right
man on right job.
2. It helps him to understand extent and scope of training required in that field.
3. It helps in evaluating the job in which the worth of the job has to be evaluated.
4. In those instances where smooth work force is required in concern.
5. When he has to avoid overlapping of authority- responsibility relationship so that
distortion in chain of command doesnt exist.
6. It also helps to chalk out the compensation plans for the employees.
7. It also helps the personnel manager to undertake performance appraisal effectively in a
concern.
A personnel manger carries analysis in two ways :
a. Job description
b. Job specification
1. JOB DESCRIPTION is an organized factual statement of job contents in the form of
duties and responsibilities of a specific job. The preparation of job description is very
important before a vacancy is advertised. It tells in brief the nature and type of job. This

type of document is descriptive in nature and it constitutes all those facts which are
related to a job such as :
1. Title/ Designation of job and location in the concern.
2. The nature of duties and operations to be performed in that job.
3. The nature of authority- responsibility relationships.
4. Necessary qualifications that are required for job.
5. Relationship of that job with other jobs in a concern.
6. The provision of physical and working condition or the work environment
required in performance of that job.
Advantages of Job Description
7. It helps the supervisors in assigning work to the subordinates so that he can guide
and monitor their performances.
8. It helps in recruitment and selection procedures.
9. It assists in manpower planning.
10. It is also helpful in performance appraisal.
11. It is helpful in job evaluation in order to decide about rate of remuneration for a
specific job.
12. It also helps in chalking out training and development programmes.
2. JOB SPECIFICATION is a statement which tells us minimum acceptable human
qualities which helps to perform a job. Job specification translates the job description into
human qualifications so that a job can be performed in a better manner. Job specification
helps in hiring an appropriate person for an appropriate position. The contents are :
1. Job title and designation
2. Educational qualifications for that title
3. Physical and other related attributes
4. Physique and mental health
5. Special attributes and abilities

6. Maturity and dependability

7. Relationship of that job with other jobs in a concern.
Advantages of Job Specification
8. It is helpful in preliminary screening in the selection procedure.
9. It helps in giving due justification to each job.
10. It also helps in designing training and development programmes.
11. It helps the supervisors for counseling and monitoring performance of employees.
12. It helps in job evaluation.
13. It helps the management to take decisions regarding promotion, transfers and
giving extra benefits to the employees.
From the above advantages, we can justify the importance of job analysis and its related products.
Both job description as well as job specification are important for personnel manager in personnel
management function. Therefore, job analysis is considered to be the primary tool of personnel
management.
Performance Appraisal
Performance Appraisal is the systematic evaluation of the performance of employees and to
understand the abilities of a person for further growth and development. Performance appraisal is
generally done in systematic ways which are as follows:
1. The supervisors measure the pay of employees and compare it with targets and plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance.
Objectives of Performance Appraisal
Performance Appraisal can be done with following objectives in mind:
1. To maintain records in order to determine compensation packages, wage structure,
salaries raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on right job.

3. To maintain and assess the potential present in a person for further growth and
development.
4. To provide a feedback to employees regarding their performance and related status.
5. To provide a feedback to employees regarding their performance and related status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programmes.
Advantages of Performance Appraisal
It is said that performance appraisal is an investment for the company which can be justified by
following advantages:
1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion
programmes for efficient employees. In this regards, inefficient workers can be dismissed
or demoted in case.
2. Compensation: Performance Appraisal helps in chalking out compensation packages for
employees. Merit rating is possible through performance appraisal. Performance
Appraisal tries to give worth to a performance. Compensation packages which includes
bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on
performance appraisal. The criteria should be merit rather than seniority.
3. Employees Development: The systematic procedure of performance appraisal helps the
supervisors to frame training policies and programmes. It helps to analyse strengths and
weaknesses of employees so that new jobs can be designed for efficient employees. It
also helps in framing future development programmes.
4. Selection Validation: Performance Appraisal helps the supervisors to understand the
validity and importance of the selection procedure. The supervisors come to know the
validity and thereby the strengths and weaknesses of selection procedure. Future changes
in selection methods can be made in this regard.
5. Communication: For an organization, effective communication between employees and
employers is very important. Through performance appraisal, communication can be
sought for in the following ways:
a. Through performance appraisal, the employers can understand and accept skills of
subordinates.
b. The subordinates can also understand and create a trust and confidence in
superiors.

c. It also helps in maintaining cordial and congenial labour management

relationship.
d. It develops the spirit of work and boosts the morale of employees.
All the above factors ensure effective communication.
6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating
performance of employees, a persons efficiency can be determined if the targets are
achieved. This very well motivates a person for better job and helps him to improve his
performance in the future.
Performance Appraisal Tools and Techniques
Following are the tools used by the organizations for Performance Appraisals of their employees.
1. Ranking
2. Paired Comparison
3. Forced Distribution
4. Confidential Report
5. Essay Evaluation
6. Critical Incident
7. Checklists
8. Graphic Rating Scale
9. BARS
10. Forced Choice Method
11. MBO
12. Field Review Technique
13. Performance Test
We will be discussing the important performance appraisal tools and techniques in detail.
1. Ranking Method

The ranking system requires the rater to rank his subordinates on overall performance. This
consists in simply putting a man in a rank order. Under this method, the ranking of an
employee in a work group is done against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It may also be done by ranking a
person on his job performance against another member of the competitive group.
Advantages of Ranking Method
i.

