MBCH732D Human Resource Management PDF

UNIT 20: Case Study
MBCH-732D
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Human Resource
Management UP
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CC
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Human Resource Management
Course Design
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Advisory Council
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Chairman
Dr Parag Diwan
Members
Dr Anirban Sengupta Dr Ashish Bhardwaj
UP
Dr Kamal Bansal
Dean Dean CIO
Dr S R Das Dr Sanjay Mittal Prof V K Nangia

VP – Academic Affairs Professor – IIT Kanpur IIT Roorkee
SLM Development Team

Wg Cdr P K Gupta
Dr Joji Rao
Dr Neeraj Anand
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Dr K K Pandey
Print Production
Mr Kapil Mehra Mr A N Sinha

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Manager – Material Sr Manager – Printing
Author
Madhurima Lall
All rights reserved. No part of this work may be reproduced in any form, by mimeograph or any other means,
without permission in writing from MPower Applied Learning Enterprise.
(c)
Course Code: MBCH-732D
Course Name: Human Resource Management
Version: July 2013
© MPower Applied Learning Enterprise

UNIT 20: Case Study
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Contents
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Block-I
Unit 1 Introduction to HRM and HRD...................................................................................... 3

Unit 2 Human Resource Policies ............................................................................................. 35
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Unit 3 Making HR a Line Function ........................................................................................ 43
Unit 4 Job Analysis .................................................................................................................. 57
Unit 5 Case Study .................................................................................................................... 73
Block-II
Unit 6 Job Design..................................................................................................................... 77

Unit 7 Human Resource Planning ........................................................................................ 103
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Unit 8 Human Resource Planning Process........................................................................... 125
Unit 9 Qualitative Models ..................................................................................................... 141
Unit 10 Case Studies................................................................................................................ 163
Block-III
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Unit 11 Recruitment ................................................................................................................ 169

Unit 12 Selection ...................................................................................................................... 179
Unit 13 Induction ..................................................................................................................... 199
Unit 14 Career Planning and Development ........................................................................... 207
Block-IV
Unit 16 Succession Planning and Organizational Development ........................................... 239

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Unit 17 Management Development ........................................................................................ 245

Unit 18 Training....................................................................................................................... 257
Unit 19 Training Methods ....................................................................................................... 267
Unit 20 Case Study .................................................................................................................. 283
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Block-V
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Unit 21 Promotion.................................................................................................................... 287
Unit 22 Transfer....................................................................................................................... 309
Unit 23 Compensation Administration................................................................................... 319
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Unit 24 HR Audit ..................................................................................................................... 351
Glossary ............................................................................................................................................ 379
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UNIT 1: Introduction to HRM and HRD
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Notes
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BLOCK-I
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Detailed Contents Human Resource Management
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Notes
UNIT 1: INTRODUCTION TO HRM AND HRD
___________________ z Differentiating Policy from Objective,
Programmes and Procedures
z Introduction
___________________ z HR Policies and Procedures
z History of HRM
___________________ z HR Programme
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z Development Process
z Considerations in Developing HR Policies
z Human Resource Development
___________________
z Factors that Developed HRM

___________________ UNIT 3: MAKING HR A LINE FUNCTION
z HRD Concepts z Introduction
___________________
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z Role and Significance of HRD z HR as a Line Function
___________________
z Management of HRD Unit z HR Manager’s Role
___________________
z Focus of the HRD System z Line Functions of HR Managers
z Structure of HRD System
___________________
UNIT 4: JOB ANALYSIS
z Roles of HRD Manager
___________________
z Introduction
z Role of Consultants in HRD
z Objectives of Job Information
z Line Managers and HRD
z Job Analysis
z HRD Culture
z Questionnaire
z HRD Climate
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z Job Descriptions
z HRD Matrix
z Job Specifications
UNIT 2: HUMAN RESOURCE POLICIES z Job Evaluation
z Introduction
UNIT 5: CASE STUDY
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Unit 1
3
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Notes
Activity
Introduction to HRM and HRD

___________________
Define the term HRM
___________________
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___________________
Objectives
___________________
After completion of this unit, the students will be aware of the following
topics: ___________________
\ The factors responsible for development of HRM ___________________
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\ Differences between Personnel Management, HRM and HRD ___________________
\ Objective of HRD
___________________
\ Role of HRD Manager
___________________
___________________
Introduction
Any discussion on Human Resource Management (HRM) would be
incomplete, without an overview on the process of its development.
Hence we have to take a brief note on HRM, especially its different
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phases of development, conceptual issues, objectives, importance
and linkages with other organizational roles. With this backdrop,
we then have to understand HRM and appreciate why HRM has
now become so important for the successful management of an
organization.
Particularly at a stage when we all confine our attention to
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downsizing or rightsizing of manpower, organizational

restructuring, process re-engineering, cost minimization, etc. to
address to the problem of an organization, HRM, per se, has
assumed more importance. While employment practices differ from
country to country, we find the experiences of industrially
advanced nations also by and large converge on HRM issues.
Almost everyday, newspapers and business magazines carry news
items on VRS, job-cuts, downsizing or rightsizing, early retirement,
retrenchment and manpower pruning. And this is not limited to
only those organizations that are operating on a smaller scale,
even globally visible multinationals are also in the fray. Thus HRM
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issues are globally relevant, although their magnitude may differ

from country to country at the macro level and organization to
organization at the micro level.
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Before we discuss structured HRM systems and processes, as was
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Notes
Activity mentioned above, let us take a brief overview of the HRM history
___________________
What is meant by span of and understand its present status.
management?
___________________
___________________ History of HRM
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___________________ Management of human resources as a subject of study; even
___________________ though of relatively recent origin – the concept upon which the
___________________
theory is based – dates back to 400 B.C. (Chaldeans Inventive
wage plans). Minimum wage and incentive wage plans were in
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___________________
Babylonian Codes or Hammurabi around 1800 B.C. The Chinese
___________________ as early as 1650 B.C. had originated the Principle of Division of
___________________ Labour (Specialisation). The 'Span of Management' and the related
concepts of organization were well understood by Moses around
___________________
1200 B.C. In India, Kautilya observed a sound base for systematic
management of human resource, as early as 4th century B.C.
Prior to Industrial Revolution, the status of labour was extremely
low and the human relationships between the employer and the
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employees were characterized by slavery, serfdom and the guild
system. Slavery was based on negative incentive system and
serfdom was based on positive incentive system. However, both
these systems have been replaced with the growth of
manufacturing and commercial enterprises by the guild system
involving master craftsman (the owner), the journeyman (the
travelling worker) and the apprentice. Guild System marked the
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beginning of Human Resource Management for selection, training

and development of workers and emergence of collective
bargaining for wages and working conditions.
The Industrial Revolution followed the new economic doctrine of
laissez-faire. New industrial organizations were characterized by
the factory system (a change from cottage system or home-centered
production system), which deteriorated the employer-employee
relationship due to unhealthy work environment, long working
hours, fatigue, monotony, strain, increased likelihood of accidents,
etc.
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Reviewing the history, it is observed that great thrust had been

given to personnel management functions by business expansion,
labour strategies and higher wage rates during World War-1
(1917). Many of these activities had been initiated for welfare and
paternalism. The great depression of 1920-21 threw many
personnel men out of jobs and this created a disillusion for this 5
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profession. A number of literatures came up worldwide during Notes
Activity
1920-22, dealing with different areas of personnel administration. What are personnel functions?
___________________
By 1923, the profession had reached the stage of maturity, as
___________________
organizations started giving importance to it like other core
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functions viz. production and marketing. ___________________
___________________
Check Your Progress
___________________
Fill in the blanks
___________________
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1. Prior to Industrial Revolution, the status of labour was
___________________
extremely _________and the human relationships
between the employer and the employees were ___________________
characterized by slavery, serfdom and the guild system. ___________________
2. Slavery was based on ___________incentive system and ___________________

serfdom was based on positive incentive system
Development Process
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Tracing the history, we find that personnel function derived from
the introduction of welfare and charitable activity. Initially it was
perceived as a moral duty and later it was considered as the
precondition for industrial efficiency. The second development
sprung from the employers' endeavours to cope with the challenges
of trade unionism. The third phase could be attributed to the
development of the concept of humanisation of work.
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Factors which are responsible for development of this profession in

a phased manner can be listed as follows:
z Technological changes are taking place at a rapid pace
throughout the world. Such changes have a great bearing upon
personnel functions because they fundamentally changed the
relationship between people and work. From an overall point
of view, they induced a major change in the economic system
and the structure of the society.
z The rising competition both at home and abroad (in cases of
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International Trade), virtually reduces the profit to the level of

production cost (unless the industry is monopolist). The free
movement of technology from one country to another does not
allow any production process to monopolise a particular
technology for their use.
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z The rise of consumerism, government protection, so also
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Notes
Activity international competition, developed the necessity to maintain
___________________
What factors are responsible quality and price, which completely redress the opportunity to
for the development?
___________________ follow the traditional production method.
___________________ z Social changes are also taking place at a fast pace. Business
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___________________ function is no longer a mere profit multiplying one.
Organization being a part of the society, also owes something
___________________
to it.
___________________
The political development also restructured trade unionism.
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z
___________________
Trade unionists are no longer mere wage bargainers.
___________________
z The structural changes in employment (more oriented towards
___________________ white collared jobs, gradual decline of unskilled jobs) and
___________________ changes in sector distribution of employment (more geared to
tertiary or service sectors) also bought a great challenge to the
employers.
For the personnel profession, all these challenges have a great
impact on their functions.
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Alienating and humanizing effect of repetitive and monotonous
tasks, in the wake of technological advancement is a universal
phenomenon. Effective utilization of human resources under this
technological environment is the prime challenge before today's
personnel profession. Even in the United States of America (USA)
at the present level of production, particularly for workers in the
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service industries, it is estimated only 50% of the potential is

available from existing human skills, initiative and energy. About
50 million employees are now considered obsolete in the USA,
which includes a considerable number of engineers, IT
professionals and technical people. Manpower obsolescence is also
being faced by Japanese industries. Other industrially advanced
countries are also facing a similar crisis.
The history of evolution and growth of Personnel Management in
India is not very old. The Royal Commission on Labour in 1931 for
the first time recommended the abolition of Jobbers System and
appointment of Labour Officers to deal with recruitment and to
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settle their grievances. The Factories Act, 1948, statutorily made it

obligatory for the industries to appoint Labour Welfare Officers.
Today Personnel Management function in India encompasses all
the professional disciplines like; Welfare, Industrial Relations,
Personnel Administration, Human Resource Development (HRD), 7
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etc. Notes
Activity
The general functional areas of personnel vis-à-vis HRD ___________________
What are HRD functions?
professionals can be grouped under five major heads as below: ___________________
z Determining and staffing for employment needs,
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___________________
z Measuring performance and developing employee potential, ___________________
z Preserving effective employee-management relationships, ___________________
z Uncovering and resolving employee problems, ___________________
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z Anticipating and coping with organizational change.
___________________
The new changes have extended the functional horizon to many.
From a legalistic approach it extended to human relations. From a ___________________
mere passive factor of production, employees are now perceived as ___________________
human resources. The functional demand, therefore, encompasses
many areas like; management by anticipation, more use of work
teams by small group activities/quality circles, practising total
quality management culture, etc.
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Check Your Progress
Fill in the blanks
1. Technological changes are taking place at a
________pace throughout the world.
2. The new changes have extended the functional horizon
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to many ____________.
Human Resource Development

So far, our discussion centres on personnel functions. At this stage
we will delineate Human Resource Development (HRD) as a
separate discipline of Personnel Management. But before we go
into the details of HRD functions, brief understanding of the
historical process is considered necessary to appreciate the
importance of HRD functions in today's organization.
It is believed that Kurt Lewin's (1947) studies of behaviour of
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small groups and setting up of National Training Laboratories laid

the foundation for HRD profession, which till late 1940 was the
domain of psychiatrists, psychologists, counsellors, nurses, and
furthered the concept of human relations training and the
experiential approach. Participants in training groups (T-groups)
8 effectively identified problems, acquired the skills and also actively
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Notes
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collaborated in the problem solving process. Training group
___________________
What are models of
leaders, unshackling their traditional role of instructors, became
excellence? facilitators and focussed on how the individual relates to and
___________________
interacts with other individuals and with groups and trained on
___________________
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leadership and its influence, handling conflicts, expressing
___________________ feelings, giving and receiving feedback, competition and co-
___________________ operation, problem solving and increasing awareness of oneself and
ones impact on others.
___________________
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In 1969, the Handbook of Structured Experiences for Human
___________________
Relations Training was published by University Associates giving
___________________
structured experiences with guidelines for training and
___________________ development. Subsequent publication of handbooks for Group
___________________ Facilitators in 1972 and 1973 furthered the process of developing
Training and Organization Development vis-à-vis Human
Resource Development as a recognized area of professional
endeavour, delineating HRD as a new profession, encompassing
the personnel function.
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Check Your Progress
Fill in the blanks
1. Participants in training groups (T-groups) effectively
identified problems, acquired the skills and also actively
collaborated in the _____________ process.
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2. Training and Organization Development has become a

recognized area of ________________
Factors that Developed HRM

In the introductory submission, we have discussed the
development process of HRD, delineating it from traditional
Personnel Management functions and Human Resource
Management. Before we begin with the definitions and objectives
of HRD, it is necessary to study the factors which developed the
concept of HRM by replacing the traditional concept of Labour
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Welfare and Personnel Management. These factors are:

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Search for Competitive Advantage Notes
The competitive advantage school of thought (pioneered by Beer, ___________________
1985, Tricky, Fombrun and Devenna, 1982) argued that better
___________________
utilizations of human resources by an organization or by any
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nation is necessary to achieve competitive advantage. ___________________
___________________
Models of Excellence
___________________
Study of Successful Organizations as Models of Excellence by
___________________
Peters and Waterman (1982) and Kanter (1984) evinced the
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interest of HRM, as models of excellent companies, isolating it ___________________
from traditional Personnel Management Functions. ___________________
___________________
Failure of Personnel Management
___________________
Management of human resources as a mainstream management
activity has been advocated by Skinner (1981) and many others as
their studies show Personnel Management has failed to promote
potential benefits of effective management of people.
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Decline in Trade Union Pressure
Changing economic and political climate around the world resulted
in decline in trade union pressure on management. This
necessitated switch in emphasis from collective issues (traditional
Industrial Relations Approach) to individual and co-operative
issues i.e. the Human Resource Management Approach.
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Changes in Workforce and the Nature of Work

Structural change in the occupational pattern is now a worldwide
phenomenon. Technology, increased requirement of skill and
knowledge, occupational shifts, restructuring of production, new
quality systems requirement, etc., are now demanding better
educated, new generation of workers, who obviously have higher
expectations from their organizations. Such a trend calls for
redefining the employer-employee relationship associated with
Human Resource Management.
All these factors listed above revolutionized the concept of
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traditional Personnel Management, which is restricted to

utilization of human resources complying with mainly statutes and
coping with the challenges of trade unions; and led to the
development of HRM as another form of response for sustaining
better employer-employee relation.
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HRM is a sub-system of the total management system and is the
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Notes
responsibility of all managers, irrespective of their functions,
___________________
disciplines and levels. It is primarily concerned with the
___________________ management of people, individuals or groups at work, as also their
___________________ inter-relationships. HRD, OD and IR are separate aspects of the
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broader concept of HRM. However, in reality each of this concept
___________________
overlaps and cannot be viewed in isolation. HRM practices, to
___________________ succeed, must go concurrently with HRD, OD interventions. Sound
___________________ IR systems cannot be visualized without good HRD practices.
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___________________
HRM versus Personnel Management
___________________
HRM is a distinctive approach and it is possible to distinguish it
___________________ from traditional Personnel Management in three different ways as
___________________ follows:
z The first approach is by simple re-titling of Personnel
Management, as many companies did by renaming their
Personnel Department as HR Department.
The second approach is by re-conceptualizing and re-
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z
organizing personnel roles in line with the conceptual
framework of Harvard Business School (1985), i.e., subsuming
personnel and labour relation activities in four policy areas,
like; employee influence, human resource flow, reward systems
and work systems, differentiating HRM from Personnel
Management concepts pioneered by Institute of Personnel
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Management, U.K. i.e., employee relations, employee

resourcing and employee development. Thus, it is apparent
that HRM concept categorizes employee relations (industrial
relations) as a separate strategic function, which falls under
the traditional Personnel Management function.
z The third approach designates HRM as a distinctively
different and new approach for Management. This approach
integrates HRM into Strategic management and emphasizes
on full utilizations of human resources.
As this stage, it is necessary to develop a definition of HRM. Let us
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now define the term human resources first. Human resource is the
total knowledge, skills, creative abilities, talents, aptitudes, values,
attitudes and beliefs of the people of an organization. There are,
however, differences of opinion among many experts as some of
them consider that human resource is not only the people, who are
part of the organization, i.e., the direct employees, it includes
customers (TQM concepts) and others who are having a variety of 11
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other relationships with the organization. Integrating the concept Notes
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of human resource with management, we can define HRM as an What___________________
is misconception about
approach to identify right people for the right job. It also includes raining, education and
___________________
development?
the process of socializing such identified people to integrate them
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with the organization, train them for increasing their functional ___________________
skill, develop them for both identified and unidentified future ___________________
roles, place them in right tasks and roles, motivate them to
___________________
perform well and inculcate in them a sense of belongingness.
___________________
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Within the HRM, there are two major activities; the first is
___________________
concerned with the recruitment, selection, placement,
compensation and appraisal of the human resources (personnel ___________________
functions), more commonly termed as Human Resource Utilization ___________________
(HRU) function. The other group of functions are directed towards
___________________
working with the existing human resources in order to improve
their efficiency and effectiveness. Such activities are also designed
to enable the existing members of the organization to assume new
roles and functions. These activities are concerned with Human
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Resource Development (HRD).
Check Your Progress

Fill in the blanks
1. HRM is a ___________ approach
2. Within the HRM, there are two major activities; the first
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is concerned with the recruitment, selection, placement,

compensation and __________of the human resources
personnel functions), more commonly termed as Human
Resource Utilization (HRU) function.
HRD Concepts
HRD is concerned with an organized series of learning activities,
within a specified time limit, designed to produce behavioural
change in the learner (Naddler, 1969). From the organizational
context, therefore, HRD is a process which helps employees of an
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organization to improve their functional capabilities for their

present and future roles, to develop their general capabilities, to
harness their inner potentialities both for their self and
organizational development and, to develop organizational culture
to sustain harmonious superior-subordinate relationships,
teamwork, motivation, quality, and a sense of belongingness.
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There are a lot of misconceptions about training, education and
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Notes
development functions vis-à-vis HRD. Essentially, HRD activities
___________________
are designed to make people effective in their present job position,
___________________ which is a part of the training function. But when the focus is on a
___________________ future identifiable job it becomes a part of the education function.
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For future unidentifiable jobs, i.e., to develop capabilities for a
___________________
future position or new activities within the organization, which are
___________________ not very specific at the present stage, it becomes a part of the
___________________ development function.
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___________________ Without precisely knowing the functions of training, education and
___________________
development, it would further make it difficult for us to appreciate
the objectives, roles and significance of HRD in an organization. In
___________________
the succeeding paragraphs we will take a cursory view of these
___________________ functions before we elaborate on other issues of HRD.
Training
Training concerns people already employed with the organization
and whose jobs are so defined that we are able to identify what
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should be the desired job behaviours. The focus on training
programmes should be such, so as to enable the individual to
perform more effectively in his present job position. Training is
needed when a person is hired without the requisite skills, attitude
or knowledge or after putting the person on the job, we are able to
identify deficiencies that are possible to rectify through training.
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Even in cases, where an employee may be performing very well,

changes in procedures, materials, processes may stimulate the
need for further training. Total Quality Management (TQM), Small
Group Activities (SGA) or Quality Circles (QC) concepts are now
calling for new areas of training for employees to make them
functionally more effective in their restructured jobs. We have
discussed these issues in a separate supplementary note. For
effective results, the responsibility for training should be on the
immediate supervisor of the trainee. As the pay-off of training is
verified on the job, the supervisor is expected to see the results and
therefore, he is the right person to allocate physical and financial
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resources to improve his human resources. However, in most of the

organizations, supervisors are made responsible for identification
of training needs and their role is restricted to imparting technical
skill enriching training. For conceptual and human skills, training
is given by a specialized group of trainers. Training can either be
conducted through in-house programmes or by retaining 13
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professional trainers/consultants. Notes
The evaluation of training is done in direct relation to the job. At ___________________

the end of the training, it is expected that there should be some ___________________
identifiable changes in job behaviour. Where no such changes in
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___________________
job behaviour could be identified, we expect there may be one or
more of the following problems; ineffective training programme, ___________________
lack of linkage between the training programme and the job or ___________________
negative reinforcements in the work situation. Evaluation of ___________________
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training is easy because of its job relatedness.
___________________
Education ___________________
Educational experiences benefit those who are employed and who ___________________
are required to be gradually equipped for other positions in the
___________________
organization. Thus, the education component of HRD is future-
oriented for identifiable job positions. Since return on investment
from education is unclear or unascertainable, very few
organizations are prepared to invest on employee education
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programmes unless future needs or manpower plan of the
organization substantiates the possibility of redeployment of
employees after completion of educational programmes.
Many organizations allow their employees to go on study leave for
pursuing institutional studies in areas like, Management,
Accounting and Finance, Quality, Engineering or even for
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Research, which are relevant to organizational needs. Employees

are allowed to draw their pay and get reimbursement of actual cost
for study during this period and such leave is not debited against
employees' leave account.
Some organizations encourage their employees to get enrolled in
part-time evening programmes and allow them reimbursement of
actual cost. In India a number of institutes are encouraging
sponsored candidates to pursue studies as full-time students.
However, education within the organization is considered as a
better alternative as it simultaneously ensures employees on-the-
job activities and learning of new techniques for their future roles.
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For example, some organizations with their in-house talents run

professional programmes for their employees like, Engineering
Degree Courses of Institute of Engineers, Indian Institute of
Metals, Management Degree Courses of All India Management
Association, National Institute of Personnel Management, ICFAI
14 Business School, International Institute of Management Science,
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Notes Professional Programmes of Indian Society for Training and
___________________ Development, National HRD Network, Academy of HRD, etc. This
is considered more cost-effective than the earlier two methods and
___________________
this also reduces the time-lag between the time of education
___________________
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experience and its application on the new job.
___________________
Employee education calls for attitudinal changes of corporate
___________________ leaders as they should be prepared at the outset to invest in the
___________________ future of individuals who may or may not remain with the
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organization. It is also necessary to identify individuals who are
___________________
future-oriented. Evaluation of employee education is difficult when
___________________
there is considerable time-lag between learning and its actual on-
___________________ the-job application.
___________________
Development
The development component of HRD is to conduct learning
experiences for a future undefined job. The focus being on a future
undefined job an organization, before going ahead with employee
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development, the organization must be able to identify individuals
who enjoy high risk and new undefined challenging jobs. Such risk
takers may not necessarily be confined to the higher levels of an
organization, even though conventionally, development function
rests with the higher levels only since decisions on investment in
employee development are taken at higher levels and, people at
higher levels are considered to be more knowledgeable (both by
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virtue of experience and educational background) than people at

lower levels. Hardly a few organizations consider it right to risk
the investment to develop employees at lower levels. However,
experience shows, carefully planned development experiences can
be helpful in realising human potential, irrespective of the
hierarchical levels and functional areas.
Before the introduction of computers in Indian organizations,
computer literacy was considered as a development function. At
present, however, TQM, business process re-engineering,
benchmarking, ISO:9000 quality systems, value engineering, etc.
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are considered as new areas of development.

Valuation of employee development programmes is extremely
difficult both in terms of return on investment and application of
learned experiences, for obvious time-lag, in the organization.
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However, success of training, i.e. HRD efforts of an organization in
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Notes
the form of education and development programmes, largely
depends on simultaneous changes in the organization, which is ___________________
known as Organizational Development (OD). Changes in the ___________________
employee behaviour (for training, education and development
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___________________
programmes) are reinforced by changes in the organization by OD
process, which uses many strategies and interventions. Hence, ___________________
HRD efforts should be in congruence with OD investments. ___________________
___________________
Objectives of HRD
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___________________
From the foregoing discussion, objectives of HRD can be listed as
follows: ___________________
1. To develop capabilities of all individuals working in an ___________________
organization in relation to their present role. ___________________
2. To develop capabilities of all such individuals in relation to

their future role.
3. To develop better interpersonal and employer-employee
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relationships in an organization.
4. To develop team spirit.
5. To develop coordination among different units of an
organization.
6. To develop organizational health by continuous renewal of
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individual capabilities (averting manpower obsolescence)

keeping pace with the technological changes.
Objectives of HRD can be made clear when we highlight the
importance of human resources in line with the examination
process of the 'Baldridge Award', which is given at an international
level to a quality organization. Objectives of HRD practices in an
organization should be to put efforts to develop/and realize the full
potential of the workforce, including management and to maintain
an environment conducive to total participation, quality leadership
and personal and organizational growth. In an organization there
are six units which are concerned with HRD; namely person, role,
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dyad, team, inter-team and organization. The effectiveness of one

contributes in turn to the effectiveness of the others.
HRD objectives can also be couched in line with W. Edward
Deming's fourteen principles for quality improvement in an
organization. Here we won't discuss the fourteen principles but we
16 will focus on only those points which are related to HRD objectives.
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Notes There are:
___________________
1. Institute training on the job.
___________________
2. Breakdown barriers between departments to build teamwork.
___________________
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3. Drive fear out of the workplace.
___________________
4. Create conditions to enable employees to take pride in their
___________________
workmanship.
___________________
5. Institute programme of education and self-improvement.
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___________________
At this stage for better appreciation, we will review the HRD
___________________ objectives of two leading companies in India.
___________________
Exhibit 1.1: HRD Objectives of Siemens Limited
___________________ z Development of employees is the primary task of the
company.
z It is the policy of Siemens to recruit, train, develop and
advance employees within the company.
z To achieve these objectives Siemens have laid down their
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policies as under:
Recruitment of quality manpower and their
retention.
Recruitment mainly at entry level.
Plan and monitor career development staff to perform
effectively in their present jobs; groom potential
managers for higher responsibilities.
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To introduce and sustain an objective system of

evaluation of performance based on result.
Performance as the sole criterion for increments and
promotion.
Use of training as the strategic factor for competitive
advantage.
To nurture a spirit of entrepreneurship among
employees.
Work in close collaboration for fostering the spirit of
openness.
To ensure transparency in decision making.
Self-motivated employees
(c)
Employee commitment
Commitment of results.
17
Exhibit 1.2: HRD Objectives of W. S. Industries India Limited
S
Notes
z To plan and induct appropriate manpower in terms of
knowledge, skill and attitude. ___________________
z To provide opportunities for growth to employees in terms ___________________

of remuneration, career and skill endowment.
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___________________
z To practice equity and fairness in all its dealings with
employees. ___________________
z To continuously enhance knowledge, skill of employees for ___________________
the performance of their present and future tasks through
education and training. ___________________
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z To create an organizational climate that encourages a ___________________
highly motivated work force.
___________________
z To prepare employees for easy and faster adaptation to
change. ___________________
___________________
Check Your Progress
Fill in the blanks
1. Valuation of employee development programmes is
extremely______________.
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2. Employee education calls for ________________ changes
of corporate leaders.
Role and Significance of HRD

For any dynamic and growth-oriented organization to survive in a
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fast changing environment, HRD activities play a very crucial role.

Recent economic restructuring in India at the macro level
influenced the need for production restructuring at unit (micro)
level and production restructuring necessitated labour
restructuring vis-à-vis restructuring of HRD activities in
organizations. Training, retraining and redeployment have now
become buzzwords in corporate circles as market globalization
(which is an outcome of the economic restructuring programme),
delicensing and free flow of technology (as per New Industrial
Policy of July, 1991), and intensified competition are rendering
traditional skills and knowledge redundant. Many organizations in
(c)
India are now threatened with manpower obsolescence. To

withstand this, HRD activities have now received prime
importance.
Increased morale and motivation of employees no doubt are
necessary to achieve productivity and functional effectiveness. But
18 these alone cannot sustain a dynamic organization, unless effort
S
Notes and competencies of human resource are renewed constantly,
___________________ developing an enabling organizational culture. An enabling
organization culture is possible when employees of an organization
___________________
are found to use their initiative, take risks, experiment, innovate
___________________
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and make things happen.
___________________
Hence, role and significance of HRD in an organization can be
___________________ appreciated when we consider the fast changing environment
___________________ coupled with technological change and intensified competition.
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This has necessitated the need for renewal of capabilities of people
___________________
working in the organization which are simultaneously reinforced
___________________
by changes in the organization by the Organizational Development
___________________ (OD) process.
___________________ The role and significance of HRD can further be appreciated when
we consider different sub-systems of HRD like performance
appraisal, career planning and development, manpower planning,
management succession and development, training (which includes
the role of education and development discussed earlier),
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organizational development (OD), quality of work life (QWL), etc.
Check Your Progress

Fill in the blanks
1. Increased morale and motivation of employees no doubt
are necessary to achieve ________and functional
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effectiveness.
2. QWL stands for__________
Management of HRD Unit

It is pertinent to mention that Indian organizations, by and large,
have personnel functions integrated with HRD functions, except
for a few who have separate HRD department, exclusively for HRD
functions. Most of the organizations, therefore, merely retitled the
designation of their core personnel people by either calling them
Human Resource Manager or Human Resource Development
(c)
Manager. Yet there are some organizations, which have isolated

their HRD as training function, entrusting the responsibility to
Management Development Officers or Principals of their
Management Development Centres. Public sector giants like Steel
Authority of India Ltd. (SAIL), Indian Oil Corporation (IOC),
NTPC, ONGC, Coal India, have set up their own management 19
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development institutions/centres. Departmental undertakings like Notes
Activity
Indian Ordinance Factories, Indian Railways also have their ___________________
What are the focus areas of
separate management development centres. Many commercial HRD?
___________________
banks, Reserve Bank of India, Regional Rural Banks, Financial
E
Corporation of India (IFCI), Industrial Credit and Investment ___________________
Corporation of India (ICICI), insurance companies like, Life ___________________

Insurance Corporation of India, General Insurance Corporation of
___________________
India, have set up their own staff training colleges for developing
___________________
their human resources. Similarly private companies like TISCO,
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Kirloskar Group, Reliance, Lakshmi Group, Hinduja Group, ___________________
Modern Group, Lalbhai Group, have their own management ___________________
development centres to develop and train their human resources.
___________________
We have shown three different organizational charts for
___________________
personnel/human resources/HRD functions for a large company, for
a company where personnel/HRD functions are integrated and for
an organization where HRD is shown as a separate department.
But before we review the organization charts, it is important to
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discuss the principles pertaining to focus, structure and
functioning, which we should consider while designing an
integrated HRD organization.
Check Your Progress

Fill in the blanks
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1. IFCI stands for________

2. SAIL stands for____________
Focus of the HRD System

Reviewing the definition, role, significance, purpose and objectives
of HRD it is evident that HRD department of an organization
focuses on the following important areas:
1. Increasing the 'enabling' capabilities by developing human
resources, organizational health, team spirit and increasing
employee motivation and productivity.
(c)
2. Focus on balanced organizational culture by conducting

periodic surveys, workshops, discussions stimulating
openness, mutual trust, team spirit, creativity, initiative,
mutuality, collaboration, delegation, autonomy, respect,
management of mistake, management of conflict, etc.
20
3. Focus on learning contextual factors from different
S
Notes
Activity professional bodies like NIPM, ISTD, HRD Network, AIMA,
___________________
What is precise organization etc. These professional bodies, through their publications,
plan?
___________________ seminars and workshops, share the experiences of the
___________________ corporate world.
E
___________________ 4. Focus on periodic reviewing of HRD system which may call for
redesigning performance appraisal, job-rotation, reward
___________________
systems, career planning, promotion, selection, induction,
___________________ training and development programme, etc.
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___________________
5. Focus on integrating HRD with other corporate functions like
___________________ production, marketing, finance, material, corporate planning,
___________________ etc. Such integration will strengthen the development of an
'enabling' organization.
___________________
6. Focus on diffusion of HRD function involving line managers in
various HRD aspects like training of subordinates,
performance appraisal, promotion, placement, selection, career
planning, etc. Line people by virtue of their rich experience
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may effectively contribute to these HRD areas. Moreover, their
active association will accentuate the process of developing an
integrated HRD system in an organization.
7. Focus on working with unions by taking them into confidence
and collaborating with them. That unions can also play a
positive role in furthering the organization is evident from a
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number of examples. Syndicate Bank Employees Union very

recently collaborated with the management to reduce the Non-
performing assets (i.e. bad debt realization).
Check Your Progress

Fill in the blanks
1. Increase the '_________' capabilities by developing
human resources.
2. Focus on working with unions by taking them into
______________.
(c)
Structure of HRD System

The precise organizational plan for an HRD department depends
on the type of organization in which it is located and the size of
organization. Here we are giving hypothetical examples of
organization structure for three different organizations to 21
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appreciate the functioning of HRD departments in different Notes
organizations. ___________________
___________________
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___________________
___________________
___________________
___________________
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___________________
___________________
___________________
Figure 1.1: Organization Chart No. 1 for a Large Company ___________________

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Figure 1.2: Organization Chart No. 2 - Integrated HRD
Figure 1.3: Organization Chart No. 3 HRD as a Separate Department
The structure of HRD system organizations was briefly discussed

(c)
in the introductory part of this unit, duly illustrating an integrated

HRD structure and HRD as a separate functional identity in an
organization. Here we will discuss the basic principles while
structuring the HRD department of an organization.
22
Needless to mention that the structure of HRD department differs
S
Notes
from organization to organization in terms in size, nature of
___________________
activity, philosophy and attitude. However, the principles given
___________________ below are usually followed in every organization, while it goes in
___________________ for structuring the HRD Department.
E
___________________ 1. Developing an identity of HRD which may or may not
encompass other personnel functions.
___________________
2. Establishing credibility for the HRD function, which is
___________________
possible by entrusting the responsibility for HRD at a higher
UP
___________________
level in an organizational hierarchy.
___________________
3. Balancing integration and differentiation. Differentiation can
___________________ be ensured by not diluting the HRD function with traditional
___________________ Personnel Management and Industrial Relations function,
which is possible by entrusting the functional responsibilities
to different department heads as illustrated in the
organization Chart No. 3. Similarly, integration can be
achieved by diffusion of HRD function with other major
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corporate functions like; marketing, production (as explained
earlier) and line functions, as inputs from these areas can
enrich the functioning of the HRD department, the structure
of which has been illustrated in Organization Chart No. 2.
4. Likewise, while structuring an HRD department of an
organization, it should be ensured that it has linkages with
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external and internal systems, i.e. HRD department should

represent various task groups, ad hoc committees, etc.
5. Finally, structure of HRD department should be developed so
that it can sustain a monitoring mechanism.
Basic principles governing the functioning of HRD systems in an
organization have been made amply clear by ASTD, while
describing different roles of HRD managers. However, the basic
essence of functioning principles of HRD systems can be listed as
follows:
1. HRD systems should develop a strong feedback and re-
(c)
enforcing mechanism.
2. They should balance qualitative (subjective) and quantitative
(objective) decisions.
3. They should balance the requirement of internal and external
expertise.
23
4. The systems should be introduced in a phased manner.
S
Notes
Check Your Progress ___________________
Fill in the blanks ___________________
1. HRD systems should develop a ____________ feedback
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___________________
and re-enforcing mechanism. ___________________
2. The structure of HRD department differs from ___________________
organization to organization in terms in size, nature of
___________________
activity, philosophy and ____________.
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___________________
Roles of HRD Manager ___________________
___________________
From the foregoing discussions, it is apparent that the primary
goal of HRD is to increase a worker's productivity and a firm's ___________________
profitability as investment in HRD improves a worker's skill and

enhances motivation. The other goal of HRD is to prevent
obsolescence at all levels. To achieve these two goals, the HRD
manager of any organization plays the following two important
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roles:
1. To assist people in obtaining the knowledge and skills they
need for present and future jobs and to assist them in
attaining their personal goals.
2. To play the 'enabling' role by providing the right context in
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which human performance occurs and the organization

reaches its stated objectives.
The American Society for Training and Development (ASTD, 1998)
identified eleven roles of the HRD manager, which can be
enumerated as follows:
1. Administrator: The role of providing coordination and
support services for the delivery of HRD programmes and
services.
2. Evaluator: The role of identifying the impact of an
intervention on individual or organizational effectiveness.
(c)
3. Individual Career Development Advisor: The role of

helping individuals to assess personal competencies, values
and goals and to identify, plan and implement development
and career actions.
24
4. HRD Manager: The role of supporting and leading a group's
S
Notes
Activity work and linking that work with the total organization.
Who___________________
is HRD consultant?
5. Instructor/Facilitator: The role of presenting information,
___________________
directing structured learning experiences and managing group
___________________ discussions and group process.
E
___________________ 6. Marketer: The role of marketing and contracting from HRD
___________________ viewpoints, programmes and services.
___________________ 7. Material Developer: The role of producing written and/or
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___________________ electronically mediated instructional materials.
___________________ 8. Needs Analyst: The role of identifying ideal and actual

performance and performance conditions and determining
___________________
causes of discrepancies.
___________________
9. Organizational Change: The role of influencing and
supporting changes in organizational behaviour.
10. Programme Designer: The role of preparing objectives,
defining content and selecting and sequencing activities for a
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specific intervention.
11. Researcher: The role of identifying, developing or testing new
information (theory, concepts, technology, models, hardware)
and translating these two implications for improved individual
or organizational performance.
R. Wayne Pace, Philip C. Smith and Gordon Mills (1991) after
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reviewing the eleven roles of HRD, as indicated by ASTD, grouped

all these roles into four major areas, as given below:
1. Analytic
a. Needs Analyst
b. Researcher
c. Evaluator
2. Developmental
a. Programme Designer
(c)
b. Materials Developer
3. Instrumental
a. Instructor/Facilitator
b. Organization Change Agent
25
c. Marketer
S
Notes
4. Mediational
___________________
a. HRD Manger
___________________
b. Individual Career Development Advisor
E
___________________
c. Administrator ___________________
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___________________
1. _____________plays the role of providing coordination
and support services for the delivery of HRD ___________________
programmes and services. ___________________
2. The Goal of HRD is to prevent ____________ at all levels. ___________________
Role of Consultants in HRD

In HRD, consultants play a very crucial role, particularly in the
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following areas:
1. In designing a career plan for the employees, many
organizations prefer to retain the services of consultants.
Career planning is a very complicated function of the
organization as faulty career planning may ultimately lead to
dissatisfaction among the employees, who may leave the
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present organization to get employed elsewhere. Many Indian

organizations are facing the crisis of mid-career shift for not
adopting suitable career plans for their employees. SAIL, the
public sector giant very recently lost 400 of their key and
middle level executives who left to join the newly formed
private steel manufacturing companies. The chairman of SAIL
in a recent press briefing lamented such large scale exodus of
executives from SAIL will cost heavily to the organization, as
developing an executive requires 10 to 15 years time. All such
executives who have left SAIL attributed reasons which, inter
alia, include absence of better career progression in SAIL and
(c)
more financial benefits in private steel manufacturing

companies. Banks and other financial institutions are also
facing similar unpleasant situations due to the recent
liberalization of financial markets vis-à-vis emergence of
private banks/foreign banks/global financial institutions, etc.
Very recently the State Bank of India retained the services of
26 world famous management consultant, McKinsey for
S
Notes restructuring the organization, which inter alia includes
___________________ developing suitable career plans for their employees.
___________________ 2. Manpower planning has also become a crucial function for
___________________ HRD consultants, especially in the wake of increasing
E
manpower obsolescence for technological changes in Indian
___________________
industries.
___________________
3. Similarly in training and development, performance appraisal,
___________________ recruitment, selection and placement, developing suitable
UP
___________________ promotional policies, management succession and
___________________
management development etc., HRD consultants are playing a
very crucial role.
___________________
Before engaging HRD consultants, it is necessary to consider
___________________
the following important points:
(i) When an organization needs to expand its capabilities on
'Crash Basis' it cannot afford to rely solely on the untried
competence of internal resources. It needs to hire the
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services of consultants, who have the required expertise.
(ii) Similarly an organization may require availing the
services of specialized experts in some areas, where it does
not have the requisite internal skill and knowledge. This
is particularly relevant in cases like training and
management development programmes where we find
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many organizations retaining consultants to impart

training on TQM, ISO:9000, quality circles, value
engineering, business process re-engineering,
benchmarking, Just in-Time, total productive
maintenance, etc.
(iii) HRD consultants are also engaged in cases where
objectivity or corporate strategy leverage to a job done
needs to be given.
Whatever may be reasons for retaining the services of HRD
consultants, we find their increasing use in the corporate sector for
efficient results, cost benefit, less time-lag, etc.
(c)
27
Check Your Progress
S
Notes
Fill in the blanks
___________________
1. In HRD, consultants play a very ________role.
___________________
2. An organization may require availing the services of
E
___________________
specialized __________in some areas.
___________________
Line Managers and HRD ___________________
___________________
Udai Pareek and T. V. Rao (1991) also emphasized the role of line
UP
managers in realising the HRD objective of an organization. Since, ___________________
line managers translate the objectives in to action, they are ___________________

responsible to develop and utilize the manpower. In all the ___________________
components of HRD, i.e., career planning, training, performance
___________________
appraisal and organization development, line managers have
certain specific responsibilities, which precede development of
certain congenial conditions for employees. Line managers need to
ensure that, they create such conditions in the workplace which
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enable employees to:
(i) Acquire and develop new capabilities;
(ii) Perceive possible outcome of acquiring such new capabilities;
(iii) Assess the self growth; and,
(iv) Enjoy the growth process.
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Since line managers are in close proximity with the operations

people, it is their responsibility to create and develop such
conditions in the organization, which can reinforce the HRD
objectives of the organization as a whole. Creating the above
conditions in the workplace is a precondition in realising the HRD
objectives by line managers, which, inter alia, also require them to
play a proactive role in the following area:
1. Line managers need to define the capabilities of employees. By
developing such capability profiles of employees, they can
facilitate skill and competency mapping for other strategic
decisions of the organizations, like; HRM, etc. This input also
(c)
helps an organization to identify shortage in critical skill areas

and accordingly organization can initiate required action plan
through training and development programmes. Apart from
the above strategic functions, this also helps in developing
28 skill inventory, deciding about redundancy, transfer,
S
Notes promotion, relocation, restructuring, redeployment, etc.
___________________
2. Line managers facilitate identification of training needs. Being
___________________ in close proximity to the operational people, they observe and
___________________ understand the performance of employees better. This
E
requirement is important even for documentation of quality
___________________
standards, i.e., ISO: 9000. All the ISO certified organizations
___________________ have documented systems in this respect.
___________________ 3. Line managers also play other developmental roles to motivate
UP
___________________ people to learn and take responsibility by continuous coaching
___________________
and developing problem solving skills, by recommending them
for further training, etc. They encourage employees to promote
___________________
small group activities like; Quality Circles, TQM club, value
___________________ engineering team, etc. Many organizations prefer to involve
line managers in in-house training programmes, rather than
outsourcing training experts.
4. Line managers also play a role in identification and
clarification of KRAs/KPAs. Setting KRAs/KPAs alone cannot
E-
set the ball rolling. It requires continuous support and
sustaining of an environment of mutual trust and openness.
Line managers by extending their help and support; enable the
subordinates to realize their goals. This inculcates a sense of
achieving, which has tremendous motivational benefit.
5. In OD intervention also, line managers play an important role
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by identifying required initiatives, by participating in

organizational diagnosis surveys and finally by implementing
the suggestive action plan.
6. Line managers also reinforce teamwork and collaboration,
suggest rewards for good performance and foster total
participation culture by involving subordinates in decision-
making. These together reinforce HRD climate in an
organization.
7. Finally in career planning and development also, line
managers play a crucial role in identification of career
(c)
opportunities and encourage subordinates to develop the

required potential to grab such opportunities.
Internationally, it is now being debated whether HRM or HRD
should continue as a separate support function or be integrated
with line functions. Since organizational structure also is getting
changed (from traditional functional system to strategic or 29
S
independent business units), it is bound to get cognizance. HR as a Notes
core management knowledge is already recognized. However, for ___________________
Indian organizations, this requires a major attitudinal change.
___________________
The threat is also from the profession itself, as it may culminate
E
___________________
into an identify crisis.
___________________
UP
1. Organizational structure is getting changed from ___________________
traditional functional system to strategic or
___________________
__________business units.
___________________
2. Managers play a crucial role in identification of career
___________________
opportunities and encourage ____________to develop the
required potential to grab such opportunities.
HRD Culture
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HRD facilitates development of an enabling culture in an
organization. In a changing environment, organizations are
required to go for frequent restructuring and re-designing of
activities. Without an enabling culture it is difficult for the
organization to withstand the change requirements. Enabling
culture is creating an environment where employees are motivated
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to take initiative and risk, they feel enthused to experiment,

innovate and they make things happen. Thus HRD culture, which
develops an enabling culture in an organization, is characterised
by the following practices:
z Openness
z Confrontation
z Trust
z Autonomy
z Proactiveness
(c)
z Authenticity
z Collaboration
30
Check Your Progress
S
Notes
Activity
Fill in the blanks
___________________
What is HRD Matrix?
___________________
1. HRD facilitates development of an enabling __________
in an organization.
___________________
E
2. In a changing environment, organizations are required
___________________
to go for frequent restructuring and __________ of
___________________ activities
___________________
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___________________ HRD Climate
___________________ HRD climate is the perception of the employees about the
___________________ prevailing HRD culture in the organization. To understand the
HRD climate, organizations often institute a survey with a
___________________
structured questionnaire. Analyzing survey responses, it is
possible to map the HRD climate, covering all the enabling
practices mentioned earlier. Necessary remedial action, if any, can
be initiated by the organization to address the gap. Some of the
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elements of the questionnaire can be listed as follows:
(i) Does the organization consider employees as the most
important resource?
(ii) Does the organization believe in developing competencies of all
cross-sections of employees and initiate action in that
direction?
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(iii) To what extent the organization is transparent in

communication?
(iv) Are the employees encouraged to take risks?
(v) Is there a climate of collaboration, team-spirit, mutual trust
and confidence?
(vi) Are the personnel policies supportive in nature?
(vii) To what extent HRD activities are development-oriented?
Check Your Progress