Employees are ranked according to their performance levels.

ii.

It is easier to rank the best and the worst employee.

Limitations of Ranking Method

iii.

The whole man is compared with another whole man in this method. In
practice, it is very difficult to compare individuals possessing various individual
traits.

iv.

This method speaks only of the position where an employee stands in his group. It
does not test anything about how much better or how much worse an employee is
when compared to another employee.

v.

When a large number of employees are working, ranking of individuals become a

difficult issue.

vi.

There is no systematic procedure for ranking individuals in the organization. The

ranking system does not eliminate the possibility of snap judgements.

2. Forced Distribution method

This is a ranking technique where raters are required to allocate a certain percentage of rates
to certain categories (eg: superior, above average, average) or percentiles (eg: top 10 percent,
bottom 20 percent etc). Both the number of categories and percentage of employees to be
allotted to each category are a function of performance appraisal design and format. The
workers of outstanding merit may be placed at top 10 percent of the scale, the rest may be
placed as 20 % good, 40 % outstanding, 20 % fair and 10 % fair.
Advantages of Forced Distribution
i.

This method tends to eliminate raters bias

ii.

By forcing the distribution according to pre-determined percentages, the problem

of making use of different raters with different scales is avoided.

Limitations of Forced Distribution

iii.

The limitation of using this method in salary administration, however, is that it

may lead low morale, low productivity and high absenteeism.
Employees who feel that they are productive, but find themselves in lower
grade(than expected) feel frustrated and exhibit over a period of time reluctance to
work.

3. Critical Incident techniques

Under this method, the manager prepares lists of statements of very effective and ineffective
behaviour of an employee. These critical incidents or events represent the outstanding or
poor behaviour of employees or the job. The manager maintains logs of each employee,
whereby he periodically records critical incidents of the workers behaviour. At the end of the
rating period, these recorded critical incidents are used in the evaluation of the workers
performance. Example of a good critical incident of a Customer Relations Officer is : March
12 - The Officer patiently attended to a customers complaint. He was very polite and prompt
in attending the customers problem.
Advantages of Critical Incident techniques
i.

This method provides an objective basis for conducting a thorough discussion of

an employees performance.

ii.

This method avoids recency bias (most recent incidents are too much emphasized)

Limitations of Critical Incident techniques

iii.

Negative incidents may be more noticeable than positive incidents.

iv.

The supervisors have a tendency to unload a series of complaints about the

incidents during an annual performance review sessions.

v.

It results in very close supervision which may not be liked by an employee.

vi.

The recording of incidents may be a chore for the manager concerned, who may
be too busy or may forget to do it.

4. Checklists and Weighted Checklists

In this system, a large number of statements that describe a specific job are given. Each
statement has a weight or scale value attached to it. While rating an employee the supervisor
checks all those statements that most closely describe the behaviour of the individual under
assessment. The rating sheet is then scored by averaging the weights of all the statements

checked by the rater. A checklist is constructed for each job by having persons who are quite
familiar with the jobs. These statements are then categorized by the judges and weights are
assigned to the statements in accordance with the value attached by the judges.
Advantages of Checklists and Weighted Checklists
i.

Most frequently used method in evaluation of the employees performance.

Limitations of Checklists and Weighted Checklists

ii.

This method is very expensive and time consuming

iii.

Rater may be biased in distinguishing the positive and negative questions.

iv.

It becomes difficult for the manager to assemble, analyze and weigh a number of
statements about the employees characteristics, contributions and behaviours.

Performance Appraisal Biases

Managers commit mistakes while evaluating employees and their performance. Biases and
judgment errors of various kinds may spoil the performance appraisal process. Bias here refers to
inaccurate distortion of a measurement. These are:
1. First Impression (primacy effect): Raters form an overall impression about the ratee on
the basis of some particluar characteristics of the ratee identified by them. The identified
qualities and features may not provide adequate base for appraisal.
2. Halo Effect: The individuals performance is completely appraised on the basis of a
perceived positive quality, feature or trait. In other words this is the tendency to rate a
man uniformly high or low in other traits if he is extra-ordinarily high or low in one
particular trait. If a worker has few absences, his supervisor might give him a high rating
in all other areas of work.
3. Horn Effect: The individuals performance is completely appraised on the basis of a
negative quality or feature perceived. This results in an overall lower rating than may be
warranted. He is not formally dressed up in the office. He may be casual at work too!.
4. Excessive Stiffness or Lenience: Depending upon the raters own standards, values and
physical and mental makeup at the time of appraisal, ratees may be rated very strictly or
leniently. Some of the managers are likely to take the line of least resistance and rate
people high, whereas others, by nature, believe in the tyranny of exact assessment,
considering more particularly the drawbacks of the individual and thus making the
assessment excessively severe. The leniency error can render a system ineffective. If
everyone is to be rated high, the system has not done anything to differentiate among the
employees.

5. Central Tendency: Appraisers rate all employees as average performers. That is, it is an
attitude to rate people as neither high nor low and follow the middle path. For example, a
professor, with a view to play it safe, might give a class grade near the equal to B,
regardless of the differences in individual performances.
6. Personal Biases: The way a supervisor feels about each of the individuals working under
him - whether he likes or dislikes them - as a tremendous effect on the rating of their
performances. Personal Bias can stem from various sources as a result of information
obtained from colleagues, considerations of faith and thinking, social and family
background and so on.
7. Spillover Effect: The present performance is evaluated much on the basis of past
performance. The person who was a good performer in distant past is assured to be okay
at present also.
8. Recency Effect: Rating is influenced by the most recent behaviour ignoring the
commonly demonstrated behaviours during the entire appraisal period.
Therefore while appraising performances, all the above biases should be avoidd.

Personnel Management: its Definitions, Objectives and Functions

Personnel Management: its Definitions, Objectives and Functions!
There is no standard definition of the term personnel management. Different writers have given
different definitions of the term.
Definitions:
1.The personnel function is concerned with the procurement, development, compensation,
integration, and maintenance of the personnel of an organisation for the purpose of contributing
toward the accomplishment of that organisations major goals or objectives. Therefore, personnel
management is the planning, organising, directing, and controlling of the performance of those
operative functions. Edwin B. Flippo, Principles of Personnel Management
2. Personnel management is that field of management which has to do with planning, organising,
and controlling various operative activities of procuring, developing, maintaining and utilizing a
labour force in order that the objectives and interest for which the company is established are
attained as effectively and economically as possible and the objectives and interest of all levels of
personnel and community are served to the highest degree. M. J. Jucius, Personnel Management
3. Manpower management effectively describes the processes of planning and directing the
application, development, and utilisation of human resources in employment. Dale Yodder,
Personnel Management and Industrial Relations
4. Personnel Administration is a method of developing the potentialities of employees so that they
get maximum satisfaction out of their work and give their best efforts to the organisation. Pigors
and Myres, Personnel Administration

5.Personnel Management is that part of management process which is primarily concerned with the
human constituents of an organisation. E.F.L. Brech (ed.) Principles and Practice of
Management
6. Personnel management is that part of management function which is concerned with people at
work and with their relationships within an enterprise. Its aim is to bring together and develop into
an effective organisation the men and women who make up an enterprise and, having regard to the
well-being of an individual and of working groups, to enable to make their best contribution to its
success. The British Institute of Personnel Management
7. Personnel Management is that part of the management function which is primarily concerned
with human relationships within an organisation. Its objective is the maintenance of those
relationships on a basis which, by consideration of the well-being of the individual, enables all those
engaged in the undertaking to make their maximum personal contribution in the effective working of
the undertaking. Indian Institute of Personnel Management, Kolkata.
Objectives of Personnel Management:
These are classified into two:
() General Objectives:
These reveal the basic philosophy of top management towards the labour force engaged on the work
and its deep underlying conviction as to the importance of the people in the organisation. The
following are the most important objectives.
(i) Maximum individual development:
The employer should always be careful in developing the personality of each individual. Each
individual differs in nature and therefore management should recognise their individual ability and
make use of such ability in an effective and make use of such ability in an effective manner.

(ii) Desirable working relationship between employer and employees:

It is the main objective of personnel management to have a desirable working relationship between
employee and employees so that they may co-operate the management.
(iii) Effective molding of human resources as contrasted with physical resources: Man is the only
active factor of production, which engages the other factors of production to work.
(b) Specific objectives: Following are some of the important activities:
(i) Selection of right type and number of persons required to the organisation.
(ii) Proper orientation and introduction of new employees to the organisation and their jobs.
(iii) Suitable training facilities for better job performance and to prepare the man to accept the
challenge of higher job.
(iv) Provision of better working conditions and other facilities such as medical facilities.
(v) To give a good impression to the man who is leaving the organisation.
(vi) Maintaining good relations with the employees.
Functions of Personnel Management:
Personnel management involves two categories of functionsmanagerial and operative.
Basic Managerial Functions:
Planning, organising, motivating and controllingare common to all managers including personnel
managers and are performed by all of them. That is why it is said that general management and
personnel management are one and the same.

The planning function of a personnel manager pertains to the steps taken in determining a course of
action. This involves developing a personnel programme and specifying what and how operative
personnel functions are to be performed.
After plans have been developed, the personnel manager must establish an organisation to carry
them out. This function, therefore, calls for groupings of personnel activities, assignment of different
group of activities to different individuals, delegation of authority to carry them out and provision
for coordination of authority relationships horizontally and vertically in the organisation structure.
Motivation involves guiding and supervising the personnel. Personnel manager must inculcate in the
workers a keen appreciation of the enterprise policies. He must guide them towards improved
performance and motivate them to work with zeal and confidence.
Control involves measuring performance, correcting negative deviations and assuring the
accomplishment of plans. Through direct observation, direct supervision, as well as reports, records
and audit, personnel management assures itself that its activities are being carried out in accordance
with the plans.
Functions of Personnel Management: 1. Managerial Functions 2. Operative Functions!
1. Managerial Functions:
The Managerial functions of a personnel manager involve POSDCORB (Luther Gullick) i.e.,
Planning, organisation, staffing, directing, coordinating, reporting and budgeting of those who
actually perform the operative functions of the Personnel Department.
The following are the managerial functions (viz. planning, organising, directing and
controlling) performed by a personnel department:

A. Personnel Planning:
Planning lays down a pre-determined course to do something such as what to do, how to do, where
to do, who is to do etc. A personnel manager plans in advance the trend in wages, labour market,
union demands etc. Through planning, most of the future problems can be anticipated.
B. Organising:
According to J.C. Massic, An organisation is a structure, a framework and a process by which a cooperative group of human being allocates its task among its members, identifies relationships and
integrates its activities towards common objectives. The personnel manager has to design the
structure of relationships among jobs, personnel and physical factors so that the objectives of the
enterprise are achieved.
C .Directing:
This function relates to guidance and stimulation of the subordinates at all levels. The personnel
manager directs and motivates the employees of his department so that they work willingly and
effectively for the achievement of organisational goals,
D. Controlling:
A personnel manager has to constantly watch whether there is any deviation from the planned path.
Controlling is concerned with remedial actions. Continuous monitoring of the personnel policies
relating to training, labour turnover, wage payments, interviewing new and separated employees
etc., is the backbone of controlling.
If deviations are unavoidable, corrective action can be planned in advance. Controlling helps the
personnel manager to evaluate the performance of employees of the personnel department so far as
the operating functions are concerned.

2. Operative Functions:
The operative functions of the Personnel Department are also called service functions. These
include.
(a) Procurement function
(b) Development
(c) Promotion, transfer and termination function
(d) Compensation function
(e) Welfare function
(f) Collective bargaining function
(g) Miscellaneous functions.
These functions of the personnel Department are discussed below:
(1) Procurement:
It includes:
(a) Recruitment i.e., tapping the possible sources from where prospective labour supply will come.
(b) Getting information regarding prevailing wage rates and job requirements.
(c) Selecting the best candidate by following a systematic selection procedure.
(d) Maintaining the records of employees.
(e) Introducing the new employee to the officers of the other departments such as Security Officer,
Time Keeper, and Cashier etc.

(2) Training or Development Function:

The training of the new employees and also of those who are being promoted is the crucial function
of Personnel Department. A training programme is devised for this purpose. The training increases
the skills and abilities of the employees.
The various aspects of training are:
(a) Training to new employees, instructors and supervisors.
(b) Training in safety equipments and various policies of companies.
(c) Training through improvement of education such as evening classes, films, Entertainment
programmes etc.
(d) Encouraging employees to give suggestions.
(3) Promotion, Transfer and Termination:
The performance of the employees is evaluated for the purpose of taking decisions concerning the
employment. Merit rating is undertaken for evaluation of the performance of the employees.
The functions of the Personnel Department in this regard are given below:
(a) To lay down a promotion policy.
(b) To formulate policies regarding transfer and termination.
(c) Analysis of voluntary separations and knowing the possible causes of such separations.
(4) Compensation:
The employees should get adequate and equitable remuneration for the work being done by them.

The functions of the Personnel Department concerned with fixation of fair wages are:
(a) To evaluate jobs and determine their worth in terms of money.
(b) To collaborate with those who formulate wage plans.
(c) To assist in formulation of policies regarding pension plans, profit sharing programmes, nonmonetary benefits, etc.
(d) To compare the wages of the enterprise with the industry and remove inconsistencies, if any.

(5) Welfare Activities:

These activities relate to physical and social well-being of the employees and include:
(a) Provision of medical facilities such as first aid, dispensaries, etc.
(b) Suggesting ways and means by which accidents can be eliminated or minimised.
(c) To make provisions for restaurants and other recreational facilities.
(d) To apply the labour laws effectively.
(e) To publish a plant magazine.
(6) Collective Bargaining:
It includes:
(a) To assist in the negotiations which are held with the union leaders?
(b) To know the grievances of employees and following their problems properly.

(7) Miscellaneous:
(a) To advise the line managers regarding administration of personnel policies.
(b) To secure co-ordination of all personnel activities.
(c) To have an effective communication system.
(d) To provide good working conditions.
Personnel Management: Scopes of Personnel Management Explained!
Scope of personnel management: (1) Employment Function (2) Training Function or Development
Function (3) Formulation of Promotion Policy (4) Job Analysis (5) Merit Rating (6) Job Evaluation
(7) Compensation and (8) Providing Service and Benefits.
The scope of personnel Management was very much restricted before 20th century. The large scale
businesses operations have led to the specialisation of ail business activities. On the other hand,
labour unions are also the product of the large scale industrial organisations. Therefore, dealing with
the problems of human beings now-a-days requires specialised knowledge. It is very common to
find a separate department (Personnel Department) for tackling all human problems in the
organisation.
Managers at all levels deal with the people; hence every manger must know the basic principles of
personnel management. Personnel administration permeates all types of functional management,
such as production management, financial management, sales management and research
management. It applies in non- industrial organisations, government, non-profit institutions and the
armed services (Pigors and Myers).
The ultimate responsibility of the personnel function lies with the line mangers. St is a staff function
and line responsibility. Hence it would be wrong to say that only the Personnel Department is
concerned with the control and management of labour.