(c)
Fill in the blanks

1. HRD climate, organizations often institute a
________with a structured questionnaires.
2. HRD climate is the ___________ of the employees about
the prevailing HRD culture in the organization.
HRD Matrix 31
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Notes
HRD matrix is the interrelationship between HRD practices and
___________________
organizational effectiveness. HRD practices generate HRD
processes, which result in HRD outcomes that contribute to ___________________
organizational effectiveness. T. V. Rao (1990) developed such a
E
___________________
matrix, which is presented below:
___________________
Table 1.1: HRD Matrix
___________________
___________________
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H R D M e c h a n is m s H R D P ro ce sse s & H R D O u tc o m e O r g a n is a tio n a l
o r S u b - s y s te m s H R D C lim a t e V a r ia b le s E ffe c tiv e n e s s ___________________
o r In s t r u m e n t s V a r ia b l e s D im e n s io n
• HRD • R o le c la r it y • M o re
H ig h e r
___________________
d e p a rtm e n t A w a re n e ss o f c o m p e te n t •
• p r o d u c t iv it y
• P e r fo r m a n c e c o m p e t e n c ie s p e o p le
• G ro w th a n d
a p p r a is a l r e q u ir e d fo r jo b • B e tte r
d iv e r s ific a t io n ___________________
• R e v ie w p e r fo r m a n c e d e v e lo p m e n t
r o le s • C o st
d is c u s s io n s , • P r o a c t iv e
r e d u c t io n
Feed ba ck, o r ie n t a t io n H ig h e r w o r k -
c o u n s e llin g T ru st
•
c o m m it m e n t • H ig h e r P r o fit s ___________________
• B e t t e r im a g e
R o le a n a ly s is C o lla b o r a t io n a n d jo b •
• •
• P o t e n t ia l a n d te a m w o rk in v o lv e m e n t
d e v e lo p m e n t • A u t h e n t ic it y • P r o b le m
• T r a in in g • O p en ness s o lv in g s k ills
• C o m m u n ic a t i • R is k - t a k in g • B e tte r
on V a lu e u t ilis a t io n o f
•
p o lic ie s g e n e r a t io n hum an
• J o b - r o ta t io n C la r ific a t io n o f re s o u rc e s
•
• O D e x e r c is e n o rm s a n d • H ig h e r jo b -
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R e w a rd s s ta n d a rd s s a t is fa c t io n O th e r F a c to rs
•
Jo b B e tte r a n d w o rk
• •
e n r ic h m e n t c o m m u n ic a t io n m o t iv a t io n E n v ir o n m e n t ,
O th e r F a ir r e w a r d s • G e n e r a t io n o f T e c h n o lo g y ,
• •
m e c h a n is m s G e n e r a t io n o f in t e r n a l R e so u rce
• •
u n b ia s e d d a ta re s o u rc e s a v a ila b ilit y ,
o n e m p lo y e e s , • B e tte r N a tu re o f
e tc . o r g a n is a t io n a b u s in e s s , e t c .
l h e a lt h
• G re a te r te a m
w o rk
O th e r F a c to rs
P e r s o n n e l p o lic ie s
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Top m anagem ent

s t y le , in v e s t m e n t
o n H R D , to p
m a n a g e m e n t’s
c o m m it m e n t s ,
h is t o r y , p a s t
c u lt u r e , e t c .
Check Your Progress

Fill in the blanks
1. HRD matrix is the ____________ between HRD practices
and organizational effectiveness.
2. HRD practices generate HRD processes, which result in
HRD outcomes that contribute to organizational
(c)
___________.
Summary
HRM, per se, cannot be understood without appreciating its
process of development, suitably delineating it from the traditional
32 labour welfare and Personnel Management concepts. Even though,
S
Notes we still suffer from the crisis of a suitable title for the profession;
___________________ HRM or HRD and there obviously exists a difference of opinion, we
should not unnecessarily drag this debate and leave it to the
___________________
organizations to name it as it suits them. Whether it is utilization
___________________
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or development, strategic or operational, HRM and HRD can really
___________________ be not separated as one reinforces the other. For the purpose of
___________________ this book we have used both the terms without bothering much
about its etymological connotation. HRM is an integrated part of
___________________
HRD and without successful HRM, organizations can not remain
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___________________ competitive.
___________________
___________________ Lesson End Activity

___________________ Visit an organization to observe rituals, behaviours, dress codes
and interactions that help identify the firm's culture. Discuss your
observations with your class.
Keywords
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HRM: A process of bringing people and organizations together so
that the goals of each one are met, effectively and efficiently.
HRD: A planned way of developing individual employees, groups
and the total organization to achieve organizational goals, in an
atmosphere of mutual trust and cooperation.
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HR planning: Process of identifying human resource needs and

formulating plans to meet these needs.
Recruitment: The process of finding and attracting capable
applicants for employment.
Selection: The process of matching the qualifications of applicants
with job needs and choosing the most suitable one.
Training: A learning process designed to achieve a relatively
permanent change in an individual that will improve the ability to
perform on the job.
(c)
Effective: Producing the right goods and services society deems

appropriate.
Efficient: Using the minimum amount of resources needed to
produce goods and service.
33
Employee Welfare: The efforts to make life worth living for
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Notes
workmen.
___________________
Career Planning: The process of integrating the employee's
needs and aspirations with organizational needs. ___________________
E
___________________
Questions for Discussion ___________________
1. Briefly discuss the history of development of HRD function. Or ___________________

discuss the process of development of HRD suitably ___________________
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delineating it from Labour Welfare and Personnel
___________________
Management.
___________________
2. What are the general functional areas of HRD? Answer these
___________________
keeping in view the HRD functions of any organization.
___________________
3. Do you think HRM and HRD are different functions? How the
concept of HRD developed in an organization?
4. Differentiate between training, education and development.
Discuss how they are related to HRD?
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5. What are the objectives of HRD functions? Briefly explain the
HRD objectives of any leading organization.
6. Explain the role and significance of HRD. Do you think, in the
present context in India, we really need HRD professionals in
our organizations?
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7. Organizations impart education to their employees for

grooming them for future unidentified positions. This is
because today's organizations are environment sensitive.
Elucidate this statement.
8. What should be your focus areas for designing an effective
HRD system? Which focus would you consider more important
than others?
9. What important factors should be considered while structuring
the HRD unit of an organization? Illustrate your answer with
an organization chart of HRD department of any organization.
(c)
10. Briefly discuss the principles for functioning of HRD system of

an organization. What are the important roles of a HRD
manger?
34
11. Do you think for an organization it is necessary to retain an
S
Notes
HRD consultant? What are the possible advantages and
___________________
disadvantages in retaining HRD consultants?
___________________
12. Write short notes on:
___________________
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(a) Guild System
___________________
(b) Structural Change in Employment
___________________
(c) Kurt Lewin
___________________
UP
(d) T-Groups
___________________
(e) Competitive Advantage
___________________
___________________
(f) Human Resource Utilization (HRU)
___________________ (g) Integrated HRD Functions

(h) Enabling Organization
(i) Analytic Role
(j) Instrumental Role
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Further Readings
Books
Human Resource Management Text and Cases, VSP Rao, 2nd
edition, Excel books
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Comprehensive Human Resource Management, P L Rao, 2nd

A Handbook of Human Resource Management Practice, Michael
Armstrong, 10th edition, Kogan Page Publishers
Web Readings
http://www.explorehr.org
http://shrm.org
http://ipma-hr.org
(c)
http://hrdatwork.com
UNIT 2: Human Resource Policies
Unit 2
35
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Notes
Activity
Human Resource Policies

___________________
Define the term policy
___________________
E
___________________
Objectives
___________________
topics: ___________________
\ Differentiating policy from objective, programmes and procedures. ___________________
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\ HR Policies and Procedures ___________________
\ Considerations in developing HR policies
___________________
___________________
Introduction
___________________
A policy is a predetermined established guideline towards the
attainment of accepted goals and objectives. Such guidelines
facilitate properly designed efforts to accomplish the strategic
intent. Policy is not a strategy or tactic. Strategy is a proposed
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course of action to exert a far-reaching impact on the ability of the
enterprise to attain its goals. Strategy relates to means.
Differentiating Policy from Objective, Programmes

and Procedures
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Policy can be differentiated from objective, programmes and

procedures. Policy relates to the fundamental framework of
principles and rules which are used as reference information for
decision-making and provide a constant pattern of decisions and
structured thought processes. Objectives are specific goals or aims,
preferably in quantitative terms and can be considered as
something which an individual or group seeks to accomplish.
Hence an objective is something to accomplish, while a policy is a
guide to accomplish it.
Again policy is different from procedure, as procedure defines the

manner or way of accomplishing something, i.e., it is the process
(c)
and method. While policy forms part of a framework of general

principles, a procedure necessarily indicates how to do something
and direct employees towards the accomplishment of goals. Policies
are also differentiated from programmes. Programmes are
developed on the basis of policies with a view to implementing
36
them and accordingly programmes involve one additional step
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Notes
Activity beyond policies to simplify the decisions. The execution of
___________________
1. What is the main aspect of programmes leads to specific actions including practices and
procedure? procedures.
___________________
2. What are the main contents
of___________________
HR programme? Check Your Progress
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___________________ Fill in the blanks
___________________ 1. Policy can be __________ from objective, programmes

___________________
and procedures.
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___________________ 2. Policy is _________ from procedure.
___________________
HR Policies and Procedures
___________________
___________________ Policies in the management of HR cover a wide variety of subjects.

A comprehensive coverage of policies embrace any action or
decision, taken by either employees or management in relation to
the working environment, the rights and responsibilities of
employees and management, and the action of both parties. Thus
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one policy may be a statement of standards for employee
attendance and another statement of management obligations in
grievance administration. One policy may explain conditions under
which loans will be granted whereas another may indicate
conditions under which an employee is subjected to discharge.
Procedures prescribe the details for carrying out policies. They
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spell out the specific rules and regulations, the steps, time, place,
and personnel responsible for implementing policies. Procedures
also clarify what is to be done in particular circumstances.
Check Your Progress

Fill in the blanks
1. Policies in the management of HR cover a __________ of
subjects.
2. Procedures prescribe the details for carrying out
policies.
(c)
HR Programme
HR programme consists of the entire broad course of action
governing employees at all levels (including management) in a
firm. Like any other programme of management, it can be thought
of as a "stable plan of action that continues over an extensive 37
S
period of time." It is the end product of philosophy, values, Notes
Activity
concepts, principles, policies and procedures. ___________________
What is the origination of
policies?
Some universal elements in a HR programme are: ___________________
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1. Employment – Selection and job change, ___________________
___________________
2. Training and development,
___________________
3. Communication,
___________________
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4. Grievances and discipline,
___________________
5. Wages and salary, ___________________
6. Health and safety, ___________________
7. Benefits and services, ___________________
8. Labour relations,
9. Research.
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Check Your Progress
Fill in the blanks
1. HR programme consists of the entire broad course of
action governing employees at _______ levels (including
management) in a firm.
2. Like any other programme of management, HR
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programme can be thought of as a "_____________” that

continues over an extensive period of time.
Considerations in Developing HR Policies

Statements of policy constitute criteria for making decisions. They
render decision-making easier, more routine. They permit
decisions on problems without detailed analysis and thus facilitate
saving of precious time.
Policies provide a clear idea of what management and employees
(c)
can expect. Therefore, policies promote consistency and fairness of

action under conditions that are similar in character and eliminate
any bias in employee related decisions. This way, policies help to
avoid confusion and misunderstanding.
38
Policies may originate from anywhere inside an organization or
S
Notes
from external sources - the community, state and national
___________________
legislation, changes in the economy, and even international forces,
___________________ such as war-time or defence conditions. Internally, policies have
___________________ their inception in employees' suggestions or complaints, in
E
collective bargaining, and at any level of management - staff or
___________________
line.
___________________
The approval of new or changed HR policies ultimately comes from
___________________ top management. However, the responsibility for administration
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___________________ rests with the line. An effective HR department recommends
___________________
policies and policy changes that it considers appropriate for the
benefit of the organization. The HR department also has to assist
___________________
in communicating policies to those who should know about them.
___________________ There are many ways of communicating the policies, like; standing
orders, house journals, circulars or through a documented policy
manuals. HR department interprets policies, exercises control over
policy administration and periodically reviews the same in order to
ensure fairness and uniformity.
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In formulating policies, the first consideration is the objective or
purpose. Operationally, it is also necessary to consider the
economics (costs) and benefits in relation to the size and
complexity of the organization. Then comes the need for
determining the policies acceptability to management and to
employees and this depends to a great extent on their
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administrative feasibility and fairness to employees.

Because of an unfortunate tendency to think of policies as formulae
that obviate the need for careful thought, it is necessary to
anticipate circumstances that may arise subsequently in
administration. Imagination is required here, as well as knowledge
of operating problems. Supervisors are in a good position to aid in
projecting exigencies that can arise under a particular policy.
Unions have had a tremendous impact on policy formulation. They
seek certain policies; they seek to alter management policies (e.g.,
in overtime payment); and they cause concerns without unions to
(c)
change policy as a defence against unions. Some unions' influence

on policy administration appears to be beneficial whereas some is
harmful to employee relations.
Guidelines for Policy Formulation 39
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Notes
A number of guidelines for policy writing have been well
established and are worth enumerating. ___________________
___________________
1. Purpose: A statement of purpose or rationale helps to
understand the policy and ensures acceptance of it.
E
___________________
2. Semantics: Choice of words should be geared to the ___________________
educational level of the group for whom the policy is intended. ___________________
Wording should avoid irritating expressions that antagonize,
___________________
denote inferiority, or cast aspersion, e.g., "You are forbidden."
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___________________
3. Tone: A warm, understanding tone will help to show the
___________________
interest and concern of management. This means avoidance of
legalistic language as much as possible. ___________________
4. Form: An outline form may be useful for management ___________________
reference and application. But outlines are difficult for

employees to follow, they repel reading, and they are cold and
lifeless. Relatively short paragraphs, some use of
underlinings, and adequate spacing (double rather than
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single) - encourage reading.
5. Clarity: Short sentences are better than long ones linked

together with 'whereas", "provided", etc. and simple sentences
are easier to read and comprehend than complex or compound
sentences.
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Communicating the Policies

Management has a definite responsibility to see that employees
become familiar with any policies that affect them. Written
explanations of changes in policy, reinforced by oral discussion, are
minimal for policy communication. All of the written media found
in organizations may be used - employee hand books, bulletin
boards, company periodicals, etc. In orientation sessions for new
and old employees, oral explanation can be accompanied by visual
aids such as film strips, placards and funnel boards.
Administering Policies
(c)
Uniformity in administration is desirable when circumstances are

similar among the various individuals and groups concerned.
Customs amongst various groups, practices that have been in
operation for sometime and needs of different groups of employees,
etc. influence decisions in regard to degree and extent of
40 uniformity. Also to be weighed the questions of fairness and of
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Notes employees' attitudes toward concession in specific cases. Long
___________________ standing policy differences between office and shop, for example,
are under constant fire from unions.
___________________
___________________ Questions of rigidity of administration and consistency or
E
flexibility of interpretation must also be faced. In weighing special
___________________
consideration to an employee or penalty for a violation, many
___________________ factors must be taken into account, work record, demonstrated
___________________ capability, history of relationships, impact on other and on future
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situations, knowledge at the individual's disposal, past practices,
___________________
responsibility of management, nature and frequency of the request
___________________
or act, obligations to the organization, to the employee, and to
___________________ society, respective values, reasons, ameliorating circumstances,
___________________ etc.
Check Your Progress

Fill in the blanks
1. Management has a __________responsibility to see that
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employees become familiar with any policies that affect
them
2. Questions of ________ of administration and consistency
or flexibility of interpretation must also be faced.
Summary
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Policy is not a strategy or tactic. Strategy is a proposed course of

action to exert a far-reaching impact on the ability of the
enterprise to attain its goals. Policies in the management of HR
cover a wide variety of subjects. A comprehensive coverage of
policies embrace any action or decision, taken by either employees
or management in relation to the working environment, the rights
and responsibilities of employees and management, and the action
of both parties
Lesson End Activity

(c)
Arrange yourself in small groups of four or five students and

compare and contrast the differences among the organizations you
investigated. Can you isolate any factors that appear to influence
how an organization perceives the value of its employees?
41
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Keywords Notes
___________________
Policy: It is a pre determined established guideline towards the
___________________
attainment of accepted goals and objectives.
E
___________________
Objectives: These are the specific goals or aims, preferably in
quantitative terms and can be considered as something which an ___________________
individual or group seeks to accomplish. ___________________
HR Programme: The entire broad course of action governing ___________________
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employees at all levels in a firm.
___________________
___________________
Questions for Discussion
___________________
1. What are the implications of policies and procedures on
___________________
strategies?
2. Develop a personnel policy for an organization selecting at
least four important areas of HRM.
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Further Readings
Books
CC

A Handbook of Human Resource Management Practice, Michael

Web Readings
http://www.quickmba.com/strategy/levels/
http://www.enotes.com/strategy-levels-reference/strategy-levels
http://www.1000ventures.com/business_guide/strategy_hierachical
_levels.html
(c)
http://www.citehr.com
(c)
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UP
ES
UNIT 3: Making HR a Line Function
Unit 3
43
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Notes
Making HR a Line Function

___________________
___________________
E
___________________
Objectives
___________________
topics: ___________________
\ HR as a line function ___________________
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\ HR Manager’s Role ___________________
\ Managerial and operative functions of HR Managers
___________________
___________________
Introduction
___________________
The primary job of HR managers is “to create value by engaging in
activities that produce the employee behaviours the company
needs to achieve its strategic goals” (Dessler). To this end, they
may assume the role of a line manager, the staff expert and even
E-
an integrator—coordinating various personnel activities Viewed
broadly all managers are HR managers as they are involved in
activities like selecting, compensating, training and developing
employees. Yet most modern firms have the HR department
headed by a person with requisite qualifications in behavioural
sciences. How do the duties of this HR manager relate to the line
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managers’ HR duties would be an interesting question to examine.

Line managers have the final responsibility for achieving the
organisation's goals. They also have the authority to direct the
work of subordinates. Staff managers usually help and advise line
managers in achieving organisational goals.
HR as a line function
HRM’s line management responsibilities include, placing the right
person on the right job, offering orientation to new hires, training
employees and helping them develop their knowledge and skills,
improving performance of each person, gaining creative
(c)
cooperation and developing smooth working relationships,

explaining firm’s policies and procedures, taking steps to control
labour costs, protecting employees’ health; undertaking
appropriate safety measures; boosting the morale of employees etc.
44
HR Manager’s Role
S
Notes
Activity
HR managers use line authority –-right to make decisions, direct
___________________
Discuss in group “All
managers are HR managers” other’s work and give orders---to carry out the above activities.
___________________ However, HR managers, by nature, are staff experts. They are
___________________ there to assist and advise line managers in areas like recruiting,
E
___________________
selecting, training and compensating. Managing people, in a
broader context, is every manager’s business and successful
___________________
organisations generally combine the experience of line managers
___________________ with the experience of HR specialists while utilizing the talents of
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___________________ employees to their greatest potential. HR managers have to win
the hearts of employees working alongside line mangers and
___________________
deliver results in a cost-effective manner. HR managers as
___________________
indicated earlier are assuming a greater role in top management
___________________ planning and decision making-a trend that indicates the growing
realisation among executives that HRM can make significant
contributions to the success of an organisation.
Check Your Progress

E-
Fill in the blanks
1. ______ managers have the final responsibility for
achieving the organisation's goals.
2. HR managers, by nature, are ________ experts
Line Functions of HR Managers

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To facilitate easy understanding, the functions of HR managers

may be broadly divided into two categories: managerial functions
and operative functions.
Managerial Functions
The basic managerial functions comprise planning, organising,
directing and controlling.
z Planning: This function deals with the determination of the
future course of action to achieve desired results. Planning of
personnel today prevents crises tomorrow. The personnel
(c)
manager is expected to determine the personnel programme

regarding recruitment, selection and training of employees.
z Organising: This function is primarily concerned with proper
grouping of personnel activities, assigning of different groups
of activities to different individuals and delegation of 45
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authority. Creation of a proper structural framework is his Notes
primary task. Organising, in fact, is considered to be the wool ___________________
of the entire management fabric and hence cannot afford to be
___________________
ignored.
E
___________________
z Directing: This involves supervising and guiding the
personnel. To execute plans, direction is essential for without ___________________
direction there is no destination. Many a time, the success of ___________________

the organisation depends on the direction of things rather than ___________________
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their design. Direction then consists of motivation and
___________________
leadership. The personnel manager must be an effective leader
who can create winning teams. While achieving results, the ___________________
personnel manager must, invariably, take care of the concerns ___________________
and expectations of employees at all levels.
___________________
z Controlling: Controlling function of personnel management
comprises measuring the employee’s performance, correcting
negative deviations and industrial assuring an efficient
accomplishment of plans. It makes individuals aware of their
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performance through review reports, records and personnel
audit programmes. It ensures that the activities are being
carried out in accordance with stated plans.
Operative Functions
The operative functions of P/HRM are related to specific activities
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of personnel management, viz., employment, development,

compensation and industrial relations. These functions are to be
performed in conjunction with managerial functions.
z Procurement function: The first operative function of
personnel management is procurement. It is concerned with
procuring and employing people who possess necessary skill,
knowledge and aptitude. Under its purview you have job
analysis, manpower planning, recruitment, selection,
placement, induction and internal mobility.
Job analysis: It is the process of collecting information
relating to the operations and responsibilities pertaining
(c)
to a specific job.
Human resources planning: It is a process of determining
and assuring that the organisation will have an adequate
number of qualified persons, available at proper times,
46 performing jobs which would meet their needs and provide
S
Notes satisfaction for the individuals involved.
___________________
Recruitment: It is the process of searching for prospective
___________________ employees and stimulating them to apply for jobs in the
___________________ organisation.
E
___________________ Selection: It is the process of ascertaining qualifications,
experience, skill and knowledge of an applicant with a
___________________
view to appraising his/her suitability to the job in
___________________ question.
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___________________
Placement: It is the process that ensures a 360º fit,
___________________ matching the employee’s qualifications, experience, skills
___________________ and interest with the job on offer. It is the personnel
manager’s responsibility to position the right candidate at
___________________
the right level.
Induction and orientation: Induction and orientation are
techniques by which a new employee is rehabilitated in his
new surroundings and introduced to the practices, policies,
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and people. He must be acquainted with the principles
which define and drive the organisation, its mission
statement and values which form its backbone.
Internal Mobility: The movement of employees from one
job to another through transfers and promotions is called
internal mobility. Some employees leave an organisation
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due to various reasons leading to resignation, retirement

and even termination. These movements are known as
external mobility. In the best interest of an organisation
and its employees, such job changes should be guided by
well-conceived principles and policies.
z Development: It is the process of improving, moulding,
changing and developing the skills, knowledge, creative
ability, aptitude, attitude, values and commitment based on
present and future requirements both at the individual’s and
organisation’s level. This function includes:
Training: Training is a continuous process by which
(c)

employees learn skills, knowledge, abilities and attitudes
to further organisational and personnel goals.
47
Executive development: It is a systematic process of
S
Notes
developing managerial skills and capabilities through
appropriate programmes. ___________________
Career planning and development: It is the planning of ___________________
one’s career and implementation of career plans by means
E
___________________
of education, training, job search and acquisition of work
___________________
experiences. It includes succession planning which implies
___________________
identifying developing and tracking key individuals for
executive positions ___________________
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Human resource development: HRD aims at developing the ___________________
total organisation. It creates a climate that enables every ___________________

employee to develop and use his capabilities in order to
___________________
further both individual and organisational goals.
___________________
z Motivation and compensation: It is a process which
inspires people to give their best to the organisation through
the use of intrinsic (achievement, recognition, responsibility)
and extrinsic (job design, work scheduling, appraisal based
E-
incentives) rewards.
Job design: Organising tasks, and responsibilities towards
having a productive unit of work is called job design. The
main purpose of job design is to integrate the needs of
employers to suit the requirements of an organisation.
Work scheduling: Organisations must realise the
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importance of scheduling work to motivate employees

through job enrichment, shorter work weeks’ flexi-time,
work sharing and home work assignments. Employees
need to be challenged at work and the job itself must be
one that they value. Work scheduling is an attempt to
structure work, incorporating the physical, physiological
and behavioural aspects of work.
Motivation: Combining forces that allow people to behave
in certain ways is an integral aspect of motivation. People
must have both the ability and the motivation if they are
to perform at a high level. Managers generally try to
(c)
motivate people through properly administered rewards

(financial as well as non-financial).
Job evaluation: Organisations formally determine the
value of jobs through the process of job evaluation. Job
48 evaluation is the systematic process of determining the
S
Notes relative worth of jobs in order to establish which jobs
___________________ should be paid more than others within the organisation.
Job evaluation helps to establish internal equality
___________________
between various jobs.
___________________
E
Performance appraisal: After an employee has been
___________________
selected for a job, has been trained to do it and has worked
___________________ on it for a period of time, his performance should be
___________________ evaluated. Performance evaluation or appraisal is the
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process of deciding how employees do their jobs. It is a
___________________
method of evaluating the behaviour of employees at the
___________________
workplace and normally includes both the quantitative
___________________ and qualitative aspects of job performance. It is a
___________________ systematic and objective way of evaluating work-related
behaviour and potential of employees. It is a process that
involves determining and communicating to an employee
how he or she is performing and ideally, establishing a
plan of improvement.
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Compensation administration: Compensation
administration is the process of dividing how much an
employee should be paid. The important goals of
compensation administration are to design a low-cost pay
plan that will attract, motivate and retain competent
employees-which is also perceived to be fair by these
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employees.
Incentives and benefits: In addition to a basic wage
structure, most organisations nowadays offer incentive
compensation based on actual performance. Unlike
incentives, benefits and services are offered to all
employees as required by law including social security,
insurance, workmen's compensation, welfare amenities
etc. Organisations have been offering a plethora of other
benefits and services as well as a means of ‘sweetening the
pot’. (Employee stock options, birthday gifts, anniversary
gifts, paid holidays, club membership)
(c)
z Maintenance: It aims at protecting and preserving the

physical and psychological health of employees through
various welfare measures.
Health and safety: Managers at all levels are expected to
know and enforce safety and health standards throughout
the organisation. They must ensure a work environment 49
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that protects employees from physical hazards, unhealthy Notes
conditions and unsafe acts of other personnel. Through ___________________
proper safety and health programmes, the physical and
___________________
psychological well-being of employees must be preserved
E
and even improved. ___________________
Employee welfare: Employee welfare includes the services, ___________________
amenities and facilities offered to employees within or ___________________

outside the establishment for their physical, psychological ___________________
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and social well being. Housing, transportation, education
___________________
and recreation facilities are all included in the employee
welfare package. ___________________
Social security measures: Managements provide social ___________________
security to their employees in addition to fringe benefits. ___________________

These measures include: (a) Workmen’s compensation to
those workers (or their dependents) who are involved in
accidents; (b) Maternity benefits to women employees; (c)
Sickness benefits and medical benefits; (d) Disablement
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benefits/allowance; (e) Dependent benefits; (f) Retirement
benefits like Provident Fund, Pension, Gratuity, etc.
z Integration function: This tries to integrate the goals of an
organisation with employee aspirations through various
employee-oriented programmes, like redressing grievances
promptly, instituting proper disciplinary measures,
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empowering people to decide things independently,

encouraging a participative culture, offering constructive help
to trade unions etc.
Grievance redressal: A grievance is any factor involving
wages, hours or conditions of employment that is used as a
complaint against the employer. Constructive grievance
handling depends first on the manager’s ability to
recognise, diagnose and correct the causes of potential
employee dissatisfaction before it converts into a formal
grievance.
(c)
Discipline: It is the force that prompts an individual or a

group to observe the rules, regulations and procedures,
which are deemed necessary for the attainment of an
objective.
50
Teams and teamwork: Self-managed teams have emerged
S
Notes
as the most important formal groups in today’s
___________________
organisations. They enhance employee involvement and
___________________ have the potential to create positive synergy. By
___________________ increasing worker interaction, they create camaraderie
E
among team members. They encourage individuals to
___________________
sublimate their individual goals for those of the group.
___________________ Teams have inherent strengths which ultimately lead to
___________________ organisational success at various levels.
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___________________ Collective bargaining: It is the process of agreeing on a
___________________
satisfactory labour contract between management and
union. The contract contains agreements about conditions
___________________
of employment such as wages, hours, promotion, and
___________________ discipline; lay off, benefits, vacations, rest pauses and the
grievance procedure. The process of bargaining generally
takes time, as both parties tend to make proposals and
counter- proposals. The resulting agreement must be
ratified by unions, workers and management.
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Employee participation and empowerment: Participation
means sharing the decision-making power with the lower
ranks of an organisation in an appropriate manner. When
workers participate in organisational decisions they are
able to see the big picture clearly and also how their
actions would impact the overall growth of the company.
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They can offer feedback immediately based on their

experiences and improve the quality of decisions greatly.
Since they are now treated with respect, they begin to
view the job and the organisation as their own, and
commit themselves to organisational objectives whole-
heartedly.
Trade unions and employees association: Trade union is an
association either of employees or employers or
independent workers. It is a relatively permanent a body
formed by workers with the objective of countering
exploitation and harassment. It strives towards providing
(c)
economic and social benefits to the labour community.

Trade unions have always played a powerful role in
improving the lot of workers in India, using aggressive
bargaining tactics. However since the 90’s, the situation
changed dramatically. Unable to fight the forces of
competition, many employers have been forced to 51
S
shutdown units and scale down operations. This has made Notes
Activity
both parties realise the importance of bargaining for their ___________________
Organize a debate on topic
rights in an atmosphere of ‘give and take’. ‘Internal Mobility’.
___________________
Industrial relations: Harmonious industrial relations
E
___________________
between labour and management are essential to achieve
industrial growth and higher productivity. When the ___________________
relationship between the parties is not cordial, ___________________

discontentment develops and conflicts erupt abruptly. It is ___________________
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not always easy to put out the fires with the existing
___________________
dispute-settlement-machinery, created by the government.
Hence both labour and management must appreciate the ___________________
importance of openness, trust and collaboration in their ___________________
day-to-day dealings.
___________________
z Emerging issues: Effective management of human resources
depends on refining HRM practices to changing conditions.
Hence the need to look at other important issues that can
motivate people to give their best in a dynamic and ever-
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changing environment.
Personnel records: Personnel records such as papers, files,
cards, cassettes and films are maintained to have tangible
record of what is actually happening in an organisation
and to formulate appropriate HR policies and programmes
(based on historical records, actual experience and future
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trends) from time to time.

Human resource audit: Human resource audit refers to an
examination and evaluation of policies, procedures and
practices to determine the effectiveness of HRM.
Personnel audit (a) measures the effectiveness of
personnel programmes and practices and (b) determines
what should or should not be done in future.
Human resources research: It is the process of evaluating
the effectiveness of human resource policies and practices
and developing more appropriate ones.
(c)
Human resources accounting (HRA): It is a measurement

of the cost and value of human resources to the
organisation. Human resource management is said to be
effective if its value and contribution in any organisation
is more than its cost.
52
Human resource information system: HRIS is an
S
Notes
integrated system designed to improve the efficiency with
___________________
which HR data is compiled. It makes HR records more
___________________ useful to the management by serving as a source of
___________________ information.
E
___________________ Stress and counseling: Stress is the psychological and
physical reaction to certain life events or situations. At an
___________________
organisational level, stress results in burn out, substance
___________________ abuse in the form of alcohol or drug use/dependence
UP
___________________ reduced job satisfaction, increased absenteeism and
___________________
increased turnover. Companies, therefore, are closely
looking at what should be done to promote the physical
___________________
and mental well being of employees through proper
___________________ counseling and employee development programmes.
International human resource management: International
business is important to almost every business today and
so firms must increasingly be managed with a clear global
focus. This of course, poses many challenges before
E-
managers including coordinating production, sales and
financial operations on a worldwide basis. International
HRM places greater emphasis on a number of
responsibilities and functions such as relocation,
orientation and training services to help employees adapt
to a new and different environment outside their own
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country.
Check Your Progress

Fill in the blanks
1. The first operative function of personnel management is
___________.
2. __________ is the psychological and physical reaction to
certain life events or situations
Summary
(c)
All managers are HR managers as they are involved in activities

like selecting, compensating, training and developing employees.
Yet most modern firms have the HR department headed by a
person with requisite qualifications in behavioural sciences. How
do the duties of this HR manager relate to the line managers’ HR
duties would be an interesting question to examine. Line 53
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managers have the final responsibility for achieving the Notes
organisation's goals. They also have the authority to direct the ___________________
work of subordinates. Staff managers usually help and advise line
___________________
managers in achieving organisational goals.
E
___________________
Lesson End Activity ___________________
___________________
Being a line manager of a reputed fashion management company,
what additional skills are must for you to have substantiating role ___________________
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in effective line functioning. ___________________
___________________
Keywords
___________________
Planning: This function deals with the determination of the ___________________
future course of action to achieve desired results.
Organising: This function is primarily concerned with proper
grouping of personnel activities, assigning of different groups of
activities to different individuals and delegation of authority.
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Directing: This involves supervising and guiding the personnel.
Controlling: Controlling function of personnel management
comprises measuring the employee’s performance, correcting
negative deviations and industrial assuring an efficient
accomplishment of plans
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Procurement It is concerned with procuring and employing people

who possess necessary skill, knowledge and aptitude.
Job analysis: It is the process of collecting information relating to
the operations and responsibilities pertaining to a specific job.
Human resources planning: It is a process of determining and
assuring that the organisation will have an adequate number of
qualified persons, available at proper times, performing jobs which
would meet their needs and provide satisfaction for the individuals
involved.
Recruitment: It is the process of searching for prospective
(c)
employees and stimulating them to apply for jobs in the

organisation.
Selection: It is the process of ascertaining qualifications,
experience, skill and knowledge of an applicant with a view to
appraising his/her suitability to the job in question.
54
Placement: It is the process that ensures a 360º fit, matching the
S
Notes
employee’s qualifications, experience, skills and interest with the
___________________
job on offer. It is the personnel manager’s responsibility to position
___________________ the right candidate at the right level.
___________________ Induction and orientation: Induction and orientation are
E
___________________ techniques by which a new employee is rehabilitated in his new
surroundings and introduced to the practices, policies, and people.
___________________
Internal Mobility: The movement of employees from one job to
___________________
another through transfers and promotions is called internal
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___________________
mobility.
___________________
Development: It is the process of improving, moulding, changing
___________________ and developing the skills, knowledge, creative ability, aptitude,
___________________ attitude, values and commitment based on present and future
requirements both at the individual’s and organisation’s level.
Training: Training is a continuous process by which employees
learn skills, knowledge, abilities and attitudes to further
organisational and personnel goals.
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Executive development: It is a systematic process of developing
managerial skills and capabilities through appropriate
programmes.
Career planning and development: It is the planning of one’s
career and implementation of career plans by means of education,
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training, job search and acquisition of work experiences.

1. Define the term line function.
2. Who is line manager?
3. What are the managerial functions of a line manager?
4. What are the operative functions of a line managers?
5. Write brief note on:
(a) Job analysis
(c)
(b) Internal mobility

(c) Induction and orientation
(d) Placement
(e) Training
Further Readings 55
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Notes
Books ___________________
Human Resource Management Text and Cases, VSP Rao, 2nd ___________________
E
___________________
___________________
___________________
A handbook of human resource management practice, Michael
___________________
UP
___________________
Web Readings
___________________
www.coolavenues.com/know/hr/sidharth-hr-1.php
___________________
smallbusiness.chron.com/should-hr-line-managers-work-together- ___________________
10377.html
www.academicjournals.org/ajbm/pdf/pdf2011/.../Qadeer%20et%20al
.pdf
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www.slideshare.net/.../all-managers-are-hr-managers-an-open-
discussion
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(c)
(c)
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ES
UNIT 4: Job Analysis
Unit 4
57
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Notes
Activity
Job Analysis
___________________
What is the aim of providing
job information?
___________________
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___________________
Objectives
___________________
topics: ___________________
\ Job information ___________________
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\ Objectives of job information ___________________
\ Job analysis
___________________
\ job questionnaire
___________________
___________________
Introduction
For HRM in an organization, effective information and
documentation on job analysis, job description and job evaluation
are important prerequisites. All these processes help in identifying
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job requirements and suitably describing the job and job-families,
skill sets skill mapping and developing skill inventories in an
organization. In HRM, these are critical inputs to decide about
manpower requirement to meet present and future needs.
Although we have briefly discussed these concepts in other units,
here we will be discussing these in detail to understand their
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importance in HRM.
Objectives of Job Information

Job information is one essential input for effective HRP. It not only
facilitates job evaluation for compensation designing but also helps
in disseminating information to employees about their duties and
responsibilities. Imperfect knowledge of employees about their
duties and responsibilities due to inadequate job information also
affect their performance and overall organizational productivity.
Disseminating job information in the 'Letter of Appointment' may
not be adequate. Proper documentation and communication in
(c)
induction training is the right approach.

z The first objective of job information is to communicate duties
and responsibilities attached to a job to the employees for their
clear understanding. This also helps employees to understand
organizational expectations from them.
58
z Another objective of job information is organizational analysis.
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Notes
Activity It helps in work flow analysis with respect to a job and also
___________________
What is job analysis? helps in identification of redundant work elements in a job and
___________________ thus facilitates in job restructuring.
___________________ z For HRP, job information helps in analyzing the scope for
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___________________ internal hiring and the requirements of external hiring for
staffing various positions in the organization.
___________________
z In setting performance standards and establishing job
___________________
objectives, job information is essential both in qualitative and
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___________________
quantitative terms. This also facilitates in appraising
___________________ performance of an employee against such set standards more
___________________ scientifically.
___________________ z For other HR related decisions like; promotion, transfer,

relocation, redundancy and compensation designing, job
information provides critical inputs.
Check Your Progress

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Fill in the blanks
1. For HRP, job information helps in analyzing the scope
for ___________ hiring.
2. Objective of job information is ______________ analysis.
Job Analysis
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Job analysis is the process of gathering information about the job

and evaluating such information in terms of what is necessary and
relevant. Essentially, job analysis involves three questions: What
is a job? What should be analyzed? What methods of analysis
should be used?
A job is a group of essentially similar activities or tasks performed
by a person or a group of persons. These activities or tasks together
become a job. Obviously tasks or activities of jobs need not be
identical. They may be performed in different places, with different
equipment, in a different sequence. Also, some employees may
(c)
perform certain activities in addition to the main job. Or some

employees may perform a job occasionally or temporarily, normally
to fill in for persons who are absent or on vacation. This definition
of a job is typically used in compensation designing and for other
management practices. However, a more generic description of a
job is used, which is identified by 'position' rather than 'job'. A 59
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position is a family of jobs in which specific duties vary but some Notes
interchangeability of work is possible and the functional nature of ___________________
the work is similar. Examples include assemblers, clerk-cum-
___________________
typists, and bookkeepers. Broader definition of a job facilitates
E
development of accurate job information and this accurately ___________________
reflects the work of each employee. While on the other hand, the ___________________
more precise the job definition, the more difficult it is to identify
___________________
the job differences, which further complicates the management of
___________________
employees.
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___________________
Another basic issue for job analysis is whether the organization
should measure work assigned or work actually performed. Some ___________________
compensation designing experts argue that unless job analysis ___________________
considers work performed, the organization may not account for
___________________
employees' credit for what they are actually doing. On the other
hand, analyzing work performed may imply that employees have
been given latitude to assign work to themselves. While in reality
it is the manager's responsibility to assign a job. The role of an
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analyst is essentially to gather job information and not to evaluate
the logic of work assignments. He is primarily responsible for
recording of those responsibilities that a manager has assigned to
an employee.
What should be Analyzed?

What should be the nature of job information for job analysis,
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depends upon a number of considerations. Whether the analysis is

required for evaluation purposes or for other purposes as well;
what job level is to be analyzed; what type of evaluation plan is to
be used; and what job knowledge is held by the analyst who is
going to conduct the evaluation. Certain basic areas of information
may include:
z Fundamental purpose of the job.
z Work elements in the job. It requires study of specific tasks,
areas of responsibility, and examples of work.
General importance of each job element and its relationship to
(c)
z
the total operation. How it is integrated with the total job.
z Approximate time spent on each task or specific area of
responsibility.
z Scope of the job and its impact on the operation.
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z Inherent authority (not only formal delegation but also
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Notes
Activity latitude of action) and formal or informal audits of work.
___________________
What is job questionnaire?
z Working relationships (including supervision).
___________________
z Specific methods, equipment or techniques, that are required
___________________
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for the job.
___________________
z Job climate, including objectives and work environment.
___________________
z Job conditions like; physical effort, hazards, discomfort,
___________________
chasing of deadlines, travel requirement, creativity and
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___________________ innovations required, etc.
___________________
What Methods of Analysis should be Used?
___________________
Job information can be obtained in various ways either by a staff
___________________
analyst or by the individual line manager. Because of functional
proximity, it is always better to involve the line managers in
compiling job information. One relatively simple and inexpensive
method of analysis is collecting of job information through the
questionnaire response. Direct observation of work performed is
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another important method of job analysis. Observation of work is
essential to understand the job role. However, it is more costly and
time consuming.
Valuable job information can also be obtained from organization
manuals, time-study reports, former job descriptions, and method
studies.
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Check Your Progress

Fill in the blanks
1. ____________ is the process of gathering information
about the job and evaluating such information in terms
of what is necessary and relevant.
2. Valuable job information can also be obtained from
organization ____________.
Questionnaire
(c)
A job questionnaire is a special tool for consolidating job

information. It is a printed form, in which essential information
about the job may be listed either by the employee or by his
supervisors. The major advantage of the job questionnaire is that it
uses the knowledge of those who are proximate to the job. In
addition, it gives each employee an opportunity to participate and 61
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contribute by giving responses to the questionnaire, which Notes
Activity
facilitates immediate compilation of job information. ___________________
What are the elements of job
descriptions?
Another important advantage of job questionnaire is that compiled ___________________
information can be used as job descriptions. This, therefore,
E
___________________
eliminates the requirement of further writing of job descriptions.
Moreover, by using a job questionnaire, organizations also get the ___________________
benefit of communicating the up-to-date job information to the ___________________

employees. ___________________
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However, the major disadvantages associated with job ___________________
questionnaire are that, its success depends on the understanding
___________________
and writing ability of individual employees and supervisors. For
perceptual incongruence, inconsistencies in the response pattern ___________________
may arise. Such inconsistencies in the response pattern may ___________________

multiply further when more cross-section of people participate in
the questionnaire response/survey. In addition, compiling job
information from the questionnaire response again
may suffer from the problem of exaggeration. These are the
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inherent problems of information quality through job
questionnaire.
To eliminate such inherent problems of compiling job information
through job questionnaire, it is always better to compile the
information through a combination of direct observation and job
questionnaire. This approach may be time consuming and involve
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huge cost, but is more scientific as it eliminates the chance of error

by both accounting the perceptive differences between what they
perceive and what they do.
Check Your Progress

Fill in the blanks
1. Job questionnaire is a special tool for ____________ job
information.
2. By using a job questionnaire, organizations also get the
benefit of communicating the _____________ job
(c)
information to the employees.
Job Descriptions
Compiled job information is translated to job descriptions. Job
descriptions are written records of job duties and responsibilities
62 and they provide a factual basis for job evaluation. Job descriptions
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Notes
Activity are recorded on a standard form in a uniform manner.
___________________
What are the essentials of job For the obvious requirement of writing skill in the preparation of
specifications?
___________________ job descriptions, many organizations assign this task to trained
___________________ and professional job analysts. However, this by itself cannot
E
guarantee flawless job descriptions. This is because a professional
___________________
job analyst may not have specific job knowledge. Therefore, despite
___________________ engaging an analyst, it is always better to involve the in-house
___________________ people for scientific description of jobs.
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___________________ In terms of format, the job description should first name the job,
___________________
using the title which accurately summarizes duties assigned.
While naming a job, it is always better to consider the job family.
___________________
To illustrate, instead of naming a HR job as HR Manager, if the
___________________ term `Knowledge Manager' is used, it may give a contemporary or
trendy job title but for the others (including members within the
organization) it may be a misnomer. Secondly, job description
should then document in a single form (frequently with short
sentences or phrases) a list of duties assigned. What is to be
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included, while listing the job duties and how those are to be
written will depend on the level of the position and the purpose to
be served by the description. For the top management level, a job
description may be the description of the business goals and
objectives. While, at the operational level, job descriptions may be
limited to listing of specific duties performed, equipment used, and
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procedures followed. The broader the use of the job description

information and the higher the functional level, the longer the job
description. Therefore for operational positions, job description
may be about one page, while for higher management, it may run
through pages.
Check Your Progress

Fill in the blanks
1. Compiled job information is translated to _____________
2. Job descriptions are ___________records of job duties
and responsibilities
(c)
Job Specifications
In addition to providing information about duties associated with
job assignments, job descriptions also outline basic specifications of
the job. Such specifications include education or experience, 63
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required to do the job and special knowledge and skill set Notes
necessary to carry out the job. In addition, specifications also ___________________
identify the soft skills like; interpersonal skills, analytical ability,
___________________
problem solving skills or decision-making skill, etc. which are
E
required to perform the duties assigned. ___________________
This exercise of processing job information is known as developing ___________________
job specification. It helps in the evaluation of jobs and at the same ___________________
time it defines the attributes required for a job position, which are ___________________
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required while going for recruitment. Therefore, job specifications
___________________
list out all those attributes, like; education, experience, age,
physical fitness, etc. along with other soft skills required for ___________________
performing a job. This also requires special skill of the analyst, as ___________________
any judgmental mistake, may defeat the purpose, not only by
___________________
selecting a wrong person for a job but also for wrongly evaluating a
job, which is directly associated with job pricing.
Should Employees see their Job Descriptions?

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Today's organizations are dynamic and every now and then require
restructuring, which also necessitates redesigning of jobs.
Therefore, it is widely believed that showing a job description to
employees may cause controversy and in future, employees may
resist doing work which is not specifically listed in their job
descriptions. However, if job descriptions are well developed, there
is nothing wrong in sharing them with the employees, as it spells
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out the list of duties employees are expected to perform. To

eliminate the problem, an all inclusive statement like `in addition
to the listed duties and responsibilities, your superior may
ask you to perform other tasks from time to time' can be
considered.
By sharing job descriptions with employees, organizations can
make their job evaluation process participative and avoid any
dissonance on job evaluation results. This is also important, as
organizations are also laden with employees' dissatisfaction on job
pricing. Communication of job descriptions enhance acceptance of
(c)
the same, as employees are not left with any doubts about their
duties and responsibilities. Such communication with the
employees should be an ongoing exercise, as employees also can
understand their changed job duties and responsibilities, if any.
64
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Notes Objectives of Job Description
___________________ Job descriptions help in getting the things done through people
___________________
and it help management to accomplish following objectives:
___________________ 1. Efficient organization of jobs.
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___________________ 2. Proper recruitment or staffing in the organization.
___________________ 3. Assigning jobs to people by communicating to them their

___________________
duties and responsibilities and by setting job standards.
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___________________ 4. Reviewing performance of the people.
___________________ 5. Improving performance through appraisal and training.
___________________ 6. Rewarding employees.