Scope of Personnel Management:

(1) Employment Function:
It covers areas connected with the employment of employees such as manpower requirements,
recruitment, selection, placement and induction.
(2) Training Function or Development Function:
In order to perform work properly, employees must be trained. This function is concerned with
increasing the efficiency of employees by enhancing their skill.
(3) Formulation of Promotion Policy:
This function deals with the formulation of policy setting out the basis of promotion (viz., seniority,
merit or both).
(4) Job Analysis:
In job analysis, factors concerning jobs are analyzed (such as skill, responsibility, working
conditions, training, qualifications etc.). It is concerned with anatomy of a job. It is a detailed study
of job from all angles.
(5) Merit Rating:
It refers to the evaluation of an employees performance after he has been placed on the job.
(6) Job Evaluation:
In order to know the worth of the job in terms of money job evaluation process may be undertaken.
(7) Compensation:

This function deals with the determination of fair wages for the employees. Wages may be paid
according to the time spent or units produced or there may be a combination of time and piece rate
system in the form of incentive plans.
(8) Providing Service and Benefits:
This function is concerned with the provision of good working conditions and other benefits such as
safety provisions, counselling, medical services, recreational facilities, etc. The scope of personnel
management is changing over the years.
According to Andrew F. Sikula Changes definitely are taking place in personnel administration.
Some personnel sub-functions seem to be breaking away from personnel others seem to be new subareas, while still others seem to be changing only in terms of their relative emphasis and degree of
importance.
While importance of appraisal and wage administration is declining, certain other areas of personnel
management (Manpower planning, staffing, training etc.) are getting prominence.
Personnel Management: its Importance and Policies Explained!
Personnel Management: its Importance and Policies Explained!
The value of human resources cannot be over-emphasised. During the last two decades,
computerised machines are replacing human beings in the industries.
As a result of this, the functions of personnel management have also taken a new turn. The proper or
improper use of the different factors of production depends on the human resources. Hence, besides
other resources, human resources need more development.
The personnel department of an organisation can be compared with the human brain. The different
parts of the body cannot work if brain stops working. If the labour force of an undertaking is cooperative, a strong and sound organisation can be built.

The following points bring about the importance of personnel department:

1. The personnel manager is regarded by the employees as protector of their interests.
2. In order to provide stability to an organisation, personnel policies are developed by the personnel
manager.
3. It supplies skilled personnel to various departments.
4. It ensures maximum return from training programmes of employees.
5. The workers are prepared in advance to meet the problems which may be created by industrial
and technological factors.
6. It is primarily involved in securing and maintaining work force.
7. It motivates workers and creates opportunities for their promotion.
8. There a constant evaluation of personnel policies and an effort is made to reduce the costs by
increasing productivity through innovations and experimentation.
9. It helps in improving employer-employee relations.
10. It helps in solving the various problems of workers thereby creating congenial atmosphere for
the management.
According to Harbison and Myers, While Capital, natural resources, foreign aid and international
aid play an important role in economic growth, none of these factors is more important than an
efficient pool of well educated, well trained and highly developed manpower.
Most of the problems of the workers will be automatically solved and many others will not arise if
proper attention is paid to the personnel function of the management.

Personal Policies:
The objective of a business lay down the goals whereas the personnel policies provide guidelines to
achieve such goals. In order to perform the personnel functions efficiently, personal policies must be
prepared by all personnel executives in advance .Personnel policies are a part of the total system and
includes policies relating to recruitment selection development, wages, and promotion , demotion ,
transfer, performance evaluation.
13 Important Characteristics of a Good Personnel Policy
The following are the characteristics of good personnel policy:
1. A personnel policy is framed by the Board of Directors and it should be definite, positive, clear
and easily understandable.
2. A personnel policy must fit into the overall business policies.
3. Like other policies, a personnel policy also acts as a guide for decision making. If the objective of
an organisation is to develop the competent and contented employees, certain guidelines may be laid
down by the management called as policies.
4. A personnel policy should provide stability, consistency and a framework to an organisation.
5. It must try to achieve the objectives of an enterprise.
6. It should be written, uniform and progressive.
7. A personnel policy must take into consideration the changing aspirations and managerial styles.
8. It should not be rigid and the management should periodically review it. Thus, the policy should
be clear, unambiguous and flexible.
9. It must fulfil the desire of workers for recognition as groups in order to deal with management.

10. It should provide for two way communication and encourage co-operation among employees. It
should be framed in consultation with the trade unions.
11. It should be written in the manuals and must be communicated to every employee of the
organisation.
12. It must assure justice to the workers.
13. It should be framed keeping in mind that each individual is different from another i.e., there are
individual differences among the employees.
Need of Personnel Policies in an Organisation (9 Reasons)
Need of Personnel Policies in an Organisation!
Certain authors consider personnel policies as unnecessary and insignificant as they obstruct
independent thinking and are nothing less than handcuffs to managers.
According to Wilier Personnel policies are unnecessary restrictions on our freedom of action. It is a
waste of money to have written policies. I think that each personnel problem must be handled on its
own merit. However, there are personnel policies in almost all organisations because of the
following reasons:
(1) Achievement of Objectives of Organization:
Establishment of personnel policies help to a great extent in achieving the objectives of an
organisation. The objectives of an organisation relate to what to do whereas policies deal with
how to do
(2) Uniformity and Consistency in Decisions:
Personnel policies help to ensure consistency and uniformity in dealing with problems that recur
frequently. Policies provide guidance for the course of action to be followed under similar situations.