___________________ Therefore, job descriptions play a very crucial role in key
management activities. However, it is very important for the
manager to ensure that job descriptions are correct and whatever
jobs have been assigned are essential. He must ensure that
essential tasks have only been grouped into jobs. Since job
E-
descriptions have interconnectivity he has to align it to
recruitment, performance appraisal, training needs, promotion,
transfer and relocation decisions. From employees' point of view, it
should also show employees what is expected of them how to do the
work assigned.
By listing assigned duties in a job description, a manager can
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determine reasonable performance standards. Identification of

such performance standards facilitate benchmarking of
performance of an employee against the best performer.
Job descriptions also facilitate proper manpower utilization. By
periodic reviewing of the listed duties, a manager can identify
which jobs are time consuming but require lower skill-set. He can
reassign such jobs accordingly to lower-paid employees. In
addition, the manager can also study jobs in terms of workload and
determine man-hours required. For low technology and low-skill
jobs, he can consider the decision to off-load the job to sub-
contractors. Therefore, it has tremendous implication for effective
(c)
HRP in an organization. We may call this also an instrument for

proper rightsizing of employees in an organization.
Finally, job descriptions, as a basic management tool, also
influence operating procedures by identifying duplication of work,
indicating a scientific work flow, suggesting better allocation of 65
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jobs and by pointing out possible job bottlenecks. Notes
Activity
___________________
Define the term job evaluation.
A central peripheral relational model of job analysis is given below:
___________________
Skills and
Competency
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Mapping
___________________
Human
Industrial Resource ___________________
Relations Planning
___________________
___________________
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Setting Safety Recruitment
and Health
Standards ___________________
Job Analysis ___________________

Compensation Job Descriptions
Selection ___________________
Designing
Job Specifications
___________________
Training &
Development
Performance Management
Appraisal Development
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and Succession
Setting Performance Career Planning

Standards and
(KRA/KPAs) Development
Figure 4.1: Central Peripheral Relational Model of Job Analysis
Check Your Progress

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Fill in the blanks

1. Job descriptions also facilitate proper ______________
utilization.
2. Job descriptions is a basic ______________.
Job Evaluation
Job Evaluation originated in the United States in 1971. In 1909,
the Civil Service Commission and the Commonwealth Edison
Company in Chicago pioneered the field. In 1926, Merill R. Lott
(c)
wrote a book on 'Wage Scales and Job Evaluation', describing

methods used in his company, the Sperry Gyroscope Co., Inc.
Job evaluation is the process of determining the worth of one job in
relation to that of another without regard to the personalities. It
analyses and assesses the content of jobs, to place them in some
66 standard rank order. The end result is used as the basis for a fair
S
Notes and logical remuneration system.
___________________
A properly devised job evaluation scheme provides management
___________________ with definite, systematic and reliable data for working out wage
___________________ and salary scales. Thus, logical wage negotiation reduces wage
E
grievances and dissatisfaction with wage differentials and ensures
___________________
fair treatment for each employee. It also provides a logical basis for
___________________ promotion. A survey of British Institute of Management indicated
___________________ the following reasons for its use:
UP
___________________ 1. To reduce layout turnover,
___________________ 2. To increase output,
___________________ 3. To improve morale,
___________________ 4. To reduce loss of time due to wage negotiation and disputes,
5. To reduce the complaints regarding wages,
6. To reduce wage and salary anomalies.
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Steps in Job Evaluation
1. Thorough examination of the job (job assessment),
2. Preparation of job description (recording its characteristics to
suit assessment of method).
3. Preparation of job analysis to set out the requirements of the
job under various factor headings,
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4. Comparison of one job with another,

5. Arrangement of jobs in a progression,
6. Relating the progression of jobs to a money scale.
Types of Job Evaluation Schemes

There are four basic types of job evaluation, which can be
1. Ranking: This is a simple system to judge each job as a whole
to understand its relative worth by ranking one whole job
(c)
against another job. To start with, a job description is

prepared in a narrative form, starting with duties,
responsibilities and qualifications, required for the job. Jobs
are then ranked in order of relative difficulty or value to the
company and grade levels are then defined and wage levels are
finalized. One of the disadvantages of this method is that the 67
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degree of difference between jobs cannot be indicated. Notes
Ranking, therefore, may be incorrect and unduly influenced. ___________________
Relative value of the employees (currently occupying the jobs)
___________________
may be ranked rather than the jobs. The method may be
E
adequate for the easily defined jobs of a small number of ___________________
workmen but it is regarded as impractical for complicated jobs ___________________

and large number of workmen.
___________________
2. Classification: This is different from ranking as in this case ___________________
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grade and wage levels are predetermined before jobs are
___________________
ranked and descriptions are written defining the type of job
which should fall into each group. Under this method, usually ___________________
a committee allocates jobs to each group using job description. ___________________
The system is simple but suffers from limitations similar to
___________________
the ranking system.
3. Points Rating: Under this system, to achieve a higher level of
accuracy, each job is broken down into its component factors or
characteristics and then evaluated separately rather than
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evaluating the job as a whole. A narrative job description is
prepared and supplemented by a statement of the various
requirements (present in the job). Characteristics like
experience and training, mental and physical effort, common
to the jobs are selected and a point value for each
characteristic or factor is determined. Factors are defined
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objectively and points are given to each factors based on its

estimated importance. Consolidated point values are finally
converted into money terms.
4. Factor Comparison: This method is also similar to the points
rating system as here also each job is broken into factors. The
only difference, here five factors are used, i.e. mental
requirements, skill requirements, physical requirements,
responsibility and working conditions. After job descriptions,
key jobs are judged and related to one another. The jobs are
considered one by one and reviewed to understand how much
of the current wage rate for the job is paid for each factor. Key
(c)
jobs are arranged in a scale in order of their value for each

factor.
Remaining jobs are compared with the key job factors and a
comparative money value is determined for each factor in each
individual job. The total of the factor values so determined for
68
each job represents its rate. This is a complex system;
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Notes however, higher degree of accuracy can be attained through
___________________ this.
___________________ Limitations of Job Evaluation
___________________ Job evaluation alone cannot establish a wage scale. For wage
E
___________________ fixation, we need to take into cognizance statutory requirements,
___________________
like Minimum Wages Act, 1948. Similarly, other factors of wage
fixation such as capacity to pay, inter-industry wage variation,
___________________
inter-regional wage variation, collective bargaining agreement, if
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___________________ any, also need to be given importance. Job evaluation is highly
___________________ subjective (being based on judgemental estimate). Similarly, it
cannot take into account the cyclical effect of market value of
___________________
occupations. For example, finance jobs were highly priced in the
___________________ market at one point of time (now IT and marketing has taken its
place). However, with the failure of NBFC, finance jobs are not
that highly priced in the market at least at this point of time, even
though no material change in the job profile of finance
professionals has taken place in between. Despite such limitations,
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job evaluation technique is considered very useful for reasons
explained earlier.
Check Your Progress

Fill in the blanks
1. Job Evaluation originated in the United States in
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_________.
2. Job evaluation is the process of determining the worth
of one job in relation to that of another _________
regard to the personalities.
Summary
Imperfect knowledge of employees about their duties and
responsibilities due to inadequate job information also affect their
performance and overall organizational productivity.
Disseminating job information in the 'Letter of Appointment' may
(c)
not be adequate. Proper documentation and communication in

induction training is the right approach. Job evaluation is the
process of determining the worth of one job in relation to that of
another without regard to the personalities. It analyses and
assesses the content of jobs, to place them in some standard rank
order. The end result is used as the basis for a fair and logical 69
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remuneration system. Notes
___________________
Working, individually or in groups, develop a job description for
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___________________
'Head-Retail Banking in respect of a fast growing, new generation ___________________
private sector bank operating in all major metros in India. Based
___________________
on that, use your analytical skills and judgement to develop a job
specification. Compare your conclusions with those of other ___________________
UP
students or groups. Were there any major differences? If yes, ___________________
explain the reasons briefly.
___________________
___________________
Keywords
___________________
Job: A group of positions similar in their significant duties such as
technical assistants, computer programmers, etc.
Job Code: It uses numbers, letters or both to provide a quick
summary of a job and its content.
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Job classification: The grouping of jobs on some basis such as
the nature of work done or the level of pay. For example, skilled,
semi skilled and unskilled; Grade I, II and III officers in a bank.
Job analysis: The process of gathering information about a job.
Job specification: A profile of the human characteristics
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(knowledge, skills and abilities) needed by a person doing a job.

1. What are the purposes of job evaluation?
2. Discuss the steps involved in job evaluation.
3. Discuss different types of job evaluation technique. Which type
do you consider more suitable and why?
4. In what ways are job analysis and job assessment different?
Select any job and analyze its individual content.
(c)
5. Define job analysis and its role in the HRP process.

6. Explain briefly the elements that constitute the job analysis
process.
70
Further Readings
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Notes
___________________ Books
___________________ A Practical Guide to Job Analysis, Erich P. Prien & Leonard D.
___________________ Goodstein, John Wiley and Sons
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___________________ Human Resource Management Text and Cases, VSP Rao, 2nd
___________________ edition, Excel books
___________________ A Handbook of Human Resource Management Practice, Michael
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___________________
___________________ Web Readings

___________________ http://www.mindtools.com/pages/article/newTCS_02.htm
___________________
http://www.openlearningworld.com/books/Job%20Design%20and%
20Enrichment/Job%20Design%20and%20Enrichment/Approaches
%20to%20Job%20Design.html
http://en.wikipedia.org/wiki/Job_evaluation
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https://www.businessknowhow.com/manage/jobdesc.htm
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(c)
71
Appendix-I
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Notes
Job Analysis Data Sheet
___________________
Job Title __________________________ Code: ______________
___________________
Other Titles
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___________________
Suggested Title _________________________
Department __________ Dept. No._________ Dept. Head _________ ___________________
No. on Job __________ Range _________ Supervised By __________ ___________________

Persons Interviewed _________________________________________ ___________________
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Analysis ________ Date ________ Location of Job _______
___________________
Other Identification __________________________________________
___________________
Job Summary (Key phrases that cover job): ____________________
Relation to Others Jobs : _____________________________ ___________________
Promotion From : _____________________________ ___________________

Promotion To : _____________________________
Transfer To and From : _____________________________
Work Performed: What - How - Why (Use additional sheets if
required)
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Major Duties : ______________________________
Other Tasks : ______________________________
Equipment, Machines : ______________________________
Skills Involved-Physical Demands : _____________
Experience (type and amount) : _____________
Education and training (specific skills required): _____________
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Responsibility for product and material : _____________

Responsibility for equipment and machinery : _____________
Responsibility for work of others: _____________
Other Jobs directly affected: _____________
Resourcefulness : _____________
Monetary : _____________
Visual efforts : _____________
Physical efforts : _____________
Surroundings : _____________
Hazards : _____________
(c)
(c)
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UNIT 5: Case Study
Unit 5
73
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Notes
Case Study
___________________
___________________
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___________________
Objectives
___________________
After analyzing this case, the student will have an appreciation of the
concept of topics studies in this Block. ___________________
___________________
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Case Study: Role Play ___________________
Brief for the Manager ___________________

You are the manager of a design department, whose task is to ___________________
plan, organize and control layout and equipment changes in the
manufacturing division of the company. One of your staff, a ___________________
graduate aged 25, has just completed a project to install a new
layout of conveyors, sorters and packing machines at the end of a
line, producing small plastic bottles. This has been highly
successful. The manager of the line and the staff working on it are
all pleased with it and prefer it to the original layout.
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Now is the time to talk to your young graduate, show how pleased
you are with this project and try to discover which areas are ones
in which further help, training and development of skills are
required.
Brief for the Graduate
You have been working for one year in this design department,
whose task is to plan, organize and control layout and equipment
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changes in the manufacturing division of the company. You have

just completed a project to install a new layout of conveyors,
sorters and packing machines at the end of a line, producing
small plastic bottles. This has been highly successful. The
manager of the line and the staff working on it are all pleased
with it and prefer it to the original layout.
Your boss has asked to see you. You hope he is as pleased as you
are with the outcome of this project. If you get the chance, you
would like to become involved in an automation and
computerization project next. You have heard that the main line
producing the shrink wrapped 6-pack of half-litre bottles is due to
be automated further later this year. You would like to do that.
The most difficult issue during this last project was negotiating
with several different companies for the purchase of the conveyor
equipment; their salesmen were fairly aggressive and you found it
(c)
difficult to deal with them.

Questions
1. Do this role play, writing the dialogues both for the Manager
and for the Graduate.
2. What is the theme of above play?
(c)
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UNIT 6: Job Design
75
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Notes
___________________
___________________
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___________________
___________________
___________________
___________________
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___________________
___________________
___________________
___________________
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BLOCK-II
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(c)
Detailed76 Contents
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Notes
___________________
UNIT 6: JOB DESIGN z Analysis of Productivity
___________________
z Introduction z Macro and Micro Human Resource Planning
___________________
Job Assessment Macro-level HRP Models
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z z
z Other Methods of Job Assessment

___________________ z Labour Economics
z Work Measurement
___________________ UNIT 8: HUMAN RESOURCE PLANNING
z Time Study PROCESS
___________________
Ergonomics z Introduction
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z
___________________ HRP Process Outline
z Motion Economy z
z Human Engineering
___________________ z Time-scale of HRP Forecasts
z Value Analysis
___________________ z Difficulties in Manpower Forecasts using
Quantitative Tools
___________________
UNIT 7: HUMAN RESOURCE PLANNING UNIT 9: QUALITATIVE MODELS
z Introduction z Introduction
z Defining HRP z Delphi Technique
z Activities Required for HRP/Manpower Planning z Nominal Group Method
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z Responsibilities of the HR Department z Analysis of Manpower Supply
z Steps for HRP/Manpower Planning z Different Methods of Wastage Analysis
z Objectives of HRP z Manpower Planning Models
z Manpower Demand Forecasting
UNIT 10: CASE STUDIES
z Analysis of Performance
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(c)
UNIT 6: Job Design
Unit 6
77
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Notes
Job Design
___________________
___________________
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___________________
Objectives
___________________
topics: ___________________
\ Differences between job design and job specification ___________________
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\ Objectives of job description ___________________
\ Various job evaluation method
___________________
___________________
Introduction
___________________
Every work undergoes constant modification because of the impact
of mechanisation and automation. Some jobs become redundant
while others are created and still others are altered in content.
This necessitates different types of education, experience and other
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attributes. Also for effecting job design, the organization needs to
respect the unions, who otherwise may stall the move on one
ground or the other.
While designing a job, management must also be concerned with
the practical considerations of quantity and quality of available
personnel (both within the organization and in the labour market).
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Personality conflict and friction, problem of human relations,

boredom, obsessive thinking, etc. also need to be taken care of.
Thus the factors which are likely to affect job design can be
1. Job specialisation and repetitive operations,
2. Changing technology,
3. Labour-union policies,
4. Abilities of present personnel,
5. Adequate availability of potential personnel,
(c)
6. Interaction among jobs with the system, and

7. Psychological and social needs that can be met by the job.
78
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Notes
Activity
Job Assessment
___________________
What is job assessment? At this stage information about each job is made available to the
___________________ assessors. Every job, whether manual or not, is closely observed
___________________ and inspected in actual operation by the assessors. If required,
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assessors question the operators and their supervisors to collect
___________________
further details about the job to clear doubts if any. To keep pace
___________________ with the changing job content, due to technological changes, it is
___________________ necessary to make periodic reassessment of the job keeping in view
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the old job description.
___________________
___________________ Pricing Job Value

___________________ The purpose of job evaluation is to establish the relative job value
___________________ within the organization in terms of points or rankings and in terms
of pay levels. The next step is to translate these data into a pay
structure through job correlation. This therefore involves first
deciding the pay grades and then developing pay ranges for each
grade.
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Steps in Job Pricing
The initial process of pricing the job and fitting them into a pay
structure calls for translating the points into different job grades.
Thereafter jobs have to be grouped as per different pay grades and
the result is related with comparable jobs in other companies.
However, this may not be possible for jobs which are unique in
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nature. When jobs are properly grouped, it is not difficult to price

each such job group. After pricing each job group, pay structure
can be developed on the mathematical principle that `things which
are equal to the same things are equal to each other'.
From the survey report of other companies, base salaries for each
pay grade are established considering the average paid by the
companies surveyed.
The next step in job pricing is to develop pay ranges around the
base salaries. Once this is developed, individual compensation
based on performance and other considerations can be worked out.
(c)
Different pay ranges enable an organization to adopt a flexible

approach (within the range) in hiring new employees, taking into
cognizance the labour market flexibility.
To illustrate, for a manufacturing organization, a Fitter may have
a pay grade ranging between ` 5-000-10,000 per month. This pay
UNIT 6: Job Design
grade can be broken into different ranges, like, Fitter Grade-I - ` 79
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8,000-10,000/- per month, Fitter Grade-II - ` 6,000-8,000 per Notes
month, Fitter Grade-III - ` 5,000-6,000 per month. ___________________
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___________________
1. Every work undergoes ___________ modification.
___________________
2. The purpose of job evaluation is to establish the relative
job value _________ the organization in terms of points ___________________
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or rankings and in terms of pay levels. ___________________
___________________
Other Methods of Job Assessment ___________________
There are various other methods of job assessment for pricing a job ___________________
value, which is essential for compensation designing. At the same
time such methods ensure job simplification and humanisation of
jobs. Even though some of these methods do not directly contribute
to job pricing, these are still useful for achieving productivity and
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efficiency. In the subsequent part of this unit, we have discussed
such methods briefly.
Work Study
Work study literally implies study of human work. British
Standards Institute 3138: 1969 defined work study as:
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"A management service based on those techniques, particularly

method study and work measurement, which are used in the
examination of human work in all its contexts and which lead to
the systematic investigation of all the resources and factors which
affect the efficiency and economy of the situation being reviewed, in
order to effect improvement".
Thus it is a generic term for two interdependent techniques, i.e.,

method study and work measurement. In the said British
standard, methods study has been defined as…. "The systematic
recording and critical examination of the factors and resources
involved in existing and proposed ways of doing work, as means of
(c)
developing and applying easier and more effective methods and

reducing costs'. Work measurement on the other hand is defined by
the British Standards Institute as "the application of techniques
designed to establish the time for a qualified worker to carry out a
specified job at the defined level of performance”.
80
Contextual analysis of the agreed definition of work study given by
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Notes
Activity the British Standards Institute, therefore, enables us to define the
___________________
Discuss the human context of subject as a procedure for understanding and determining the
work study.
___________________ truth about the activities of the people, plant and machineries,
___________________ identifying the factors which affect their efficiency and achieving
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economy through their optimum utilizations. Most of the
___________________
productivity improvement techniques involve major capital
___________________ expenditure in plant or equipment. Work study being a
___________________ management technique, on the other hand, ensures productivity by
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using existing resources. In work study, human element is
___________________
emphasized and importance is given to operation rather than to
___________________
the technical process. This, therefore, assists management in
___________________ following three major ways, which are actually its primary
___________________ objectives:
1. Effective use of plant and equipment
2. Effective use of human effort
3. Evaluation of human work.
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Human Context of Work Study – Trade Union's Response
If work study techniques are not properly applied, they are likely
to encounter resistance at all levels. Therefore, it is important to
understand the human reactions and design the programme
investigation and implementation accordingly. Most of the unions
by now are aware that work study provides benefits to the workers
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by eliminating drudgery, frustration and unhealthy working

environment. So also it gives an opportunity to the workers to
increase their earnings at the micro-level and the nation as a
whole at the macro-level.
However, to satisfy the unions the following three points need to be
considered:
1. Workers should be consulted before the introduction of any
scheme, which is likely to affect their interest, in one way or
the other.
2. There should be a definite policy for those workers who will
(c)
become redundant after implementation of the

recommendations of the work study team.
3. The procedure to deal with the changes in the method of work
and for measurement of work would be laid down and
communicated to the workers.
UNIT 6: Job Design
81
International Labour Organization (ILO) emphasized on the
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Notes
importance of such sharing of information with the workers in a
resolution concerning consultation and cooperation between ___________________
employers and workers at the level of the undertaking in the 35th ___________________
session at Geneva in the year 1952.
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___________________
Method Study ___________________
Method study is a productivity improvement step, which helps to ___________________

produce same output using less resources or enables to produce ___________________
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more with a proportionately less increase in the inputs. Thus it
___________________
reduces the waste. Method study ensures creativity,
innovativeness, optimal decision making power, good ___________________
organizational practices and better communication. It is essential ___________________

to keep the following factors in mind while carrying out a method
___________________
study:
1. Economic considerations,
2. Technical considerations,
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3. Human reactions.
Role of Method Study

Summarizing, the above discussions, we can, therefore enunciate
the role of method study as follows:
1. To appraise the purpose and objectives of the organization
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2. To asses the tasks of the organization

3. To evaluate the communication and control structure of the
organization
4. To optimize the use of resources of the organization
5. To improve the procedures, methods and processes of the
organization
6. To ensure individual and group effectiveness and at the same
time satisfaction of work in the organization.
(c)
Importance of Method Study

The objective of method study is to find better ways of doing things
and to contribute to the improved efficiency by eliminating
unnecessary work, avoidable delays and other forms of waste.
Through systematic recording, analysis and critical examination of
82 methods and movements involved in the performance of existing or
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Notes proposed ways of doing work, it achieves the above stated
___________________ objectives. However, importance or objectives of method study
would be clearer once we review its contributions that flow from its
___________________
above role. The contributions of method study could be indicated
___________________
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below:
___________________
1. Reorientation of the corporate objectives and mission
___________________
2. Review of the plans and programmes
___________________
3. Evaluation of the tasks, targets and available resources
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___________________
4. Balancing the structure of the organization
___________________
5. Introduction of a good communication system in the
___________________
organization
___________________
6. Better design of plant and equipment
7. Simplification of processes and methods
8. Standardisation of products and procedures
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9. Improvement of work flow
10. Planning and control of work
11. Managing resources, inventory control and replacement of
plant and machinery
12. Quality and cost control
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13. Improving the layout of the shop floor

14. Betterment of working environment and working conditions
15. Optimum utilization of resources
16. Higher standards of safety, security and health
17. Performance satisfaction.
Basic Procedure of Method Study

The method study technique is flexible enough to accommodate
different given situations, however, a simple framework for its
application in any given circumstances may be designed as follows:
(c)
Select : the work to be studied

Record : all the relevant facts of the present (or proposed
method)
Examine : facts critically and in sequence
UNIT 6: Job Design
83
Develop : the most practical, economic and effective
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Notes
methods, with due regard to all contingent
circumstances ___________________
Install : that method as a standard practice ___________________
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___________________
Maintain : that standard practice by regular routine checks.
___________________
Even though, we have indicated five basic steps in a particular
order in the actual study, it does not necessarily follow that ___________________
sequence or pattern. Selection of the subject of study may be ___________________
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preceded by the possibility of data collection. Similarly,
___________________
preliminary critical examination (pilot study) may be needed in
order to identify the problem area. During a pilot study, there may ___________________
be need for more detailed data. Or, it may be revealed during ___________________
preliminary critical examination that the real problem is ___________________
something other than the selected one. Thus sticking to a rigid
procedure of analysis may often mar the prospect of getting a
productive solution.
In method study, there should not be any veil of secrecy.
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Discussion, exchange of views and efforts at mutual understanding
are part of every basic step of method study. There are several
undefined stages. Before implementation, the final plan has to be
discussed with all concerned. Similarly, installing the new system
has to be preceded by a plan to familiarize all concerned through
reorientation programmes. After installation, the system has to be
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maintained to ensure that this becomes an accepted standard.

The steps of method study, therefore, may be enumerated as below:
1. Initial data collection
2. Preliminary/pilot survey and assessment
3. Identification of problem areas
4. Collection and assembly of data concerning the factors
5. Determining their interconnection
6. Finalizing the subjects for study
(c)
7. Defining the problems/subject for study

8. Assessment of their impact/reaction
9. Evolving alternatives
10. Deciding optimal solutions
84
11. Testing the solutions
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Notes
___________________
12. Preparation of the report
___________________ 13. Presentation of recommendations
___________________ 14. Decision on implementation
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___________________ 15. Preparation for implementation
___________________ 16. Installation of the newly evolved system
___________________ 17. Maintenance of the newly installed system
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___________________ 18. Evaluation of improvements achieved.
___________________
Detailed Procedures Steps in Method Study
___________________
Procedures/steps in detail in any method study investigation may
___________________
be enumerated as follows:
1. Selection of the Job: Once the method study idea is
conceived, the first step is orientation and determination of
objectives. The problem must be defined. The method study
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investigator faces the following types of problem:
(a) Bottlenecks, which disrupt smooth flow of materials or
processes.
(b) Products which may have to be produced economically by
application of cost reducing techniques.
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(c) Economic utilisation of space, including land and

buildings.
(d) Economic utilisation of labour, material and plant
(e) Elimination of idle item or non-value adding time caused
due to problems of flow, queues and congestion.
While selecting the subjects for study, it is essential to keep in
mind that the ultimate objective of the method study is to
improve achievement by raising the level of productivity and
increasing satisfaction at work. Secondly, the term 'select'
should not be taken in a narrow sense, i.e., to choose from
(c)
among others, but it must include a preliminary survey, which

enables the investigator to decide on the continuity of the
study. Similarly, select does not necessarily mean just
selection of the job but also selection of the appropriate
techniques to achieve the end-result.
UNIT 6: Job Design
85
2. Record the Facts: Before discarding the existing method or
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Notes
procedure, adequate facts about the present system must be
collected. This is required to prepare an objective record of the ___________________
way the job is carried out. To eliminate the change of bias, this ___________________
record is not compiled from second-hand accounts or on the
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___________________
manager's version as to how he thinks the job is done or an
operator's description of how the job is done, but is based on ___________________
direct observation by the concerned investigator. ___________________
3. Critically Examine the Facts: It is also an important stage ___________________
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of method study. Information collected is scrutinised in this ___________________
stage and each part of the job critically examined to determine
___________________
whether any part may be:
___________________
(a) Eliminated altogether
___________________
(b) Combined with any other part of the job
(c) Changed in sequence
(d) Simplified to reduce the content of the work involved.
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For effective examination of the facts, following questions are
generally asked:
(a) What is done and why is it done?
(b) What it does and what that person does?
(c) Where is it done and why it is done there?
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(d) When is it done and why it is done then?

(e) How is it done and why is it done this way?
By rearranging, simplifying, combining, eliminating or
modifying the facts or records, a basis is obtained for an
improved method.
4. Develop the New Method: Alternatives selected are used to
reshape and develop the new method, layout or procedure.
These may require test runs to determine their feasibility.
Tests of this nature may be preferably carried out at a place,
away from the work site, if possible. To ease the problems of
(c)
acceptance for the new method in the department, it is good to

involve the department. The end result must be an improved
method and must be acceptable to the departmental staff and
workers. It must meet all their practical requirements and
technical specifications.
86
5. Install the Method: To install the method, decision must be
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Notes
Activity taken on ordering of new plants or material (if any), phasing in
___________________
Who are qualified worker? changes in production process, deciding the extent of
___________________ redeployment, training, introducing new documentation
___________________ procedures, setting new quality standards and test procedures.
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It is good to have a detailed timetable for effecting such
___________________
changes. The end product of the installation stage is that the
___________________ new method is in operation at the work site, the line
___________________ management is in complete control and finally that all
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members of the department are fully conversant with the
___________________
method.
___________________
6. Maintaining the Method: When a method has been
___________________
installed, it tends to change slowly for obvious small
___________________ alterations made by the operators or supervisors. A reference
standard (job instruction sheet) is needed against which the
job can be compared to detect any alterations. Similarly, a
corresponding document for an incentive scheme, which also
contains details of the standard time for each job, called a job
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specification, is prepared. With these data, changes in method
can be detected. If changes are considered to be useful, the
instruction sheet can be amended to incorporate them and if
they are thought undesirable, they can be removed through
line management.
Check Your Progress

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Fill in the blanks

1. Elimination of idle item or non-value adding time
caused due to problems of flow, queues and __________.
2. It is essential to keep in mind the ultimate objective of
the _________ study.
Work Measurement
ILO defined work measurement "as the application of techniques
designed to establish the work content of a specified task by
(c)
determining the time required for carrying it out at a defined

standard of performance by a qualified worker". Conventionally it
is known as time study, which is primarily carried out to
determine the standard time to perform a specific task. Such time
standard is used for planning and scheduling work, for cost
UNIT 6: Job Design
estimating or for labour cost control or it may serve as the basis for 87
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a wage incentive plan. But we find it has wide application in Notes
Activity
deciding a wage incentive plan. ___________________
Define the term ‘time study’.
There are different techniques of work measurement. However, the ___________________
following are the principal techniques:
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___________________
1. Time study,
___________________
2. Ratio-delay study (statistical sampling technique), ___________________
3. Synthesis from standard data, ___________________
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4. Predetermined motion time standard, ___________________
5. Analytic estimating. ___________________
Out of all these, only time study technique is widely used, others ___________________
being complicated in nature. Here also we will discuss in detail the ___________________
time study only, while simply defining the other techniques.
Check Your Progress

Fill in the blanks
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1. ILO defined work measurement as the application of _____.
2. Conventionally work measurement is known as __________.
Time Study
ILO defined as "a technique for determining as accurately as
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possible from a limited number of observations the time necessary

to carry out a given activity at a defined standard of performance".
For carrying out a time study, equipments such as stopwatch,
study board, pencils, slide rule, etc. are required. The stopwatches
are of different types, like:
1. Stopwatch which records one minute per revolution by
intervals of 1/5th of a second with a small hand recording 30
minutes.
2. Stopwatch which records one minute per revolution, calibrated
in 1/100th of a minute with a small hand recording 30
(c)
minutes.
3. Decimal-hour stopwatch recording 1/100 the of an hour and a
small hand records up to one hour in 100 divisions.
88
Following steps are necessary for carrying out a time study for
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Notes
measurement of work:
___________________
z To collect and complete all available information about the job,
___________________
which should also include surrounding conditions and so also
___________________ the attribute of the operators, which are likely to affect the
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___________________ work.
___________________ z To record the details of the method and also to break down
different operations into elements.
___________________
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___________________ z To record the time taken by the operators to perform the
operation (element-wise) measuring preferably with a timing
___________________
device such as stopwatch.
___________________
z To assess the working speed of the operators comparing the
___________________ same with a predetermined normal speed.
z To convert the observed time to normal time.
z To decide the rate of allowances which may be given over and
above the normal time of the operation.
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z To determine the allowed time for the operation.
Other Techniques of Work Measurement

Since carrying out time study for each job is a time consuming
task, statistical techniques, i.e., ratio-delay study is often carried
out. Ratio-delay is a sampling technique. Instead of going for the
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complete job study under ratio-delay techniques, a sufficiently

large number of readings are taken at random intervals. Like all
other sampling techniques, under this method also there are bound
to be some errors. However, the cost of such study being less, many
organizations which are having the expertise may prefer this
method. Moreover, under this method as rating is not done, the
time is recorded directly using a stopwatch. This method
encounters no resistance from the workers.
Synthesis from standard data method synthesis time standards
that are built up or synthesized from element times previously
obtained from direct time-study. Most of the organizations that
(c)
have an independent work study department, build up a synthetic

table converting the common elements. However, some units also
use such time record of other organizations as standard data. For
obvious non-commonality of technology, skill, process and working
environments, this type of synthesis may not always be correct.
UNIT 6: Job Design
89
Predetermined motion time standards have been developed for
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Notes
different job elements based on elementary movement. Usually, for Activity
time measurement, work factor and basic motion times are ___________________
Define the term ergonomics.
recorded in any predetermined time standards. Work study ___________________
analysts use such time standards as the basis for comparing the
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___________________
observed time of the present workers. This enables the work study
men to quickly decide the efficiency or otherwise of the workers ___________________
and to give decision accordingly. ___________________
Analytical estimating is normally used in plant maintenance and ___________________
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repair work. This is a compromise between straight rate fixing and ___________________
time study. Since maintenance and repair jobs require adequate
___________________
planning and also job nature calls for creativity and
innovativeness, it is difficult to enforce straight rate fixing. ___________________
Analytical estimating is difficult in nature and also not always ___________________

foolproof due to inexperience of the work-study men.
Check Your Progress

Fill in the blanks
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1. ILO defined time study as "a technique for determining
as accurately as possible from a limited number of
observations the time necessary to carry out a given
activity at a defined _______________".
2. Analytical estimating is normally used in plant
maintenance and _____________ work.
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Ergonomics
Ergonomics is derived from two Greek words; ergon, meaning work
and enomos, meaning laws. It is the study of the effects of work
system on workers and it aims at fitting the work to the men to
increase their efficiency, comfort and satisfaction. ILO defined
ergonomics as:
"The application of human biological sciences in conjunction
with engineering sciences to the worker and his working
(c)
environment, so as to obtain maximum satisfaction for the

work which, at the same time, enhances productivity."
Contextual analysis of the ILO definition, therefore, provides a
more meaningful basis for understanding ergonomics. An
ergonomist for effective accomplishment of work tries to integrate
90 the work system (which broadly includes the tasks, working
S
Notes equipment, working conditions and working space) with the
___________________ capabilities and requirements of work. In this process, he
therefore, tries to ensure job satisfaction for the workers, which,
___________________
inter alia, increases their productivity.
___________________
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In all schemes of human activity, ergonomics can be applied, be it
___________________
in offices, factories, shops, ships, air and even in the space. Some of
___________________ the areas where ergonomics has been successfully applied are as
___________________ under:
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___________________ (a) Design of equipment, power and hand tools.
___________________ (b) Design of displays and warning systems.
___________________ (c) Design of furniture, seats, rests and steps for operators.
___________________ (d) Design of tools, jigs and fixtures.
(e) Plant layout
(f) Improvement in working conditions and environments.
(g) Computation of relaxation allowances for workers.
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(h) Selection, training and placement of personnel.
(i) Motivation of workers.
However, for better understanding, the areas of ergonomic
investigation of a work system may be grouped as below:
1. Human Characteristics: Health, physique, anthropometric
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data, personal background, education, training, experience,

age, sex, intelligence, aptitude, reaction time, interest,
personality characteristics, temperament, attitude towards
work, motivation, etc.
2. Work: Physical loads, perceptual loads, mental loads, displays
and warning systems, controls, compatibility of inputs and
outputs.
3. Working Conditions: Workplace layout, postures, motion
and movements, fatigue, monotony and relaxation allowances,
comfort, safety and health, working hours and shift work
(c)
conditions.
4. Environment: Illumination, ventilation, temperature and
humidity, colour dynamics, fumes, dust, odour and smoke,
landscape, scenery and garden, cleanliness and sanitation.
UNIT 6: Job Design
91
Many alternative terms like; human engineering, human factors in
S
Notes
engineering, engineering psychology, applied experimental
psychology, applied and human engineering research, man- ___________________
machine system analysis, etc., are used to designate the discipline. ___________________
This subject has developed during World War II with the
E
___________________
coordinated efforts of physiologist, psychologists and the design
engineers. Its earliest application can be traced to Frederick ___________________
Winslow Taylor (1856-1915). Taylor's experiments were mainly to ___________________

arrive at the optimum design of equipment for specific types of ___________________
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work and so also to train the workers to suit them for each type of
___________________
task. Frank Bunker Gilberth (1869-1924) and his wife Lillian
elaborated the principles of motion economy and introduced the ___________________
rest pauses and spacing out of work to reduce the fatigue and ___________________
eliminate stresses. Since then, with the advancement of
___________________
experimental physiology, psychology and method study, the subject
delved deeper into the human make-up for better and scientific
understanding of the efforts of working conditions and
environment on human body and mind.
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Impact of Ergonomics on Work Study
Work study, which aims at scientific analysis of a work system to
increase productivity and satisfaction at work, is dependent on
ergonomics for the research data on many facets of human reaction
to a given work situation. Such input information makes the task
of the work study practitioner more scientific and result-oriented.
CC
These input information/data mostly relate to the following areas:

1. Limits of sustained physical endurance, normal speeds of
movement and optimum method of handling of controls.
2. Receptivity to sensory inputs and time required for perception
of deviations.
3. Reaction time for motion output and time required for
evaluation and decision-making.
4. Anthropometric data to guide the design and layout of
equipment, work place and furniture.
(c)
5. Effects of different types of environmental conditions on the

human being in order to generate improvements.
6. Effects of working conditions so as to raise the standards of
comfort, safety and health.
92
7. Qualitative and quantitative analysis of factors contributing to
S
Notes
industrial fatigue for computation of 'relaxation allowances'.
___________________
___________________ Ergonomics and Management

___________________ Ergonomics is a discipline at the service of management from the
E
very planning and design stage of a work system. In the
___________________
organization and control of human effort directed to specific ends,
___________________ management needs to have an appreciation of the human factors
___________________ involved in a work system.
UP
___________________ The findings of ergonomic research, particularly in the field of
___________________ perceptual and mental loading have a special bearing on the work
situation confronting managerial performance in an organization.
___________________
The aim here will be to eliminate all perceptual and mental
___________________ loading that may arise from the perusal and evaluation of reports
on the normal activities of the organization, thereby highlighting
only the deviations from the equilibrium state. This will permit
more effective application of the managerial talent to really
important problems over a wide span. In other words, ergonomics
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can help in increasing the productivity of managerial brain power.
This single improvement, by itself, without any changes in the
methods on the shop-floor will lead to a spectacular increase in
overall productivity of the organizations.
Working Areas
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The working area of an operator may be categorized into three

groups; normal, immediate and maximum working areas. The
normal working area is one that can be reached by the operator
using any movement up to and inclusive of class 3 movements.
This area is bounded by two arcs made by the fingers using the
elbow as the pivot. The immediate working area is the surface
immediately in front of the operator where the two arcs of the
normal working area overlap. The maximum working area is one
that can be reached by the operator using arcs made by the fingers
with the shoulders as the pivot.
The space between the normal and the maximum working areas is
(c)
accessible through a class 4 movement. Anything beyond the

maximum working area may be reached only through a class 5
movement, including body bending or stretching. The immediate
working area is most suitable for bimanual operation. If the
various equipment, materials and tools are replaced within the
UNIT 6: Job Design
normal working area, they can be reached without using the upper 93
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arm and shoulder muscles. It is not desirable to place anything Notes
outside the maximum working area. ___________________
The field of vision should also be taken into account while ___________________
considering working areas. The normal cone of vision, without
E
___________________
head movement, is restricted. Covering the whole perimeter of the
normal working area would impose undue eye strain and ___________________
sometimes involve excessive head movements. Due care must ___________________

therefore be taken to position all the materials well within a ___________________
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worker's cone of vision. In inspection work, as much of the work as
___________________
possible, must take place directly in front of the operator.
___________________
For better understanding, classes of movements can be grouped
under the following five categories, based on the pivots around ___________________
which the body members move: ___________________
Class Pivot Body member movement
1. Knuckle Finger(s)
(finger joint)
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2. Wrist Hand and fingers
3. Elbow Forearm, hand and fingers
4. Shoulder Upper arm, forearm, hand and fingers
5. Trunk Torso, upper arm, forearm, hand and

(body apart from limbs) fingers
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A similar classification is available of the movements of

corresponding members of the leg. For economy of motion, the
movement should be of the lowest classification possible,
compatible with the normal capacity of the body member affected.
Check Your Progress

Fill in the blanks
1. Ergonomics is derived from two Greek words;
__________, meaning work and enomos, meaning laws.
2. The field of _________ should also be taken into account
(c)
while considering working areas

94
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Notes
Activity
Motion Economy
___________________
What is motion economy? Motion economy is the process of minimising the physical and
___________________ perceptual loads imposed on people engaged in any type of work;
___________________ whether it is in the office, the shop-floor, the kitchen or at the
E
driving wheel. It leads to better design of equipment, jigs and
___________________
fixtures, hand tools, furniture and labour saving devices. Also it
___________________ facilitates better layout of offices, warehouses, plants and
___________________ operating areas like office desk, work bench, aircraft, cockpit and
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crew compartments of armoured fighting vehicles. Application of
___________________
the principles of motion economy eliminates or minimises wasteful
___________________
and fatiguing movements and increases the productivity of the
___________________ workers. It considers minimising movements in respect of:
___________________ (a) Number of movements,
(b) Length of movements,
(c) Classification,
(d) Number of parts of body used,
E-
(e) Necessity for control,
(f) Muscular force,
(g) Complexity of movements,
(h) Distances between eye fixation,
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(i) Time required for eye fixation.

For achieving motion economy, following principles have been
evolved by different specialists:
(a) Principle of minimum movement
(b) Principle of natural movement
(c) Principle of simultaneous movement
(d) Principle of rhythmic movement
(e) Principle of habitual movement
(f) Principle of continuous movement
(c)
Simultaneous movements reduce fatigue and increase the rate of

output. More fatigue is caused when only one hand is working, the
other is idle. Simultaneous movements include the movements of
the feet while both the hands are operating as in driving a car.
Application of this principle leads to the better design of jigs,
UNIT 6: Job Design
fixtures and duplication of tools, so that both hands work at 95
S
similar tasks simultaneously. Notes
The principle of symmetrical movements should be applied in ___________________

conjunction with simultaneous movements. Proper balance is ___________________
achieved only when the movement of one hand is the 'mirror
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___________________
image' or eliminates fumbling. When movements of the hands are
asymmetrical, there is a tendency on the part of the operators to ___________________
interpolate additional, but non-productive, movements in order to ___________________

achieve balance. ___________________
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Rhythm is the regular repetition of a movement pattern. It often ___________________
incorporates the accentuation of a specific part of a cycle. Rhythm
___________________
contributes to speed, elimination of fumbling and reduction in
fatigue. Examples of rhythmic movements are; boat rowing, ___________________
hammering at the smithy and drawing water from a well using a ___________________
see-saw lift.
The pattern of movement should be so designed as to facilitate
habituation. When a cycle of activities is performed habitually, the
movements are executed almost as a reflex action. Habitual
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movements eliminate hesitation and increase speed of
performance. Rhythm helps in speed habit formation. Tools,
materials, displays and controls must always be located in the
same position. The pattern must be standardised for similar types
of panels, work places and equipment. Continuous movements
which are smooth and curved are superior to jerky straight line
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movements which involve sudden changes of direction and loss of

momentum. Materials, tools and jigs must be so positioned as to
incorporate smooth, curved and continuous movements and
eliminate undue changes of direction.
The above principles should be treated merely as guides and not
rigid rules. Quite often, one principle would be in conflict with
another and a proper evaluation of the principles, in their totality,
would be needed for optimization. Conditions differ from job to job.
It may sometimes be necessary to compromise load over the
various muscles or to give due weightage to the principle of
continuous movement. It is, therefore, essential that the principles
(c)
are applied with flexibility.

96
Check Your Progress
S
Notes
Activity
Fill in the blanks
___________________
Define the term human
engineering.
___________________
1. _____________economy is the process of minimising the
physical and perceptual loads imposed on people
___________________
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engaged in any type of work.
___________________
2. Rhythm helps in speed ___________formation.
___________________
___________________ Human Engineering
UP
___________________
Method study seeks to determine the effective combination of the
___________________ man, the machine and the working environment. In doing so, it is
___________________ necessary to determine which functions are better performed by
men and which functions are better performed by machines. Both
___________________
men and machines can surpass each other in certain ways. The
question of economy again influences the man-machine
combination. The term human engineering is more appropriately
used to solve man-machine problems in design, operation and
E-
maintenance of plants and machineries and in fact it broadly
comes under the purview of ergonomics. It is therefore, not
appropriate to designate human engineering as an independent
discipline, separating it from ergonomics. However, to understand
the context and meaning of human engineering, it is considered
necessary to define it in the context and meaning of human
engineering, in line with Ernest J. McCormick. McCormick defined
CC
it as the mechanism for 'the adaptation of human tasks and

working environment to sensory, perceptual, mental, physical and
other attributes of people. This adaptation for human use applies
to such functions as the design of equipment, instruments, man-
machine systems and consumer products and the development of
optimum work methods and work environment.
Human Engineering and Machine Design

The designer of the machine should know the way the human
being functions, his body dimensions, his physical limitations and
so also the conditions under which a person performs perfectly. For
(c)
performing a task, a person normally does the following three

things:
1. Receiving the information (through different sense organs.)
2. Making decisions (acting on perceived information)
UNIT 6: Job Design
97
3. Taking action (which results from decision).
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Notes
Activity
Thus the basic control cycle for the human being consists of these
___________________
What do you know about
parts - sense, decide and act. The power to reason inductively, CNC?
exercise judgement, develop concepts, decide and create methods ___________________
are unique to human beings. While quick performing of repetitive
E
___________________
routine tasks, power to perform rapid computations, apply great
___________________
force, simultaneous performance of many different functions etc.
___________________
are characteristic features of machines.
___________________
The designer of the machine, therefore, is required to consider all
UP
the above details before developing a better designed machine for ___________________
productive use. Most of the Computer Numerically Controlled ___________________

(CNC) machining centres developed by large industrial
___________________
organizations in India are not performing well as they have been
___________________
designed without considering the human factor. In fact the
sophisticated machine centres, whenever introduced, have become
instrumental for perpetual industrial relations problems as these
adversely affect workers pay packets as cycle time printed in the
machine literature is considerably less than the actual time taken
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by the workers. This complicates job correlation with the workers'
payment, as technically they are supposed to get payment as per
the printed cycle time.
Since, a badly designed machine may be responsible for poor
performance of the workers, application of ergonomics/human
engineering techniques is necessary to design the machine.
CC
Modern machines are ergonomically designed to prevent stress and

fatigue of the workers, to make them work at ease and at the same
time to gain an increased rate of production. We also find
application of human engineering/ ergonomic techniques even in
designing consumer products, kitchen gadgets, furniture etc.
Recently, Blow Plast Ltd., under technical collaboration with
Klober of Germany, designed office-chairs ergonomically.
Check Your Progress

Fill in the blanks
(c)
1. Method study seeks to determine the effective

combination of the man, the machine and the __________
2. A badly designed machine may be responsible for
_________performance of the workers.
98
Value Analysis
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Notes
Activity
Henry Erlicher of General Electric Company, in 1947, drawing
___________________
Discuss value engineering
concept. lessons from World War-II, observed that substitution of materials
___________________ (as manufacturers were then compelled to go for substitution to
___________________ encounter shortage of original materials) often led to cost reduction
E
___________________
and better functionality. This has prompted further research in the
field of alternative materials and processes and in fact L.D. Miles,
___________________
another top executive of the company, was directed by him to go
___________________ into the details which were later called as value analysis. By 1949,
UP
___________________ this approach in its more institutionalized form was used in
General Electric Company and gradually in the US Department of
___________________
Defence. By 1970, the value engineering concept received
___________________
international attention.
___________________
Value engineering is an organized creative technique to analyze
functions of a product or service or a system to achieve the
required functions at the lowest cost ensuring its performance
reliability and maintainability. It is also known as value analysis
or value management.
E-
Literally, value is the worth of an article/product/service. In terms
of cost and function, value is determined. Value of product can be
improved by:
1. Improving function (keeping function constant)
2. Reducing cost (keeping function constant)
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3. Both by improving function as well as by reducing cost.