(3) Removal of Favouritism:

All employees are treated at par irrespective of their caste and creed. Thus, chances of favouritism
and discrimination are minimised.
(4) Help In Stability Of Organization:
In many concerns, personnel keep on changing as the tenure of a manager is fixed and limited. The
organisation continues and personnel policies thus provide stability to an organisation.
(5) Encouragement to Decentralization:
When sound personnel policies are established, a large number of problems are settled at the lower
level and are not required to contact high officials every time.
(6) Help In Control:
Policies are framed in relation to ail the areas of personnel management. The function of controlling
the labour force becomes very easy when clear cut laid policies are framed by the management.
(7) Performance Evaluation:
Personnel policies specify the route towards selected goals and serve as standards for measuring the
evaluation of employees. The comparison of actual performance with the standards will show as to
how much these policies are beneficial to the enterprise.
(8) Help to Build Loyalty:
Sound policies help to build employees enthusiasm and loyalty. Since all the workers know the goals
of the business, they contribute their maximum for the achievement of these goods. It enhances their
morale and loyalty towards the organisation.
(9) Act as Guide to Management:

The management tries to solve all labour problems in the light of the policies and in this way,
policies act as a guide as to what kind of work they should do. Thus, personnel management
becomes more effective when personnel policies exist.
6 Operative Functions of a Personnel Manager (Management)
Some of the major operative functions of a personnel manager are as follows: A. Procurement B.
Development C. Compensation (Wages and Incentives) D. Integration E. Maintenance (Health,
Safety and Security) F. Records, Audit and Research.
A. Procurement:
1. Determination of Manpower Need:
(i) To analyse each job to determine the nature of the work; the qualifications necessary; the nature
and amount of training required; the amount of supervision necessary; etc.
(ii) To derive from the job analysis job specifications containing in condensed form the most
pertinent points relating to the position and the worker, to be used by employment interviews to
facilitate the work of selection and placement.
(iii) To determine the manpower needs of the organisation.
2. Recruitment and Selection:
(i) To develop different sources of supply of applicants for different jobs.
(ii) To design a standard requisition blank for use by operating department in requesting personnel.
(ii) To design an application blank for each category of employees.
(iv) Interview applicants by a trained interviewer.
(v) To introduce (after a careful study) a testing programme to supplement the interview,

(vi) To thoroughly investigate and medically examine successful applicants prior to employment.
3. Placement:
(i) To assign employees to jobs for which they appear best qualified on the basis of the selection
techniques.
(ii) To introduce a uniform procedure for introducing new employees to the company and to the
respective departments.
(iii) Copy of rules and regulations is to be given to each employees, supplemented by a short
discussion about the company, its products, etc.
(iv) Department head or supervisor is to designate a fellow employee to escort newcomer during
first several days and to act as his sponsor.
B. Development:
1. Training and Education:
(i) To develop pre-job and in-service training programmes for operatives.
(ii) To develop programme for the training of understudiesjunior executives.
(iii) To develop programmes of lectures and classes for clerical personnel.
(iv) To organize supervisory training programmes with emphasis on techniques of handling
relationships. Topics in these programmes can be Management of men, Production and costs,
Wage plans and incentives, Quality control and Energy economy.
(v) To develop company library to include books, pamphlets, magazines, etc., of interest to all
classes of personnel.

2. Suggestions System:
(i) To organize a suggestions system which attracts, offers rewards commensurate with the value of
suggestions, and in general serves as a clearing house for ideas. (Suggestions may be for
improvement of methods, machinery, processes, employee relations, etc.
(ii) To tie the suggestion system to the supervisory training programme and to sell it to the
supervisory personnel through that medium.
3. Communication:
(i) To compile and publish in tentative form an employee hand-book subject to periodic revision,
containing details of company history and a clear and concise outline of company policy with
respect to such items as employment, security plans, vacations, wages, etc.
(ii) To prepare and publish employee magazine (called house organ).
In this respect the following points are to be considered:
(a) Specific objectives to be achieved through this medium,
(b) who shall edit the magazine,
(c) its format,
(d) how often it shall be issued,
(e) to what type of content it will limit itself,
(f) periodic determination of the effectiveness of the contents.
(iii) To develop a company organisation chart showing the relationship of the departments and
divisions to each other and the lines of responsibility and authority.

(iv) To develop a detailed personnel department organisation chart.

4. Performance Appraisal and Promotion:
(i) To arrange for annual or semi-annual appraisals of all personnel.
(ii) To devise appropriate appraisal forms for each class of employees.
(iii) To work out promotional charts with lines of advancement clearly defined.
(iv) To develop a promotion policy based on periodic reviews of employees, records.
C. Compensation (Wages and Incentives):
(i) To grade jobs in relationships to each other, to some established base or to similar jobs in other
plants with frequent examination of results.
(ii) To formulate wage scales for each job classification.
(iii) To consider payment of bonus to supervisory personnel.
(iv) To consider effective means of stimulating and rewarding executives. iv) To provide for stability
of emplo3Tnent, in so far as possible, through careful scheduling of operations and financial
planning.
D. Integration:
1. Discipline and Grievances:
(i) To provide for uniformity in disciplinary action for similar infractions.
(ii) To render special assistance on problem cases referred to personnel department.

(iii) To establish an efficient mechanism for the adjustment of individual complaints and grievances
(the channels for settlement of a grievance should be clearly outlined.)
2. Discharges, Quits, Layoffs, Rehearings:
(i) To establish leaving or exit interview as standard practice to determine all the real facts leading
to involuntary termination,
(ii) To determine relative weight of factors (length of service, proficiency, etc.) in deciding of
layoffs,
(iii) To determine policy with respect to rehiring.
3. Labour-Management Relations:
(i) To establish a realistic, positive and clear-cut philosophy of labour-management relations,
(ii) To analyse thoroughly the existing labour agreement with measurements as precise as possible of
its costs, both actual and potential.
4. Industrial Relations:
To establish good relations with government agencies, citizens, organisations, newspapers,
influential individuals and educational institutions.
E. Maintenance (Health, Safety and Security):
(i) To provide for adequate facilities in respect of legal advice, canteen, recreation, first- aid, etc.
(ii) To introduce effective rest pauses.
(iii) To educate employees in safety and health.

(iv) To provide for sickness, disability, accident and retirement benefits through insurance and other
schemes.
F. Records, Audit and Research:
(i) To develop a good system of record-keeping.
(ii) To formulate a checklist for carrying out annual personnel audit.
(iii) To carry out research on various subjects of interest to the organisation,
(iv) To make contacts with professional management organisations which serve as source of
research material (this can be done by becoming member or attending conferences etc.).
Major Functions of Human Resource Management (287 Words)
Some of the major functions of human resource management are as follows:
Human Resource Management (HRM) is a very wide function in an organization. It focuses on
staffing function (human resource planning, recruitment, selection, and placement of people),
development function (training and development, and organization development), welfare
function (safety, wellness, and benefits), utility function (maintenance and record keeping,
compensation) function, monitoring function (performance appraisal), managerial function
(planning, organizing, directing and controlling), and above all a strategic function (to bring in fit
between organization vision, mission and goals and the goals of people working in the
organization). However, it is not the exclusive domain of HR managers. In fact, it is to be
performed by every line manager (motivation, communication, and supervision). HRM is no way
a one-way traffic.

Image Courtesy : lh5.ggpht.com/_iFIztPmvqg8/Szd5qp9HBlI/Management.jpg

Human Resource Management is the organizational function that deals with issues related to
people such as compensation, hiring, performance management, organization development,
safety, wellness, benefits, employee motivation, communication, administration, and training.
Human Resource Management is also a strategic and comprehensive function to manage people
and the organization culture and environment. Effective HRM enables employees to contribute
effectively and productively to the overall company direction and the accomplishment of the
organizations goals and objectives.
Human Resource Management is moving away from traditional personnel, administration, and
transactional roles, which are increasingly outsourced. HRM is now expected to add value to the
strategic utilization of employees and that employee programs impact the business in measurable
ways. The new role of HRM involves strategic direction and HRM metrics and measurements to
demonstrate value.
The list of functions performed by HRM department is very long. For a better understanding we
shall discuss some important functions of HRM.

ABOUT NIPM
National Institute of Personnel Management is the premier all-India Institute of professionals
engaged in personnel management, industrial relations, labour welfare and human resources
development. NIPM is a professional, non-profit-making society registered under Societies
Registration Act, 1960.
It has a nation-wide membership of over 8,000 Individual Members and over 250 Institutional
members spread over 49 chapters.
NIPM was established in the year 1980, after the merger with the erstwhile IIPM (founded in 1948
at Calcutta, now Kolkata) and NILM (established in 1950 at Bombay, now Mumbai). Its National
office is located at Kolkata and chapters in most capital cities and major industrial towns all over the
country. New chapters are being added every year, depending upon the congregation of members in
major industrial locations.

Industrial relations
Industrial relations is a multidisciplinary field that studies the employment relationship.[1][2] Industrial
relations is increasingly being called employment relations or employee relations because of the
importance of non-industrial employment relationships;[3] this move is sometimes seen as further
broadening of the human resource managementtrend.[4] Indeed, some authors now define human
resource management as synonymous with employee relations.[5] Other authors see employee relations
as dealing only with non-unionized workers, whereas labor relations is seen as dealing with unionized
workers.[6] Industrial relations studies examine various employment situations, not just ones with a
unionized workforce. However, according to Bruce E. Kaufman "To a large degree, most scholars regard
trade unionism, collective bargaining and labor-management relations, and the national labor policy and
labor law within which they are embedded, as the core subjects of the field." [7]
Initiated in the United States at end of the 19th century, it took off as a field in conjunction with the New
Deal. However, it is generally a separate field of study only in English-speaking countries, having no
direct equivalent in continental Europe.[1] In recent times, industrial relations has been in decline as a
field, in correlation with the decline in importance of trade unions, [7] and also with the increasing
preference of business schools for the human resource management paradigm.[8]