There are different types of values of an industrial product, which
may be classified as follows:
1. Use Value: The properties and qualities which are useful and
which enable to accomplish the work. Use value again may be
either for primary use, secondary use or for auxiliary use.
2. Esteem Value: Aesthetic features or properties which attract
a customer to own it.
3. Cost Value: The cost required to produce the item.
(c)
4. Exchange Value: The properties which enable the owner to

exchange it for anything else, if he so desires, in the future.
However, for all practical purposes, in industrial situations, we are
primarily concerned with use value and esteem value only.
UNIT 6: Job Design
99
In the backdrop of the above discussion, value analysis, therefore,
S
Notes
can be defined as a "method of search, a systematic procedure
resulting in the orderly utilisation of alternative materials and ___________________
processes. It focuses on engineering, manufacturing and ___________________
purchasing with attention on one objective that of obtaining
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___________________
equivalent or even better performance for lower cost".
___________________
Steps in Value Analysis ___________________
Following steps are followed for value analysis: ___________________
UP
(a) Collect full facts and information about the product ___________________
(b) Get the details of the cost break-up ___________________
(c) Determine the function ___________________
(d) Think creatively ___________________
(e) Compare and evaluate the alternatives.
To succeed in each step, it is necessary to take the following line of

action:
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(a) Eliminate the redundant parts
(b) Initiate action of cheaper substitutes without impairing the

use value
(c) Standardize the parts

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(d) Develop alternative methods
(e) Redesign, if necessary.
Advantages of Value Analysis

We can get the following advantages from value analysis:
(a) Lowering of cost
(b) Better quality of product
(c) Increased efficiency
(d) High level of morale and team spirit
(c)
(e) Increased customer satisfaction

(f) Optimum resource utilisation
(g) Improved methods of production
(h) Increased job satisfaction and motivation to workers through
use of their creative ability.
100
The term value analysis has now been replaced by value
S
Notes
engineering in corporate circles. In most of the organizations, value
___________________
engineering practices are followed, forming a value engineering
___________________ team of workers (a small group activity like quality circles, etc.).
___________________ This, therefore, provides the opportunity to workers to derive
E
creative satisfaction and also to fulfil their intrinsic needs. At the
___________________
same time, the organization also gets active services from the
___________________ workers.
___________________
Check Your Progress
UP
___________________
Fill in the blanks
___________________
1. ___________is the worth of an article/product/service.
___________________
2. The term ____________ has now been replaced by value
___________________
engineering.
Summary
For HRM, critical inputs related to a job are necessary. This in one
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way helps in identifying the skill sets while hiring and on the other
hand also helps in compensation designing. Although job analysis
and job evaluation are considered as important techniques for such
purposes, we have discussed other important areas too for
understanding a job from the holistic point of view.
CC
Lesson End Activity

Working with a group of three or four students, collect at least five
different job descriptions from reputed organizations operating in
your area. The description highlighting similarities and
differences.
Keywords
(c)
Ergonomics: It is a discipline at the service of management from

the very planning and design stage of a work system.
Motion economy: It is the process of minimizing the physical and
perceptual loads imposed on people engaged in any type of work;
UNIT 6: Job Design
whether it is in the office, the shop-floor, the kitchen or at the 101
S
driving wheel. Notes
Rhythm: It is the regular repetition of a movement pattern. ___________________
___________________
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___________________
1. How is compensation structure linked with job evaluation? ___________________
2. Define work study. What are its important objectives? Why ___________________
trade unions react to a work study programme? In what way ___________________
UP
can you combat such a reaction?
___________________
3. What are the important roles of method study? Identify the ___________________
important contributions of method study and discuss at least
___________________
five such contributions in detail.
___________________
4. Elaborately discuss the steps involved in a method study
programme.
5. Define work measurement. What are its different techniques?
Discuss at least three techniques elaborately.
E-
6. What are the steps involved in a time study programme? How
does it help work measurement programmes in an industrial
unit?
7. What is ergonomics? How does it help to increase productivity?
Discuss with examples.
CC
8. What are the basic principles of motion economy? Discuss

these principles in relation to a work area with which you are
familiar.
9. Explain how human engineering techniques influence machine
design. Select an advertisement of a furniture item and
discuss its ergonomic features.
10. What are the steps involved in value analysis? What course of
action can you suggest for a successful value analysis study?
Elaborate your answer.
11. For HRM, why it is so important for us to study different job
(c)
measurement techniques?
102
S
Notes Further Readings
___________________
Books
___________________
A Practical Guide to Job Analysis, Erich P. Prien & Leonard D.
___________________
E
Goodstein, John Wiley and Sons
___________________
___________________
UP
___________________ Armstrong, 10th edition, Kogan Page Publishers
___________________
Web Readings
___________________
http://www.mindtools.com/pages/article/newTCS_02.htm
___________________
http://www.openlearningworld.com/books/Job%20Design%20and%
20Enrichment/Job%20Design%20and%20Enrichment/Approaches
%20to%20Job%20Design.html
http://en.wikipedia.org/wiki/Job_evaluation
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https://www.businessknowhow.com/manage/jobdesc.htm
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(c)
UNIT 7: Human Resource Planning
Unit 7
103
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Notes
Human Resource Planning

___________________
___________________
E
___________________
Objectives
___________________
topics: ___________________
\ Human Resource Planning (HRP) ___________________
UP
\ Steps for HRP ___________________
\ Models of Macro Level HRP
___________________
___________________
Introduction
___________________
Comparison of the present human resources to future needs of an
organization, duly identifying skill and competency gaps and
subsequently developing plans for building the human resources
needed in future is the basic process of Human Resource Planning
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(HRP). The process not only limits its focus on such assessment but
also tries to ensure that the required competency is maintained in
line with organizational mission, vision and strategic objectives.
HRP provides strategic basis for taking HR decisions, and
anticipating change. It is not merely concerned with manpower
demographics, turnover projections, succession planning, etc.
CC
Therefore, HRP helps to plan replacements and changes in

manpower competencies in a systematic manner. Of late HRP has
become an important enterprise-wide strategic function not only to
achieve goals and objectives but also to sustain the present level in
organizations. Globally, skill shortages, competency gaps,
redundancies, downsizing, rightsizing are the major issues in
today's organizations. Such syndromes have become so acute in
Indian organizations also that almost everyday we find
newspapers carrying reports on job cut or manpower redundancies.
These phenomena have changed the structure of employment
relations in Indian organizations, not to talk about global
(c)
organizations. All major Indian organizations like, SAIL, Keltrons,

IBP, Tata Iron & Steel, etc. are going for manpower redundancies
in a phased manner. Commercial banking organizations in India
recently reduced 30% of their workforce at a whopping cost of
` 10,000 crore.
104
There are many reasons for such manpower or human resource
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Notes
Activity redundancies, although at the corporate level, the only possible
___________________
Define HRP. reason attributed to such cause is skill obsolescence. Inadequate
___________________ business planning, inflexibility of job descriptions, absence of
___________________ training and development programmes are some of the identified
E
causes. But the biggest problem lies with inadequate Human
___________________
Resource Planning (HRP).
___________________
With labour percentage increasing at the rate of 1.09% against job
___________________ opportunities of 0.96% (during the period from 1993-94 to 1999-
UP
___________________ 2000), large-scale manpower redundancies are further adding fuel
___________________
to the fire, causing a national problem.
___________________ John Bramham (1989-1994) has distinguished between HRP and

manpower planning (MP). He has defined HRP as a process in
___________________
which costs, numbers, controls and systems interact and play a
part. Manpower planning is more concerned with the numerical
elements of forecasting of manpower. However, other authors
including Benni Son and Casson (1984), Thomason (1988) have
discarded such perceptual differences, arguing that HRP and
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manpower planning are the same. For our purpose also we have
not conceded any difference in HRP and MP and discussed the
issues from a holistic approach.
Defining HRP
CC
Human resource or manpower is a primary resource without which

other resources, physical and financial, cannot be put into use.
Even a fully automatic unit requires manpower to run it and also
to plan for further improvement.
To achieve any goal, manpower requirement needs to be assessed,
located and harnessed. HRP is not mere assessment of the number
of men required. An organization has to categorize men as per
their knowledge and skills and also ensure their balanced
allocation. Improper manpower planning may lead to overstaffing
increasing direct cost (viz. salary), cost of training, amenities,
apart from the cost of production. Under-staffing also affects
(c)
production, morale and productivity.

Optimum manpower planning, therefore, aims at:
z Balancing demand, supply, distribution and allocation of

manpower
105
Controlling cost of human resources
S
z
Notes
z Formulating policies on transfer, succession, relocation of ___________________
manpower.
___________________
HRP/manpower planning is essential wherever production of goods
E
___________________
and services are involved. This may be done either by external
___________________
agencies (consultants, suppliers of plant and machineries) or
internal agencies (Personnel Department, Industrial Engineering ___________________
Department, Production Department etc.)
___________________
UP
HRP is a planning process by which an organization can move ___________________
from its current manpower position to its desired manpower
___________________
position. Through manpower planning, an organization strives to
have the right number and the right kinds of people at the right ___________________
places at the right time. However, this definition only focuses on ___________________
assessment of manpower needs in an organization. More
appropriately manpower planning may be defined as a strategy for
acquisition, utilization, improvement and retention of human
resources.
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Check Your Progress
Fill in the blanks
1. __________ is a planning process by which an
organization can move from its current manpower
position to its desired manpower position.
CC
2. Through manpower planning, an organization strives to

have the right number and the right kinds of people at
the right places at the ___________
Activities Required for HRP/Manpower Planning

Manpower planning consists of a series of activities, which can be
listed as follows:
z Forecasting future manpower requirements: This is done
either in terms of mathematical projections or in terms of
judgemental estimates. Mathematical projections are done
(c)
extrapolating factors like, economic environment, development

trends in industry, etc.
Judgemental estimates, on the other hand, are done depending
on the specific future plans of a company by managerial
discretion, which is based on past experience.
106
z Preparing an inventory of present manpower: Such
S
Notes
inventory contains data about each employee's skills, abilities,
___________________
work preferences and other items of information. Inventory of
___________________ manpower resources helps in assessing the extent of deploying
___________________ such resources optimally.
E
___________________ z Anticipating problems of manpower: This can be done by
projecting present resources into the future and comparing the
___________________
same with the forecast of manpower requirements. This helps
___________________ in determining the quantitative and qualitative adequacy of
UP
___________________ manpower.
___________________ z Meeting manpower requirements: This can be achieved
___________________ through planning, recruitment and selection, training and
development, induction and placement, promotion and
___________________
transfer, motivation and compensation to ensure that future
manpower requirements are correctly met.
Check Your Progress

Fill in the blanks
E-
1. __________ estimates are done depending on the specific
future plans of a company.
2. Inventory of manpower resources helps in assessing the
______________ such resources optimally.
CC
Responsibilities of the HR Department

HR Department, as an internal agency, plays a crucial role in
manpower planning. Its responsibilities in regard to manpower
planning may be summed up as follows:
z The first responsibility is to put pressure on the operating
management to plan and establish objectives. HR Department
at this stage is required to assist and to give counsel to the
operating management groups firm time to time.
z It has to collect data in total organization terms and to ensure
that manpower planning is carried out, keeping pace with the
(c)
long-range objectives and the total business plan of the

organization.
z It has to measure and monitor performance against the plan
and provide feedback to the top management.
107
z It has to carry out research for effective manpower and
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Notes
organizational planning.
___________________
Steps for HRP/Manpower Planning ___________________
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___________________
From the above discussions, it is evident that HRP/manpower
planning should precede a number of steps. Such steps can be ___________________
briefly discussed as follows: ___________________
Job Analysis ___________________
UP
___________________
To start with, job analysis is done to differentiate one job from the
other. Job is defined as collection or aggregation of tasks, duties ___________________
and responsibilities, which are assigned to an individual employee. ___________________
Job analysis, therefore, provides requisite information about a job.
___________________
It is a process of determining the nature of a specific job through a
detailed and systematic study.
Job analysis provides the following information:
Job identification, which is done by providing a title or a code

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z
number for each job.
z Job characteristics, location, physical setting, hazards and

discomforts of a job.
z Job assignment, specific operations and tasks which make an

assignment, its importance, simplicity, complexity and the
CC
responsibility.
z Materials, tools and equipment required for a job.
z Job performance, nature of operations (lifting, handling,

drilling, setting up, etc.)
z Personal attributes, like; experience, training, physical

strength, mental capabilities, aptitudes, other skills etc.,
required for efficient performance of the job.
z Job relationship, scope for advancement, patterns of

promotions, direction or leadership form etc.
Sources of Information
(c)
Information on a job is usually obtained from four principal

sources as follows:
z From those who are supervising the job, e.g. supervisors and
foreman.
108
From professional job analysts (consultants) who may be
S
Notes z
Activity
retained to study a job.
___________________
Discuss the purpose of job
analysis.
___________________
z From technology vendors, who define jobs in their literatures.
___________________ Purposes of Job Analysis
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___________________ Apart from HRP, job analysis serves the following important
___________________ purposes of Human Resource Management:
___________________ z Recruitment and Selection
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___________________
z Wage and Salary Administration
___________________
z Job Re-engineering
z Industrial Engineering Activity
___________________
z Employees Training and Management Development
___________________
z Performance Appraisal
z Health and Safety.
Job Description and Job Specification

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After the job analysis process is over, job description and job
specification are developed before going into the successive steps of
HRP. Job description is recording of duties, responsibilities and
conditions needed for satisfactory performance of a particular job.
Both the terms, job description and job specification are used
interchangeably. However, it is appropriate to distinguish the term
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'description' to cover job content (conditions, tasks and

responsibilities) and 'specification to denote job requirements (i.e.
qualities necessary) in the worker for satisfactory performance of
the job.
Thus job specifications translate job descriptions into
human qualifications, required for successful performance of a job.
Developing Work Rules

Most of the organizations, after developing job descriptions and job
specifications, develop work rules, which are some predetermined
decisions about certain courses of action that may be taken when
(c)
certain contingencies arise. Organizations develop such work rules

in documented form and use the same as a control device to ensure
predictability of behaviour. Starting and stopping of work, rest
periods, time-keeping, insubordination, fighting or drinking on the
job, smoking, report of injuries, etc. are normally incorporated in
such work rules.
109
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Application of Industrial Engineering Techniques Notes
Work study, method study and work measurement techniques are ___________________
also applied as a preceding step for HRP. These techniques provide ___________________
opportunity for effective use of plant and equipment, effective use
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___________________
of human efforts, measurement of human work, better ways of
doing things, developing predetermined standard time etc. ___________________
Other Factors ___________________
___________________
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Layout
___________________
Layout of a factory influences determination of manpower
___________________
requirement. Some plants and equipments work in isolation (like
lathe, drilling machine, etc.), while some others work in groups ___________________
continuously (like excavators). When a group of machines work in ___________________
union, the whole group may be attended by one or more persons.
But when machines are not in continuous operation, a single
person may look after more than one machine. Thus requirements
of manpower may vary for the layout and machine arrangement in
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a shop floor or factory.
Statutory Requirements
For certain positions in mines, electrical installations, hazardous

places (chemical plants, etc.), welfare amenities need to be
provided as per statutory regulations. Positions like Welfare
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Officers, Safety Officers, Medical Officers fall under this category.
Shifts
Number of manpower required also depends on whether the work
would be carried out in general shift or in shifts. Number of
working shifts will decide the requirement of manpower.
Leave Reserve
Since no one can work all the days for one reason or the other,
certain allowances need to be given while working out manpower
requirement. Apart from unpredictable leave of absence, workers
(c)
are allowed leave systematically for a certain period in a year.

Conventionally, 20% allowance for weekly off and leave reserves
are allowed in factories while working out manpower
requirements. In mines, however, rate of absenteeism being high,
such allowance percentage is on the higher side.
110
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Notes Check Your Progress
Activity
What___________________
is coordinate manpower Fill in the blanks
policy?
___________________ 1. Job analysis is done to ____________ one job from the
___________________ other.
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___________________ 2. _________ is defined as collection or aggregation of
tasks, duties and responsibilities,
___________________
___________________ Objectives of HRP
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___________________ The first objective of manpower planning is to integrate planning
___________________ and control of manpower with organizational planning to ensure
best possible utilisation of all resources.
___________________
___________________ The next objective is to of the organization. Requirement and

selection, training and development programmes, placement and
induction programmes, promotion and transfer policies, decisions
on remuneration and rewards etc. affect the future need of
manpower. Without proper coordination of manpower policies with
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each such decision, it is difficult to achieve the corporate objectives.
Therefore, it is necessary to harmonize such objectives (corporate)
with the manpower planning system. Without co-ordination, a
company's plans may get frustrated for not having the right people
in the right place at the right time. Subsequent objectives of
manpower planning are to:
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z Achieve efficiency of work in all spheres of the corporate body,
z Ensure cost minimization,
z Eliminate all types of wastages including waste of time,
z Maintain required levels of skill and competency, matching

present and future needs of the organization.
Check Your Progress

Fill in the blanks
1. The first objective of manpower planning is to
__________ planning and control of manpower with
(c)
organizational planning to ensure best possible

utilisation of all resources.
2. The next objective of manpower planning is to
_________ manpower policies of the organization.
Manpower Demand Forecasting 111
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Notes
Activity
Manpower demand forecasting is influenced primarily by two
___________________
Define the term manpower
important factors, i.e. volume of output and the level of demand forecasting.
productivity. Manpower requirement may change due to change in ___________________
output volume or mix, which calls for analysis of performance.
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___________________
Similarly, as the level of productivity alters over time, it also ___________________

affects manpower requirements. This calls for analysis of ___________________
productivity.
___________________
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Analysis of Performance ___________________
___________________
To derive the manpower demand, it is necessary to estimate the
___________________
manpower requirements in relation to the workload. To start with,
each unit of manpower (more conveniently defined in terms of ___________________
man-hours or man-days) required for different categories of job to
accomplish the job in its entirety, are determined. After such
determination the total workload is related with the manpower
units of different categories and then finally the total requirement
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of manpower of different categories is determined. Such analysis,
therefore, calls for analysis of performance either through direct or
indirect methods.
Direct analysis is to review past performance to derive a ratio

between two variables (workload and manpower of certain
category). This can be done either by relating to a particular point
of time or by averaging figures over a period of time. To illustrate
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this, we may give the following hypothetical example:

Category A Category B
Manufacturing Manufacturing
1 ton of saleable steel requires 1 ton of saleable steel requires 10

10 skilled workers skilled workers.
2 tons require 20 skilled workers 2 tons require 15 skilled workers.
Company A has a constant ratio, while Company B has a variable

ratio, as it can double the rate of production, adding relatively less
number of manpower and therefore, can achieve the economy of
(c)
scale. The period over which such forecasts can be made depends
on the organization.
Indirect analysis is based on the estimates made on past

experience. Thus it is less systematic than the direct analysis.
However, for short-range forecasts, indirect analysis is more
112
preferred, as experienced managers can make this analysis after
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Notes considerable thought.
___________________
For making both direct and indirect analysis, interdependence of
___________________ different factors need to be considered. The experience of Indian
___________________ Ordnance Factories may be illustrated here to understand the
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importance of such interdependence. Very recently some Ordnance
___________________
Factories have gone in for technological change over, installing NC,
___________________ CNC, DNC machines and systems. Today most of the Ordnance
___________________
Factories are facing acute crisis of operators and so also paucity of
maintenance men to gain the advantage from such technology.
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___________________
Such short-sightedness, therefore, is resulting in idling crores of
___________________ rupees of investment.
___________________
Check Your Progress
___________________
Fill in the blanks
1. Manpower requirement may change due to change in
____________ or mix, which calls for analysis of
performance.
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2. Today most of the Ordnance Factories are facing
_______crisis of operators.
Analysis of Productivity
Productivity has two major components, technological change and
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manpower utilisation. As technological change requires huge

capital investment, organizations look for better manpower
utilisation to achieve increased productivity. With better human
relations, productivity can be increased. Again rates of productivity
substantially vary the level of performance. Manpower demand
forecasting can be made more effective, once we consider both the
variables, i.e., the performance and the productivity. Most of the
public sector enterprises are over-staffed, presumably due to
inadequate emphasis on both these two aspects simultaneously.
Check Your Progress

Fill in the blanks
(c)
1. Productivity has two major components, technological

change and ________________.
2. With better human relations, _____________ can be
increased.
Macro and Micro Human Resource Planning 113
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Notes
Organization level manpower or human resource planning cannot Activity
___________________
be done in isolation of macro issues. In fact the primary reasons for Differentiate Macro and Micro
Human Resource Planning.
rising importance of HRP are both macro and micro level issues. At ___________________
the aggregate or macro level, HRP is influenced by general
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___________________
environmental factors like; employment-unemployment situation,
___________________
demographic changes, legal control and institutional policies,
policies on globalization and opening of markets, etc. At ___________________
organizational or micro level, HRP is more influenced by
___________________
technology changes, organizational restructuring, skill and
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competency gap, strategic objectives, trade unions pressure ___________________
(though it is dwindling over the years), lead time for manpower ___________________
procurement, i.e., recruitment and selection, training and
___________________
development, etc. Macro level issues are exogenous, i.e.,
uncontrollable, while micro level issues are endogenous and, ___________________
therefore, controllable by an organization.
HRP at Macro-level
Development of human resources is one of the important objectives
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of any country for long-term economic growth. For a developing
economy like India such importance is far more. This is more
visible from our economic planning, as governments over the years
have been giving increasing priority to population planning and
control, education, health, social security, housing, etc. All planned
efforts are now being initiated to augment institutional support for
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developing human resources at the national level. Following are

the major issues before our Government to develop human
resources at the national level:
1. Population Planning and Control: To enforce control over

population explosion to avert economic imbalances, population
planning and control measures have been initiated by the
government. Unless such control is enforced in a planned
manner, no amount of institutional support can sustain this,
resulting in generation of unproductive population, which will
remain a drain on our national resources. Recognizing this,
Government of India has adopted a National Population
Policy (2000) to ensure population stabilization. The policy
(c)
emphasizes on affordable reproductive health care, increased

quality of life by enhancing services of primary and secondary
education, sanitation, drinking water, housing, transport,
communication and empowering women. In Exhibit 7.1, we
have reproduced the salient features of National Population
114
Policy, 2000 to understand the macro level strategies of the
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Notes Government to develop human resources. That such planned
___________________ efforts have helped us to achieve the goal, if not in absolute
terms, at least in percentages, is evident from the decadal
___________________
trend analysis on population growth in India. Birth rate from
___________________ 3.99% in 1951 has decreased to a level of 2.3% in 2010. There
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___________________ is a significant rise in population control awareness among
people, which is evident from the phenomenal increase in
___________________
averting birth over the decades.
___________________
2. Literacy and Education: To develop human resources at the
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___________________
macro level, the Government of India has also adopted a
___________________ National Policy on Education in 1986. The policy provides a
broad framework for complete eradication of illiteracy in the
___________________
country by declaring basic primary level education up to
___________________ standard V, free and compulsory. To strengthen institutional
infrastructure for education, the policy emphasizes on
increased government and non-government expenditure.
Allowing private participation in education is a right direction
at this stage. From elementary education, the focus on
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secondary, university and higher education, and technical and
vocational education, adult education are also increasing. A
significant rise in literacy rate (71.7%) authenticates the effort
of our Government in developing human resources at the
macro-level.
3. Health and Medical Care: Health sector reforms are the

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other important initiatives for developing human resources at

the macro-level. In this respect, India has recorded disparity
and regional imbalances. Baring few positive changes in life
expectancy ratio, infant mortality rate, child mortality rate,
etc. we are still far away from improving general health
indices for the nation. Core communicable and non-
communicable diseases such as malaria, tuberculosis, leprosy,
blindness, AIDS, cancer, etc. are still not under the expected
level of control. Although, Government statistically proves
otherwise, still more than 50% of our population is not having
access to basic health care. In other heath related activities
like water supply and sanitation, achievements are also not at
(c)
its expected level to support total development of quality of

life.
4. Housing: In housing, Government have renewed its efforts by

adopting the National Housing and Habitat Policy, 1998. The
basic thrust of this policy is to achieve sustainable
development of housing infrastructure through public-private 115
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partnership. Repealing of Urban Land Ceiling and Regulation Notes
Act, 1976 is also another positive direction in this respect. In ___________________
building housing infrastructure, Housing and Urban
___________________
Development Corporation (HUDCO) is playing a crucial role.
Although achievement is falling far short of the requirement,
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___________________
positive attitude of the Government in this direction would ___________________
definitely contribute to the development of human resources
and quality of life in years to come. ___________________
Exhibit 7.1: National Population Policy, 2000 ___________________
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z Address the unmet needs for basic reproductive and child ___________________
health services, supplies and infrastructure.
___________________
z Make school education up to age 14 free and compulsory, and
reduce drop outs at primary and secondary school levels to ___________________
below 20 per cent for both boys and girls.
___________________
z Reduce infant mortality rate to below 30 per 1,000 live
births.
z Reduce maternal mortality ratio to below 100 per 100,000
live births.
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z Achieve universal immunization of children against all
vaccine preventable diseases.
z Promote delayed marriage for girls, not earlier than age 18
and preferably after 20 years of age.
z Achieve 80 per cent institutional deliveries and 100 percent
deliveries by trained persons.
z Achieve universal access to information/counselling, and
services for fertility regulation and contraception with a wide
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basket of choices.
z Achieve 100 per cent registration of births, deaths, marriages
and pregnancies.
z Contain the spread of Acquired Immune Deficiency
Syndrome (AIDS) and promote greater integration between
the management of Reproductive Tract Infection (RTI), and
Sexually Transmitted Infection (STI) and the National AIDS
Control Organization.
z Prevent and control communicable diseases.
z Integrate the Indian System of Medicine (ISM) in the
provision of reproductive and child health services, and in
reaching out to households.
(c)
z Promote vigorously the small family norms to achieve

replacement levels of TFR.
z Bring about convergence in implementation of related social
sector programmes so that family welfare becomes a people
centered programme.
Source: Economic Survey, 2000 - 2001

116
Plan and non-plan expenditure of the Central Government on the
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Notes
above social sector services increased by about 4 times over 1992-
___________________
93. Following social sectors schemes of the Government are in
___________________ operation to enhance social security and overall 'quality of life'.
___________________ 1. Jawahar Gram Samridhi Yojana (JGSY)
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___________________ 2. Employment Assurance Scheme (EAS)
___________________
3. National Social Assistance Programme
___________________
4. Swaran Jayanti Gram Swarozgar Yojana (SJGS)
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___________________
5. Nehru Rozgar Yojana (NRY)
___________________
6. Prime Minister's Rozgar Yojana
___________________
In addition to the above centralized strategy for human resource
___________________
planning and development, at the state level, state planning
boards and at the district level, manpower planning generation
councils have been set up. At the apex level, Planning Commission
is very active in HRP related activities, which culminated in the
setting up of the Institute of Applied Manpower Research (IAMR).
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So far, however, IAMR could come out with labour market
information planning and forecasting of scientific manpower.
Macro-level HRP is a complex and dynamic process and it requires
longitudinal study to understand the results of various policy
measures and actions.
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In Table 7.1, annual growth of employment in organized sector,

both public and private for the period 1991-1999 is presented. The
trend indicates hardly any growth in public sector and marginal
growth in private sector employment. There is a tremendous
structural change in the employment pattern, with more shift
towards knowledge intensive jobs. Sectoral growth rates in GDP in
the year 2009-2010 are highest in services, followed by industry
and agriculture.
Table 7.1: Employment in Organised

Public & Private Sectors
Year Public Private Total

(c)
1999 194.15 86.98 281.13

2000 193.14 86.46 279.60
2001 191.38 86.52 277.89
2002 187.73 84.32 272.06
2003 185.80 84.21 270.00
Contd…
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2004 181.97 82.46 264.43
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2005 180.06 84.52 264.58 Notes
2006 181.88 88.05 269.93 ___________________

2007 180.02 92.74 272.76
___________________
2008 176.74 98.75 275.48
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___________________
Source: DGE&T, Ministry of Labour & Employment
___________________
There still exists an imbalance in supply and demand for human
resources at the macro-level. While on the one hand the country is ___________________
facing the mounting burden of unemployment, on the other, it is ___________________
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still in shortage of skilled manpower. Large scale migration of
___________________
skilled manpower to other countries has further aggravated the
situation. ___________________
___________________
HRP at Micro-level
___________________
We have discussed the micro or organizational level HRP in our
initial notes. Major activities, objectives, steps and processes for
micro-level HRP have been introduced in this unit.
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Macro-level HRP Models
Macro-level manpower planning is reinforced through educational
planning with the following two recognized approaches:
1. The Manpower Requirement Approach (MRA)
2. The Rate of Return Approach (RRA)

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RRA is also known as Cost-Benefit Analysis of Human Capital.
Manpower Requirement Approach

By establishing a linear relationship between the manpower
category in different industry groups and their output, MRA helps
us to project the demand for manpower at the macro-level. For the
educational planning at the national level, this approach is much
in use in our country. Let us understand how it works:
1. It establishes a linear relation between employment and

output and then extrapolates manpower requirements in
(c)
different categories for years to come.
2. Initially category-wise manpower coefficients are computed

based on past data, which then are applied on the
hypothesised growth pattern of different industry groups.
118
3. Thereafter, aggregate manpower requirement of different
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Notes
categories are worked out.
___________________
___________________
4. These inputs are then converted to different type of
educational requirements.
___________________
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Even though it is a simple technique for macro-level manpower vis-
___________________
à-vis educational planning, it is not a dynamic approach, as it does
___________________ not cater for labour market flexibility. Perhaps this deficiency is
___________________ responsible for the critical skills shortage in our country, as our
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educational planning is reinforced by this approach. Similarly,
___________________
technology-output relationship is considered as stable under this
___________________ approach, which in reality is not. Moreover, inter-occupational job
___________________ mobility, man-machine substitution, costs, etc. are also not
considered, while computing aggregate manpower requirement of
___________________
different categories. That such limitations defeat the purpose of
macro-level manpower planning is evident from the fact that it
took over a decade for us to respond to redesigning course
curriculum in IITs and ITIs, matching the same to industry
requirements.
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Rate of Return Approach (RRA)
RRA or cost-benefit analysis of human capital is applied to decide
the aggregate investment requirement for different skill
development. Cost and earnings of an individual over his
productive life cycle is first computed and then their discounted
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value is estimated to assess the rate of return. However, aligning

our national plans to such cost-benefit considerations alone may
ignore the social cost-benefit aspects of education. Non-availability
of data, labour market flexibility, fluctuations in rate of return, etc.
are the other major deficiencies of this approach.
However, despite such deficiencies in both the estimation tools of

manpower at the macro-level, these can at least help in
approximation in setting priorities in education and skill
development. Certain deficiencies are due to our in-built system of
compiling labour market information. At least on two important
counts, these are visible. Indian Labour Year Book and Annual
Survey of Industries are two major publications of the Government
(c)
of India, which can streamline the information inputs required for

macro-level manpower planning. First of all both the publications
are not available on time. There still exists a time lag of 5 - 6 years
in their publications. The system of data compilation in such
publications is age-old and not in relation to requirements. Here
we will explain one major deficiency in Indian Labour Year Book of 119
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Labour Bureau, Shimla. This Year Book, among others, compiles Notes
Activity
data on the trend of industrial disputes in India, with their ___________________
Define the term Labour
distribution of casual factors, like, wages and salaries, indiscipline Economics.
___________________
and violence, bonus, etc., in percentage terms. There is no
interrelation with `man-days loss'. Therefore, it is difficult for us to
E
___________________
understand the severity of individual casual factor, as mere ___________________
percentage distribution is a misnomer. The Institute of Applied
Manpower Research over the years studied the manpower ___________________
requirements of different categories in the country. They have ___________________
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made some sectoral and occupational requirement analysis of
___________________
manpower for engineers, nurses, scientific manpower, etc.
___________________
Apart from the above, Labour Economics as a subject for study is
___________________
not yet properly integrated with major labour-management related
courses, which again restricts our knowledge input about labour ___________________
market trend and its analysis. For the primary understanding, we
have briefly discussed the concepts of Labour Economics.
Check Your Progress

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Fill in the blanks
1. Organization level manpower or human resource
planning _____________ be done in isolation of macro
issues.
2. MRA helps us to project the demand for manpower at
the _________level.
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Labour Economics
Labour Economics studies the demand and supply for the
important factor of production, i.e., human beings. Marshall and
Smith are the two pioneering economists who first recognized that
the study of market for labour is not possible without
understanding the social relations of production, long-term
contractual arrangement, problems of motivation, institutions like
unions and internal labour markets, etc. All these characteristic
requirements differentiate the market for labour from other
(c)
markets.
The most important development in modern Labour Economics is
the development of the concept of human capital. Human capital
approach analyses the individual decision-making in regard to
supply of labour and other behavioural areas which are more
120 related with sociology rather than economics. Before the
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Notes development of the concept of human capital, labour supply
___________________ decisions were considered more as an economic rationality. By
making such decision as in inter-relational variable of education,
___________________
skill, investment, wages, working hours, etc., the subject of labour
___________________
E
economics has been demarcated from the traditional economic
___________________ analysis.
___________________ Like labour supply, which emphasize on individual decision-
___________________ making, as an outcome of different inter-relational variables,
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labour demand and a firm's behaviour is influenced by internal
___________________
labour markets, hiring, promotion, wage policies and the structure
___________________
of wages in various markets, etc. Most of the firms maintain
___________________ computerised personnel records to analyze their demand for
___________________ labour. There are many techniques for analysis of labour demand.
For example, a firm may study the likely response of workers to a
particular wage and personnel policy (which optimizes their
profits). Some firms offer maximum compensation to match with
the workers' expectations and then try to maximize the utility of
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workers, while other study the effect of deferred compensation,
piece rates and others systems of rewards. The neo-classical model
on study of labour demand examines the magnitude of elasticities
and cross-elasticities of labour demand for workers of different
skills and the effect of minimum wages on employment. Similarly,
elasticities of substitution and complementarily are also studied to
analyze the labour demand.
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In the area of labour institutions, effects of unions on wages, wages

in unionised and non-unionised industries and occupations,
differences between union and non-union workers, etc. are studied.
Labour Markets
Demand, supply and institutions interact in labour markets and
labour economics studies the operation of labour markets
considering all these issues. Analysis of labour markets are carried
out for different occupational segments, viz., markets for blue-
collar workers, markets for white-collar workers, markets for
professionals, etc. Investigating markets for knowledgeable and
(c)
skilled workers, differentiating supply and demand forces in the

markets, geographic and industrial mobilities, unemployment,
wage pattern, etc., are the areas for studying the labour markets.
Recently, however, macro changes in wages and unemployment
over a given period of time, both within the country and across
countries, are also studied to synthesize the facts of the labour 121
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markets with the basic principles of economics. Notes
In India, pioneering studies in labour economics are institutionally ___________________
being carried out by the Indian Society of Labour Economics ___________________

(ISLE). ISLE organizes national level conferences on different
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___________________
areas of labour economics and is trying to develop this as a distinct
discipline having importance both in academic and professional ___________________
research in understanding the trend of the most important factors ___________________
of production, i.e., human beings. ISLE regularly publishes the
___________________
Indian Journal of Labour Economics, which is considered as an
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international journal on the subject of Labour Economics. ___________________
___________________
Check Your Progress
___________________
Fill in the blanks
___________________
1. Non-availability of data, labour market flexibility,
fluctuations in rate of return, etc. are the major
deficiencies.
2. ISLE organizes ___________ level conferences on
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different areas of labour economics
Summary
The basic concern of HRP is to identify skill and competency gaps
and subsequently develop plans for development of deficient skills
and competencies in manpower in order to remain competitive. It
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has now become an important enterprise-wide strategic function

not only to achieve goals and objectives but also to sustain the
present level in a globally competitive environment. Macro-level
HRP is an important objective of the Government for long-term
economic growth. Micro level HRP is influenced by technological
changes, organizational restructuring, skill and competency gap,
strategic objectives, trade unions pressure, lead time for manpower
procurement, etc.
Lesson End Activity

(c)
Suppose you manage a restaurant in a holiday resort near

Dehradun. During the summer it is profitable to keep the business
open, but in winters you need only one half of the cooks, servers,
supervisors and cleaners. What actions would you take in October
for the beginning of the peak tourist season?
122
Keywords
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Notes
Human resource planning: The process of getting the right
___________________
number of qualified people into the right job at the right time, so
___________________ that an organization can meet its objectives.
___________________
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Job analysis: A systematic exploration of the activities
___________________ surrounding - and within- a job.
___________________ Job description: It is recording of duties, responsibilities and
___________________ conditions needed for satisfactory performance of a particular job.
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___________________ Job Specifications: Translate job descriptions into human
___________________ qualifications, required for successful performance of a job.
___________________ Labour economics: It studies the demand and supply for the
important factor of production, i.e., human beings.
___________________

1. Define manpower planning. What are the activities involved
in manpower planning?
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2. What is optimum manpower planning? You have been
retained by an organization to develop a manpower planning
system. What factors would you recommend them to consider
for effective manpower planning?
3. Explain the importance of macro-level manpower planning in

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India.
4. Discuss the different models of macro-level manpower

planning.
a. Judgmental Estimate of Manpower
b. Job Description
c. Work Rules
d. Industrial Engineering Techniques

(c)
e. Leave Reserve
f. Indirect Analysis of Manpower

Further Readings 123
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Notes
Books ___________________
Human Resource Planning, M.S. Reddy, 1st edition, Discovery ___________________

Publishing House
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___________________
Planning and Managing Human Resources, William J. Rothwell, ___________________

H. C. Kazanas, Second Edition, HRD Press, Inc.
___________________
Web Readings ___________________
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http://www.citehr.com/4272-human-resources-planning.html ___________________
http://www.google.com/url?sa=D&q=http://hrera.com/contributions ___________________
1/hr_planning_vareta.doc&usg=AFQjCNGTbMnLpQaxfutwb84Ol_
___________________
lD3-NQGg
___________________
http://www.employment-studies.co.uk
http://gametlibrary.worldbank.org/FILES/844_HR%20
planning%20principles.pdf
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(c)
(c)
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UP
ES
UNIT 8: Human Resource Planning Process
Unit 8
125
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Notes
Human Resource Planning

___________________
___________________
Process
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___________________
___________________
Objectives ___________________
___________________
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topics:
___________________
\ HRP process outline
\ Various stages of HRP process ___________________
\ Time-scale of HRP Forecasts ___________________
___________________
Introduction
In the earlier unit we have introduced the concepts of Human
Resource Planning at macro and micro-levels, suitably delineating
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its strategic role rather than mere head counts and extrapolation,
keeping pace with budgetary requirements. We have also discussed
that HRP at organizational or macro-level cannot be done without
taking into account the micro-level issues. Almost all developed
countries today are facing the crisis of quality manpower. The
problem is so acute for them that they are now going for direct
recruitment in developing countries instead of outsourcing from
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body shoppers. The United Kingdom is now finding them in a very

awkward situation for non-availability of teachers. Nearly 2,00000
teachers need to be recruited by them from developing countries,
including India, to man such posts. The situation is not so different
in other developed countries for almost all trades like; computer
scientists/engineers and systems analysts, physical and corrective
therapy assistants and Aids, medical assistants, physical
therapists, occupational therapy assistants, sales representatives,
social and human service assistants, speech language pathologists
and audiologists, health information technicians, dental
hygienists, physician assistants, professional managers, engineers,
etc. In explaining the trades, we have used the job titles as they
(c)
prevail in their countries. Major reasons for such job vacancies in

those countries can be attributed to total failure of their macro-
level planning of human resources. Interestingly all these
countries are also going for simultaneous curtailment of their
manpower.
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Almost every day in the newspapers we get news-clips on
S
Notes
downsizing or job cuts, be it in IT industry or banking and finance
___________________
or engineering. Such redundancy of manpower, once again
___________________ vouches, that even at micro-level, they are equally not able to
___________________ address to the problem of skill obsolescence. It is interesting to
E
observe that even with acknowledged professionalism; they are not
___________________
able to adopt a strategic approach to HRP, resulting in culmination
___________________ of redundancy problems, after each annual performance results. It
___________________ has now become their operational decision, every now and then to
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go for manpower redundancy. When we get news like, ABN Amro
___________________
reduces 2,000 jobs in Netherlands or American Express announces
___________________
5,000 job-cuts worldwide or even Micro Systems asks 872 of their
___________________ workers to find new jobs within the company or leave, or NEC
___________________ Corporation, Japan, to cut 4,000 jobs, we ponder over, how come,
such world-class and globally visible organizations could not get a
signal well ahead! Are their business plans a total failure! Are
their strategic plans minus people! The situation in India is not
quite different, but we still can boast, we are well ahead. Be it for
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the prevailing work culture (institutional employment relations
rather than contractual) or for the ability to foresee the
organizational dysfunctions, is a matter of debate. When Telco goes
for axing 1,500 jobs through VRS or Balco offers VRS to their
employees, or even commercial banking organizations to axe 30%
of their employee strength through VRS, we do not get surprised,
as it is more for organizational restructuring rather than
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operational results. They are doing all this for a better tomorrow,
as a part of their organization-wide restructuring plan. And they
give reasonable separation benefits. But when Daewoo Motors asks
their employees to leave without compensation, we question their
business practice!
Such detailed outlining of the global scenario is necessary to
understand the problem of HRP across the world.
HRP process cannot be something like a thumb rule which is
universally applicable. It varies from organization to organization.
In this unit, we have discussed the HRP process in general, which
(c)
may merit the attention of practitioners. But what to adopt and

what not, is left to the practitioners to identify, keeping pace with
organizational requirements.
127
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HRP Process Outline Notes
Activity
___________________
Define the term investigation.
Let us once again review a definition of HRP of HMSO, 1974. It is
a strategy for the acquisition, utilization and retention of an ___________________
enterprise's human resources. It seeks to link policy and practice
E
___________________
in day to day decision-making. Thus, interrelationship of HRP with
___________________
other HR functions is an established hypothesis, as evident from
corporate practices. ___________________
We can broadly delineate the HRP process into four different ___________________
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stages as under: ___________________
1. Investigation: It is the primary stage of HRP in any ___________________
organization. In this stage, organizations try to develop their
___________________
awareness about the detailed manpower scenario with a
holistic view, looking at their current manpower. A SWOT ___________________
analysis can reveal a better picture with due consideration of

the external environment, performance and productivity
trends, working practices, operational and strategic plans.
Scientific homework, at this stage itself can help to identify
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present and future skill gaps. For a better result, SWOT
analysis can proceed a cause-effect diagram (fish-bone
diagram), which is simple to comprehend. While doing
external manpower review, macro level issues need to be
understood with due cognizance to the relevant literatures
like; Annual Economic Survey, Year Book on Indian Labour,
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Survey of Indian Industries, ILO International Year Book on

Labour, various reports of Planning Commission on
manpower, etc. Internal manpower review has to be done with
enterprise-wide current operational data, like; marketing,
finance, performance data, current employment practices and
methods, etc. Also internal manpower review is done with a
futuristic view with due cognizance to strategic plans and
objectives.
2. Forecasting: After adequate investigation, in the next phase
of HRP process, analysis of demand and supply of manpower is
done. There are different models of demand forecasting, which
(c)
we have discussed later in this chapter. Manpower supply

analysis is done considering both internal and external supply.
While doing internal supply analysis, career planning and
development, training and development and succession plan
aspects are considered along with corporate policies and
128 procedures. For example `promotion from within' as a
S
Notes corporate policy may or may not exist in a particular
___________________ organization. Where it exists, it has to be understood for which
levels it is applicable, is it a time-scale (seniority) promotion or
___________________
promotion on merit, is there any policy on this, etc.
___________________
E
Interestingly promotional decision is a prerogative of
___________________ management, hence an employee, prima facie cannot contest
___________________ such a decision of management in a court of law, unless
otherwise he or she can prove that such a decision has
___________________
prejudiced his or her interest. The onus of proving this lies
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___________________ with the employee concerned. Many organizations have their
___________________ documented promotion policy, to address to the problem of
___________________
personal bias in promotional decision. External supply
analysis is done considering macro-level issues to understand
___________________
their availability. Since current employment practice is to
employ people for a given time period, employment status also
needs to be assessed in terms of availability. Demand
forecasting helps in identifying requirements of manpower for
various positions at different points of time. What should be
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the status of employment (permanent, temporary, part-time
contract labour, sub-contracting, etc.) will depend to some
extent also on the nature of position. While in abroad, they
have the flexibility to hire for all positions from employee
leasing companies on assignment basis, in our country the
scope of such engagement is limited to some specific jobs only.
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Moreover, people are by nature sensitized for contractual

employment terms. This practice however, is slowly catching
up and since it is a total transition of attitude, it will take
some time to settle down. May be in 5-10 years time, job
mobility will increase and people of the new-age will consider
it normal.
3. Planning and Control of Manpower: At this stage forecasts
of manpower are translated into HR policies, which encompass
all HRP related issues like recruitment, training and
development. While going for recruitment, it is necessary to
(c)
understand the job descriptions, which precede job analysis

and job roles. Also it is necessary to document the status of
recruitment, i.e. the time period for which recruitment has to
be made. Most of the organizations have their own
documented recruitment system. What should be best, needs
to be decided by the HR managers? Most of the organizations
are besieged with the problem of restructuring. Hence extent 129
S
and scope of internal hiring i.e. redeploying in restructured Notes
jobs also need to be understood. Similar efforts should be made ___________________
in planning and documenting the training and development
___________________
policies of the organization to address to the problem of
E
knowledge and skill obsolescence in the context of changing ___________________
technology. Hence the scope for redeployment through ___________________

retraining also needs to be explored at this stage. While doing
___________________
HRP, flexibility and inter-relationship of all other policies also
___________________
need to be considered. We must appreciate that manpower
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redundancy in India and abroad is not only for inadequate ___________________
business planning but also for inadequate human resource ___________________
planning, which among others, can be attributed to inflexible
___________________
policies on redundancy, inflexible job descriptions (that restrict
lateral job movement), inflexible employment conditions, ___________________
absence of retraining and redeployment programmes. Mere

planning and documenting the policies will not help. Control
must be there to correct any observed deficiency in such plans.
For example offering VRS with additional benefits may
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transpire to be a costly decision than skill renewal of
manpower through training and re-training. Similarly
outsourcing manpower through a body shopper may be costly
than direct recruitment on contractual terms. Giving overtime
to employees for sharing extra job load may be cheaper than
recruiting an extra hand (obviously if extra job load is
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seasonal). Need for control can be understood when manpower

costs overshoot the budget.
4. Utilisation: In this final stage of HRP process, success is
measured in terms of achievement trend, both quantitatively
and qualitatively. While quantitative achievement is visible
from productivity trend, manpower cost, etc. qualitative
achievement is a subjective appraisal on achievement of
organizational objectives. Reflection of qualitative
achievement can also be studied in the context of prevailing
industrial relations, level of motivation and morale, grievance
pattern etc.
(c)
Time-scale of HRP Forecasts

Determining the time-scale of human resource forecasts is very
important to decide about their availability and chart the possible
130
action to meet the requirement. We have already explained that
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Notes forecasts for the manpower or human resources are made at the
___________________ organizational level, keeping in view demand and supply analysis,
internal availability, external availability, employment practices,
___________________
etc. Depending on the time-frame, which again depends on the
___________________ basis of requirement, nature of analysis of the above factors, keeps
E
___________________ on changing.
___________________ Thus it is evident that depending on the time-scale, human

___________________
resource or manpower forecast pattern also changes. However, it is
not out of place to mention that today's organizations are not
UP
___________________
catering to such requirement analysis beyond the time-frame of 1-2
___________________ years, as they take decisions on manpower redundancy based on
their annual operational results.
___________________
___________________ For better appreciation, we have explained a tentative table for

manpower forecasts, below:
Table 8.1
Time-frame Requirement basis Availability Possible action plans

to meet the requirement
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Less than a year Annual Budget Existing manpower Body shoppers/
(operational plans) (by proper distribution contractors, overtime,
of workload) + recruitment on
contractual manpower contractual terms,
restructuring, and layoffs.
1-2 years Forecasted budget or Current manpower less Transfer, promotion,

forward budget projected attrition new recruitment,
(business plans) restructuring,
redundancy, training
and development
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2-5 years Long-term plans Projected manpower Succession plans,

(including those recruitment, training
trainees who will be and development,
inducted during the restructuring,
period) redundancy
More than 5 years Perspective plans Labour market, Succession plans,

education system management
development,
organizational
development,
redeployment, job
restructuring
Forecasting HR or manpower requirements: Forecasting

processes have been briefly discussed, while explaining steps in
manpower planning in the next unit. Here we have discussed
(c)
various quantitative tools to reinforce the idea. Use of quantitative

tools in manpower planning centres on the following areas given
below. There are, however, many developed models for HRP, which
we have discussed separately.
Analysis of Workload Factors 131
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Notes
To forecast the manpower requirements at different points of time,
workload analysis is extremely important. Analysis of present and ___________________
future workload depends on the possibility of quantifying the work ___________________
content in every area of an organizational activity. Following steps
E
___________________
help in workload analysis.
___________________
1. Classification of work: Classification of work is done by
___________________
identifying the work or job content and time requirement for
such job or work unit. Work or job content classification helps ___________________
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in breaking jobs in different components, which together ___________________
completes an operation. Time requirement analysis for each
___________________
such job component can be done by deciding the standard
time, using work measurement techniques. In some cases, ___________________
cycle time for each job component is mentioned in machine ___________________
literatures. Extrapolating time requirement from such data
can help in deciding time requirement. However, this may not
help us for service jobs, like; customers' query handling,
administrative or managerial jobs, clerical jobs, etc.
E-
Approximation of time requirement for such jobs can be done
for an existing organization, based on past experience and
benchmarking with others. While a new organization can
emulate others, there are certain limitations of job or work
content analysis for the reason that all jobs are not strictly
quantifiable. Deciding the standard time of job scientifically,
requires rigorous time study, which is not only costly but also
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time consuming. Secondly, normal fatigue allowance is not

considered while developing such time requirement. However,
during the process of developing standard time through time
study, such problems can be addressed. Thirdly, with the pace
of technological change, standard time required also varies,
which means setting of job time at one point of time may not
hold good subsequently. Moreover, technology also changes
the job content and even the job family. For example, the job
of a turner, who is using a lathe machine, may change to an
operator, when he uses a computerised machining centre.
Similarly, the job of a clerk who is doing the job manually may
change to a computer operator, when he is using computer
(c)
systems.
Thus classification of job content and analysis of time

requirement for each job component is a dynamic process.
2. Forecasting number the of jobs: After classification of jobs
and work content and its time requirement, in the next phase
132
of workload analysis, job forecasting in quantitative terms for
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Notes a number of jobs is done for a time period. This is done based
___________________ on the demand projection.
___________________ 3. Converting the projected jobs in man-hours: Multiplying
___________________ the time requirement of each job with the number of projected
E
jobs, man-hours for jobs are computed.
___________________
4. Converting the man-hours into manpower requirement:
___________________
In the final phase of workload analysis, aggregate man-hours
___________________ are converted into manpower requirements. This is done
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___________________ considering leave reserve, normal fatigue allowance, etc.
___________________ Let us analyze workload factor to access manpower requirement in
___________________ a given day of the Maintenance Department of Delhi Vidyut Board
to attend to customer complaints. Based on analysis of customer
___________________
complaints (pertaining to maintenance jobs), classification of work
has been grouped into four categories.
(i) Classification of Work
Job Category Hours Per Job
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Related to meters 0.75
Related to installation 2.50
Related to maintenance 1.50
Related to emergency calls 1.10
(ii) Forecast of jobs in a day for different years
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Job Category YEAR

2008 2009 2010 2011
Meters 15 13 11 8
Installation 85 95 110 125
Maintenance 27 35 41 45
Emergency 10 8 6 4
(iii) Converting forecast into man-hours required per day
Job Category YEAR
(c)
2008 2008 2010 2011

Meters 11.25 9.75 8.25 6
Installation 212.5 237.5 275 312.5
Maintenance 40.5 52.5 61.5 67.5
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Emergency 11 8.8 6.6 4.4
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Notes
Total man-hours 275.25 308.55 351.35 390.4
___________________
required per day
___________________
(iv) Converting man-hours into manpower requirement per
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___________________
day
___________________
This is done considering skill interchangeability of
maintenance staff for the identified job categories with 20% ___________________
fatigue allowance and 20% leave reserve. Therefore, in a given ___________________
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day of 8 man-hours per employee, net available time for
___________________
attending customer complaints get reduced by 40% per
employee, i.e., only 4.8 man-hours per day, per employee is ___________________
available to attend customer complaints. Thus manpower ___________________

forecasting has to be done, considering 4.8 manpowers per ___________________
employee, per day. Delhi Vidyut Board would therefore require
maintenance staff per day for different years, as under:
No. of maintenance YEAR
staff required
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2008 2009 2010 2011
Employees 57 64 73 84
Note: Number of maintenance staff required has been rounded off to the nearest total as we
cannot fractionate manpower requirement.
Time Series Analysis

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Employment data over a time period (time series) are used under
this method as the basis for manpower forecast. However, mere
projecting the past into the future, without considering endogenous
and exogenous changes, will increase the forecasting errors, which
may be either under forecasting or over forecasting of manpower
requirements.
The relevance of such change factors has been discussed earlier.
When we record employment levels over a time period, we observe

the following five distinct elements in it.
(c)
1. Trend: Fluctuations in level of employment over a time

period.
2. Cyclical Effects: Change in employment in relation to some

particular event, like; economic liberalization in India or WTO
resolutions.
134
3. Seasonality: Seasonal fluctuations occur more than once in a
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Notes
given time period like, requirements of more maintenance
___________________
staff in Delhi Vidyut Board during summer and rainy season
___________________ while less in winter.
___________________
4. Step: This is a sudden change in employment level due to
E
___________________ economic environment or increased market share or
procurement of some new machines, etc.
___________________
___________________ 5. Random Fluctuations: These are fluctuations in
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employment level which are random in nature, i.e., such
___________________
fluctuations do not follow any obvious pattern. We can address
___________________ this problem by following a moving average method.
___________________ Given below are some illustrations of manpower forecasts using
___________________ time series analysis.
Moving Average Method

Under this method, average of the combined employment level
data for the recent past is considered as the forecasted employment
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level for the next period. This technique is useful to guard against
random fluctuations. However it requires careful selection of time
periods, which may be a 6-period, 10-period, 12-period moving
average. If time periods chosen are too few, we may get wide
variability in our forecast. Therefore, considering more time
periods, we get better results. Whatever time period we select for
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over forecast, it is necessary to continue the same number of

periods for our computations. After each period elapses, the figure
for the oldest period is dropped and the figure for the newest
period is added for our subsequent computation of manpower
requirements.
Example:
Godrej has the following manpower data for their health care
division for the past 6 years:
Year Manpower Level/Data
(in nos.)
(c)
2005 500
2006 600
2007 800
2008 1,000
135
2009 1,100
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Notes
Activity
2010 1,300
What is exponential
___________________
smoothing?
You have been asked to forecast their manpower requirement in ___________________
2011 using a 6- period moving average
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___________________
Solution: ___________________
500 + 600 + 800 + 1000 + 1100 + 1300 ___________________

Fm =
6 ___________________
UP
___________________
= 5300 / 6 = 883 nos.
___________________
If we are asked to use 4-period moving average to forecast ___________________
manpower for 2011, then we require to drop the data of 2005 and
___________________
2006 and compute the forecasted manpower as under:
800 + 1000 + 1100 + 1300
Fm = = 4200 / 4 = 1050 nos.
4
From the above variation in results, we can well understand the

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danger of considering lesser time periods in manpower forecasting.
For achieving better results, weights may be assigned for different

time periods at the discretion of the analyst. For example
manpower levels of 2005, 2006 and 2007 may be less relevant,
hence, for these years weights may be assigned as 1 each. For
2008, weight may be 2, for 2009 weight may be 3, while for 2010,
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weight may be 4. Now the forecasted manpower for the year 2011
would be as under:
Fm =
a f a f a f a f a f a f
1 500 + 1 600 + 1 800 + 2 1000 + 3 1100 + 4 1300
Σ w, i. e., 12
500 + 600 + 800 + 2000 + 3300 + 5200

= = 12400 / 12 = 1033 nos.
12
Exponential Smoothing
In moving average method, we need to carry forward a large

(c)
volume of historical data. We can eliminate the need for such past
records by adopting this method. This method smoothens random
errors by giving exponentially decreasing weights to historical
data.
136
Such weight factor is indicated by alpha (α), which is a smoothing
S
Notes
constant, a non-linear decimal value which lies between 0 an 1.
___________________
The formula for the exponential smoothing model is:
___________________
Fm = Ft + α – (At-1 – Ft-1)
___________________
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Where,
___________________
Fm = Forecasted manpower
___________________
Ft-1 = Forecasted demand for the previous
___________________
period
UP
___________________
α = Smoothing constant
___________________
At-1 = Actual manpower required for the
___________________ previous period
___________________
Example:
Assume that the forecasted manpower requirement for an
organization was 500, while their actual requirement was 480.
Considering an alpha value of 0.4 (which the company feels would
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produce the best results), compute the manpower requirement for
the current period.
Solution:
500 + 0.4 (480 - 500) = 492 nos.

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Double exponential smoothing can also be done to get further

cushion in manpower forecasting.
Analysis of Productivity and other Ratios
Productivity and performance analysis was discussed in the

previous unit. We have seen, for short-range forecast, usually the
normal budgetary process is followed.
Managerial Judgement
A manager has to make a judgement about the future employment
levels. Such judgemental decision is based on his past experience,
(c)
which he relates to past occurrences of some events and its effects

on manpower plans. He has to use his judgement considering
contingencies. Combining quantitative tools with judgement yield
better results. There are, however, certain pitfalls in our assumed
variables. In the following paragraphs, we have examined such
pitfalls, which may lead to inaccurate manpower forecasts.
Difficulties in Manpower Forecasts using Quantitative 137
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Tools Notes
___________________
1. When productivity data is considered as available to decide
___________________
about manpower requirement, it is important to understand
that productivity rise cannot always be attributable to
E
___________________
increased human effort. Thus increase of productivity due to ___________________
changes in technology or the sum total of operational and
___________________
managerial efficiency (total factor productivity approach) are
the factors, which need to be integrated while doing manpower ___________________
UP
forecasts. But developing manpower planning models ___________________
integrating the above two productivity variables is not so easy ___________________
for obvious computational difficulty.
___________________
2. It is difficult to get units of output in the same form for all
___________________
jobs. For example, maintenance jobs are difficult to quantify.
Moreover, maintenance problem is time independent.
Planning for maintenance staff is one of the difficult tasks for
the manpower planner. Obviously for this reason, most of the
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organizations prefer to sub-contract their maintenance
function. Even with Customer Relationship Management
(CRM) solutions, quantification is difficult.
3. Relationship between output and manpower is not always
straight forward. Increase in output may lead to economies of
scale and resultant cost efficiency and rise in productivity,
which may not be attributable to manpower productivity.
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4. Effect of factors to improve productivity, i.e., new technology,

incentive schemes, etc. may not be consistent over a time
period. Therefore, projecting manpower requirement,
considering effects of such factors may be inaccurate.
5. Effect of different factors may not always be linear. Inter-
relationship of different factors complicates forecasting of
manpower. Although we have statistical techniques like
multiple regression analysis, factor analysis, etc., their
computational rigours often dissuade the manpower planners
to use such tools.
(c)
6. Uncertainty about the future is again a major problem for the

manpower planner. Thus extrapolating on past data may lead
to a major inaccuracy in manpower estimation.
7. Data on past workload factors may not be available, creating
difficulty in emulating the same.
138
8. Integration of manpower planning with corporate plans may
S
Notes
not exist in an organization, creating problems for enterprise-
___________________
wide manpower plans.
___________________
9. Employees cannot always be related to output in a direct way.
___________________
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10. Human Resource Information Systems (HRIS) may not exist
___________________ in an organization. Lack of such information support system
___________________ leads to inaccurate estimation of manpower.
___________________ For obvious constraints, explained above, managerial judgement
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___________________ along with statistical tools is often considered as the best option for
manpower planning. Often it is said that planning for manpower
___________________
within a given cost constraint, without bothering for past practices,
___________________ leads to a better estimation.
___________________
Check Your Progress
Fill in the blanks
1. Managerial judgement along with statistical tools is
often considered as the ___________ option for
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manpower planning.
2. Planning for manpower within a given cost constraint,
without bothering for past practices, leads to a
________estimation.
Summary
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Human Resource Planning process considers both macro and

micro-level issues. The problem of human resource planning is not
unique for Indian organizations. It is now a global phenomenon.
Without proper human resource planning, organizations would
continue to take manpower redundancy decisions on short-term
operational results. The HRP process follows certain well defined
stages. At each such stage, it is necessary for the organization to
collect data (both macro and micro), analyse those and then plan
for manpower.
(c)
Lesson End Activity

Working, individually or in groups, develop a forecast for the next
three years of occupational market conditions for five occupations
such as accountant, engineer, doctor, journalist and lawyer.
Keywords 139
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Notes
Job content classification: It helps in breaking jobs in different
___________________
components, which together completes an operation.
___________________
Labour turnover index: It indicates the number of leavers
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___________________
___________________
1. Discuss the importance of Human Resource Planning process
for Indian organizations. ___________________
UP
2. What are the different stages of HRP process? Why it is ___________________
important for us to consider the time-scale of HRP forecasts? ___________________
3. Discuss the process of HRP forecasts using workload analysis ___________________

and time series analysis. ___________________
4. Write Short notes on:
(a) Workload Factors
(b) Random Fluctuations
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(c) Delphi Technique
Further Readings
Books
Human Resource Planning, M.S. Reddy, 1st edition, Discovery
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Publishing House
Planning and Managing Human Resources, William J. Rothwell,
Web Readings
http://studyvalue.com/_management_sciences/_hrm/hrm_planning_
and_manpower_13.html
http://www.google.co.inurl?sa=t&rct=j&q=human
%20resource%20planning% 20process&source=web&
(c)
cd=8&sqi=2&ved=0CFoQFjAH&url=http%3A%2F%2F
www. andrews.edu%2F~schwab%2F384plan4.ppt&e
(c)
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UP
ES
UNIT 9: Qualitative Models
Unit 9
141
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Notes
Qualitative Models
___________________
___________________
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___________________
Objectives
___________________
topics: ___________________
\ Different manpower planning models ___________________
UP
\ Delphi technique ___________________
\ Nominal group technique
___________________
\ Wastage analysis
___________________
Introduction ___________________
Qualitative Models are meant for Better Managerial Judgement

which are discussed hereunder:
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Delphi Technique
The word ‘Delphi’ has come from Greek. In Athens of Greece
during ancient times, it was a convention to consult an oracle
representative of God Apollo who was believed to have contact with
God. The advice of the oracle at that time could only be interpreted
by the Priest.
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In modern times this method is essentially a group process to

achieve a consensus forecast. This method calls for selection of a
panel of experts either from within or outside the organization,
whose comments are crystallized from a series of questionnaire
responses and then used as the basis to forecast. A series of
questionnaire are prepared from the responses received from a
prior set of questions in a sequencing manner. At every stage,
information obtained from the previous questionnaire is shared
among the participating members, without, however, disclosing
majority opinion, this otherwise may have peer-group influence on
minority opinion.
(c)
The procedure of Delphi Technique may be enumerated as follows:

1. To start with, it requires selection of a coordinator and a panel
of experts both within and outside the organizations.
142
2. The coordinator then circulates questions in writing to each
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Notes
such expert.
___________________
3. The experts then write their observations.
___________________
4. The coordinator then edits those observations and
___________________
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summarizes, without, however disclosing the majority opinion
___________________ in his summary.
___________________
5. On the basis of his summary, the coordinator then develops a
___________________ new set of questionnaire and circulates those among experts.
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___________________ 6. Experts then answer such new set of questions.
___________________ 7. The coordinator repeats the process till such time he is able to
___________________ synthesize from the opinion of the experts.
___________________ The success of the process again depends on the following factors:
1. Experts should be so chosen that they have the requisite

knowledge and skills to give the best answers.
2. Questions should be relevant to the objective.

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3. Criteria for evaluating responses should be consistent,
unbiased and befitting with the objectives. Although there is
no universal set of criteria for evaluating responses, it is often
considered necessary to follow the under mentioned
guidelines:
(a) Consider the assessment made by the experts in terms of

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their knowledge in the area.
(b) Consider the assessment in terms of feasibility,

objectives, time and resource requirement.
(c) Consider the assessment in terms of desirability.
(d) Consider the assessment in terms of extraneous factors.
Check Your Progress

Fill in the blanks
1. The word ‘Delphi’ has come from ______________
(c)
2. A series of questionnaire are prepared from the

responses received from a prior set of questions in a
______________ manner
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Nominal Group Method Notes
Activity’
Like Delphi method, nominal group method also involves a panel ___________________
Who are panel of experts?
of experts. However, the major difference between the two is that ___________________
while under Delhi technique, experts are not allowed to discuss
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___________________
among themselves, for assessing the questions, under nominal
group method experts are given the opportunity to discuss among ___________________
themselves. Under this method, the coordinator assumes the role ___________________
of a facilitator, allowing the experts to sit together to discus their ___________________
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ideas and records of such discussions are made on a flip chart.
___________________
After this, round table discussions on ideas, experts are asked to
rank their ideas according to their perceived priority. The group ___________________
consensus is then derived mathematically in terms of individual ___________________

rankings. The process, therefore, affords creativity and facilitates
___________________
scientific group consensus unlike consensus by qualification (as the
coordinator ultimately decides the best course of action) under the
Delphi technique.
Check Your Progress

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Fill in the blanks
1. __________ Delphi method, nominal group method also
involves a panel of experts.
2. The Nominal Group Method affords creativity and
facilitates group consensus.
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Analysis of Manpower Supply

Analysis of manpower supply at the enterprise level is also done
using some quantitative techniques for accurate HRP. Some of the
important techniques are discussed below:
Wastage Analysis
Manpower wastage is an element of labour turnover. Therefore, it
is not labour turnover; per se. Wastage is severance from the
organization, which includes voluntary retirement, normal
(c)
retirement, resignations, deaths and dismissals. Marginal

recruitment decisions, without wastage analysis may lead to
inaccuracies in HRP. Tavistock Institute of Human Relations, U.K.
suggested wastage analysis using the following curve.
144
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Notes Induction
Crisis
___________________
___________________ Differential
Transit
___________________
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Levers
___________________
Settled Connection
___________________
___________________
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___________________
Weeks Time Months/Years
___________________
___________________ Figure 9.1
___________________ The above curve identifies three different phases. During induction
phase, marginal employees leave. During differential transit
period, an employee learns about the organization and identifies
his role in it. While during the period of settled connection, an
employee settles down and decides to stay long. Wastage decreases
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with the increase of length of service. Wastage also decreases with
the increased skill exercises and age of employees.
Characteristically wastage of manpower is more in female than
male employees. It varies with the level of employment and also
exhibits seasonal variations. Working conditions and size of the
firm are also important variables of manpower wastage.
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Check Your Progress

Fill in the blanks
1. Analysis of manpower supply at the enterprise level is
also done using some __________ techniques.
2. Wastage __________with the increase of length of
service.
Different Methods of Wastage Analysis
Labour Turnover Index

(c)
This index indicates the number of levers as percentage to average

number of employees. Average number of employees employed in a
given time period is decided by adding the employees at the
beginning and end and then dividing the same by two.
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Example: Notes
At the beginning of a year, a firm has 250 employees, while at the ___________________
end it has 230. Assume no recruitment has been made in between. ___________________
Compute the labour turnover index.
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___________________
Solution: ___________________
Number of employees leaving = 250 – 230 = 20 ___________________
250 + 230 ___________________

= 240
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Average number of employees employed = 2 ___________________
Labour Turnover ___________________
Number of empolyees leaving ___________________

= × 100
Average number of employees employed ___________________
20
× 100 = 8.33%.
= 240
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Suppose 5 people have been recruited in between during the year,
then labour turnover would be:
Number leaving = (250 + 5 - 230) = 25
Average number employees employed =

a255 + 230f = 243
2
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25
Labour turnover = × 100 = 10%
243
Stability Index
This index indicates stable workforce percentage for a given period
and can be computed as under:
Number with more than 1 year service now

× 100
Total Employed one year ago
Cohort Analysis
Cohort means homogeneous groups. Cohort analysis takes into
(c)
account the length of service, which is an important variable of

wastage analysis. This, therefore, eliminates the defect of labour
turnover index. Cohort analysis is more accurate for a small
homogenous group. However, changing social and economic
conditions can invalidate this analysis. In the table below, we have
146 illustrated a cohort analysis, assuming number of people engaged
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Notes in the beginning of a year as 500 and number of leavers for
___________________ different length of service as under:
___________________ 1st Year 50
___________________ 2nd Year 45
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___________________ 3rd Year 40
___________________
4th Year 35
___________________
5th Year 30
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___________________
Length of Service No. Leaving Cumulative Remaining Survival as
___________________ (in years) Levers percentage
of leaving
___________________
1. 2. 3. 4. 5.
___________________
0 0 0 500 100.00
1 50 50 450 90.00
2 45 95 405 81.00
3 40 135 365 73.00

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4 35 170 330 66.00
5 30 200 300 60.00
The percentage remaining in column 5 can be presented on a

graph paper, which is known as the survival curve. This was
obtained using the following formula:
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Number remaining at a giventime

× 100
Number engaged at the start
Census Analysis
One of the major deficiencies of cohort analysis is that it holds good
for a small homogenous group. Census analysis can eliminate this
problem, taking into account a cross section of the organization,
i.e., all the age-specific wastage rates at a given time and applying
a smoothing algorithm to the resulting data to identify a general
pattern.
(c)
Census analysis requires three sets of data as under:

i. The number of employees at the beginning of the census,
ii. The number of employees at the end of the census, and
iii. The number of levers during the census period.
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Check Your Progress Notes
Activity
Discuss hierarchical systems.
1. This index indicates the number of levers as percentage ___________________
to ___________number of employees.
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___________________
2. Cohort means _____________ groups. ___________________
Manpower Planning Models ___________________
___________________
Use of mathematical models for manpower planning dates back
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1779, when John Rowe developed an actuarial model for planning ___________________
careers in the Royal Marines (Jones, 1964). Manpower systems are ___________________
described in terms of stocks and flows. Stocks are the number of
___________________
staff in the system at a given point of time. Stocks are divided into
categories like, sex, age, length of service, etc. Flows are ___________________
recruitment, promotion, wastage, transfers, demotion, etc. Details

of some of the conventional models have already been discussed in
this chapter. Here we will be discussing some selected
mathematical models which require fundamental knowledge of
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mathematics with greater details.
Markov Models-Hierarchical Systems

In hierarchical systems, routes for the employees, which is the
promotion ladder, are well defined. It means every employee
elevates himself in the organization through a well defined career
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path. All employees start in an organization at the bottom rung

and climb up the ladder one at a time.
Any wastage is falling off the ladder. Young and Almond (1961),
devised a hierarchical manpower system, framing sub-groups on
the basis of salary grade and length of service. They have used the
theory of the Markov process to measure the long-term equilibrium
distribution of staff among the sub-groups. The basic assumption
of this model is that an employee in a particular grade or a status
group has a fixed chance of promotion in a given year, independent
of vacancy. Thus number receiving promotion depends on the
number of eligible staff in the grade below, subject to fulfilment of
(c)
eligibility criteria, which may be age, seniority, qualifications or

experience. The central equation for this model is:
n (t + 1) = n (t) P + R (t+1)r
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Notes
___________________
___________________
___________________
PE
___________________
___________________
___________________
___________________
___________________
___________________
U
___________________
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Renewal Models
 (t)
0
(c)
149
(i) Management Trainee (MT)
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Notes
(ii) Assistant Manger (AM)
___________________
(iii) Manager (M)
___________________
(iv) Senior Manager (SM)
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___________________
The progression from one level to another is straightforward and is ___________________

up the hierarchy from (i) to (ii) to (iii). Obviously, not everyone
___________________
moves up the ladder and the percentage of progression drops
steadily as we go up the levels. ___________________
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___________________
There are two entry points in the system, one at the MT level and
the second at the Assistant Manager level. There is an employee ___________________
turnover at every level, although the percentage of turnover drops
___________________
at every level as we go up the hierarchy level.
___________________
The data for these employees are given below:
Particulars MT AM M SM
No. of employees 60 180 50 20
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Emp. turnover rates 22% 30% 10% 4%
New recruitments as a % of 95% 5% – –
total recruitments
Percentage promoted to 78% 5% 2% –
next levels (per annum)
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There are two assumptions which underlie that, (i) the employee in
any group (for example managers) has a fixed chance of promotion
in any given year and, (ii) there is no requirement of vacancy to
exist in the higher grade and, therefore, no delay in promotion to
the next higher grade because of competition from other
employees.
The central equation used in this type of model is written in the

form:
n ( t + 1) = n (t) P + R ( t + 1) r
Where n (t) is the vector of employees at time t, P is the matrix of

(c)
transition probabilities between each pair of employee groups, r is

the vector of probabilities of a new recruit starting in each
particular employee group, and R (t) is the number of new recruits
at time t
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In the above example the various figures would be as follows:
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Notes
___________________
a f MT
n t =
AM M SM
a60 180 50 20f
___________________
___________________ MT 0 0.78 0 0
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___________________ P= AM 0 0.65 0.05 0
___________________
M 0 0 0.88 0.02
___________________
SM 0 0 0 0.96
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___________________
r= (0.95 0.05 0 0)
___________________
___________________ We have deliberately used the rotation in explaining so that we

can be clear how these numbers come into being-n (t) is the actual
___________________
numbers of employees in each employees group, r is the number of
new recruits (95% in MT & 5% in AM grade).
Let us try and understand the matrix P. We can see from the table
that 78% of employees in MT are promoted to AM in the next year.
So from MT on the left to AM we find a figure of 0.78. Just below
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that is the figure of AM who remain AM. This figure comes from
deducting the employee turnover figure (30% in this case) and
promoted to the next grade figure (5% in this case) from a total of
100% (100 - 30 - 5 = 65%) =(0.65).
From MT to MT, there is no figure as there is no MT which

remains as MT after a year (either he is promoted or he leaves).
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Also note that there is no figure from MT to M or to SM as no

jumps are possible.
Once we have data in place, we can use the equation to calculate
the number of employees in each grade for any number of years
that we so desire, provided our assumptions are fulfilled and
number of new recruits each year are known to us. Let us calculate
the number of managers for the next year.
= n ( t + 1) = n (t) P + R ( t + 1) r
= 0.05 × 180 (5% of last year AM's who were promoted)
+ 0.88 × 50 (88% of current managers)
(c)
= 9 + 44 = 53 managers.
If we assume that we are going to take 60 new recruits every year
for the next two years, we can find out what is the number of
employees in different grades.
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It comes out to be,
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Notes
n (1) = (57 168.23 53 20.2) ___________________
Which can be rounded off to: ___________________
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n (1) = (57 168 53 20) ___________________
___________________
n (2) = (57 156.67 55.04 20.26)
___________________
= (57 157 55 20)
___________________
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While the AM level employees are going down from the current 180
___________________
to 168 next year and to 157, two years from now, the number of
managers are going up progressively. ___________________
___________________
The benefits of the model are obvious, it helps us to see the effect of
our policies and plan for the future accordingly. ___________________
Cambridge Model
This model concentrates on steady-state age distribution, i.e., staff
distribution by age, which remains unchanged year to year.
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Steady-state is a stable equilibrium. Thus if the system is affected,
i.e., if it goes beyond equilibrium, it will tend to return to it.
Everanuz (1975) developed the following models for steady-state
age distribution.
r (j)
(i) A (j) =
1+ P
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1 − w (j)
(ii) B (j) =
1+ p
(iii) H (jL) = A (jL) + B ( j - 1) for j = jL +1, jL + 2, ……….jH
j = JH
(iv) c = 1 ∑ Hj
j = jL
(v) g (j) = cH (j) for jL……jH
Here, g (j) = proportion of staff in the steady-state

(c)
age distribution aged j
r (j) = proportion of recruits aged j, i.e.,

recruitment age distribution
w (j) = wastage rate for staff aged j

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P = long-term expansion rate
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Notes
Activity
To ___________________
simulate is to initiate. (1+P) = Number of staff increases by a factor. If
Discuss.
___________________
this is negative and it implies a
contraction.
___________________
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___________________
Check Your Progress
___________________
Fill in the blanks
1. ____________ are divided into categories like, sex, age,
___________________
length of service, etc.
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___________________
2. ________ are recruitment, promotion, wastage, transfers,
___________________
demotion, etc
___________________
Simulation
___________________
To simulate is to initiate. In general terms, simulation involves
developing a model of some real phenomenon and then performing
experiments on the model evolved. It is a descriptive, and not an
optimizing, technique. In simulation, a given system is copied and
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the variables and constants associated with it are manipulated in
an artificial environment to examine the behaviour of the system.
Using simulation, an analyst can introduce the constants and
variables related to the problem, set up the possible courses of
action and establish criteria, which act as measures of
effectiveness. The benefit of simulation from the view point of the
analyst stems from the fact that the results of taking a particular
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course of action can be estimated prior to its implementation in the

real world. Instead of using hunches and intuition to determine
what may happen, the analyst using simulation can test and
evaluate various alternatives and select the one that gives the best
results.
Broadly, there are four phases of the simulation process. They are:
(a) Definition of the problem and statement of objectives.
(b) Construction of an appropriate model.
(c) Experimentation with the model constructed, and
(c)
(d) Evaluation of the results of simulation.
Monte Carlo Simulation

It is also known as probabilistic simulation method. It can be
described as a numerical technique that involves modelling with
the objectives of predicting the system's behaviour. The chance
element is a very significant feature of Monte Carlo simulation and 153
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this approach can be used when the given process has a random or Notes
chance component. ___________________
Illustration ___________________
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___________________
A hotel keeps a record of the number of staff requirement of
various categories. Information relating to 200 days' requirement ___________________
are as under: ___________________
Demand Total ___________________
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No. of staff 5 6 7 8 9 10 11 12 ___________________
No. of days 4 10 16 50 62 38 12 8 200
___________________
Develop a simulation model to predict the demand of staff for a 10- ___________________
day period.
___________________
Solution
Firstly, derive the probability distribution of demand for the staff,
expressing each of the frequencies in terms of proportions. This is
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done by dividing each of the values by 200, i.e. the total frequency.
The resultant distribution would, therefore, be as follows:
No. of staff 5 6 7 8 9 10 11 12
No. of days .02 .05 .08 .25 .31 .19 .06 .04
Secondly, determine random numbers using any mechanism of

random number generator. There are various ways in which
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random numbers can be generated. These could be result of some

device like coin or die, published table of random numbers etc.
However, the most convenient method is to make use of the
published table of random numbers, published by the Rand
Corporation of USA.
An assignment has to be worked out so that the interval of random

numbers correspond to the probability distribution. Since the
probabilities have been calculated to two decimal places, which add
up to 1.00, we need 100 numbers of two digits to represent each
point of probability. Thus we take random numbers 00 through 99
to represent them. Now, as the probability of 5 staff is equal to .02,
(c)
we assign two random numbers 00-01 to this demand level; the

probability of 6 staff being equal to .05, the next five numbers, 02-
06 would be assigned to this level. In a similar manner each of the
demand levels would be assigned appropriate intervals as under:
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Demand Probability Cumulative Random number
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Notes
(No. of staff) probability interval
___________________
5 .02 .02 00-01
___________________
6 .05 .07 02-06
___________________
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7 .08 .15 07-14
___________________
___________________ 8 .25 .40 15-39
___________________ 9 .31 .71 40-70
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___________________ 10 .19 .90 71-89
___________________ 11 .06 .96 90-95

___________________
12 .04 1.00 96-99
___________________
The Cumulative probabilities column analyses the assigned
numbers to correspond to the same probability range for each
event.
Thirdly, once the random number intervals are determined, we

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select a tracking pattern for drawing random numbers from the
random number table. We may start with any column and row of
the table and read the values in any set manner - horizontally,
vertically or diagonally. Using the pattern, we draw the random
numbers and match them with the assigned events.
Let us assume for the purpose of this problem, we have decided to

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take every third value horizontally, starting with the fifth column
and fourth row of the table of random numbers. The random
numbers, according to this pattern are 61, 74, 24, 03, 59, 16, 84, 92,
52, 07…….. etc. ( for 10-day demand period). We draw as many
random numbers as the number of days' demand required to be
simulated.
The first number, i.e. 61, lies in the interval 40-70. Corresponding
to the demand level of 9 staff. Thus, the simulated demand for the
first day is 9 staff members. In a similar manner, we can obtain
the demand for each of the day. For the 10-day period, we have the
following demand:
(c)
Day 1 2 3 4 5 6 7 8 9 10
Number 16 74 24 03 59 16 84 92 52 07
Demand of staff 9 10 8 6 9 8 10 11 9 7
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Exercise Notes
A caterer keeps on reserve cooks during marriage season. Previous ___________________
experience indicates the daily demand of cooks is as under: ___________________
Daily demand 0 10 20 30 40 50
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___________________
Probability .01 .20 .15 .50 .12 .02 ___________________
Consider the following sequence of random numbers: ___________________
___________________
48, 78, 19, 51, 56, 77, 15, 14, 68, 09
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Using this sequence, simulate the demand for the next 10 days. ___________________
Find out the reserve situation if the owner of the caterer decides to ___________________
maintain on payroll 30 cooks every day. Also estimate the daily ___________________
average demand for the cooks on the basis of simulated data.
___________________
Solution
Demand Probability Cumulative Random number

(No. of staff) probability interval
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0 0.01 0.01 00
10 0.20 0.21 01-20
20 0.15 0.36 21-35
30 0.50 0.86 36-85

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40 0.12 0.98 86-97
50 0.02 1.00 98-99
The simulated demand for the cooks for the next 10 days and the
stock position for various days when the decision is to make
available 30 cooks a day would be as under:
Determination of Demand and Stock levels
Day Random number Demand Stock
1 48 30 –
2 78 30 –
(c)
3 19 10 20
4 51 30 20
5 56 30 20
6 77 30 20
Contd…
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7 15 10 40
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Notes
8 14 10 60
___________________
9 68 30 60
___________________
10 09 10 80
___________________
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Expected demand = 220/10 = 22 cooks per day.
___________________
___________________ Advantages and Disadvantages of Simulation

___________________ Advantage: The chief merit of the simulation technique is its
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___________________ capacity to lend itself to problems that are cumbersome or
impossible to handle mathematically using analytical methods.
___________________
Not only this, the technique allows the analyst to experiment with
___________________ the system behaviour without subjecting it to the risks that would
___________________ be inherent in experimenting with the real system. It also
compresses time to enable the manager to visualize the long-term
effects in a quick manner. Besides, simulation is often used to test
proposed analytic solutions as well.
Disadvantage: It does not represent a methodology for derivation

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of optimal solutions to the given problems. This approach is
designed merely to provide characterization of the behaviour of the
system in question for a given set of inputs. Further, the
simulation approach is not precise in the sense that it yields only
estimates which are subject to sampling error. Of course, the
sampling error can be reduced by increasing the sample size.
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Another drawback is that it may not prove economical, as it

requires lot of efforts to develop a suitable model.
It is a tool of solution evaluation and does not generate problem

solution. Thus the analyst has to develop the proposed solution;
then simulation can be used to test the relative desirability of
those solutions.
Check Your Progress

Fill in the blanks
1. To simulate is to _________
(c)
2. Simulation involves developing a model of some real

phenomenon and then performing ________________ on
the model evolved.
157
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Replacement Theory Notes
Activity
A replacement is called for whenever new equipment offers more ___________________
What is replacement theory?
efficient or economical service than the old existing one. For ___________________
example, the old equipment might fail and work no more, or is
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___________________
worn out and needs higher expenditure on its maintenance. The
problem, in such situations, is to determine the best policy to be ___________________
adopted with respect to replacement of the equipment. The
___________________
replacement theory provides answer to this question in terms of
optimal replacement period. ___________________
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___________________
We consider the question of replacement in the following
situations: ___________________
1. In respect of equipment/assets that deteriorate in performance ___________________

over a time and may be restored in whole or in part by ___________________
expanding maintenance costs. Thus, the existing assets might
be good technically, yet on economic considerations, it may not
be worthwhile continuing with them and hence replacement
may be called for. Machinery, equipment, buildings fall in this
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category.
2. In respect of units that perform adequately until sudden
complete failure. The length of their service until failure varies
randomly over some predictable range. Car bulbs, tubes, some
electronic components etc. are the items that are considered in
this category.
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3. In respect of replacement of staff of an organization which

diminishes gradually due to death, retirement, retrenchment
and other reasons.
Staff Replacement
The staff of an organization calls for replacement because people

leave the organization for several reasons. For planning a suitable
recruitment policy, historical data are collected to estimate the
likely stay of individuals with the organization through time. Here
also, the stay of an individual employee may be a random variable
but the characteristics of the group of employees are likely to be
(c)
fairly stable.
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Notes Example:
___________________ Year 1 2 3 4 5 6 7 8 9 10 11 12
___________________ Percentage 5 18 35 45 62 75 88 90 95 96 99 100
expected to
___________________
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leave by the
end of period
___________________
___________________ Using the above information, answer the following questions:

___________________ 1. What recruitment level per annum would be necessary to
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___________________ maintain this strength?
___________________ 2. If 15 of the sales persons are to be promoted to the next higher

post, for which length of service in the organization is the
___________________
primary criterion and at what average length of service can a
___________________ new entrant expect to be promoted?
Solution:
1. With an intake of 100 sales people every year, the distribution
of the length of service of the sales force, when equilibrium
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has been reached shall be as follows:
Year No. of people
Continuing
0 100
1 95
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2 82
3 65
4 55
5 38
6 25
7 12
8 10
9 5
10 4
11 1
(c)
12 0
Total =492
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Recruitment of 100 sales people every year would thus give a
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Notes
total strength of 492. To maintain strength of 80 sales people,
we need to recruit then: ___________________
___________________
80 × 100
= 16.26,
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492 say 16 persons ___________________
___________________
2. With 80 persons in the sales team, the distribution of the
completed length of service would be as follows: ___________________
Year No. of persons ___________________
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0 16 ___________________
1 15 (95%, of 16) ___________________
___________________
2 13 (82% of 16)
___________________
3 11 (65% of 16)
4 9 (55% of 16)
5 6 (38% of 16)
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6 4 (25% of 16)
7 2 (12% of 16)
8 2 (10% of 16)
9 1 (5% of 16)
10 1 (4% of 16)
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11 0
12 0
Since 15 sales people are to be promoted and the promotion would
be on the basis of their length of service, the cumulation of the
frequencies in this distribution reveals that a sales person can
expect to be promoted after 5 year of service.
This is ascertained by counting backward, i.e., from the 12th year

onwards. After the 5th year the total number of persons left is 16.
Thus promotion after the 5th year is considered better, if 15 people
are required to be promoted on length of service.
(c)
160
Check Your Progress
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Notes
Fill in the blanks
___________________
___________________
1. A replacement is called for whenever new equipment
offers more efficient or economical service than the
___________________
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___________one.
___________________
2. The staff of an organization calls for replacement
___________________ because people _________ the organization
___________________
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___________________ Summary
___________________ There are various tools for such analysis; some of these have been
___________________ discussed, with examples, wherever necessary. However,
quantitative tools and models may not be effective, when used in
___________________
isolation. Combination of quantitative and qualitative techniques
yield better results.
Lesson End Activity

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Why staff replacement is done? Discuss.
Keywords
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Labour turnover index: It indicates the number of leavers as

percentage to the average number of employees.

1. What are the difficulties encountered in manpower forecasts
using quantitative tools? Do you think such difficulties can be
removed by using qualitative tools?
2. What are the different methods of manpower wastage
analysis? Do you think such methods are fool proof?
3. Discuss with examples different manpower planning models
(c)
with a critical note about their limitations.

4. Write Short notes on:
(a) Wastage Analysis
(b) Cohort Analysis
161
(c) Markov Models
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Notes
(d) Monte Carlo Simulation Staff Replacement
___________________
___________________
Further Readings
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___________________
Books ___________________
Human Resource Planning, M.S. Reddy, 1st edition, Discovery ___________________
Publishing House
___________________
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Planning and Managing Human Resources, William J. Rothwell,
___________________
___________________
Web Readings ___________________
http://studyvalue.com/_management_sciences/_hrm/hrm_planning_ ___________________
and_manpower_13.html
http://www.google.co.inurl?sa=t&rct=j&q=human
%20resource%20planning% 20process&source=web&
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cd=8&sqi=2&ved=0CFoQFjAH&url=http%3A%2F%2F
www. andrews.edu%2F~schwab%2F384plan4.ppt&e
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(c)
(c)
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UP
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UNIT 10: Case Studies
Unit 10
163
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Notes
Case Studies
___________________
___________________
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___________________
Objectives
___________________
___________________
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Case Study 1: Goodearth Financial Services ___________________
Goodearth Financial Services Limited has grown considerably
during the last 5 years. Mr Jashpal Bhatti started the company ___________________
with two employees and business for ` 6,00,000/- in gross sales. ___________________
The company now employs 200 people and is expected to have
business for ` 6,00,00,000/- this year. During the early years, it ___________________
was always clear what was expected from each employee.
Everyone knew how to do everything and was often called upon to
do exactly that. This is no longer true and it is apparent to Mr
Jashpal Bhatti that each employee must be given a clear set of
general guidelines as to what duties the employee must perform.
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A number of new players are now in financial services who are
the arch competitors for Mr Bhatti's company. The service-mix for
Goodearth also has significantly changed to keep pace with the
changing customers' expectation. The company, therefore, had to
change its operation strategy.
In addition, it is becoming increasingly difficult to hire employees
without having a clear understanding of exactly what the
individual will be doing. Applicants seem reluctant to join the
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firm without some information about their probable job profile

and it is difficult to know exactly what skills, the prospective
applicants should have without knowing in some detail what they
will be doing.
Mr Jashpal Bhatti decided to write job descriptions and job
specifications for his employees. It is his belief that such
documents will clear any misunderstandings among employees
regarding responsibilities, help to organize better the work that
must be done, inform prospective employees about their probable
job duties, orient new employees and help to make better selection
decisions.
You have been retained by Mr Bhatti to determine whose
responsibility it will be to gather the data and write the
(c)
descriptions and specifications, how the data will be gathered

(observation, questionnaire or interview) and how detailed
descriptions and specifications should be.
Mr Bhatti is currently considering these job analysis issues but
has a number of questions about how each will affect the final
results.
Contd…
164
Questions
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Notes
1. What recommendations would you make to him regarding the
___________________ most appropriate individuals and methods to be used for data
collection?
___________________
2. What approach to the design of jobs should be considered by
___________________ you and why?
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___________________ 3. Keeping in mind the recent trends in financial services
companies, design the job of different hierarchical levels for at
___________________ least four operational areas with supporting background
information, like; job analysis, job description etc.
___________________
UP
___________________
___________________
___________________
___________________
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(c)
165
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Case Study 2: Right Payment Notes
Human resources are among the most challenging inputs to
___________________
manage because people are so much more complex than
machines. Job design policies should recognize this humanness ___________________
and foster satisfaction of higher-level needs. Work goals should be
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clear, moderately challenging, and accepted if they are to be ___________________
useful.
___________________
A well-designed job should reflect both social (market) priorities
and technical (organizational) capacities. Motivational techniques ___________________
focus upon (1) variety (job enlargement adds more tasks, and job
___________________
rotation adds variety because workers are rotated among tasks),
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(2) time (flexitime, 4-day workweeks, and job sharing), and (3) ___________________
psychology (enrichment).
___________________
The Herzberg enrichment approach emphasizes five motivational
factors, and the Hackman-Oldham model stresses meaningfulness ___________________
and responsibility. Hackman and Oldham have also developed a
Job Diagnostic Survey, which measures skill variety, task ___________________
identity, task importance, autonomy, and feedback. Finally, the
socio-technical approach is a view of production systems which
incorporate much of this psychological knowledge into a working
system that blends both social and technical components.
Work methods can often be improved by conducting a scientific
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study of present methods using well-developed questioning
techniques and principles of motion economy. In office systems,
significant productivity improvements can come from better
information flow and better used employee time.
Standards of performance should encourage the cooperation and
participation of the workers to whom they will apply. Historical
approaches, time studies, predetermined time methods, and work
sampling are all useful ways of developing standards. Both time-
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study and work-sampling methods consist of sampling a worker's

activities and subjectively rating the worker's performance level
to determine a normal time. Allowances are then taken into
consideration and a standard time is determined. Work sampling
is particularly suitable for analyzing less structured activities and
group operations.
Every operations manager has opportunities to foster a
favourable work climate among the employees by providing safe
working conditions, just wages, and an environment that gives
employees stake in what the organization is doing. Many firms
report favourable results from worker participation in problem
solving teams, quality circles, and other involvement
programmes.
(c)
Question
In the context of the above text, briefly discuss the significance of
work study and method study and suggest the most appropriate
tool for pricing a job in an organization engaged in the
manufacture of a ball point pen.
(c)
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ES
UNIT 11: Recruitment
167
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Notes
___________________
___________________
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___________________
___________________
___________________
___________________
UP
___________________
___________________
___________________
___________________
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BLOCK-III
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(c)
Detailed168Contents
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Notes
___________________
UNIT 11: RECRUITMENT z Employee Socialization
___________________
z Introduction z Placement
___________________
Recruitment Importance of Induction and Placement
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z z
z Internal Recruitment and Recruitment Policy

___________________ UNIT 14: CAREER PLANNING AND
z Sources of Recruitment DEVELOPMENT
___________________
UNIT 12: SELECTION z Introduction
___________________
Introduction z Definition of Career
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z
___________________ Overview of Career Development
z Preliminary Screening of Applicants z
z Review of Application Blanks

___________________ z Interrelation with other HRD Functions
z Psychological Testing
___________________ z Different Stages or Cycles of Career Development
Process
z Defining Attitude
___________________ z Issues in Career Development Process
z HRD and Attitudinal Change
z Career Anchors
z Types of Measurement
z Security and Stability
z Attitude Scales
z Career Development and Employee Empowerment
z Interview
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z Indian Scenario
UNIT 13: INDUCTION
z Career Planning and Career Development Process
z Introduction
z Steps in the Career Planning Process
z Induction
UNIT 15: CASE STUDIES
z Steps in Induction Programme
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(c)
Unit 11
169
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Notes
Activity
Recruitment
___________________
Define the term recruitment.
___________________
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___________________
Objectives
___________________
topics: ___________________
\ Recruitment ___________________
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\ Various careers of recruitment ___________________
\ Recruitment functions
___________________
___________________
Introduction
___________________
For staffing various positions in the organization, we need to go for
external hiring, as redeploying existing manpower through job
restructuring may not be adequate. External hiring process
succeeds Human Resource Planning. Through HRP we can
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understand the extent of external hiring after adjustment of
internal manpower.
Recruitment
Recruitment is an important tool for procuring and effectively
using human resources in an organization. While recruitment
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involves employing suitably trained work force, selection helps in

choosing the right candidate for the right job. Induction and
placement is putting the men to the right jobs. This unit focuses on
these four important organizational activities.
The traditional approach to personnel management was to ensure

routine human resources maintenance functions for the
organizations. But recently, radical changes in human resource
management, i.e. perceiving human resources like other important
resources (physical and financial) of an organization have
developed new areas for personnel management. The human
(c)
resources are the people who are part of the organization. Broadly,
they may be direct employees, the customers served, part-time
persons, temporary employees or consultants or any person or
persons with a variety of other relationships to the organization.
Within the human resources area, there are two major activities.
The first is concerned with the recruitment, selection, placement,
170
compensation and appraisal of the human resources (they are
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Notes known as human resources utilisation functions or personnel
___________________ functions). The other functions are directed to work with the
existing human resources, improving their efficiency and
___________________
effectiveness. These are known as human resources development
___________________ (HRD) functions which are designed to enable existing human
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___________________ resources to learn activities for their effective functioning in the
present jobs, future identifiable jobs and so also for future
___________________
undefined jobs.
___________________
For increasing importance of human resources, it is now
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___________________
imperative for all organizations to retain the manpower and at the
___________________ same time to recruit and select best possible talents in the country.
Most of the organizations are now facing technological changes,
___________________
resulting in the radical change in the recruitment process. Such a
___________________ technological change, inter alia, calls for hiring manpower having
higher skills and knowledge, which were not so far available.
However, when we consider the recruitment of manpower for
unskilled jobs, there seem to be no apparent problems for the
organization, as these people are abundantly available in our
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country due to the high rate of unemployment. For high technology
employees, i.e. mostly those who are in managerial positions with
professional skills, recruitment function is more complex and
dynamic.
Recruitment Function
The term recruitment may be defined as the process to discover
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sources of manpower to meet the requirements or the staffing

schedule and to employ effective measures for attracting that
manpower in adequate number to facilitate the selection of an
efficient working force.
The first important task of recruitment function is to frame a

recruitment policy, which calls for review of manpower
requirement i.e. it should be adequately supported by effective
manpower forecasting. Manpower planning and so also manpower
forecasting of an organization depends on many important factors
like present nature of work, possible change in the future working
of the organization, the manpower records and information
(c)
available in the organization for the present strength, the

diversification plans and programmes of the organization, the
environmental change and the change necessary in the
organization to respond to such environmental change, etc. Most of
the organizations, in principle, believe in recruiting the best
possible manpower from outside the organization. However, the 171
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recruitment policy of some organizations considers recruiting the Notes
Activity
employees based on the recommendation of the present employees ___________________
Define recruitment policy.
or recruiting employees from the wards of the existing employees.
___________________
For example, in Tata, there is a system to recruit employees for
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___________________
unskilled/ low-skilled jobs, both technical and non-technical
nature, from the wards of the existing employees. Such a policy of ___________________
recruitment in Tata has been accepted in principle and Tata, in ___________________

their manufacturing units, maintain separate employment
___________________
exchange records to enlist the names and other details of the
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employees' wards to offer them employment as and when a ___________________
vacancy arises. But such type of recruitment policy is not followed ___________________
while hiring manpower for managerial jobs. In such cases,
___________________
companies are looking for best available talents. Thus, they go
either for advertising the vacancies in leading newspapers of the ___________________
country, even in good professional journals or they may go in for
recruitment of such managerial manpower by effecting campus
interview, and also going for retaining the services of recruitment
consultants. Such recruitment consultants, having maintained a
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separate data bank for the prospective job seekers, can make
available a list of prospective managerial manpower to such
companies. In addition to the framing of the recruitment policy,
each organization for making their recruitment a scientific process
of selection carries out regular forecasting of manpower
recruitments.
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Check Your Progress