Overview[edit]
Part of a series on

Organized labour

The labour movement[show]

Labour rights[show]

Trade unions[show]

Strike action[show]

Labour parties[show]

Academic disciplines[show]

V
T
E

Industrial relations has three faces: science building, problem solving, and ethical. [9] In the science
building phase, industrial relations is part of the social sciences, and it seeks to understand the
employment relationship and its institutions through high-quality, rigorous research. In this vein,
industrial relations scholarship intersects with scholarship in labor economics, industrial sociology, labor
and social history, human resource management, political science, law, and other areas.
Industrial relations scholarship assumes that labor markets are not perfectly competitive and thus, in
contrast to mainstream economic theory, employers typically have greater bargaining power than
employees. Industrial relations scholarship also assumes that there are at least some inherent conflicts
of interest between employers and employees (for example, higher wages versus higher profits) and
thus, in contrast to scholarship in human resource management and organizational behavior, conflict is
seen as a natural part of the employment relationship. Industrial relations scholars therefore frequently
study the diverse institutional arrangements that characterize and shape the employment relationship
from norms and power structures on the shop floor, to employee voice mechanisms in the workplace, to
collective bargaining arrangements at company, regional, or national level, to various levels of public
policy and labor law regimes, to "varieties of capitalism" (such ascorporatism, social democracy,
and neoliberalism).
When labor markets are seen as imperfect, and when the employment relationship includes conflicts of
interest, then one cannot rely on markets or managers to always serve workers' interests, and in
extreme cases to prevent worker exploitation. Industrial relations scholars and practitioners therefore
support institutional interventions to improve the workings of the employment relationship and to protect
workers' rights. The nature of these institutional interventions, however, differ between two camps within
industrial relations.[10] The pluralist camp sees the employment relationship as a mixture of shared
interests and conflicts of interests that are largely limited to the employment relationship. In the
workplace, pluralists therefore champion grievance procedures, employee voice mechanisms such
as works councils and labor unions, collective bargaining, and labor-management partnerships. In the
policy arena, pluralists advocate for minimum wage laws, occupational health and safety
standards, international labor standards, and other employment and labor laws and public policies.
[11]

These institutional interventions are all seen as methods for balancing the employment relationship to

generate not only economic efficiency, but also employee equity and voice. [12] In contrast, the Marxistinspired critical camp sees employer-employee conflicts of interest as sharply antagonistic and deeply
embedded in the socio-political-economic system. From this perspective, the pursuit of a balanced
employment relationship gives too much weight to employers' interests, and instead deep-seated
structural reforms are needed to change the sharply antagonistic employment relationship that is
inherent within capitalism. Militant trade unions are thus frequently supported.

History[edit]
Industrial relations has its roots in the industrial revolution which created the modern employment
relationship by spawning free labor markets and large-scale industrial organizations with thousands of
wage workers.[9] As society wrestled with these massive economic and social changes, labor problems
arose. Low wages, long working hours, monotonous and dangerous work, and abusive supervisory
practices led to high employee turnover, violent strikes, and the threat of social instability. Intellectually,
industrial relations was formed at the end of the 19th century as a middle ground between classical
economics and Marxism, with Sidney Webb and Beatrice Webb's Industrial Democracy (1897) being the
key intellectual work. Industrial relations thus rejected the classical econ.
Institutionally, industrial relations was founded by John R. Commons when he created the first academic
industrial relations program at the University of Wisconsin in 1920. Another scholarly pioneer in
industrial relations and labor research was Robert F. Hoxie.[13] Early financial support for the field came
from John D. Rockefeller, Jr. who supported progressive labor-management relations in the aftermath of
the bloody strike at a Rockefeller-owned coal mine in Colorado. In Britain, another progressive
industrialist, Montague Burton, endowed chairs in industrial relations at Leeds, Cardiff and Cambridge in
1930.[14]
Beginning in the early 1930s there was a rapid increase in membership of labor unions in America, and
with that came frequent and sometimes violent labor-management conflict. [15] During World War II these
were suppressed by the arbitration powers of the National War Labor Board.[15]
However, as World War II drew to a close and in anticipation of a renewal of labor-management conflict
after the war, there was a wave of creations of new academic institutes and degree programs that
sought to analyze such conflicts and the role of collective bargaining. [15] The most known of these was
the Cornell University School of Industrial and Labor Relations, founded in 1945.[16][15] But counting
various forms, there were over seventy-five others.[16] These included theYale Labor and Management
Center, directed by E. Wight Bakke, which began in 1945.[17] An influential industrial relations scholar in
the 1940s and 1950s was Neil W. Chamberlain at Yale and Columbia Universities.[13] The discipline was
formalized in the 1950s with the formation of the Oxford School by Allan Flanders andHugh Clegg.[14]

Industrial relations was formed with a strong problem-solving orientation that rejected both the classical
economists' laissez faire solutions to labor problems and the Marxist solution of class revolution. It is this
approach that underlies the New Deal legislation in the United States, such as the National Labor
Relations Act and theFair Labor Standards Act.