Fill in the blanks
1. Through HRP we can understand the extent of external

hiring after adjustment of __________ manpower.
2. The first important task of recruitment function is to frame

a __________________
Internal Recruitment and Recruitment Policy

In some cases, organizations are also trying to internally man
(c)
higher managerial vacancies from their existing employees. In

those cases, organizations need to develop their existing manpower
adopting suitable training and development functions. Training
and development may not necessarily always ensure availability of
the best talents internally. Organizations are then compelled to
recruit from outside sources, mentioned above.
172
A sound recruitment policy calls for adopting a scientific process of
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Notes
Activity recruitment, i.e. those techniques, which are modern and scientific.
___________________
What are the different sources Recruitment policy also requires one to consider the high cost of
of recruitment?
___________________ managerial turnover. Unless a company adopts a suitable
___________________ recruitment policy, it may not be possible for the company to select
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the right candidate for the right job. A sound recruitment policy,
___________________
therefore, needs to:
___________________
1. Identify, at the outset, the recruitment needs of the
___________________
organization,
UP
___________________
2. Identify the preferred sources of recruitment,
___________________
3. Frame suitable criteria for selection and finally,
___________________
___________________ 4. Consider the cost of recruitment.
Check Your Progress

Fill in the blanks
1. Training and development may ______________ always
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ensure availability of the best talents internally.
2. Organizations are mostly compelled to recruit from
_____________ sources, mentioned above.
Sources of Recruitment
As has already been discussed, a particular organization may effect
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recruitment either from the internal sources, i.e. by promoting the

existing employees for higher positions, or they may go for outside
sources. Thus internal and external sources of recruitment can
either be resorted to by any organization, subject to convenience
and feasibility. Recruitment is an art of attracting applicants, from
whom the most suitable ones may be selected in a particular job or
jobs. Internal recruitment may often avoid unpleasantness, but it
is not necessarily effective because it does not allow the
organization to get many alternatives to select the best available
talent. External sources being available, it gives opportunity to an
organization to tap the best or suitable candidates from widely
(c)
dispersed areas. The requisition for recruitment contains a brief

description of the post, qualification and experience required, etc.
Such requisitions are normally signed by the head of the human
resource department. External sources of recruitment are taken
recourse to keeping in view the type of personnel required. The
workmen may be recruited at the gate itself or from the 173
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employment exchange. Management trainees are taken from the Notes
institutes and universities, effecting campus interviews. Senior ___________________
executives are attracted through advertisements in leading
___________________
newspapers and magazines. The major sources of recruitment for
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different types of personnel, therefore, are as follows: ___________________
1. Employment exchanges, ___________________
___________________
2. Consultants and private employment agencies,
___________________
3. Advertisements in periodicals and newspapers, radio and TV,
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___________________
4. Deputation,
___________________
5. Universities and management institutes,
___________________
6. From the source of existing employees,
___________________
7. Trade unions,
8. Internet/job site, etc.
The employment exchanges maintain a register of candidates
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seeking various types of job. Under Compulsory Notification of
Vacancies Act, 1955, the employers are required to notify certain
types of vacancies to the nearest employment exchange and recruit
candidates from among the applicants registered with them. The
skilled and unskilled workers and the clerical staff are mostly
recruited through employment exchanges. Private consultants and
agencies assist organizations in locating technical and managerial
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staff.
They charge prescribed fees for their services to the organization.
Advertising in newspapers and magazines, radio and TVs, have
now become most effective sources for attracting the prospective
candidates. It also helps in building the image for the organization
because through such advertisements, the organizations make
available certain information, like their products, their market
share, their turnover value, etc. to the public in general and target
consumers in particular. Since written Press insertions or verbal
advertisements through audio and audio-visual methods give first
(c)
hand information to the prospective job seekers, each organization

is required to give as much factual information as possible
regarding the job-expectations from the candidates, their age-
group, qualifications and experience, salary and perks attached to
the positions and important conditions of service, the time-limit
and mode of applying, etc. There are some agencies that help
174 organizations in drafting, publishing and broadcasting
S
Notes advertisements.
___________________
Deputationists are mainly appointed in public sector undertakings.
___________________ The civil servants are often deputed for many senior and mid-level
___________________ positions for a specified time.
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___________________ Recruitment from universities and management institutes are
effected through campus interviews. Almost all good private
___________________
organizations select their management trainees through such
___________________ method. Some organizations even sponsor the cost of prospective
UP
___________________ students during their learning to join them after completion of the
___________________
course.
___________________ From the source of existing employees also, recruitment is done by

many private organizations to ensure commitment and loyalty and
___________________
at the same time to motivate the employees. Such type of
recruitment however is restricted only to the clerical and unskilled
jobs in most of the cases.
Trade unions also recommend candidates for clerical and unskilled
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jobs. This practice is not in vogue in many organizations. Only in
technical training schemes, trade unions were found to influence
the organizations to induct their recommended candidates as
apprentices.
Recruitment through internet/job sites also have now become very
popular for its wide reach to focussed job seekers, immediacy and
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cost effectiveness. Because of its global reach, organizations also

get the flexibility to attract the best talent. Many placement agents
have now started this service to increase their business volume.
Check Your Progress

Fill in the blanks
1. ___________ is an art of attracting applicants, from
whom the most suitable ones may be selected in a
particular job or jobs.
2. Internal recruitment may often _________
(c)
unpleasantness
Summary
Recruitment is an important tool for procuring and effectively
using human resources in an organization. While recruitment
involves employing suitably trained work force, selection helps in 175
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choosing the right candidate for the right job. Induction and Notes
placement is putting the men to the right jobs. This unit focuses on ___________________
these four important organizational activities.
___________________
Recruitment from universities and management institutes are
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___________________
effected through campus interviews. Almost all good private
organizations select their management trainees through such ___________________
method. ___________________
___________________
UP
Design and describe a recruiting process for filling openings for a ___________________
sales representative's job for a large pharmaceutical company
___________________
___________________
Keywords
Recruitment: The discovering of potential applicants for actual or
anticipated organizational vacancies.
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Employee Referral: A recommendation from a current employee
regarding a job applicant.
Campus Recruiting: Visiting specific-skill institutes to hire

graduates.
Internal Advertising: Informing employees of vacancies

internally.
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Inducements: Positive features and benefits offered by an

organization to attract job applicants.

1. Define recruitment. What are the important recruitment
functions? Why such functions are important for an
organization?
2. What is internal recruitment? Why is it important for an
organization? Do you think it is necessary to have a
(c)
recruitment policy for an organization?

3. What are the different recruitment processes? Briefly state
their merits and demerits.
176
Further Readings
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Notes
___________________ Books
___________________ Competency-Based Recruitment and Selection, Robert wood & Tim
___________________ Payne, 1st edition, Wiley
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___________________ Comprehensive Human Resource Management, P L Rao, 2nd
___________________ A handbook of human resource management practice, Michael
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___________________
___________________ Web Readings

___________________ http://www.small-business-advice.org/hr/recruitment-selection.htm
___________________
http://www.ijimt.org/papers/77-M469.pdf
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(c)
177
Appendix
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Notes
Flexible Recruitment through Employee Leasing
___________________
Employee leasing is an arrangement under which an employer
transfers all workers or groups to a leasing company which then ___________________
assigns the same employees back to their original employer.
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Under the leasing arrangement employees get employed by ___________________
employee leasing company, though they may be working with the
___________________
same employer (who leased them), may do the same job, work
under the same environment with the same pay packets. Under ___________________
changed circumstances, however, employers do not necessarily
transfer their paid employees to an employee leasing company to ___________________
UP
get them back subsequently under leasing arrangement, but do
___________________
not retain any employees to the employee leasing companies from
time to time, depending upon their production programme. ___________________
In the USA and other industrially developed countries in the
___________________
world, all manufacturing and service organizations, to the extent
possible, are trying to avoid retaining employees on permanent ___________________
pay roll and to the extent possible running their operations, which
are highly flexible by hiring employees from employee leasing
companies. Such manufacturing and service organizations, during
the lean phase of production, send the leased employees back to
the employee leasing company to gain relief from wage cost
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burden for the idle time and to achieve economic efficiency.
Employee Leasing in India
Employee leasing is not a much known concept in India. However,
etymologically employee leasing is quite akin to an
institutionalized approach like the contract labour system, which
is prevalent in India and is legally sustainable.
The most formidable challenge before the Indian industries
during the post liberalization era is to withstand price
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competition both at home and from abroad. Wage cost and non-
wage labour cost (NWLC) together form a considerable percentage
of total cost for Indian industries, particularly those in the
organized sector. The increased burden of NWLC made it
inevitable for industries to restrict the number of workmen on
permanent payroll. Moreover, since production plans and
programmes are highly flexible for industries, from time to time are
required to engage workers to share the increased workload.
Simultaneously, industries are also required to pay for idle working
hours and also required to bear the brunt of NWLC for such
workers. Institutionalized contract labour system, i.e. employee
leasing, therefore, offers economic benefits to industries, which,
inter alia, enable them to sustain competition by cost minimization.
This is a part of the technological revolution in Indian industries,
(c)
gradually giving rise to the capitalistic mode of production in line

with other developed countries in the world. This has made the
skill factor in labour units more and more specific and
transformed the labour as an item for sale and purchase in the
competitive market. Moreover, because of technology, industrial
occupations have rapidly changed from productive to supportive
activities. This changed phenomenon is particularly evident from
Contd…
178 the 1981 census which shows swelling of professional, technical
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Notes and related workers, clerical and related workers over the other
occupations. This, therefore, indicates structural change in
___________________ occupational pattern. Economic rationality and technical
feasibility, therefore, sustain employee leasing in India.
___________________
However, in India we find contract labour system as an
___________________ alternative to employees leasing practice going on since long.
E
What is important here is to understand that there is a wide
___________________ difference in the approach to employee leasing in India and in the
___________________ developed countries, which have succeeded in institutionalizing
employee leasing. It is observed that many favourable
___________________ infrastructural changes, both at government and at institution
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levels, have been initiated by these countries to effectuate
___________________ employee leasing successfully. Adequate state supported social
security measures, safety net, insurance and pension schemes etc.
___________________
sustain employee leasing in these countries without much
___________________ problem. Moreover, leased employees in these countries are
getting higher paid wages than employees on permanent pay roll,
___________________ as organizations hiring leased employees can substantially gain
from NWLC and overhead cost of personnel department, even
after paying wages at higher rate to leased employees. Rights of
leased employees also remain protected as their retirement
benefits are taken care of by the leasing companies, subscribing to
government sponsored schemes.
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In India, our experience shows contractors' labourers are getting
less than the workers on permanent pay roll. Contractors'
labourers and/or leased employees are engaged by organizations
not only to save NWLC but even to gain substantially on paid
wages costs (by paying less to them). Organizations engage them
at substantially reduced wage rate than their permanent
employees. A large number of placement agencies are extending
such services to the organization, in veil, making readily available
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various categories of manpower, details of whom they maintain in

their data bank. In most of the cases such employees even do not
know their employment status and continue as temporary
employees for years together, which deprive them from all retrial
benefits. Working as temporary employee on an organization’s
pay roll for certain period makes them statutorily eligible to enjoy
permanent employment status. To avoid such complication,
organizations prefer to retain the services of such employees
hiring them either from contractors or from placement agencies
(who are in veil leasing companies).
Thus, it is evident that in India, employee leasing is a standing
practice, which is continuing to flout all social and institutional
norms. This practice is further gearing up under the New
Industrial Policy of the Government of India which necessitates
production restructuring through technological change.
(c)
Technology upgradation, therefore, will affect the traditional

employment relation, making it more contractual than
institutional in the coming years.
Institutional theory empowers management to subordinate
employees as they are in lower hierarchy of management,
contractual theory advocates that the employer-employee
relationship stems from the contract of employment.
UNIT 12: Selection
Unit 12
179
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Notes
Activity
Selection
Define the term selection.
___________________
___________________
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___________________
Objectives
___________________
topics: ___________________
\ Selection ___________________
UP
\ Importance of selection ___________________
\ Application blank
___________________
Introduction ___________________
___________________
The major step in selection procedure is to personify such
attributes in candidates, i.e. developing a specification of persons,
to define the background education, training, personality and
characteristics of the candidates to suit the vacancy position. This
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in reality is an exercise to pre-portray an ideal candidate for a job.
Preliminary Screening of Applicants

The number of applications normally received against any
advertised vacancy is usually more. This creates the problem of
selecting the right persons. Moreover, conducting tests and
interviews for all the candidates may not be always feasible and
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cost-efficient. To obviate such problems, most of the organizations

sort out unsuitable candidates before going ahead with the
selection process. There are many different ways to do such
preliminary screening. Some organizations conduct short tests for
all the applications, while the best method may be the checking of
'application blank'. Each organization before going for the selection
process develops their own standards or potential attributes for the
prospective candidates. This helps them also to define the rejection
standards. For example for the post of a stenographer, a particular
organization may define their rejection standards as below:
1. Those having shorthand speed below 100 words per minute
(c)
and types speed below 40 words per minute.

2. Those who are not having any working experience;
3. Those who are above 35 years age.
180
By checking 'Application Bank' of the candidates, an organization
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Notes
may reject a good number of applicants based on the above
___________________
rejection parameters. All the above processes, therefore, enable the
___________________ organization to short-list the candidates before going ahead with
___________________ the subsequent stages of selection. The rejection standards, like
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the ones stated above, may also be mentioned in the advertisement
___________________
itself so that the number of applicants is minimized.
___________________
Some organizations also adopt the 'successive-hurdles' technique
___________________ as an effective screening process. This technique calls for
UP
___________________ arranging all selection factors in order of importance. For example,
___________________
if for a particular post, aptitude test is considered most important,
the first step should be to test the aptitude of the candidates, then
___________________
the other successive tests, like qualification, job experience,
___________________ personality etc. may be conducted provided the candidates qualify
these hurdles one by one.
Check Your Progress

Fill in the blanks
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1. The major step in selection procedure is to personify
various _________ in candidates.
2. The number of applications normally received against
any advertised vacancy are usually _________.
Review of Application Blanks

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The application blank form is designed to have detailed

information about the applicants. Some organizations have their
own printed application blank, while others ask the candidates to
give their particulars in a standard format to elicit information
like;
(a) Personal data and biographical Information, i.e., name,
address, telephone number, age, sex, martial status, children,
nationality, education (school, college, university attended,
degree/diploma passed, year of passing, subjects, grade or
division obtained etc.), professional qualification and
(c)
membership of professional bodies, language known (ability to

read, write and speak) etc.
(b) Chronological employment history for all jobs (with joining and
leaving dates in each case of employment change), employer's
UNIT 12: Selection
name, address and nature of business positions held and 181
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duties, reason for leaving (if any). Notes
Activity
(c) Personal circumstances, whether prepared to serve anywhere ___________________
What are reference check?
or not. ___________________
(d) Medical history, brief details of any serious illness, remained
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___________________
absent for how many days during the last few years (in case
___________________
the applicant served earlier somewhere) on medical grounds,
___________________
record of hospitalization (if any), disability, major operation,
etc. ___________________
UP
(e) Interest, hobbies, sports and other activities. ___________________
(f) Anything else which the applicant may like to add in support ___________________
of his candidature. ___________________
___________________
Several other items may be included in the application blank on
the specific requirements of the organization and the job. Weighted
application blanks are also prepared by some organizations to
record personal history items associated with job success. For each
item of the application blank, weight factors are predetermined.
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Importance of weight factors for different jobs also vary. For
example, for unskilled labourer's job, education may be given less
weight, while for executive positions, education receives higher
weightage. Application blank, therefore, helps in comparing the
applications.
Reference Checking
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Some organizations ask for references from the applicants in the

application blank itself to get information on a candidate's
character and antecedents. Such references are preferred from
earlier employers and schools/colleges/universities that have some
acquaintance with the candidates. Organizations try to verify
candidates’ antecedents from the references either over phone,
through correspondence or through personal visits. Most of the
organizations send a brief questionnaire to such references along
with a confidential note, requesting them to furnish such details.
Check Your Progress

(c)
Fill in the blanks

1. The application blank form is designed to have detailed
information about the __________.
2. Application blank, helps in ___________the applications.
182
Psychological Testing
S
Notes
___________________ Generally, psychological testing is used for purposes like,

determining training needs and evaluation of training
___________________
programmes, selection and placement, transfer and promotion,
___________________ counselling. However, such testing is primarily used for selection
E
___________________ and placement. Such tests are of different types such as group or
individual tests, instrumental tests, aptitude or achievements
___________________
tests, personality and interest tests, etc. Group tests are designed
___________________ to test a group of candidates simultaneously. Individual tests are
UP
___________________
for individual candidates at a particular point of time.
Instrumental tests can be group tests or individual tests. When it
___________________
is an individual test, it makes use of different tools to study
___________________ candidate's familiarity and skills. But in case of its application for
a group, it involves a written test or paper-pencil test to study the
___________________
written responses of the candidates. Aptitude tests are intended to
assess the potentiality of the applicants to learn the job, while
achievement tests enable us to assess how effectively an individual
can perform his job. Conventionally, aptitude tests are
administered on freshers, i.e. those who are not having any past
E-
job experience, while achievement tests are intended for
experienced candidates. For marketing jobs and managerial and
executive positions such tests have much relevance. However,
psychological tests are mostly designed to measure the aptitude
and skills of successful job performers. For selection and
placement, most of the organizations retain the services of
consultants and experts for psychological testing. This minimises
CC
the chance of error in selecting the wrong candidates for different

job positions. Since psychological testing is a complex method and
it has wide divergence, we have briefly introduced the concept of
attitudinal measurement with simple examples and illustrations
together with some conceptual details about different types of
measurement and scales.
Check Your Progress

Fill in the blanks
1. Psychological testing is used for purposes like,
determining training needs and evaluation of training
(c)
programmes, selection and placement, transfer and

promotion, ______________.
2. Psychological tests are mostly designed to measure the
aptitude and skills of successful _____________.
UNIT 12: Selection
Defining Attitude 183
S
Notes
Activity
Attitude is a mental state of an individual who tends to act or
___________________
Define attitude
respond or is ready to respond for or against objects, situations,
etc., with which his/her vested feeling or affect, interest, liking, ___________________
desire and so on, are directly or indirectly linked or associated.
E
___________________
During the course of development the person acquires tendencies
___________________
to respond to objects. These learned cognitive mechanisms are
called attitudes. Changes in knowledge are followed by changes in ___________________
attitudes. Attitudes are different from knowledge in a sense that ___________________
UP
attitudes are emotion-laden. Knowledge reinforces attitudes and
___________________
reinforced attitudes in the long run reinforce individual and group
behaviour. Hence, attitude is neither behaviour nor the cause of ___________________
behaviour but it relates to an intervening predisposition or a frame ___________________
of reference which influences the behaviour of an individual.
___________________
When the interest, feeling, etc., of an individual is not connected in
any way with the object or situation, his/her responses (towards
the said object or situation) will then not be attitude but opinion.
Attitudes or psychic states cannot be observed because
E-
psychological variables are dormant or latent. Being covert,
attitude measurement is difficult. Inference, prediction from
behaviour data, interviews with structured questionnaires and
scales are the usual tools for attitudinal measurement.
Attitude Survey
To recruit new incumbents and to evaluate the human relation in
CC
the factories, industries and different organizations, attitude

survey is indispensable. The study of attitude is also important in
designing a training programme, which is a core HRD function.
Attitude surveys focus on feelings and motives of the employees'

opinions about their working environments. There are three basic
purposes for conducting attitude surveys;
1. To compare results with other survey results
2. To measure the effect of change that occurs; and,
3. To determine the nature and extent of employee feelings

(c)
regarding specific organizational issues and the organization

in general.
Usually attitude surveys are carried out by interviewing a person

with a structured close ended questionnaire. The skill of the
interviewer is all important here for correct measurement of
184
attitude. While framing the questionnaire, the interviewer should
S
Notes be cautious, as simple opinion-laden questionnaire items will not
___________________ depict the attitude of the interviewee. What is important is to put
value-laden questionnaire items, use of behaviourally anchored
___________________
statements, asking the respondents to rank any myth statements,
___________________ etc. A sample list of such myth statements and value-laden
E
___________________ questionnaire items are given below:
___________________ Myth Statements

___________________
1. Hard work ensures better result,
UP
___________________
2. Liking to work with subordinates for prompt results,
___________________
3. Never say no to anyone; listen to everybody's problems.
___________________
___________________
4. One who is indispensable is efficient.
5. Maintaining the hierarchical structure while taking decisions.
Sample Questionnaire Items for Attitude Measurement

1 Do you think the expenditure on training is wasteful? (Give
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your answer selecting any one from the given alternatives).
a. To a large extent
b. To some extent
c. To a very little extent

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d. Not at all
2. Which, to your knowledge, are the major barriers to effective

implementation of flexible working hours in India? (Please
arrange the factors in order of your perceived preference).
a. Lack of awareness,
b. Difficulty in implementation,
c. Supervisory problems,
d. Lack of support from workers,
e. Lack of support from unions,

(c)
f. Production problems,
g. Any other (please specify).
The first questionnaire item (which reflects the attitude of a person

regarding training) can be evaluated by adding the weighted value
UNIT 12: Selection
of individual responses. How to give weight against questionnaire 185
S
items has been explained in the scaling and attitude measurement Notes
part of this unit. ___________________
Example ___________________
E
___________________
Let the number of respondents be 15. Suppose they have given
their responses as follows to the four alternatives. ___________________
Alternatives No. of Respondents ___________________
(a) To a large extent 4
___________________
UP
(b) To some extent 4
___________________
(c) To a very little extent 5
___________________
(d) Not at all 2
___________________
Total 15
___________________
Weighted average attitude
Alternatives No. Weighted Attitude
(a) 4 4 16
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(b) 4 3 12
(c) 5 2 10
(d) 2 1 2
Alternative (a) `To a large extent' is the group attitude.
The second questionnaire item allows the respondents to answer

the question by selecting all alternatives in order of their perceived
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priority. This requires use of factorial method for quantification of

all responses. Let us give an example to illustrate the matter.
Example
Let there be 15 respondents. Suppose they have responded by

giving ranks to the alternative (a) as follows:
Respondent 1 2 3 4 5 6 7
Rank of (a) 1 3 5 7 1 4 3
Respondent 8 9 10 11 12 13 14 15
(c)
Rank of (a) 2 6 5 1 2 3 4 5
From the above, we get:

Priority/Rank 1 2 3 4 5 6 7
Number of Respondents (Tr) 3 2 3 2 3 1 1

186
(Total no. of respondents = 15, No. of priorities/ranks = 7, i.e., a to
S
Notes
g)
___________________
___________________
Weighted Score Value (WSV) is calculated as follows:
___________________ Priority 1 2 3 4 5 6 7
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___________________ Total Value 3 2 3 2 3 1 1
___________________ Weights (factorial) 7 6 5 4 3 2 1

___________________
WSV 21 12 15 8 9 2 1
UP
___________________
In the same way, the total weighted score value for other
___________________
alternatives can be calculated from the responses obtained against
___________________ each. Suppose they are as follows:
___________________ Alternative b c d e f g
Total WSV 65 30 70 55 60 40
The total weighted score value of alternative (d) is highest.

Therefore, alternative (d) i.e., "lack of support from workers"
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should be the attitude/opinion of the group of respondents.
Similarly, sample behaviourally anchored statements have also

been discussed as a tool for performance appraisal a separate unit.
For measurement of attitude, we can use various statistical tools.

Since attitudes are psychological variables or qualitative variables,
the first and foremost task for the rater is to assign numerals to
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objects, events or persons. Use of Likert type of scale, Thurstone

scale, etc. helps the interviewer to assign numbers, either discrete
or continuous. Analysis of variance, correlation, chi-square test,
Kendal's coefficient and concordance test are some useful
statistical tools for attitude measurement.
Check Your Progress

Fill in the blanks
1. Attitude is a __________ state of an individual who tends
to act or respond.
(c)
2. Thurstone scale, etc. help the interviewer to assign

numbers, either __________-or ___________________.
UNIT 12: Selection
187
S
HRD and Attitudinal Change Notes
Changing attitudes, values and motivations are now the major ___________________
issues before the organizations. Through appropriate HRD ___________________
interventions, organizations can turn such change into advantages,
E
___________________
ensuring quality of work life, keeping pace with the changing
human expectations. The following area of attitudinal changes ___________________
require HRD intervention. ___________________
___________________
(a) Attitudes towards perceived threats to trade union legality
UP
and other large scale efforts to reduce trade union power or ___________________
cohesion; ___________________
(b) Attitudes towards methods of wage negotiations, whether by ___________________

collective or local bargaining;
___________________
(c) Attitudes towards working conditions and any administrative
machinery for the discussion or regulation of such conditions;
(d) Attitudes towards worker training or promotion and towards

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education in general as means of improving management and
industrial skills.
As explained earlier, economic restructuring, market globalization,

international quality system standards, etc. have, inter alia,
prompted the Indian organizations to go for radical organizational
restructuring, which among others call for adoption of TQM
principles in managing the human resources. TQM, inter alia, calls
CC
for Total Employee Involvement (TEI), employee empowerment,

development of small group activities (quality circle forums), value
engineering teams, etc. To translate the TQM requirements into
corporate practices, therefore, requires lot of attitudinal changes at
the top like; developing flatter type of organization, de-layering,
delegation, and information, organizational culture, where every
employee needs to be considered as a member of a well integrated
family. To infuse attitudinal changes both at the top and down the
level, it is necessary to adopt the following HRD strategy.
Employee Empowerment
(c)
Empowerment is to give everyone, instead of just people with

certain positions or certain job titles, the legitimate right to make
judgement, form conclusions, reach decisions and then act.
Empowerment, therefore, calls for employee participation in day-
to-day problem solving and innovation. Traditional participative
forums (works committees, joint consultative machinery, etc.)
188
restrict employee participation in operational areas. But
S
Notes empowerment demands employee participation in each and every
___________________ corporate function, so much so as to accept that the employee is not
a mere seller of his time and labour for a contracted sum of money.
___________________
The empowered employee acquires necessary skill and authority to
___________________ make decision concerning quality and productivity. They initiate
E
___________________ changes on their own. Empowerment changes attitude of the
employee as it develops employee ownership and commitment.
___________________
___________________ By Promoting Quality Circles and Developing the Culture of

Total Participation
UP
___________________
___________________
This strategy is used to infuse attitudinal changes and to facilitate
personal involvement of employees.
___________________
Quality circles have been defined originally by JUSE (Japanese
___________________
Union of Scientists and Engineers) as a small group of workers,
voluntarily performing quality control activities within the
workshop to which they belong. These small groups, with
voluntary participation of each and every member of the
organization continuously engage themselves in promoting quality
E-
control activities, because of total participation of the members of
the organization, irrespective of their hierarchical levels. Quality
circles in reality encompass the concepts of self-development and
mutual development and at the same time, reinforce quality
control techniques. Even though the concept of 'quality circles'
eventually originated in Japan to survive under compelling
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circumstances, it has now been expanded far and wide, cutting

across cultural and ideological barriers. It gained popularity
gradually in most of the industrialised nations and among the
developing nations of the world. India being one of the fast
developing nations is no exception. Quality circles can be related to
increased employee motivation and productivity and hence it is
used as an important HRD tool in the organization. Total
knowledge, skill, creative abilities, talents and aptitudes together
with values, attitudes and beliefs of the workers and/or individuals
of the organization represent the human resources in more
aggressive terms.
(c)
Quality circles ensure total involvement of employees through a

number of small group forums. Experience shows that many
organizations have succeeded to improve their productivity by
Quality circles activities. Increased productivity can be achieved by
increased employee motivation, which Quality circles can better
UNIT 12: Selection
ensure than any other methods like complex planning, rigorous 189
S
execution, etc. Notes
___________________
By Imparting Knowledge and Value-laden Attitudinal Changes
in Training ___________________
E
Organizations need to focus on more training on human relations ___________________
areas like leadership, communication, motivation, etc. Such ___________________

knowledge inputs gradually reinforce the attitude of the
___________________
employees.
___________________
UP
By focusing more on Team Spirit
___________________
To integrate employees with the organization. This initiative is ___________________
further strengthened when we simultaneously ensure a sense of
___________________
belongingness among the employees.
___________________
Check Your Progress
Fill in the blanks
1. Changing attitudes, values and motivations are now the
E-
major issues __________ the organizations.
2. Through appropriate HRD interventions, organizations
can turn such change into advantages, ensuring
______________
Types of Measurement
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Type Basic Empirical Typical Usage Typical Statistics

Operations
Descriptive Inferential
Nominal Determination of Classification of Percentage Chi-square,

equality male-female, mode Binomial
smoker, non-
smoker, team-I,
Ordinal Determination of Rankings: Pre- Median Rank-order
greater or less ference data, correlation
market position,
attitude
measurement,
many others
psychological
measures, etc.
Interval Determination of Index numbers, Mean, range, Product moment
equality of attitude standard correlation T-
intervals measurement deviation Test, Factor
(c)
Analysis
Ratio Determination of Sales, units Geometric Coefficient of
equality of ratios produced, number mean variation
of customers, costs,
age, etc.
190
S
Notes Accuracy, Reliability and Validity
Activity
___________________
Discuss various types of Accuracy is the extent to which a measurement is free from
measurement.
___________________ systematic and variable errors. Freedom from variable errors is
known as the validity of measurement. Reliability measures the
___________________
E
yields same result in repeated applications to the same
___________________ respondents or events. Validity measure is consistent as it is free
___________________ from systematic errors and measures what it purports to measure.
___________________
Attitude Scales
UP
___________________
___________________ Scale is an instrument with the help of which a concept is

measured. It is used in all types of data collection techniques such
___________________
as observation, interviews, projective techniques, etc. Broadly,
___________________ there are two types of scales; rating scales and attitude scales.
Attitude scales measure one or more aspects of an individual's or

group's attitude toward some object. An individual's responses to
the various scales may be aggregated or summed to provide a
single attitude for the individual. Similarly, group responses to the
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various scales may be aggregated or summed to provide a single
attitude for the group.
These scales are of three types:
(a) Likert's Summated Scales,
(b) Thurstone's Equal Appearing Intervals Scale and,

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(c) Guttman's Cumulative Scale.
Likert's Summated Rating Scale

A summated rating scale is a set of attitude statements of which
all are considered or approximated an equal attitude value and to
each of which, the subjects respond with a degree or agreement of
disagreement (intensity) carrying different scores. These scores are
summed and averaged to yield an individual's attitude score.
Under this method each respondent's ranking is found out by
totalling his scores on all the statements (usually 5). To illustrate
this, let us take the following example:
(c)
The total of his scores on all statements is taken as the

measurement of his attitude. Statement may be either favourable
or unfavourable. For favourable statements, values given are
5,4,3,2,1, and for unfavourable statements values are 1,2,3,4,5.
UNIT 12: Selection
191
The following examples will illustrate this:
S
Notes
Statement SA A U D SD
___________________
Management is a science 5 4 3 2 1
___________________
Management is not a science 1 2 3 4 5
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___________________
Thurstone's Equal Appearing Intervals Scale ___________________
This scale attempts to represent the attitudes of a group on a ___________________

specified issue in the form of frequency distribution. The various ___________________
UP
opinions or items on a scale are allocated to different positions in
accordance with the attitudes they express. Following steps are ___________________
necessary to construct a Thurstone attitude scale. ___________________
1. Brief statements expressing attitudes about a particular issue ___________________

are gathered from current literatures or are especially
___________________
prepared for this purpose. The statements should cover
different range of attitudes from extremely favourable to
extremely unfavourable and also include neutral statements.
2. Statements are given an arbitrary number for identification
E-
and a group of judges are asked to sort those into several piles.
3. After sorting, a complete tabulation is made to determine the
number of times each statement is included in the several
piles.
4. The scale values for each statement are determined
graphically in the form of an ogive or cumulative frequency
CC
curve.
5. The final scale is then made, selecting 15 to 20 statements
(preferably those on which judges have had least
disagreement).
6. Respondents then are asked to check only those statements
with which they agree.
The construction of this scale being very cumbersome and time
consuming, it is usually avoided. Moreover, scale values assigned
to statements are influenced by the attitudes, background and
(c)
intelligence of judges who may see things as different from the

actual respondents. This scale also does not allow subjects to
express the intensity of the feelings of the respondents as they
have only the choice to indicate their agreement with the finally
selected statements.
192
S
Notes Guttman's Cumulative Scale
___________________ This scale is made up of a relatively small number of statements
___________________ which have been tested for their uni-dimensionality. A uni-
dimensional scale measures one variable only. The scale is known
___________________
E
as cumulative as respondents agreeing with the most favourable
___________________ statements are theoretically presumed to agree with all other
___________________ statements expressing 'lesser' degree of favourability. Use of this
scale is also avoided for its complexity. Other scale to measure the
___________________
attitude is Social Distance Technique of Bogardus, which is
UP
___________________ normally used to measure highly subjective attitudes.
___________________
___________________
Interview
___________________ In the literal sense of the word, an interview means a conversation
with a purpose. Such purposes are classified under three categories
i.e., obtaining information from the candidates, giving information
to the candidates and finally motivating the candidates. The first
purpose is intended to get information from candidates regarding
E-
their background, experience, education, training and interests to
evaluate their suitability as per the requirements of the
organization. The second purpose is to provide the candidates
information regarding the organization, its philosophy, personnel
policies, etc. The third purpose is to establish a positive
relationship to motivate the prospective candidates to join the
organization. However, all these purposes being successive stages
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of interview, the subsequent stages will be followed only when the

interviewers are prima facie satisfied with the candidates in the
first stage.
The human resource department of most of the organizations

conduct preliminary interview for the candidates. However, for
subsequent interview, a committee of executive is formed to select
the right candidates. For managerial and executive positions,
organizations prefer to retain the service of consultancy
organizations with subject experts on the selection committee.
There are different types of interview as under:

(c)
(a) The Patterned Interview: This is also known as structured

or standardised interview. It is intended to assess the
candidate's emotional strength and stability, industry, ability
to get along well with others, self-reliance, willingness to
accept responsibility, motivation, etc.
UNIT 12: Selection
193
(b) Indirect or Non-directive Interview: This type of interview
S
Notes
is meant for helping the candidates to feel relaxed and free to
talk. Interviewers become listeners and allow the candidates ___________________
to reveal their personality, in-depth knowledge in a free and ___________________

relaxed atmosphere.
E
___________________
(c) Direct Planned Interview: It is a simple question-answer ___________________
session to ascertain the suitability of the candidates.
___________________
(d) Stress Interview: This interview assesses the candidates'
___________________
UP
emotional balance under a situation of tension and stress.
Such tension is, therefore, deliberately created by ___________________
interruptions, provocations, silence, criticism or even by firing ___________________

questions. Interviewers in such a situation deliberately
___________________
become more unfriendly and even, at times, hostile. For
selection of executives, who are required to work under stress, ___________________
such method is often adopted.
(e) Group Interview: This method is intended to assess the

leadership ability of the candidates. Generally, a topic is given
E-
to the candidates to discuss among themselves. The
interviewers remain in the background to assess the best
leaders, their initiative, poise, adaptability, awareness,
interpersonal skills, etc.
(f) Panel or Board Interview: Several interviewers collectively

interview a candidate to rate his/her attributes. Generally,
such a panel consists of several experts and each of them
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interview a candidate only in those areas on which they have

the requisite expertise.
For conducting a successful interview, interviewers should be

adequately competent and trained. Interview should be conducted
in a suitable place. It should be well planned; job descriptions and
information about the applicants should be adequately studied.
Interviewers should be free from any conceivable prejudice.
Interviewees should be allowed to feel relaxed, beginning and
ending of an interview should be made in a best possible friendly
manner, etc.
(c)
The limitations of traditional selection process like failure to select

the right persons for the right jobs, too much emphasis on written
tests and interview, resulted in the development of psychometric
method. This method enables us to quantify the attributes, adding
which we can select the candidates in order of their merit. Many
194 organizations today are making use of this method to ensure
S
Notes proper selection of their employees.
___________________
Check Your Progress
___________________
Fill in the blanks
___________________
E
1. Freedom from variable errors is known as the
___________________
_____________
___________________
2. Reliability measure the yields same result in repeated
___________________
applications to the same __________ or___________
UP
___________________
___________________ Summary
___________________ By checking 'Application Bank' of the candidates, an organization
___________________ may reject a good number of applicants based on the above
rejection parameters. All the above processes, therefore, enable the
organization to short-list the candidates before going ahead with
the subsequent stages of selection. The rejection standards, like
the ones stated above, may also be mentioned in the advertisement
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itself so that the number of applicants is minimized.
Lesson End Activity

You work for a medium-sized software solutions company that
faces intense competition from local as well as global competitors.
Change seems to be the only permanent feature in your work spot
CC
and each employee's responsibilities shift from project to project.

Suppose you have been asked to fill up the job openings at your
company. How would you identify the best people to work in such
an environment?
Keywords
Selection: The process of picking individuals who have relevant
qualifications to fill jobs in an organization.
Assessment Centre: It is a standardized form of employee

(c)
appraisal that uses multiple assessment exercises such as 'in

basket', games, role play, etc., and multiple raters.
Interview: It is the oral examination of candidates for

employment.
UNIT 12: Selection
195
Stereotyping: Attributing characteristics to individuals based on
S
Notes
their inclusion or membership in a particular group.
___________________
E
___________________
1. Briefly discuss the importance of selection process and
mention the steps involved in such process. ___________________
2. You have been retained by an organization to select few ___________________
management trainees. What process you think you should ___________________
UP
consider and why?
___________________
3.. Write short notes on: ___________________
a. Stress Interview ___________________
b. Application Blank ___________________
c. Successive Hurdles
d. Equal Appearing Intervals Scale
e. Cumulative Scale
E-
f. Summated Rating Scale
g. Employee Empowerment and Attitudinal Change
Further Readings
CC
Books
Competency-Based Recruitment and Selection, Robert wood & Tim
Payne, 1st edition, Wiley


Web Readings
http://www.small-business-advice.org/hr/recruitment-selection.htm
(c)
196
Appendix
S
Notes
___________________ Application Blank Format

___________________ Name of the Post _________________________________________
___________________ Advertisement No. ________________________________________
E
___________________ Personal Data
___________________ Full Name: Applicant's Photograph
___________________ Ms/Mr
UP
___________________ Date of Birth, State, Marital Status
Nationally, Whether SC/ST

___________________
Height:……..cm. Vision :
___________________
Weight:…….kgs. Normal/Corrected
___________________
Spectacle Lens Nos.
Address to which we should write: Permanent Address
Telephone No. Telephone No.
Father's/Husband's Name and Occupation:

E-
If you have any relative employed in/or on the Board of our company, please
give details.
Details of previous employment in this company or its sister concerns, with

reasons for leaving.
Details of previous employment elsewhere, with reasons for leaving
Languages: Speak Read Write

CC
Mother Tongue
Education
Examinations School/ Year Attended Major Class, %of

College/ From To Subjects Marks and
University/ Ranks
Institute
Scholastic
Achievements
Training
Name of the Period From To Details of Training Stipend, if any

Firm/Institution
(c)
Work Experience
Employer Period From To Position held and Salary p.m.

nature of work Basic Total
Contd…
UNIT 12: Selection
197
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Notes
Extra Curricular Activities
___________________
Types of activities At School At College Elsewhere
___________________
Official Position held:
E
___________________
Sports
___________________
Participation
___________________
Positions held
___________________
- Captain, Secretary/Manager
UP
Have you ever been convicted? It so, give full details ___________________
Have you had any major illness, operations or accidents? ___________________
Any other information that you would like to furnish: ___________________
Name and addresses of three persons other than relatives to whom we may ___________________
write for references:
Name Address
Minimum Salary Expected:

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We appreciate the time and effort you have spent in completing this
application. Would you please check your application to ensure that you
have completely and accurately answered each and every question?
I declare that the particulars given above are to the best of my knowledge,
correct and complete, and undertake to advise the company immediately of
changes, if any, in respect of my particulars given above. I confirm that
there is no legal bar in my applying for and accepting the above mentioned
employment.
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Date Signature of the Applicant
I have verified the certificates and testimonials where necessary
Date Officer-in-Charge
(c)
(c)
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UP
ES
UNIT 13: Induction
Unit 13
199
S
Notes
Activity
Induction
Define term induction.
___________________
___________________
E
___________________
Objectives
___________________
topics: ___________________
\ Induction process ___________________
UP
\ Objectives of induction process ___________________
\ Importance of Induction and Placement
___________________
Introduction ___________________
___________________
After selection of employees, the first step is to orient them to
organizational life.
Induction
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Induction or orientation programme of an organization is a process
to guide and counsel the employees to familiarize them with the
job and the organization. This process helps an organization to
clarify the terms and conditions of employment, specific job
requirements and also to inculcate confidence in the minds of the
new entrants.
CC
Objectives
General objectives of such a programme normally are:
1. To introduce new employees with the organizational
environment, exposing them to the mission, history and
traditions of the organization, its achievements and future
challenges, its personnel policy and expectations from the new
employees.
2. To create a positive attitude in the minds of the new
employees.
(c)
3. To create proper awareness in the new employees, enabling

them to understand the business of the organization.
4. To provide opportunity to interact with other fellow employees
and also with other managerial employees of the organization.
200
A good induction programme should contain the following areas
S
Notes
which are conveniently distributed under organization's point of
___________________
view and employee's point of view.
___________________
Organization's Point of View
___________________
E
1. History, mission, objectives and philosophy of the
___________________
organization.
___________________
2. Its product, production process, operations involved, state of
___________________
technology.
UP
___________________
3. Its past achievements, present status and future growth plan.
___________________
4. Structure of the organization and the functions of different
___________________ departments.
___________________
5. Delegation of authority and decision-making process.
6. Personnel policies, other miscellaneous policies, practices and
regulations.
7. Job descriptions and responsibilities.
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8. Expectations from new employees.
Employee's Point of View

1. Job responsibilities.
2. Office procedures.
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3. Grievance handling procedures.

4. Salary and perks.
5. Service rules governing hours of work, overtime.
6. Rules covering probation, confirmation, promotion
opportunities, transfer, etc.
7. Retirement and superannuation benefits.
8. Employee services and welfare activities.
9. Employee's participation in small group activities, question
schemes.
(c)
10. Performance evaluation.

UNIT 13: Induction
Steps in Induction Programme 201
S
Notes
Activity
An induction programme essentially involves the following steps:
___________________
Define term employee
socialization
1. General Orientation: It includes guided tours in different ___________________
departments of an organization, introduction with fellow
E
___________________
employees, supervisors and executives, information about the
organizations' mission, philosophy, achievements and future ___________________
plans, etc. Some organizations have their printed manuals, ___________________
which they give to their new employees to orient them with
___________________
their induction training programmes for a week or so. The
UP
purpose of such general orientation programme is to build a ___________________
sense of pride in the minds of the new employees and also to ___________________
create an interest in them about the organization.
___________________
2. Specific Orientation: This is intended to help new
___________________
employees to get acclimatized with their new work
environment. The supervisor or the departmental boss of the
employee takes him to his place of work and imparts
vocational guidance for his particular nature of work. He is
also told about the technology, environment and other
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facilities available in the organization, prevailing practices
and customs and specific expectations from an employee. For
executives and managerial employees, targets and key result
areas for each of them are given to make them aware of what
organization expects from them.
3. Follow-up Orientation: This orientation is conducted

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sometime after the initial induction of an employee, i.e.

preferably within a period of six months or so. The purpose of
such orientation is to give guidance and counsel to the
employees to ensure that they are reasonably satisfied and
gradually settling in the organization.
Check Your Progress

Fill in the blank
1. Some organizations have their printed manuals, which
they give to their ______ employees to orient them with
their induction training programmes for a week or so.
(c)
Employee Socialization
Employee orientation and induction is also called employee
socialization process. Socialization, however, is a continuous
process, today's organizations being dynamic. For the new
202
employees, Decenzo and Robins (1999) identified that socialization
S
Notes process involves three distinct stages as under:
___________________ 1. Pre-arrival Stage: At this stage individual employees come
___________________ to an organization with certain values, attitudes and
expectations. This exercise being undertaken at the selection
___________________
E
stage, to enable an employee to understand to what extent his
___________________
perceived mapping gels with organizational culture and
___________________ systems, it is the duty of the persons involved in the selection
___________________ process to facilitate this. Nowadays because of availability of
UP
information about organizations through different media,
___________________
including web-sites and internet, an enthusiastic individual
___________________ may also have some preconceived ideas about the organization.
___________________ Therefore, it is better to first understand from the individual
about what he understands about the organization and then
___________________
help him to synchronize this information with the reality. This
helps the individual to take the right decision.
2. Encounter Stage: At this stage, perceptions earlier generated
by an individual, are reaffirmed through a well planned
E-
induction programme. Any dichotomy between the employees
perceptions and organizational perceptions, need to be
properly identified and removed through increased
socialization process.
3. Metamorphosis Stage: At this final stage of socialization,
employees understand the organizations and identify them
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with the organizations. Employees develop a sense of

belongingness and become a contributor to achieving
organizational goals and objectives.
However, as explained earlier, socialization is a continuous

process, as organizations are now required to go for restructuring
and reengineering every now and then, keeping pace with the
Check Your Progress

Fill in the blanks
(c)
1. Perceptions generated by an individual, are

_________through a well planned induction programme.
2. Any dichotomy between the employees perceptions and

organizational perceptions, need to be properly
identified and removed through _______________.
UNIT 13: Induction
Placement 203
S
Notes
After the initial programme is over, an employee is put to a specific
___________________
job, for which he has been selected. Most of the organizations put
new employees on probation for a specified period after which they ___________________
are confirmed or made permanent, provided they match the
E
___________________
organizational requirements. The personnel department
___________________
periodically reviews the progress of such employees getting
feedbacks on their performance from their controlling authority. ___________________
Some organizations have also a system to extend the probationary ___________________
UP
period, if the employees fail to match to the organizational ___________________
expectations. Such placement is known as 'differential placement'.
___________________
Placement is defined as assigning employees jobs for which they ___________________
have been identified as suitable based on the selection techniques.
___________________
But such definition would be meaningless, if a particular employee
is recruited against a particular vacancy. Generally, the question
of placement arises when a group of trainees are recruited.
Organizations, to identify the true potentiality of an employee, in
such cases, make provision for short-term placement, during which
E-
phase, employees are allowed to work on different jobs, through a
systematic job rotation programme. However, at a later stage,
permanent placement is effected matching the employees'
competence, knowledge, skill and job interest. Other forms of
placement have been discussed in the chapter on transfer and
promotion.
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Check Your Progress

Fill in the blank
1. Placement is defined as assigning employees jobs for
which they have been identified as suitable based on
the __________________.
Importance of Induction and Placement

Common use of higher technology, increased level of knowledge
and skills of the new job entrants, production restructuring and
(c)
flexibility coupled with perceptive change about human resource,

which is now considered as most important resource of an
organization, have now transformed labour as an item for
competitive sale and purchase. However, despite the problem of
unemployment in India, there still exists dearth of knowledge and
skilled workers and so also executives and managers. The recent
204 economic liberalization programme of the Government of India has
S
Notes now paved the way for entry of multinationals and foreign
___________________ companies. Market globalization has further intensified the
competition. Development of total quality management philosophy,
___________________
inter alia, is also demanding sea change in product and service-mix
___________________
E
of an organization. All these together have now increased the scope
___________________ for job mobility for employees with knowledge and skills of
___________________ appropriate type and degree.
___________________ Unfortunately, retaining employees after recruitment and selection
UP
___________________ is an utterly neglected area in Indian corporate sector. Many
organizations spend several lakhs of rupees in terms of job
___________________
advertisement, conducting tests and interviews, hiring the services
___________________ of consultants and psychologists etc., for selecting a managerial
___________________ employee. A weak induction programme, without adequate
emphasis on building confidence and sense of belongingness in the
minds of the new employees, results in quick separation, so also
wastage of colossal sum of money for the organization. Such
experience is quite common in public sector units. Very recently a
leading Tata organization has lost few hundreds of their young
E-
engineers and professionals, who left en masse to join elsewhere.
Some organizations, on the contrary, do not review the progress of

the new employees, who become permanent automatically after
completion of their probationary tenure, despite them being
unproductive. Thus, a good induction and placement programme
needs to ensure employees' retention by keeping their motivation
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high, while at the same time, getting rid of the unproductive

employees within the organizations.
Check Your Progress

Fill in the blank
1. Retaining employees after recruitment and selection is
an utterly ___________ area in Indian corporate sector.
Summary
Some organizations have their printed manuals, which they give to
(c)
their new employees to orient them with their induction training

programmes for a week or so. The purpose of such general
orientation programme is to build a sense of pride in the minds of
the new employees and also to create an interest in them about the
organization.
UNIT 13: Induction
Lesson End Activity 205
S
Notes
Prepare and give a short presentation titles, "How to orient new
___________________
employee?"
___________________
Keywords
E
___________________
Placement: Actual posting of an employee to a specific job - with ___________________

rank and responsibilities attached to it.
___________________
Induction: Introduction of a person to the job and the ___________________
UP
organization.
___________________
1. What is the objective of an induction programme? What ___________________

important areas need to be considered for an effective ___________________
induction programme?
2. What are the different steps involved in an induction
programme? In what way induction and placement have now
become important for Indian organizations?
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3. Define attitude. Why is the study of attitude necessary for
HRD profession?
4. What are the different tools for attitudinal measurement?
From an organizational point of view discuss in detail at least
two measurement tools with due emphasis on their relative
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merits or demerits.
5. You have been retained by a company to study the attitude of
50 employees on the recently introduced pension scheme.
Develop at least 5 structured close-ended questionnaires,
using Likert's Item Analysis Scale and interview the
employees. Analyse all the responses using factorial method
and measure the attitude of the employees.
6 Write short notes on:
a. Differential Placement
b. Job Rotation
(c)
c. Probationary Period
d. Follow-up Orientations
206
Further Readings
S
Notes
___________________ Books
___________________ Competency-Based Recruitment and Selection, Robert wood & Tim
___________________ Payne, 1st edition, Wiley
E
___________________ Comprehensive Human Resource Management, P L Rao, 2nd
UP
___________________
___________________ Web Readings

___________________ http://www.small-business-advice.org/hr/recruitment-selection.htm
___________________
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(c)
UNIT 14: Career Planning and Development
Unit 14
207
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Notes
Activity
Career Planning and

Define the term career
___________________
___________________
Development
E
___________________
___________________
Objectives ___________________
___________________
UP
topics:
___________________
\ Importance of career planning
\ Elements of career ___________________
\ Objectives and importance of career development ___________________

\ Different cycles of career development process ___________________
Introduction
Effective HRM encompasses career planning, career development
and succession planning. Even though in this era of rapid
E-
technological changes, organizations are besieged with the problem
of manpower redundancy, organizations are equally concerned
with the problem of retention of manpower. While one way to
increase retention is by extrinsic motivational reinforcers, the
other way obviously is to address to the need of employees, which
centres on individual career planning and career development.
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From an organization's point of view also, these initiatives

reinforce their strategic plans and make their goals and objectives
achievable. An organization without career planning and career
development initiatives is likely to encounter the highest rate of
attrition, causing much harm to their plans and programmes.
Similarly without succession planning, manning of vacancies,
particularly at higher levels, become difficult. There are examples
of many organizations, which had to suffer for not being able to
find a right successor for their key positions. With the increase
scope for job mobility and corporate race for global head-hunting of
good performers, it is now a well-established fact that normal
(c)
employment span for key performers remains awfully short. At

times it is even shorter than three years. This again strengthens
the need for effective career planning, career development and
succession planning.
208
The terms career planning and career development are used
S
Notes
interchangeably in most of the organizations. It is also
___________________
correct that but for their subtle difference in the definitional
___________________ context, their process remains the same. For the purpose of this
___________________ book also, we have considered both the concepts
E
more holistically, except for some discussions on their meaning.
___________________
Similarly, any discussion on succession planning remains
___________________
incomplete without relating the same to management development
___________________ and organizational development as succession planning
UP
___________________ immediately succeeds it. Moreover, success of one is dependent on
___________________
the other.
___________________
Definition of Career
___________________
Career is a sequence of attitudes and behaviours associated with
the series of job and work related activities over a person's lifetime.
Yet in another way, it may be defined as a succession of related
jobs, arranged in hierarchical order, through which a person moves
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in an organization. As the literal definition of career focuses on an
individually perceived sequence, to be more accurate, career may
be either individual-centered or organization-centered. Therefore,
career is often defined separately as external career and internal
career. External career refers to the objective categories used by
society and organizations to describe the progression of steps
through a given occupation, while internal career refers to the set
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of steps or stages which make up the individual's own concept of

career progression within an occupation. For such two different
approaches, in organizational context, career can be identified as
an integrated pace of vertical and lateral movement in an
occupation of an individual over his employment span. Such
integrated approach is intended to minimize diversity of hopes and
expectations of employees matching individually perceived career
with organization-centered career.
Important Elements of Career

(c)
Analyzing the definitional context, it is therefore; clear that career

has the following important elements.
1. It is a proper sequence of job related activities. Such job

related activities vis-à-vis experience include role experiences
at different hierarchical levels of an individual, which lead to
an increasing level of responsibilities, status, power, 209
S
achievements and rewards. Notes
2. It may be individual-centered or organization-centered. ___________________

Individual-centered (internal) career is an individually
___________________
perceived sequence of career progression within an occupation.
For example in medical profession, we have clearly defined
E
___________________
stages of education, internship, residency, hospital affiliation, ___________________
or private practice. Similarly, in college teaching, we have
___________________
stages like lecturer-ship, readership and professorship. In
industrial occupation those who get entry in Indian ___________________
UP
Administrative and Allied Services also have such clearly
___________________
defined stages of career. For example, in Indian Ordnance
Factories, Class-I officers start at Assistant Works Manager ___________________
level and gradually rise to the level of Works Manager, Deputy ___________________
General Manager, Additional General Manger, General
___________________
Manager and so on. These being clearly defined stages of
career, an individual before joining such services can very well
perceive his sequence of career progression. But such clearly
defined stages of career progression are not made available for
all occupation or job titles both in public and private sectors.
E-
In such cases, individuals nurture their own perceived stages
of career progression.
3. It is better defined as an integrated pace of lateral movement
in an occupation of an individual over his employment span.
Individual-centered career being not an objective or at times
even realistic description of career steps in a given occupation,
often goes against the hopes and expectations of employees as
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organizations may have a different perceived career plan for

the employees. Integrated approach, therefore, minimises such
dissonance and ensures a mutually acceptable and satisfying
career progression.
Check Your Progress

Fill in the blanks
1. Career is a __________ of attitudes and behaviours
associated with the series of job and work related
activities over a person's lifetime.
(c)
2. An organization without career planning and career

development initiatives is likely to encounter the
______________of attrition, causing much harm to their
plans and programmes.
210
Overview of Career Development
S
Notes
Activity
Career development essentially means the process of increasing an
Give___________________
an overview of career
development employee's potential for advancement and career change. In other
___________________ words, it is a process of planning the series of possible jobs which
___________________ an individual may hold in the organization over time and
E
___________________
developing strategies designed to provide necessary job skills as
the opportunity arises. Therefore, career development relates to
___________________
the readiness for progression through a series of positions during
___________________ an individual's working life. Career development may be
UP
___________________ differentiated from career planning and career management.
Career development is a systematic process of guiding the
___________________
movement of human resources of an enterprise through different
___________________
hierarchical positions, whereas career planning is a process of
___________________ establishing career objectives for an employee (or by the person
himself) and developing planned strategies to achieve them
including activities which help in making choices with respect to
occupations, organization's job assignments and self development
measures. Career management, on the other hand, relates to
E-
specific human resource management activities, such as
recruitment, selection, placement, and appraisal to facilitate career
development.
Every organization needs to provide career development
opportunities to its employees. The Indian corporate sector at
present is facing major restructuring to keep pace with the
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economic restructuring programme of the country. Market

globalization, technology upgradation, import liberalization,
delicensing, increased competition together have now prompted
Indian companies to restructure their production vis-à-vis
organization. Redeploying the manpower, through proper training,
in restructured jobs is one of the important priorities for the
organizations, particularly for those who are down the level. But
employees with matching skill and knowledge now find them
successful in better bargaining position due to increased job
mobility. Most of the foreign and multinational companies are now
winning away the employees with matching skill and knowledge
(c)
from Indian organizations with better offer of pay and career.

Therefore, poor career development programme may affect an
organization at least in two ways:
1. High employee turnover, particularly those in their beginning

of the career.
211
2. Decreasing employment involvement, i.e., commitment to
S
Notes
work.
___________________
Recruitment expenses, training expenses and reduced performance
___________________
during orientation (loss of output, increased wastages, etc.)
together add to the cost of employee turnover.
E
___________________
___________________
Decreased employee involvement also affects functional efficiency
and productivity of the employees. Other important reasons for ___________________
career development can be listed as follows:
___________________
UP
1. Changing environment is now making jobs more complex. A ___________________
suitable career development programme enables employees to
___________________
be better prepared for future positions in the organization. It
also gives the opportunity to identify prospective managers ___________________
from within. Manning vacancies from within is cost efficient ___________________
and at the same time the system motivates employees.
2. A suitable career development programme enables the

organization to receive maximum contribution from
employees. Since this helps employees to enhance their skills
E-
for higher positions, both under utilization of employee's
potential work energy and their under employment can be
avoided.
3. Career development makes employees more adaptable to

changing requirements of the organizations. The
requirements may either change due to new technology
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[Computer Numerically Controlled Technology (CNC),

Numerically Controlled Technology (NC), Direct Numerically
Controlled Technology (DNC) and Flexible Manufacturing
System (FMS)], or new management philosophy and style
(like, just-in-time manufacturing, total quality management
etc.).
4. It provides an objective basis to describe the steps of

progression in a given organization, and therefore, minimises
unfair promotion practices of employees reducing the change
of 'promotion by discretion'. Thus a suitable career
development programme avoids employees' resentment on
(c)
promotion issues, which has now become a major casual factor

of industrial disputes in India.
5. Most of the organizations are now also manned by women and

other minority classes of employees. A career development
programme ensures equitable opportunity for career
212
progression of these classes of employees also. Thus it meets
S
Notes the requirements of equal employment opportunities for all.
___________________
6. A career development programme gives opportunities to
___________________ employees to acquire more skills, obtain desired jobs, share
___________________ increased responsibility, enjoy scope of job mobility and derive
E
increased job satisfaction.
___________________
___________________ Significance and Advantages of Career

Development
___________________
UP
The significance and advantages of career development both from
___________________
organizations and employees' point of view can be summed up as
___________________ follows:
___________________ 1. It reduces employee turnover by providing increased
___________________ promotional avenues.
2. It improves employee morale and motivation.
3. It enables organizations to man promotional vacancies
internally, thereby, providing opportunities to reduce the cost
E-
of managerial recruitment.
4. It ensures better utilisation of employees' skills and provides
increased work satisfaction to employee.
5. It makes employees adaptable to the changing requirement of
the organization
6. It reduces industrial disputes related to promotional matters
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and thereby provides opportunity to the organization to

sustain harmonious industrial relations.
7. Employees' loyalty and commitment to the organization can be
substantially increased and thereby organizations can enjoy
the privilege of increased employee productivity.
8. Career development programmes being an objective
description of career progression, ensure equitable promotional
decisions even for women and minorities in an organization.
Objectives of Career Development

(c)
The objectives of a career development programme, therefore, can

be listed as below:
1. To attract and retain effective persons in an organization.
2. To utilise human resources optimally.

213
3. To improve morale and motivation level of employees.
S
Notes
4. To reduce employee turnover. ___________________
5. To practice a balanced 'promotion from within' policy. ___________________
E
6. To make employees adaptable to changes. ___________________
___________________
7. To increase employees' loyalty and commitment to the
organizations. ___________________
8. To maintain harmonious industrial relations. ___________________
UP
___________________
9. To inculcate equitable employment practices providing equal
career progression opportunities to women and minorities. ___________________
___________________
Types of Career Development Programmes
___________________
In an organization, there are different types of development
programmes to enrich different skills of human resources. These
include organization development, employee development, and
management development and career development. Organizational
E-
development programmes are planned and managed from the top
to bring about planned organizational changes for increasing the
organizational effectiveness. Management development is
concerned with upgrading the manager's skills, knowledge and
ability of the employees to enable them to accomplish the
additional process of guiding the movement of human resources
through different hierarchical levels. Whatever may be the
CC
differences, career development is interrelated with other human

resource development functions.
Check Your Progress

Fill in the blanks
1. Career development essentially means the process of
______________ an employee's potential for advancement
and career change.
2. Management development is concerned with
_____________ the manager's skills, knowledge and
ability of employees.
(c)
214
Interrelation with other HRD Functions
S
Notes
___________________ Difference with Career Planning

___________________ Career Planning process evaluates one's abilities and interests,
___________________ considering alternative career opportunities, establishing career
E
goals and planning practical development activities. Thus from an
___________________
individual's point of view, it helps in making choices with respect
___________________ to occupation, organization, job assignment and self-development
___________________ measures. However, organizational career planning is different
from individual career planning, as organizational career plan is a
UP
___________________
map of sequence of jobs for an employee within the organization
___________________ itself, whereas, individual career planning is a map of sequence of
___________________ jobs of the individual concerned without regard to the organization.
Career development process on the other hand, aims to increase an
___________________
employee's potential for advancement and career change by
providing necessary job skills.
Career pathing, personnel skills inventories, career information

systems and career counselling are different career planning
E-
activities in an organization. Thus, information of jobs to decide
the skills needed through an effective system of job analysis and
job descriptions is required. Suitable performance appraisal system
to monitor performance, clear career goals of employees, effective
human resource planning system and designated career paths and
job families enable the career planning process to move logically
and scientifically. In addition, the career planning process being
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concerned with the individual employees, an effective information

system is necessary to make all these data available to the
employees concerned from time to time. Career development
process, on the other hand, calls for assisting employees in
assessing their own internal career needs, developing and
publishing available career opportunities in the organization and
finally aligning employee needs and abilities with career
opportunities.
However, there cannot be an effective career development without

career planning in the organization. Therefore, the career
development is an integral part of career planning process as
(c)
career planning provides the opportunity for assessing

occupational and career choices of an employee, his performance
appraisal and devising a suitable development programme for him.
Conventionally in any given organization, the career planning
process primarily deals with employees at a lower level, whereas
career development entails objective description of career 215
S
progression path for all levels of employees. Notes
___________________
Difference with Manpower Planning
___________________
Manpower planning, among other things, provides higher
E
___________________
management with the data on the inventory of skills and potential
available in the organization, based on which, expansion, ___________________
technology upgradation etc. are undertaken by the organization.
___________________
Inventory of manpower resources, manpower needs in terms of
number, types, skills, levels and time, possible changes in ___________________
UP
functions and activities with the passage of time, desired ___________________
behavioural or attitudinal changes required to meet the manpower
___________________
needs, training opportunities, resources and training time etc. is
the basic information required for manpower planning. However, ___________________
manpower planning also encompasses career development process ___________________
as the latter provide the basis of manpower planning by planning
the series of possible jobs which an employee may hold in the
organization over time.
Difference with Succession Planning

E-
Succession planning involves identification of likely vacancies for
higher level executives and locating likely successors to man such
vacancies. Career development on the other hand covers employees
at all levels including executives in an organization. Succession
planning in reality, therefore, is management development for the
executives. A career development programme normally considers
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likely career progression in a given occupation, while succession

planning chart is a 'runner up chart' for higher generalist positions
like General Manager, Managing Director etc. who may be
groomed up for different specialist positions like; marketing,
production, personnel, finance etc.
Check Your Progress

Fill in the blanks
1. Career planning process evaluates one's abilities and
interests, considering ___________.
(c)
2. Succession planning chart is a __________ for higher

generalist positions.
216
Different Stages or Cycles of Career
S
Notes
Activity Development Process
___________________
Discuss exploratory stage.
___________________ In order to design a suitable career development programme it is

necessary to understand the different career stages or development
___________________
E
cycles of an individual employee. Actual stages differ from
___________________ individual to individual due to obvious differences in perceived
___________________ internal career. However, career development cycle or stages,
keeping in view the general requirements of people at different
___________________
hierarchical stages, may be grouped under the following four
UP
___________________ categories:
___________________ 1. Exploratory Stage: This stage starts when a new employee
___________________ joins the organization. An employee, who with his
qualification and knowledge, joins an organization and finds
___________________
himself in an apparent mismatch condition, which cannot be
set right with the induction programme of the organization. It
takes quite some time for him after thorough training to adapt
to the organization and more particularly to his job
assignment.
E-
Therefore, it is essential for the organization to sustain the
behavioural as well as operational deficiencies to help him to
develop in the course of time. The best solution at this stage is
to allow the new entrant to perform some specific job and to
confer freedom in functioning. This will help the new entrant
to gradually develop according to the requirements of the
CC
organization. Some companies even allow the new entrant to

undergo a compulsory job rotation for reasonable time period.
The purpose of such job rotation is to allow the employee to
select his preferred job from a wide range of available jobs in
the organization. However, due to obvious functional
specialities and different educational requirements, such a
scheme is not quite successful in Indian organizations.
2. Establishment Stage: After a new entrant chooses his career

from different given alternatives (where such options are
available), he needs to be provided with regular feedback on
his performance. Such performance feedback enables the new
(c)
employee to understand the effectiveness of his performance

and at the same time he can also initiate required corrective
action to overcome his functional deficiencies. Performance
appraisal and its feedback have also motivational values as
the new employee enjoys a sense of accomplishment when he
gets feedback on his assignment from management and
specifically when he understands that his promotional 217
S
decision has been taken based on his performance. A Notes
successful career development process at establishment stage, ___________________
therefore, is important to retain employees in the organization
___________________
and at the same time to develop a sense of loyalty and
commitment to the organization.
E
___________________
3. Maintenance Stage: This is a mid-career stage for ___________________

employees, who strive hard to retain their established name
___________________
and fame. Therefore, at this stage employees need to put their
___________________
continuous efforts for self-development. For an organization,
UP
career development process at this stage, therefore, calls for ___________________
renewing and updating the skills of employees particularly in ___________________
the context of the changing environment to help employees to
___________________
overcome their mid-career crisis. In many organizations,
absence of career development programmes makes employees ___________________
in this stage of their career to opt for a job switch. Therefore,

this stage is crucial and unless the organization adopts
suitable career development programmes, it may face high
employee turnover.
E-
4. Stage of Decline: Employees at this stage being prepared for
retirement, get scared from the possible threat of reduced role
or responsibilities in the organization. Such complexity is
behaviourally associated with old age of the employees which,
unless set right through a suitable career development
programme, may even render such employees inefficient or
CC
misfits for the organization. Career development process at

this stage, therefore, should aim at helping the employees to
get mentally prepared for retirement rituals, particularly to
prepare them to accept a reduced role and responsibilities, so
that, they can accommodate with their family and the society
in the later part of their life.
Check Your Progress

Fill in the blanks
1. It is essential for the organization to __________the
(c)
behavioural attitude.
2. ___________ allow the new entrant to perform some
specific job and to confer freedom in functioning.
218
Issues in Career Development Process
S
Notes
___________________ Edgar H. Schein suggested the following issues to be considered at

different stages or cycles of career development process.
___________________
___________________ Exploratory Stage
E
___________________ At this stage an organization should:
___________________ (a) Ensure the availability of accurate information about the
___________________ organization and the various occupations existing in the
UP
organization to the new employee.
___________________
___________________ (b) Create opportunities to enable new employees to get

acquainted with the organizational careers through job
___________________
rotation, internship, visit to different units, seminars, etc.
___________________
(c) Sponsor educational and training programmes for ensuring
supply of potential talent in future.
Establishment Stage
E-
At this stage an organization should ensure:
(a) Identification of the best possible talent for the organization;
(b) Communicating the correct and positive image of the

organization to the employee;
(c) Maximum learning and favourable attitudes of the employees

towards the organization;
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(d) Assigning challenging jobs to employees to enable them to test

their abilities and skills;
(e) Providing adequate feedback on performance to the employees

to enable them to assess their strengths and weaknesses;
(f) Designing of development plan, identification of development

needs, deciding next career steps, etc.
Maintenance Stage
This being a mid-career stage, the organization should provide:
(c)
(a) A continuing process of performance appraisals, feedback,

career counselling, long-range career planning to ensure
proper deployment of the employees and also to enable them
to feel challenged, motivated and committed to the
organization.
219
(b) Strategies to motivate plateaued employees, so that they can
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Notes
be productively utilized even without promotion. Activity
___________________
Who are career anchors?
(c) Adequate opportunities for transition from specialist cadres to
___________________
generalist positions at higher echelons of the organization.
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___________________
(d) Adequate career paths to enable employees to accommodate
___________________
their personal and family needs, especially during critical
phases in their life or family cycle. ___________________
(e) Help employees to adjust to their changing role as their career ___________________
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shifts from active (operational) positions to advisory positions. ___________________
(f) Help employees to prepare for retirement. ___________________
___________________
Decline Stage
___________________
This being a stage of separation, the organization should try to:
(a) Manage retirement without destroying the employee's sense of

self-worth.
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(b) Invent new and creative part-time roles for retired employees
which can use their knowledge, experience and wisdom.
At every stage of the career, employees also make an effort to

develop their own information sources. They analyse the feedback
on their performance, seek opportunities for development, study
the career paths available to them and provide the organization
with details of their perceived needs, goals and ambitions. Thus
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career is as much the responsibility of the individual employee as

it is the responsibility of the organization.
Check Your Progress

Fill in the blanks
1. At every stage of the career, employees also make an
effort to _________ their own information sources.
2. Manage retirement without destroying the employee's
sense of ___________.
(c)
Career Anchors
Career anchor is a syndrome of talents, motives and values which
gives stability and direction to a person's career. Such talents,
motives and values give shape to certain attributes, which an
individual derives from his early experiences and which help him
220 to conceptualize his own perceived career. This perceived career
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Notes anchor, therefore, often goes against organizational career plans
___________________ and thus, employees develop a sense of dissonance or incongruity
about their career plans. Many organizations, therefore, try to
___________________
identify perceived career anchors for their employees to develop
___________________
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matching career development programmes. Many empirical
___________________ studies have so far been carried out to identify the perceived
___________________ career-anchor of different type of employees. Edgar H. Schein,
summing up the findings of an empirical study on management
___________________
graduates, identified five such career anchors for employees.
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___________________
___________________ Managerial Competence
___________________ This competence is a fundamental characteristic for those who

prefer to rise to the top. Such employees were found to have the
___________________
following three areas of competence:
1. Interpersonal Competence: They have the ability and desire

to handle a variety of interpersonal and group situations.
They can give leadership, resolve group conflicts and also feel
E-
at ease while tackling unfavourable situations to their
advantage.
2. Analytic Competence: This competence helps such

employees to identify problems, analyse the same and to
develop situations to resolve the problems. Analytical skill
being an important prerequisite for success of managers, such
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competence naturally makes such employees befitting for

managerial positions.
3. Emotional Competence: Employees bestowed with such

competence can bear high levels of responsibility and even can
afford to remain cool in difficult situations which make them
competent to exert leadership powers without much of a
problem. Such competence develops empathetic skills in
employees leading to a matured decision making power even
in a situation of crisis.
All these competencies together develop matured employees who

are suitable for managerial positions in an organization.
(c)
Technical/Functional Competence
Persons with such competence prefer to remain in technically
satisfying jobs than rising to the higher managerial level. Such
technically satisfying jobs may be either engineering, systems
analysis or even different functional areas of management like; 221
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finance, personnel, marketing etc. In manufacturing units some Notes
executives always prefer to remain on the shop-floor as they derive ___________________
satisfaction from such jobs rather than general managerial jobs at
___________________
the higher echelon of management. Such people are committed to
E
the profession and consider their work important rather than the ___________________
benefits and/or future prospect. ___________________
___________________
Security and Stability ___________________
UP
Employees who are anchored in this competence will always get ___________________
motivated for a career which ensures job security and/or long range
___________________
stability in the form of good retirement programmes. Such people
get motivated only when they are ensured a stable career situation ___________________
which may not even at times be fitting to their level of knowledge ___________________
and skills and they may subordinate some personal needs (for
example, acceptance of less pay and amenities) to satisfy their
perceived security. Effecting transfer and promotion for this type of
employees is quite difficult. Most of the employees under this
E-
category may be identified in Government and public sector
undertakings.
Creativity and Challenge

People with such syndrome are very few in number. They become
entrepreneurs more for the sake of creating something new and to
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have their own identity than for making money. Such people when
employed in an organization always want to be functionally
autonomous to exercise their own special talents. They crave for
independence. Such type of employees being anchored for
creativity and developing something new, they are always given
challenging work assignments and scope for their identification
through innovative product designs.
Freedom and Autonomy

There are some people in the organization who always like to work
at their own pace. Organizational constraints like fixed working
(c)
hours, lack of variety of work, defined working conditions etc.

prevent them from becoming functionally autonomous and
independent. Such people, due to absence of freedom or
independence in their organization, often leave the job to start
their own consultancy and freelancing. Teachers, professors,
222
advertising professionals like; artists and copywriters,
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Notes
Activity
management consultants etc. fall under this category.
___________________
Define employee
empowerment.
Other Anchors
___________________
The complexity of behavioural parameters has of late identified
___________________
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some other career anchors which we find are very much related to
___________________ different occupations. A separate class of people may have a strong
___________________ craving for identity. Those who are in military organizations get
such identity as their occupational title, which they use as a prefix
___________________
to their names, like, Major, Colonel, Brigadier, etc. Such
UP
___________________ identification is so visible that they get special uniforms matching
___________________ their levels in the organization. Affiliate needs and interpersonal
talents to work for a cause is yet another anchor which we find in
___________________
some persons. The search for power, influence, control and job
___________________ variety are examples of other career anchors which people try to
achieve in their occupational roles. Knowledge of these career
anchors are essential for any organization in order to plan for
career development. Each employee who nurtures specific career
anchors (internal motives and values), should make it explicit to
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the organization so as to find matching occupational roles without
much of behavioural dissonance. Such a matching process,
therefore, is the principal task of planning for career development.
Check Your Progress

Fill in the blanks
1. Career anchor is a __________, motives and values which
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gives stability and direction to a person's career.

2. The complexity of behavioural parameters has of late
identified some other _______________.
Career Development and Employee

Empowerment
Employee empowerment etymologically means an extension of
employee participation vis-à-vis involvement. This definition of
empowerment is more explicit when we review the contribution of
Judith Bardwick (1991), who states, empowerment means giving
(c)
everyone, instead of just people with certain positions or certain

job titles, the legitimate right to make judgements, form
conclusions, reach decisions and then act.
A career development process ensures promotion of employees

from one career path to another. It gradually makes them
independent functionaries at later career stages. Such a system, 223
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therefore, often makes managers uneasy to open up the Notes
organizational planning process to individual employees. On the ___________________
contrary, it will also develop a sense of misgiving as they may not
___________________
really believe that the organization is truly opening up its planning
process to them.
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___________________
___________________
Issues Involved
___________________
The following issues need to be considered to empower employees
through a successful career development process. ___________________
UP
___________________
1. Commitment of the top management to ensure that the
organizational career planning process will adequately ___________________
consider individual career planning (which is internally ___________________
perceived by the employees)
___________________
2. People need to be infused with a sense of confidence to enable
them to work to their true potential.
3. Basic information like mission of the organization, its

objectives and plans, career opportunities etc. need to be
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communicated to the people.
4. Available career planning resources in the organization

should also to be communicated to the employees from time to
time.
5. The organization should help employees to make them

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competent to sort out data, formulate goals and overcome

obstacles to realise the goals.
6. Employees also need to be communicated about the status of

their present position, organizational expectations and their
level of performance.
7. Individual managers should support their employees in career

planning.
8. The organization should be responsible for the individual

career plans adopting an integrated career development
process, which accommodates both individual and
(c)
organizational needs.
It is; therefore, amply clear that the career development process

can be successfully utilized as an empowerment tool by any
organization if the above issues are duly taken care of.
224
Indian Scenario
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Notes
In India, most of the organizations seriously lack in a scientific
___________________
career development scheme for employees working at various
___________________ levels. Due to the absence of such objective schemes, career
___________________ development as promotional decisions often suffer from managerial
E
___________________
discretion causing employee unrest and unfavourable industrial
relations. In some organizations career development for employees
___________________
at higher echelons exists, making such occupational groups
___________________ entitled for career development on a regular basis. Such
UP
___________________ organizations do not have effective career development schemes for
employees down the level where such decisions, as mentioned
___________________
above, are exerted by managerial discretion. This difference in
___________________
career development approach, therefore, demotivates employees
___________________ and even at times stands against successful empowerment from
which an organization can otherwise reap motivational benefits
and increased functional effectiveness and productivity.
Check Your Progress

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Fill in the blanks
1. Employee empowerment etymologically means an
_______ of employee participation vis-à-vis involvement.
2. People need to be infused with a sense of ___________ to

enable them to work to their true potential.
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Career Planning and Career Development

Process
The dynamics and complexities of career development process have
been made amply clear through earlier discussions. It is clear that
the career development process can not be undertaken in isolation.
Some issues have to be taken care of by the organization itself,
while some others concern the individual employees. Thus an
improved career planning process is the joint responsibility of both
the organization and the employee. Internal career needs (of
individual employee), therefore, need to be integrated with the
(c)
external career opportunities (of the organizations). Unfortunately,

organizations do not interact with the employees to understand
their perceived career needs, instead they depend on guess work to
assume the needs, motives and anchors and move them around on
discretion. Such practices, therefore, lead to employees' dissonance.
Thus for having good and improved career development process it 225
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is necessary both for the organization and the employees to Notes
understand each other's needs and opportunities. ___________________
Integration of Career Development Process with Family Issues ___________________
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Since career development process is a continuous one and ___________________
encompasses the entire employment so also the life span of an ___________________

individual, it should also examine how the work, reward system
___________________
etc. can be integrated with the personal and family issues of the
employees at different career stages. Most of the organizations ___________________
UP
experience mobility or job switch of executives at their
___________________
maintenance or mid-career stage. This is because most employees
at this stage experience structural changes or life plateauing due ___________________
to the absence of adequate career paths, which can accommodate ___________________
their personal and family needs.
___________________
At this career stage, promotion and outstation transfers of
employees often invite problems, unless such decisions of the
organization are favourable to the employee's family. Moreover, at
this career stage, employees prefer to have an advisory role. All
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these aspects, therefore, deserve adequate attention of the
organization, while it works out career development plans for
employees who are at their mid-career.
Developing Career Paths Compatible to

Changing Needs
The career development process should be made compatible to the
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changing needs of the employees in their life cycle. This calls for
creating flexible opportunity structures and career paths to enable
employees to identify them with such role positions at different
stages of their life-cycle. New employees should have adequate
opportunities to gain on-the-job knowledge and experience, and
undergo training and education programmes for enriching job
skills. The organization, therefore, needs to identify suitable role
positions for such employees, who are at their beginning of career
stage. Similarly, organizations should have adequate provision for
renewals and updation of knowledge and skills for old employees,
particularly in the context of the changing environment, so that
they should not lose their self-worth. For such employees, this is
(c)
also to be followed by active pre-retirement planning and

counselling to enable them to accommodate nicely with their
family and society.
Improved career development process should also appreciate

changing social values with respect to work, life and leisure. Work,
per se, is differently perceived by different people. For some, it is a
226
source of self-fulfilment, creative pursuit, future growth and
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Notes
Activity development, rising to the higher corporate ladder, etc. Different
___________________
Define the term career path employees are at different places in the Maslow's hierarchical
needs ladder. Hence, different yardsticks should be employed for
___________________
each employee depending upon his/her perception of values.
___________________
E
Education and occupational mismatch need not always be for
___________________ reasons of non-availability of matching jobs but due to the
___________________ perceived values of the individual. Many educated persons may opt
for low profile artistic or craftsmanship jobs purely to derive
___________________
creative satisfaction. Similarly, there are people who give more
UP
___________________ priority to such work which do not demand much of their time and
effort. These people give more importance to their leisure time
___________________
activities (hobbies, drama, music, etc.) to seek self satisfaction. The
___________________ career development process, therefore, should consider these
aspects, or otherwise, the whole exercise will suffer from the
___________________
problem of employee dissonance.
Check Your Progress

Fill in the blanks
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1. Career development process can not be undertaken in
______________.
2. Education and occupational mismatch need not always
be for reasons of __________ of matching jobs.
Steps in the Career Planning Process

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The career planning process involves the following different

activities or steps in an organization:
Preparing Personnel Skills Inventories

The first step is to prepare personnel skills inventories, which
contains data on employees’ skills and career goals. In addition,
there are required data banks, which provide the following
information.
(a) The organization structure and the persons manning different
positions in the organization, their age, education, experience,
training and career goals, status, duties and responsibilities.
(c)
(b) The performance record and ratings, interpersonal abilities of

the employees.
(c) Their preferred location, desires and constraints.
227
(d) Whether the present strength is short or surplus to the
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Notes
requirements, if it is short, the extent of shortage at different
levels and the organizational resources available to make good ___________________
such shortages in future. If it is surplus, the measures ___________________
available to redeploy them through proper restructuring.
E
___________________
(e) Future requirement of manpower for expansion or
___________________
diversification of the company or for natural wastages like;
___________________
death, disability, retirement, discharge and dismissal,
resignation, etc. ___________________
UP
___________________
In most of the organizations, such information is computerised and
periodically reviewed and updated. After preparation of personnel ___________________
skill inventories and additional data, it is necessary to develop ___________________
career paths for employees.
___________________
Developing Career Paths
Career paths are logical mapping out of jobs, which represent a
potential progression tract that an employee may follow over time.
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Such mapping of job progressions are done in the form of career by
ladders clubbing together similar lines of occupations in job
families. Job families are groups of homogenous jobs, i.e., jobs with
similar characteristics. An illustrative model of career paths for
marketing jobs is presented in Figure 14.1, which shows a simple
job ladder
General Manager (Sales)
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Sales Manager Sales Manager

Domestic Sales Institutional Sales
Officer Officer
Domestic Sales Institutional Sales
(c)
Executive
Domestic Sales
or
Institutional Sales
Figure 14.1: Career Paths for Marketing Jobs

228
Works Manager
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Notes
___________________
___________________
___________________
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Assistant Manager Assistant Manager
(Production) (Maintenance)
___________________
___________________
___________________ Jr. Works Manager Jr. Works Manager Jr. Works Manager Jr. Works Manager
(Assembly) T (Spares) (Machine Repair) (Electric Repair)
UP
___________________
___________________
___________________ Supervisor Supervisor Supervisor

Supervisor
___________________
Operators Grade-1 Operators Grade-1 Operators Grade-1 Operators Grade-1

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Fitter Turner Welder Machinist Fitter Machnisit Turner Cable Man Jointer
Grinder Machinist Miller Fitter Grinder Welder Electrician Ac Plant Mechanic
Figure 14.2: Career Paths for Production Department
(progression track) in a marketing department. However, in all

cases, career paths are not so simple. For example in
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manufacturing jobs having multiple feeder posts down the level,

career paths are more complex than the earlier one. In Figure 14.2,
an illustrative model of career paths for production department of
a manufacturing unit is presented. For successful mapping out of
career paths, at the outset, it is essential to identify the job
families. After such identification, requisite skills for all the
positions along these paths need to be determined. This helps in
developing such skills in employees where these are deficient and
selecting the person with such skills for different positions in the
organization. However, the most distinguishing feature of career
paths is that it need not always be linear or straight. Similarly, it
(c)
also does not always indicate upward movement in the

organization's hierarchy. Some organizations often redesignate
employees down the level only to prepare them for future
promotion. For example, highly skilled workmen may be
redesignated as master craftsmen in a manufacturing organization
without any effect on their pay packets only to elevate them 229
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gradually to supervisory positions later. Thus lateral movement Notes
within the levels is also a distinguishing feature of the career ___________________
paths.
___________________
Put the Right Man at the Right Place
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___________________
The third step in the career planning process is to identify suitable ___________________
employees who have the ability, potential and willingness to take
___________________
up higher responsibilities and rise up the organizational ladder.
___________________
For this, most of the organizations have performance appraisal and
UP
merit rating system. This system enables organizations to compare ___________________
the performance measures of different individuals in terms of job ___________________
requirements and helps in identifying training requirements,
___________________
selecting for promotions, providing financial rewards etc.
___________________
Impart Training
The next step in the career planning process is formulation and
implementation of training and development programmes. Such
programmes should be designed, in such a manner that they can
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improve technical and conceptual skills of employees, particularly
in those areas, which have been identified as deficient through the
performance appraisal system. For continuous change in
environment, it is also necessary to constantly renew and update
the knowledge and skills of the employees to make them adapt to
the changing requirements. Most of the Indian organizations today
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impart training to their employees on quality circles (small group

activities), value engineering technique, total quality management
principles, ISO:9000 etc.
Review and Counselling

In addition to the above, career planning process is also concerned
with developing suitable promotion and transfer important. Many,
however, feel that even with greater priority of merit over
seniority, career progression paths do not become completely
meaningless, since for even promotion by merit, the lines of
progression paths are relevant. For any succession planning or
(c)
promotion planning this is still important.

In addition, organizational restructuring programmes are now
rendering many employees surplus and it has become a major
problem for the organizations to redeploy employees in
restructured jobs. Career panic has now become a global issue.
230 Most of the organizations, fearing employee turnover, are now
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Notes working on designing jobs which can offer employees recognition,
___________________ creativity (by lateral transfers etc.), challenges and empowerment.
___________________
Check Your Progress
___________________
E
Fill in the blanks
___________________
1. Career paths are _______________ out of jobs, which
___________________ represent a potential progression tract.
___________________
2. Career planning process is also concerned with
UP
___________________ developing ______________ and transfer important
___________________
___________________ Summary
___________________ Career planning and development is a holistic approach for
objective description of the career progression path for all levels of
employees in an organization. Even though the two concepts are
used with different connotation in some organizations, like; career
planning for non-executive level and career development for
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executive and managerial levels, for our purpose, we have
considered both the terms more in the general, rather than specific
sense. Since, availability of internal manpower for manning
present and future vacancies, is extremely important for an
organization to address to either planned strategic moves or
uncertainties, without career planning and development, HRP
becomes meaningless and short-sighted - limited to focus on
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current operational issues.

Retention of the key-performers is an important strategic issue for
organizations. Retention is best ensured for those organizations
who have a well transparent career planning and development
initiative.
Lesson End Activities

1. Do you think it is possible for all people to learn the skills
necessary to develop and advance themselves? Or is this an
(c)
area in which some people get ahead and others lag behind in
the race? Have the class choose sides on this issue and pick up
teams to debate the issue.
2. People in India generally follow a careerist strategy focus on
career advancement through political machinations rather
than excellent performance such as (a) favour doing (b) 231
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becoming a yes man (c) flattery etc. In your opinion, in what Notes
other ways might employees try to influence their superior's ___________________
opinions of them? How can managers tell when an employee is
___________________
sincere? What criteria should be used before promoting an
E
employee? ___________________
___________________
Keywords ___________________
Career: It is a sequence of attitudes and behaviours associated ___________________
UP
with the series of job and work related activities over a person's life ___________________
time.
___________________
Career Development: The process of increasing an employees'
___________________
potential for advancement and career change.
___________________
Career Planning Process: It evaluates one's abilities and
interests, considering alternatives career opportunities,
establishing career goals and planning practical development
activities.
E-
Career Anchors: It is a syndrome of talents, motives and values
which gives stability and direction to a person's career.
Job Rotation: Systematic movement and deliberate reassignment
of managerial personnel, carefully selected by a top management
committee into a series of positions.
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Career Paths: Logical mapping out of jobs, which represent a

potential progression tract that an employee may follow over time.
Career Counselling: It provides guidance to the employees on
occupational training, education and career goals.

1. What is career development? Why is it important for an
organization? Does it differ from career planning?
2. Do you think career planning should be individual centered or

organization-centered? Briefly discuss the career planning
(c)
programme of an organization you know.
3. What are the factors you consider important for successful

career planning?
4. Discuss the important steps in the career planning process.

232
5. What is the future of career planning and career development
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Notes
in India? Do you think recent economic restructuring has any
___________________
bearing with such process? Elaborate your answer.
___________________
___________________ Further Readings
E
___________________
Books
___________________
Career Development and Planning: A Comprehensive Approach,
___________________
Dr. Reardon, 1st edition, Brooks Cole
UP
___________________
___________________ Armstrong, 10th edition, Kogan Page Publishers
Web Readings
http://careerplanning.about.com
http://en.wikipedia.org/wiki/Career_management
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http://www.fin.ucar.edu/hr/humancapital/careerplanning. html
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(c)
Unit 15
233
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Notes
Case Studies
___________________
___________________
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___________________
Objectives
___________________
___________________
UP
Case Study 1: Mental Block ___________________
Mr Vachani is a Quality Controller for four divisions in a family-
___________________
owned manufacturing organization in which functional heads
enjoy a large measure of autonomy. Mr. Bose is the Production ___________________
Superintendent of one of the four divisions of the company. By
and large, both these senior executives, who report to the General ___________________
Manager (Works) get along well as colleagues though they have
their usual differences and disagreements over issues concerning
quality.
One day Mr. Bose stormed into Mr. Vachani's office and shouted.
"Your Senior Inspector, Mr. Sundaram, has misbehaved with me
E-
and I will not tolerate it. You must take immediate action against
him." Mr. Vachani asked Mr. Bose to cool down and explain
exactly what had happened. Narrating the incident, Mr. Bose said
that in the morning he had observed one of his workmen carrying
out an out-of-routine job. On being asked to explain why this was
so, the workman said that he was working on the job as per the
advice of Mr. Sundaram. On returning to his office, he called Mr.
Sundaram, to make enquiries on the matter. The latter did not
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respond at first, but on being sent for once again, appeared before
him. On being asked why he had assigned the out-of-routine job to
a workman, Mr. Sundaram, did not give a satisfactory answer. He
was told not to confuse his workmen. But Mr. Sundaram reacted
by making rude remarks and misbehaving.
Mr Vachani listened patiently to Mr. Bose and advised him not to
be agitated; adding that he (Mr. Vachani) would talk to Mr.
Sundaram about the matter. On Mr. Bose's attempts to again tell
Mr. Vachani as to what he wanted to be done, the latter said he
would himself decide the best course of action, though of course,
Mr. Bose was free to take any alternative action he felt necessary.
After some time Mr. Sundaram came to see Mr. Vachani in his
office. The latter did not indicate that he was aware of the
incident with Mr. Bose. After discussing various matters, Mr.
(c)
Sundaram told Mr. Vachani. "Today, I had a fight with Bose" and
proceeded to narrate the whole matter. His account of the meeting
with Mr. Bose was “I went to Bose's office a little after I was
called in. He asked me harshly to explain why I did not respond
immediately on being sent for, I replied politely that I was busy in
some work, and I did not want to disturb him. When Mr. Bose
continued to press the issue I told him to discuss with
Contd…
234 Mr. Vachani whether I am required to respond immediately to his
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Notes calls even if some work suffers in the process. About the out-of-
routine job, I tried to explain that this became necessary in view
___________________ of the important inspection on Monday (about which Mr. Bose
was also aware) and that I had taken the initiative in the interest
___________________
of work. Anyway, Mr. Bose told me rudely not to instruct his men
___________________ directly and to get out. This infuriated me and I told Mr. Bose
E
angrily that it was he who had called me. He then used some foul
___________________ language and as a result hot words were exchanged, so much so
that I felt like hitting him." Mr. Sundaram further added the he
___________________
was nowhere at fault and that Mr. Bose's behaviour, especially in
___________________ asking him to 'get out', really provoked him. He said though he
always gave Mr. Bose due regard as a senior, the latter had no
UP
___________________ right to be as rude and insulting as he was.
___________________ It needs to be mentioned here that Mr. Sundaram has been

working to the entire satisfaction of Mr. Vachani and at times
___________________ carried out his own liaison with Mr. Bose and his department,
whenever he was required to do so. After thinking over the
___________________ incident for a few minutes, Mr Vachani advised Mr. Sundaram to
go to Mr. Bose sometime and talk to him reminding him (Mr
Bose) politely about the usage of strong words like 'get out', etc.,
and admitting that he had lost his temper. In this way he felt that
Mr. Bose would not take offence to what Sundaram had said.
After some persuasion, Sundaram agreed to do so and went back.
E-
About an hour later, Mr. Vachani received a call from Mr.
Sundaram saying that he had information that Mr. Bose reported
the matter to the Personnel Manager, and as such there was no
need for him now to talk to Mr. Bose as suggested by Mr Vachani
and that he would rather let the matter be decided otherwise
since he in any case was not at fault.
Questions
1. Was Mr. Vachani's suggestions to Mr. Sundaram to talk out
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the matter with Mr. Bose correct in the circumstances?

2. Should he not have told Mr. Sundaram that his
interpretation of the incident varied from that of Mr. Bose?
3. Was Mr. Bose justified in reporting the incident to the
Personnel Manager soon after he had apprised Mr. Vachani
of the same?
4. What action, if any, should the Personnel Manager take in
this regard?
5. If Mr. Bose is found to be guilty of implicating Mr. Sundaram
without any substantial reason, what remedy do you think
the Personnel Manager should suggest avoiding recurrence of
such incidents in future?
(c)
Case Study 2: Together No More 235
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Some of your key employees recently resigned. As per your system Notes
you conduct an exit interview before you formally release anyone,
___________________
who submits resignation. In all the cases, employees have
assigned the reason for leaving as 'purely on personal grounds'. ___________________
You have collected the personal data of all the employees from
E
your HRIS. Personal inventory details indicate employees are ___________________
having the following biographical characteristics:
___________________
(i) Age-group – 25 to 35
___________________
(ii) Job Experience – 3 to 8 years
(iii) Nature of job – Marketing, HR, Information ___________________
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Technology ___________________
(iv) Qualifications – Graduate and above ___________________
(v) Hierarchical level – Asstt. Manager and above.
___________________
Further checking of performance records indicate, all these
employees have consistently achieved their targets as per their ___________________
KRAs for the last three years.
You are also given the following additional inputs about the
organization.
(i) The company follows a well defined structured compensation
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plan for the employees, which, inter alia, follows a graduated
time scale with provision for yearly increments within the
scale. Even though compensation plan provides for extra
increment for good performers, the company, to ensure
principles of equity, dissuades from such practices, as in the
past they had a problem with employees, for giving
discretionary increments to some good performers. The
company's compensation plan is integrated with their
promotion policy. Any employee who successfully completes
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his tenure of five years in a scale with at least 80%

achievement of their KRAs is automatically promoted to the
next scale, with suitable change in the job title.
(ii) The promotion policy of the company is also well defined,
giving weightage to merit and seniority. Promotion always
succeeds transfer and relocation, as the company has its
units in different parts of the country. However, the company
ensures that transfer and relocation should not prejudice the
interests of the employees, at least in the material sense.
(iii) The company maintains an excellent culture of mutual trust
and confidence with empowerment, total participation and
complete freedom and functional autonomy. Some of its HR
values are as under:
(c)
(a) Reward and recognise employees for taking risks and

demonstrating creativity in support of organizational
objectives.
Contd…
236
(b) Adopt and maintain a set of tenure, promotion and
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Notes salary enhancement to recognise and reward those who
meet and exceed the expectations.
___________________
(c) Provide competitive compensation package to attract
___________________ and retain talent.
___________________ (d) Maintain an environment to promote teamwork, trust
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and transparency.
___________________
The company was awarded twice by the National HRD Network
___________________ for best HR practices.
___________________ Question
UP
Identify the issues that are likely to come up during the exit
___________________
interview. Try to list out the possible feedback of the employees
___________________ who are resigning.
___________________
___________________
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(c)
UNIT 16: Succession Planning and Organizational Development
237
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Notes
___________________
___________________
E
___________________
___________________
___________________
___________________
UP
___________________
___________________
___________________
___________________
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BLOCK-IV
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(c)
Detailed238Contents
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Notes
___________________
UNIT 16: SUCCESSION PLANNING AND z Need for Manpower Training
ORGANIZATIONAL DEVELOPMENT
___________________
z Classification of Training Programmes
z Introduction
___________________ Induction and Orientation
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z
z Steps of Succession Planning
___________________ z Supervisory Training Programme
z Organizational Development
___________________ z Training for Top and Middle Management
UNIT 17: MANAGEMENT DEVELOPMENT z Steps for Designing the Training Programme
___________________
z Introduction Sequence of a Training Programme
UP
z
___________________
Management Development Programmes
z z Need for a Training Policy
z Techniques of Management Development
___________________
UNIT 19: TRAINING METHODS
z Auditing the MDP
___________________ z Introduction
UNIT 18: TRAINING
___________________ z Training Methods
z Introduction
UNIT 20: CASE STUDY
z Definition and Purposes
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(c)
Unit 16
239
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Notes
Activity
Succession Planning and

What is succession planning?
___________________
___________________
Organizational Development
E
___________________
___________________
Objectives ___________________
___________________
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topics:
___________________
\ Succession planning
\ Steps in succession planning ___________________
\ Organizational development ___________________
___________________
Introduction
Growth and survival of the organization are the responsibilities of
the top management. To fulfil such responsibilities each
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organization needs to plan management succession. Succession
planning is done in different time frames to ensure the availability
of right managerial personnel at the right time in right positions
for continuing organizational vitality and strength. Most of the
organizations plan for immediate requirements matching with
their budgets and business plans. This short sightedness leads
them to an alarming situation, when they find shortage of
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managerial manpower to man different positions in the

organization, resulting in organizational collapse. To avoid this,
good organizations try to make succession planning in three
different time frames, i.e., immediate (within 1 year), intermediate
(1 to 5 years) and long-range (beyond 5 years). Prevailing
managerial attitude, i.e. a potential threat from successor, which
may not sustain the desire of the managers to cling to their chairs,
also stands against the success of the succession planning.
Steps of Succession Planning

z The first step is to prepare and develop a management staffing
(c)
plan for all anticipated needs in different time frames. For

important positions at the top managerial level, such planning
should be done even for shorter duration, keeping in view the
potential threat from eventual natural wastages (death,
disability, premature retirement etc.) and so also from job
240 switch and change (which has now increased many times due
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Notes to the obviously enhanced scope of job mobility.) Other effects
___________________ of external factors like, economic factors, overall manpower
factors should also be considered while making such plan.
___________________
Each organization has to review their business plans. Effects
___________________
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of such plans on managerial needs also need to be studied.
___________________
z The second step is staffing and development. Staffing is
___________________ concerned with recruitment, selection and placement.
___________________ Selection and placement may be either done from outside or
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from within the organization through promotion and transfer.
___________________
Development of managerial personnel is done through
___________________
training, job rotation, creating 'Assistant-to' positions, projects
___________________ and boards assignments, performance appraisal, counselling
___________________ and guidance. In many organizations, management adopts
what they call a grooming process for filling up important
managerial positions. A manager is 'groomed' by giving
temporary assignments, attaching him/her with the higher
officer or sometimes designating the potential promotee as
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"officer on special duty".
z The third step is to ensure congenial organizational
environment to retain the desired managerial personnel.
Unless this is done, the whole exercise of developing a
successor may have to be repeated.
z The fourth step is to develop a good performance appraisal
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system to get feedback on managerial performance and to

review their progress and shortfalls.
z Preparation of the management resource inventory is the final
step in the succession planning. Such inventory contains
details of personal data, performance records, skills, potential,
career goals and career paths of managerial personnel.
Check Your Progress

Fill in the blanks
1. Growth and survival of the organization are the
(c)
responsibilities of the ______ management.

2. Preparation of the management resource inventory is
the ___________ step in the succession planning.
Organizational Development 241
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Notes
Activity
Organizational development is a strategy or an effort, which is
___________________
What are the goals of OD?
planned and managed from the top, to bring about planned
organizational changes for increasing organizational effectiveness ___________________
through planned interventions based on social philosophy.
E
___________________
The following statement amply clarifies the need for OD in an ___________________

organization. ___________________
"Circumstances of an ever-changing market and an ever-changing ___________________
UP
product are capable of breaking any business concerned with
___________________
upgrading of managers' skills and abilities, whereas organization
development, though includes management development, is ___________________
primarily concerned with improving the total system within the ___________________
organization.
___________________
Goals of Organization Development

The important goals of OD are as follows:
1. To emphasize the need for changing from the close system to

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open system by inculcating various changes in the
organization. Such changes inter alia, also include
introduction of concepts of social philosophy in the
organization which makes the organization socially more
responsible and transparent.
2. To supplement authority and hierarchical role with knowledge

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and skills, to create a more congenial work environment.
3. To build mutual trust and confidence in the organization for

managing people and reducing conflict.
4. To change structure and roles inconsistent with

accomplishment of goals.
5. To encourage a sense of ownership and pride in the

organization.
6. To decentralize decision-making close to the source of activity.
7. To emphasize on feedback, self-control and self-direction.

(c)
8. To develop the spirit of cooperation, mutual trust and

confidence.
9. To develop a reward system based on achievement of goals

and development of people.
242
It is apparent from the above discussion that the goal of OD is
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Notes
basically to change the attitudes of people in the organization so as
___________________
to enable them to identify the change areas and implement the
___________________ desired organization changes on their own.
___________________ Reviewing the progress of the programme: Review of OD
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___________________ programme should be preferably done by a qualified person who
was not involved in designing and developing the OD programme,
___________________
for getting an unbiased opinion.
___________________
UP
___________________
Check Your Progress
___________________
Fill in the blanks
___________________ 1. Organizational development is a _____________ or an

effort, which is planned and managed from the top, to
___________________
bring about planned organizational changes for
increasing organizational effectiveness through planned
interventions based on social philosophy.
2. Goal of OD is basically to change the __________________
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of people in the organization so as to enable them to
identify the change areas and implement the desired
organization changes on their own.
Summary
Internal manning of managerial vacancies, organizations should
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also have appropriate succession planning, or else this may

jeopardise organizational plans. Succession planning succeeds
management and organizational development. Thus suitable
management and organizational development initiatives also
reinforce HRP, particularly for employees at higher levels.
Lesson End Activity

Explain how you might use a self assessment tool as part of a
career development system you design for an organization.
(c)
Keywords
Succession Planning: It involves identification of likely
vacancies for higher level executives and locating likely successors
to man such vacancies.
243
Organizational Development: Strategy or an effort, which is
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Notes
planned and managed from top, to bring about planned
organizational changes for increasing organizational effectiveness ___________________
through planned interventions based on social philosophy. ___________________
E
___________________
___________________
1. Define succession planning. Enumerate the steps involved in ___________________
succession planning.
___________________
UP
2. What is organization development? What are its important
___________________
characteristics? How does it differ from management
___________________
development?
___________________
___________________
a. Career Plateauing
b. Career Ladders
c. Job Families
d. Skill Inventories
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e. OD Intervention
f. Succession Plans
g. Culture-specific Management
Further Readings
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Books


Web Readings
(c)
(c)
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ES
UNIT 17: Management Development
Unit 17
245
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Notes
Activity
Management Development
What are MDPs?
___________________
___________________
E
___________________
Objectives
___________________
topics: ___________________
\ Management development ___________________
UP
\ Management Development programme ___________________
\ Characteristics of Management Development
___________________
Introduction ___________________
___________________
Any succession planning initiative becomes ineffective without
management development, which is a scientific training process for
managers and executives to enrich their knowledge and skills, so
as to make them competent to manage their organizations
E-
effectively.
Management Development Programmes

Unlike general purpose training, management development
programmes aim at developing conceptual and human skills of
managers and executives through organized and systematic
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procedures. In India, many professional institutes like;

Administrative Staff College of India, Management Development
Institute, Indian Institutes of Management, Quality Management
International, National Institute of Training in Industrial
Engineering, All India Management Association, Indian Society for
Training and Development, National Institute of Personnel
Management etc. conduct different management development
programmes to sensitize managers and executives to different
emerging problems of the corporate world. Most of the programmes
being on general purpose issues, some corporate houses have also
designed their own management development programmes for
(c)
their managers and executives. In the private sector, Tata

Management Development Centre (TMDC) at Jamshedpur
conducts such programmes for Tata executives. In the public
sector, the Steel Authority of India Ltd. (SAIL) has its full-fledged
management development centre at Ranchi. Kirloskar Group,
246 Reliance Group and Lakshmi Group (Madras) have developed their
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Notes own management development centres to train their executives on
___________________ general and organization specific issues. In addition, in-house
training divisions of the business houses are also developing
___________________
requisite infrastructure to train their executives, in an attempt to
___________________
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reduce their dependence on outside agencies.
___________________
Characteristics of Management Development
___________________
___________________ To understand the concept of management development better, it

is important to list out its characteristics.
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___________________
___________________
A continuous process: Management Development is a continuous
process. It should encompass the entire professional career of
___________________ managers and executives. In India, so long management
___________________ development used to be considered as a sporadic activity, resulting
in its failure to meet the organizational requirements. In Japan,
Zen philosophic base facilitates in considering management
development as a systematic and continuous activity of any
organization.
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A knowledge updating activity: The imperative need for
management development should be appreciated as there always
exists a gap between actual and potential performance. This,
therefore, provides scope for continuous improvement in all
functional areas. Management development programmes always
attempt to bridge this gap enriching the functional capacity of
executives and managers, continuously updating their knowledge
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and skill. The gap between potential and actual capacity is always
high for managers and executives across the world as knowledge
and skill can never get plateaued.
A vehicle for attitudinal change: Human behaviour is dynamic.

Its complexity can only be appreciated once management
development programmes are attempted to understand the
behavioural and attitudinal aspects through simulating sessions.
Better interpersonal skill is an important prerequisite for
managerial success, which can be ensured through such properly
designed management development programmes.
(c)
A stimulant to higher competence: Unless managers and

executives are stimulated to the intricacies of managerial stress
and strain through different management development
programmes, their full potential cannot be exerted for the benefit
of the organization. Management development programmes can be
designed considering such issues like; employees' motivation,
habits, age-mix, pattern of conflict and chaos, and this can enable 247
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elevation of managerial functions of the executives during the post- Notes
training phase. ___________________
A deficiency improver: Management development programmes ___________________

are catered to the individual requirements to improve the
E
___________________
functional deficiencies of the individual managers, thus enabling
the organization to derive immediate benefits from such ___________________
programmes. ___________________
A self-development process: Management development facilitates ___________________
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self-development of managers, as they learn many things through ___________________
action learning methods, sharing the experiences of each other in a
___________________
simulated classroom atmosphere.
___________________
Components of Management Development Programmes
(MDP) ___________________
Analyzing the characteristics, therefore, we can identify three

important components of MDP, i.e., selection, intellectual
conditioning and supervised training.
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z Selection process enables us to understand the innate
potentiality of the executives and the degree and extent of
their managerial abilities.
z Intellectual conditioning is the process of educating managers

and executives on different managerial tools and techniques.
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Supervised training, on the other hand, is the process of guiding

managers and executives while they apply and use their
knowledge in day to day work.
Steps of Management Development Programme (MDP)

Steps of a good MDP may be listed as follows:
z To look at the organization's objectives;
z To ascertain the development needs;
z To appraise the present performance of managerial staff;

(c)
z To prepare manpower inventory;
z To plan for individual development programmes;
z To establish training and development programmes;
z To evaluate different programmes as above.

248
To improve the functional competence of the managers,
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Notes z
making them more transparent and responsive to the
___________________
changing needs of the organization.
___________________
z To sustain good performance of the managers throughout
___________________
their career by, not allowing them to develop managerial
E
___________________ obsolescence.
___________________ z To develop managers for higher assignments, duly replacing
___________________ the elderly executives.
UP
___________________ However, such objectives of MDP vary for various levels of
___________________
management. Their commonality for all levels is to infuse:
___________________ z Attitudinal change
___________________ z Behavioural change
z Change in knowledge and skills
z Change in performance
Change in desired operational results.

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z
Personal characteristics, level of intelligence and learning efforts of

people at different managerial levels being different for each level,
there exists different sets of objectives, which an organization
should strive to achieve.
MDP Objectives for Top Management

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For top management, such objectives are mostly general, primarily

intended to develop their understanding and decision-making
power. Such objectives can be listed as below:
z To improve the thought process and analytical ability so as to

enable the top level managers to understand the problems and
take managerial decisions in the best interest of the
organizations in particular and the country in general;
z To broaden the outlook in regard to their role, position and

responsibilities in the organization and outside;
To think through the problems that confront an organization

(c)
z
at present or might crop up in the future;
z To understand economic, technical and institutional forces to

solve business problems; and
z To acquire knowledge about the problems of human relations.

249
S
MDP for Middle-level Management Notes
For middle-level management, MDPs are intended to develop their ___________________

intellectual faculty and at the same time to improve their decision- ___________________
making power with some knowledge of specialized fields. However,
E
___________________
such objectives can be listed as follows:
___________________
z To establish a clear picture of executive functions and
responsibilities. ___________________
___________________
z To bring an awareness of the broad aspects of management
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problems, and an acquaintance with, and appreciation of ___________________
inter-departmental relations; ___________________
z To develop the ability to analyse problems and to take ___________________

appropriate action;
___________________
z To develop familiarity with the managerial uses of financial
accounting, psychology, business law and business statistics;
z To inculcate knowledge of human motivation and human

E-
relationships; and
z To develop responsible leadership.
MDP for Functional Executives and Specialists

z To increase functional knowledge in specific fields in which
the executive works such as marketing, production, finance,
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personnel etc.
z To increase proficiency in different management techniques

like work study, inventory control, operations research,
quality control, etc.
z To stimulate creative thinking for improving methods and

procedures
z To understand different functions in a company
z To understand human relations problems
z To develop the ability to analyse problems in one's area or

(c)
function.
However, without favourable climate in the organization, MDP

cannot attain the desired objective. Every organization should
have well-defined policy for the development of managers.
250
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Activity
___________________
Define the term job rotation Fill in the blanks
___________________ 1. TMDC stands for_____________________________
___________________ 2. For ________________ management, MDPs are intended
E
___________________ to develop their intellectual faculty
___________________
___________________
Techniques of Management Development
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___________________ Planning MDP deserves utmost attention and importance. These
___________________ objectives of the programmes need to be defined at the outset.
Objectives may be either to impart knowledge and skills for more
___________________
effective functioning of the managers in their present positions or
___________________ may be to equip them for holding higher positions in future. Most
of the organizations through adequate career planning, work out
promotion paths for the managers. Unlike career planning
programmes for non-managerial employees, which show such
career progression path in similar or allied job families, MDP may
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even chalk out career planning for managers and executives in
different functional areas cutting across departmental barriers.
Good MDPs are carefully planned so as to give responsibility to
each executive to prepare a replacement for him in successive
grades.
Job Rotation
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Another technique of MDP is to plan a systematic movement and

deliberate reassignment of managerial personnel, carefully
selected by a top management committee into a series of positions.
This device makes it possible to diversify the experience of the
executives in a variety of activities. This method attempts directly
to broaden the vision of administrators, developing the perspective
on the total organization. The period of their movement from job to
job depends on their individual need and future prospectus. They
learn mostly by observation and practice which come through
substituting for vacationing managers.
There are different types of job rotation, which may be for specified
(c)
observation, assignment, managerial training positions or for

unspecified managerial positions.
The system is criticized mainly for its high cost and 'jack-of-all
trade' type development. It deters specialisation and also lowers
job efficiency at each new post.
Assistants-to-Position 251
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Notes
'Assistant-to-positions' at executive level is a variation of the job
rotation system. This helps to broaden experience of the executives ___________________
by exposing them to many areas of managerial practice. The ___________________
success of such arrangements, however, depends upon the ability
E
___________________
and willingness of the superiors to pass on the qualities to the
successors, its adequacy, superiority', extent of up-to-date ___________________
knowledge and talents and finally on the efforts of the subordinate ___________________
officers to learn with utmost sincerity.
___________________
UP
Projects and Boards ___________________
Another practical method of management development is to put ___________________

management personnel on special projects or committees to
___________________
provide them opportunities to analyse and solve actual problems
facing top management. Since the executives encounter different ___________________
sets of problems in dealing with such project and boards, it
broadens their perspective and inculcates confidence and a sense of
responsibility in them. However, unless the executives are allowed
to take time necessary to become experts, its purpose may get
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defeated. Other techniques of MDP have been discussed earlier.
Check Your Progress

Fill in the blanks
1. ____________ MDP deserves utmost attention and
importance.
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2. ________________ at executive level is a variation of the

job rotation system.
Auditing the MDP

John M. Elliott, Vice President of Dale, Elliott & Company, Inc.,
New York identified 15 aspects, more in the form of questions, to
determine the functioning and effectiveness of MDP. These are as
follows:
1. Identification of an organization's different job levels for

establishing promotional channels for managers and at the
(c)
same time determining the likely job vacancies at each level;
2. Determining whether enough promotable manpower is

available at each level to fill all managerial openings, the
possibility of filling such vacancies through the organization's
252
own (internal) manpower, the extent of hiring from outside or
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Notes to determine the queuing problem for promotable executives.
___________________
3. Whether career planning at all levels adequately meets
___________________ financial and other long range growth plans.
___________________
4. Whether an organization is able to get a flow of management
E
___________________ trainees through the annual campus interview.
___________________ 5. Whether proper utilisation of employee's knowledge and skills
___________________ is ensured.
UP
___________________ 6. Identification of specific job assignments, which will
___________________
contribute most to prepare outstanding men for key jobs in the
company.
___________________
7. Whether an organization can afford to retain potential
___________________
executives on a particular job assignment for a long time to
allow him to prove his ability to handle it competently.
8. Whether scheduling of the job assignments have been

designed to round out experiences and training to enable the
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executives to mature ultimately to head a division or a
department.
9. Whether a sufficient number of intermediate level jobs have

been reserved as training spots for effecting job rotation or
committee/board assignment.
10. Whether adequate recruitment facility exists to ensure that

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best talents are available for managerial vacancies including

the positions of management training.
11. Whether best available tools and procedures including

psychological tests and interview guides have been developed
to identify the potentiality of the executives.
12. Whether the organization is taking full advantage of outside

training facilities such as seminars and courses available
through universities and professional bodies, so also whether
in-house training facilities have been well equipped to train
the executives to enable them to develop their potential
(c)
knowledge and skill.
13. Whether every potential managerial personnel now work

under a superior, who is able to give guidance, counsel and so
also to instil confidence and a sense of responsibility.
253
14. Whether adequate feedback system exists to review and
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Notes
update MDP from time to time depending on changing Activity
requirements. What___________________
is the reason for failure
of MDPs?
___________________
15. Whether a comprehensive guidebook has been developed for
the use of all senior managers for the success of MDP. Such a
E
___________________
guide book comprises the following sections: ___________________
a. The objectives of the programme ___________________
b. Characteristics needed in a managerial trainee ___________________
UP
___________________
c. Job scheduling procedure
___________________
d. Performance appraisal techniques and procedures
___________________
e. Training counselling, etc.
___________________
Answers to the above checklist of MDP enable us to understand
the effectiveness or otherwise of MDP
Why MDPs Fail?

E-
Most of the business organizations fail to provide an environment
which can encourage, nurture and promote the growth of
management development, i.e., a climate which can support it
rather than oppose it. Following reasons may be listed for failure of
management development programmes.
1. Purposes of the management development efforts in most of

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the organizations are often characterised by insincerity. They

conduct it as a matter of ritual rather than a systematic one.
Some organizations also arrange MDP for their executives
only to enable them to enjoy a paid vacation.
2. Some organizations are too much concerned to get the

immediate benefits of MDPs. They always concern themselves
with the immediate payout and select MDPs which are
designed only to impart business like knowledge rather than
giving philosophic ideas or conceptual insights.
3. Organizations retain the services of consultants and

professional trainers to conduct MDPs for their executives.
(c)
Such an arrangement often suffers from difficulties,

happenings in the organizations, as such professional trainers
and the consultants do not get adequate information about the
functioning of the organization for whom the programmes are
designed. Due to absence of interaction with such outside
254
agencies, MDPs suffer from major limitations like
S
Notes impracticability in introduction, irrelevance, etc.
___________________
4. In some cases, lessons imparted in MDPs are in direct conflict
___________________ with the philosophy of the organization. Such incongruence,
___________________ therefore, becomes a source of immediate frustration for the
E
executives as they confront different situations in the
___________________
respective organizations.
___________________
5. There is no system to evaluate the effectiveness of the MDPs
___________________ by such outside agencies. Post-training evaluation system, in
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___________________ the form of scientific feedback mechanism, therefore, is
considered essential for success of such programmes.
___________________
___________________ Check Your Progress

1. Most of the business organizations _____________ to
provide an environment which can encourage nurture
and promote the growth of management development.
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2. Organizations ___________ the services of consultants
and professional trainers to conduct MDPs for their
executives.
Summary
In India, many professional institutes like; Administrative Staff
CC
College of India, Management Development Institute, Indian

Institutes of Management, Quality Management International,
National Institute of Training in Industrial Engineering, All India
Management Association, Indian Society for Training and
Development, National Institute of Personnel Management etc.
conduct different management development programmes to
sensitize managers and executives to different emerging problems
of the corporate world. Most of the programmes being on general
purpose issues, some corporate houses have also designed their
own management development programmes for their managers
and executives. In the private sector, Tata Management
(c)
Development Centre (TMDC)
Lesson End Activity

What are your suggestions for making a management development
programme effective?
Keyword 255
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Notes
Employee Empowerment: An extension of employee participation
___________________
vis-à-vis involvement.
___________________
E
___________________
___________________
1. What is management development? Outline the characteristics
of management development. ___________________
2. What are the objectives and purposes of a management ___________________
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development programme? Do you think such objectives are ___________________
different for different level of employees?
___________________
3. What important steps you consider necessary for designing a
___________________
management development programme? What are the
___________________
techniques you recommend for management development?
4. What are the important aspects to be considered while
auditing the management development programme?
5. What are the reasons for failure of management development
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programmes in India? Further Readings
Further Readings
Books
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Web Readings
(c)
(c)
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UP
ES
UNIT 18: Training
Unit 18
257
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Notes
Activity
Training
Define the term training.
___________________
___________________
E
___________________
Objectives
___________________
topics: ___________________
\ Definition of Training ___________________
UP
\ Purpose of Training ___________________
\ Need for manpower training
___________________
Introduction ___________________
___________________
Training is an important HRD activity which reinforces HRM in
an organization. Apart from the need for internal staffing, training
enhances job related skills and also facilitates acquiring of new
skills required for averting skill obsolescence in an organization.
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HRD is a macro concept and it consists of organized services of
learning activities within a given time limit for achieving desired
behavioural changes in people. From the organizational point of
view, HRD is a process and it helps employees to improve their
functional capabilities for present and future roles. It also develops
their general capabilities, harness their inner potentialities, and
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there by facilitates for self and organizational development.
Discussions on training remain incomplete without linking the

same to performance appraisal. This is because performance
appraisal is one single important tool, which helps in deciding
about training requirements for an organization and it reinforces
training activities. There are lot of misconceptions about training,
education and development functions vis-à-vis HRD, which we
have clarified in the introductory unit. Without precisely knowing
the functions of training, education and development, as pointed
out earlier, it would make it difficult for us to appreciate the
objectives, roles and significance of training in an organization.
(c)
Definition and Purposes

Training may be defined as a systematized tailor-made programme
to suit the needs of a particular organization for developing certain
attitudes, actions, skills and abilities in employees irrespective of
258
their functional levels. Training therefore serves the following
S
Notes
Activity
important purposes for an organization.
How___________________
will you stabilize the z To increase the performance level of an employee and to
Workforce
___________________ develop him/her in such a manner that he/she can rise to the
position of higher responsibility.
___________________
E
z To constantly develop manpower to meet the current as well
___________________ as future needs of the organization.
___________________ z To ensure effective utilisation of human resources.
___________________ z To integrate individual goals with the organization goals by
UP
___________________ creating a climate so that an individual employee can best
achieve his goals by achieving the goals of the organization. To
___________________
be more specific this is the stage of identifying employees with
___________________ the organization.
___________________
Check Your Progress
Fill in the blanks
1. _________ is an important HRD activity which reinforces
HRM in an organization.
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2. Training may be defined as a systematized _________
programme to suit the needs of a particular
organization.
Need for Manpower Training

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Most of the organizations prefer internal manning of positions

than external hiring for obvious motivational benefits and cost
effectiveness. Even though training, prima-facie, emphasizes on
increasing the performance level of an employee, a continuous
training function enables the organization to develop employees for
future responsible positions in the organization itself.
The needs for manpower training in an organization may be

categorized as follows:
z Updating Knowledge: Technological advancement, business

environmental changes and new management philosophies
have now made it imperative for the organization to renew
(c)
and update the knowledge and skills of the employees so that

they do not become redundant for obvious functional
incompetence. The first and foremost need for manpower
training therefore, is to renew and update knowledge and
skills of employees to sustain their effective performance and
so also to develop them for future managerial positions.
UNIT 18: Training
259
Avoiding Obsolescence: Recent economic liberalization
S
z
Notes
programmes of Government of India are necessitating
___________________
organizational restructuring, which inter alia, calls for
training the employees, irrespective of their functional level, ___________________
for their redeployment in restructured jobs. Therefore, the
E
___________________
second important need for training is to avert functional
___________________
obsolescence.
___________________
z Improving Performance: Continuous training being
required to renew and update knowledge and skills of ___________________
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employees, it makes them functionally effective. The third ___________________
need is therefore, to make employees effective in their
___________________
performance through continuous training.
___________________
z Developing Human Skills: Apart from emphasizing on
___________________
technical and conceptual skills, new training programmes also
emphasize on developing human skills of employees. Such
human skill is necessary for effective interpersonal relations
and sustaining healthy work environment. This need for
training therefore also cannot be altogether ignored.
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z Imparting Trade-specific Skills: In industrial employment,
the convention is to recruit workers and employees through
compulsory apprenticeship training. Such apprenticeship
training enables an organization to impart industry and trade
specific skills to workers. This also, therefore, is an important
need for manpower training.
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z Throughout the world the importance of training is now

increasingly felt for stabilizing the workforce to withstand the
technological change and for making the organization
dynamic in this changed process. Management theorists now
unanimously agree that it is the responsibility of the
organization to train and develop their manpower as a
continuous process.
Check Your Progress

Fill in the blanks
(c)
1. Most of the organizations prefer __________ of positions

than external hiring.
2. It is the responsibility of the organization to train and
develop their manpower as a ______________.
260
Classification of Training Programmes
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Notes
___________________ Depending on the functional level and occupational categories of

employees, an organization can classify training programmes as
___________________
under:
___________________
E
___________________ Level Nos. Types of Training
___________________ 1. Workers (i) Introduction

(ii) Job Training
___________________
(iii) Craft Training
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___________________ (iv) Special Purpose Training
___________________ 2. Supervisors (i) Induction
___________________ (ii) Foremanship/Shopfloor Supervision

(iii) Manpower Management
___________________
3. Staff Members (i) Introduction
(ii) Professional
(iii) Technical
(iv) Human Relations
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4. Managers and (i) Induction
Executives (ii) Executive Training
(iii) Training in Executive Development
Apart from the above routine training programmes for different

levels, training on total quality awareness and training
encompassing all aspects of total quality management have now
become almost compulsory for all functional levels.
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Induction and Orientation

These terms are interchangeably used to give a friendly welcome to
the new employees as members of the organization so also to
introduce the new employees with the available installations (plant
and machineries, systems), work norms, organizational objectives
and the job positions of the employees. Some organizations make
available programmed instruction materials to new employees to
help them to get acquainted with the departmental rules and
regulations, their entitlement for leave, pay, overtime, retirement
(c)
benefits and other miscellaneous privileges, which affect their

whole service. Tata Iron and Steel Co. circulate to all their new
employees, a brief booklet under the name and style of 'Write Your
Future in Steel' to illustrate their career prospectus. However such
documented materials cannot be made available by all
UNIT 18: Training
organizations. They try to supplement it through a brief induction 261
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programme. Notes
Activity
___________________
What is meant by training
Supervisory Training Programme needs identification?
___________________
E
Supervisors monitor the work of the workers and are arms of the ___________________
management. They must have adequate skill, experience, ability ___________________

and leadership. A supervisor is required to do a job in five broad
___________________
areas, i.e., knowledge of the work, awareness of responsibilities,
capacity to instruct, skill in improving methods and ability to work ___________________
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with people. ___________________
Tentative contents of a supervisor training programme may be ___________________

drawn after the charts of such contents prescribed by Earl Planty ___________________
and William Mocorx as per the chart given at the end of this unit.
___________________
Training for Top and Middle Management

Top and middle management personnel are trained mainly on the
following eight areas to expose them to the managerial practices:
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z Planning: This covers the policy, general programme and
plans of the organization and also methods for effective action.
z Control: To check current performance against

predetermined standards (as mentioned in the plans) to
ensure progress and also to record experience from the
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working of plans to serve as a guide to possible future

operations.
z Co-ordination: To balance the team efforts, ensuring proper

allocation of activities among different members of the group.
z Motivation: This covers employees morale and is sought

through proper leadership. The art of self-motivation has to be
included in the manager and executives.
z Inspiration,
z Communication,
(c)
z Decision,
z Integration.
262
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Notes Steps for Designing the Training Programme
___________________
Traditionally, training needs identification is done by the HRD
___________________ department. Which to keep pace with organizational requirements
___________________ identifies a series of training modules for different categories of
E
employees and publishes such training calendars to circulate
___________________
among different departments to depute their employees for such
___________________ training courses. Depending on the facilities available, some of
___________________ these training courses are also offered utilizing in-house training
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faculty, while for others (where expertise is not available) such
___________________
training may either be offered by retaining professional trainers or
___________________ by deputing employees to attend some outside training courses.
___________________ However, to ensure better utilisation of employees' acquired
___________________ knowledge and skill, identification of training needs are now being
left with the respective departmental heads, who because of their
proximity with the employees concerned can better suggest the
training and development needs. Hence, right at the beginning of
the year, HRD department circulates the format for suggesting
training requirements of different departments, which after
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necessary processing, are developed as training calendars. The
heads of the departments through performance appraisal, job
evaluation and keeping in mind future requirements (due to
change of technology, etc.), may identify such training
requirements and also study the cost-benefit aspect closely
monitoring employees' post-training performance.
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Incidentally, it has now also become one of the important corporate

practices in line with ISO Certification requirement.
The following steps are involved in designing the training

programme.
z Selecting Strategies: The first step is to choose a strategy or

strategies for training methods. Strategies prioritise training
objectives and also help in selecting training areas which may
be skill formation, developing conceptual understanding, etc.
z Breaking Objectives: The second step in to break the

general training objectives into different parts like,
(c)
knowledge, understanding and skills. Each constituent part of

the training objective is matched with appropriate training
events.
z Choosing Methods: The next step is to use specifications for

different training methods to decide over time the facilities
required for the programme as a whole.
UNIT 18: Training
263
Deciding on Packages: The fourth step is to decide different
S
z
Notes
package in which programmes could be offered. An
organization at this stage considers different training ___________________
packages, keeping in view the time and cost aspects. ___________________
z Designing the Programme: The final step is to design the
E
___________________
training programme.
___________________
Sequence of a Training Programme ___________________
___________________
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Any training programme should follow the order of sequence of
___________________
actions, as under, to make it effective.
___________________
z Designing the programme and matching with the learning
___________________
process.
___________________
z Matching the programme to the organizational expectations.
z Developing the training group.
z Identifying the themes of training and development.

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z Achieving consistency in training.
Check Your Progress

Fill in the blanks
1. The terms induction and orientation are
interchangeably used to give a _____________ welcome to
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the new employees as members of the organization.

2. _____________ monitor the work of the workers and are
arms of the management.
Need for a Training Policy

To ensure consistency in Training and Development Function, the
HRM department of each organization develops a suitable training
policy, defining the scope, objective, philosophy and techniques.
Such a training policy, inter-alia, serves the following purposes.
(c)
z It defines what the organization intends to accomplish

through training.
z It indicates the type of persons to be responsible for training

functions.
z It identifies the formal and informal nature of training.

264
It spells out the duration, time and place of training.
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Notes z
___________________ z It indicates the need for engaging outside institutions for

___________________
training.
___________________ z It embraces and includes training in relation to labour policies
E
of the organization.
___________________

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___________________ 1. ___________ department of each organization develops a
___________________
suitable training policy.
___________________ 2. Training policy spells out the duration, time and _________
___________________
of training.
Summary
Training reinforces HRM in an organization. In this era of
technological change and global competitiveness, organizations are
E-
constantly required to renew and update skill of their people or
else they are likely to encounter the problem of manpower
obsolescence, which among others, will call for frequent downsizing
or rightsizing. Training helps to address the skill-gap.
Lesson End Activity

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Assume you were asked to develop a training programme to

improve customer sales skills. What training techniques would you
use? Why?
Keywords
Training: A planned programme designed to improve
performance and bring about measurable changes in skills,
attitude and social behaviour of employees.
Development: Broadening an individual's knowledge, skills and

(c)
abilities for future responsibilities.
Obsolescence: A condition that results when an employee loses

the knowledge or abilities to perform successfully due to changes in
the field.
UNIT 18: Training
Questions for Discussion 265
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Notes
1. Identify the need for manpower training in an organization.
___________________
What are the important purposes served by training.
___________________
2. List out training programmes for different levels of employees
E
___________________
and elaborate at least two such types of training programmes
for workers. ___________________
3. What are the steps involved in designing a training ___________________
programme? What is the sequence of actions usually following ___________________
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a training programme?
___________________
4. Do you think there is need for a training policy in an ___________________
organization? Briefly outline some of the areas which need to
be focused in such a policy. ___________________
___________________
5. Develop at least three sample training modules for
supervisors, duly pointing out their objectives, course
contents, eligibility of participants, duration, etc.
Further Readings
E-
Books
Human resource management text and cases, V S P Rao, 2nd

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Web Readings
http://www.businessballs.com/traindev.htm
http://www.google.co.in/url?sa=t&rct=j&q=training%20
development&source=web&cd=5& sqi=2&ved=0
(c)
(c)
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UP
ES
UNIT 19: Training Methods
Unit 19
267
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Notes
Activity
Training Methods
Define vestibule training.
___________________
___________________
E
___________________
Objectives
___________________
topics: ___________________
\ Different types of training ___________________
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\ Steps for designing a training program ___________________
\ Training Methods
___________________
Introduction ___________________
___________________
In this unit, we have discussed about different training methods.
We have also focus on steps in any basic training program.
Training Methods
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The following methods are mostly used for training of employees.
On-the-Job Training
Under this technique an employee is put on-the-job and is trained
to perform the said job thereby helping the employee to acquire the
skills for performing the said job in future. Most of the
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organizations utilise the services of senior workers to impart such

training. Apprenticeship, creation of 'assistant-to' positions, job
rotation and special assignments are different forms of such
training programmes.
Job Instruction Training

This is training through step-by-step learning. Usually steps
necessary for a job are identified in order of sequence and an
employee is exposed to the different steps of a job by an
experienced trainer.
(c)
Vestibule Training
This method duplicates on-the-job situation away from the actual
worksite with machinery and equipment similar to those used in
actual production or operation and is used to help employees to
268
acquire a new skill. Usually, training is given away from the
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Notes
Activity production centre.
___________________
Define the term simulation
Training Centre Training
___________________
Such site trainings are given in the form of lectures, conferences,
___________________
E
case-studies, role-playing and discussions.
___________________
Simulation
___________________
___________________
Simulation again duplicates the actual condition encountered on a
job. The vestibule training method or the business-game methods
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___________________ are among the examples of business simulation.
___________________
Apprenticeship
___________________
Such training is given for a longer duration to help the employees
___________________
to acquire skills in specific trade(s). A major part of this training is
given on the job.
Check Your Progress

Fill in the blanks
E-
1. Simulation ___________ the actual condition
encountered on a job.
2. The vestibule training method or the business-game
method are the examples of _____________
Off-the-job Methods
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These methods consist of:
z Lectures: Through lectures, participants are motivated to

learn. Lectures focus on understanding rather than enriching
knowledge and skills through reading assignments and
experience. However, empirical studies on the effectiveness of
training through lecture methods indicate that this is not
effective for obvious inability of participants to retain the
information and, failure of trainers to make such sessions
more interesting relating to on-the-job experience.
z The Conference Method: It is a participative group centered

(c)
method through which participants develop knowledge and

understanding by small group discussions and active
participation.
z Group Discussion: This is also a very useful method of

training and is usually based on papers prepared by trainees
on a given subject. The trainees read their papers which are 269
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usually followed by critical discussions. It may, however be a Notes
Activity
follow-up discussion on some statement or on a paper ___________________
What is case study method?
presented by an expert.
___________________
z Case Study: Case study method helps students to learn on
E
___________________
their own by independent thinking. A set of data or some
descriptive materials are given to the participants asking ___________________
them to analyse, identify the problems and also to recommend
___________________
solutions for the same.
___________________
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z Role Playing: This training method particularly helps in
learning human relations skills thorough practice an imbibing ___________________
and insight into one's own behaviour. Trainees of such a ___________________
programme are informed of a situation and asked to play their
___________________
roles in the imaginary situation before the rest of the class.
This therefore helps in the enriching of interactional skills of ___________________
the employees.
z Programmed Instruction: This method is prearranged

desired course of proceeding to the learning or acquisition of
specific skills or knowledge. Information in such programmes
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is conveniently broken into different units, to allow the
trainees to learn at their convenient pace.
z T-Group Training: T-group is sensitivity training, and takes

place under laboratory conditions and is mostly instructed and
informal kind of training. The trainer in such a training
programme is catalyst. He helps the individual participants to
understand how others perceive his behaviour, how he acts to
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the behaviour of others and how and when a group acts either
in a negative or in a positive way.
z E-learning: Training programmes delivered via intranet are
now thought of most cost-effective route. It is not only cost-
effective but also caters to the real time information need of
employees. However, it involves convergence of several
technologies, like; hardware, software, web-designing and
authoring, instructional design, multimedia design,
telecommunications and finally internet-intranet network
management. Organizations can outsource e-learning training
modules at relatively cheaper rate.
(c)
Even though training through e-learning is globally

increasing, we do not have adequate empirical evidence to
justify this.
270
S
___________________ 1. Most of the organizations utilise the services of
___________________ _________workers to impart such training.
E
___________________ 2. Case is an __________ description of a particular
situation an employee might encounter on the job.
___________________
___________________
Summary
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___________________
Training programmes delivered via intranet are now thought of
___________________
most cost-effective route. It is not only cost-effective but also caters
___________________ to the real time information need of employees. However, it
___________________ involves convergence of several technologies, like; hardware,
software, web-designing and authoring, instructional design,
multimedia design, telecommunications and finally internet-
intranet network management. Organizations can outsource e-
learning training modules at relatively cheaper rate
E-
Lesson End Activity
Specify the training methods you recommend for each of the
following occupations. Why?
(a) A Plumber
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(b) An unskilled assembly line worker

(c) An office clerk
(d) An inexperienced manager
Keywords
Vestibule Training: A training method involving the creation of
training facilities separate from the regular production area but
with the same equipment.
On the Job Training: Any training technique that involves

(c)
allowing the person to learn the job by actually performing it on

the job.
Simulation: Any artificial environment that tries to closely mirror

an actual condition. These include case studies, decision games,
role plays etc.
271
Apprenticeship: A training method that puts trainees under the
S
Notes
guidance of a master worker, typically for 2-5 years.
___________________
Case: An in-depth description of a particular situation an
___________________
employee might encounter on the job.
E
___________________
1. What are the different training methods available for an ___________________
organization? Which are the methods you recommend for ___________________
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white collared and blue collared employees respectively?
___________________
2. Do you think the recent economic liberalisation programme of ___________________
the Government of India has made the training function more
___________________
important for an organization? Elaborate your answer duly
listing out important training areas in the context of the ___________________
a. T-Group Training
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b. Role Playing
c. Vestibule Training
d. Simulation
e. Orientation Programme
f. Craft Training
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g. Human Skills
h. Counselling Interview
i. Assessment Centre Method
j. Field Review
k. Critical Incident Method
l. Key Performance Areas.
Further Readings
(c)
Books
Human resource management text and cases, V S P Rao, 2nd
272
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Notes
___________________
___________________ Web Readings

___________________ http://www.businessballs.com/traindev.htm
E
___________________ http://www.google.co.in/url?sa=t&rct=j&q=training%20
development&source=web&cd=5& sqi=2&ved=0
___________________
___________________
UP
___________________
___________________
___________________
___________________
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(c)
273
Exhibit 19.1: Contents of Supervisory Training Programme
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Notes
Administrative Orientation Human Relations Technical Teacher
Training Training Training Training Training ___________________
Duties and The Company Induction of new Basic science, Instructor ___________________
responsibilities size, structure of employees, giving mathematics and Training.
E
of a supervisor, organization, orders and statistics. Special Conference ___________________
Basic principles history, market directions, technical Leadership
of industrial share, communication. training. Trade ___________________
organization. achievements, Developing training. Training
___________________
Discipline and objectives and Understanding. on costing
control. mission. Product Correcting methods. ___________________
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Training. subordinates. Training on time
Shopfloor-rules Inculcating study and other ___________________
and regulations. initiative and industrial
Personnel confidence. engineering ___________________
policies. Union Placement and techniques.
___________________
contract. supervision, job Production
company evaluation, planning and ___________________
services. Service performance control. Labour
departments measurement and legislation. TQM
incentives. and ISO 9000
Reducing
absenteeism and
labour turnover.
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Self-improvement.
Grievance
handling. TQM,
small group
activities, employee
empowerment.
Exhibit 19.2: Managerial Appraisal Review Form

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Appraisal Period: From To :
I. Personal Data:
Name Designation Grade
Personal No. Department Division
Date of Birth
Academic Qualifications Years of Experience
Professional Qualifications In Present Organization
Professional Membership Outside Present Organization
Date of Retirement Date of Last Promotion
II. Appraisal
(c)
II. A. Important Points
1. Assess the employee on his performance in his present position only.
2. Try not to allow personal prejudices to influence your appraisal. The rating
should be as objective as possible.
3. Assess the ratee on his performance during the whole year. Do not allow
isolated incidents or recent instances to bias your assessment.
Contd…
274
4. Assess each factor independently, uninfluenced by the rating on the other
S
Notes factors.
___________________ 5. Assess the ratee on all factors
6. The rater and reviewer must initial in ink in the box against the most
___________________ appropriate rating in each case.
___________________ 7. All entries in this form should be handwritten in legible condition.
E
___________________ II.B. General Performance Factors
Please initial in the box against the appropriate rating

___________________
Factors Rater Reviewer Degree
___________________
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1. Knowledge of the Job Excellent Exceptional mastery of
___________________ all phases of work. Has
up to date knowledge of
his field.
___________________
All round knowledge Good Thorough knowledge of job
___________________ of the job including
concepts and
techniques required
___________________ and their application;
know-how of the latest
trends, developments
and innovations in the
field of work.
Satisfactory Adequate knowledge of

job for the position he
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is occupying.
Unsatisfactory Poor knowledge of his job.
2. PLANNING OF WORK Excellent Highly effective in setting

Scheduling of one's of goals and their
assignments in order to prioritisation.
meet deadlines; setting Anticipates
of well defined targets; problems and takes
concentration on task corrective action.
priorities; ability to
anticipate problems
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and take corrective

action.
Good Effective in meeting

tough deadlines most of
the time
Satisfactory Usually effective in

meeting routine
schedules
Unsatisfactory Is indifferent to planning

and cannot meet
deadlines
3. Abilities to Achieve Excellent Highly effective in

Results Utilisation and organising resources and
productivity of getting extra ordinary results
subordinates and
resources; target
achievement; follow-up
(c)
system and co-ordination

with departments; coping
with sustained work
pressures; quick
response to special jobs
without letting routine
matters suffer; keeping
superiors and
subordinates informed
about relevant jobs,
problems and results
Contd…
275
Good Achieves superior results
S
and is able to withstand Notes
work pressures and crises
Satisfactory Achieves normal results ___________________

expected of him through
good organization and ___________________
follow-up
E
Unsatisfactory Does not use available ___________________
resources; does not achieve
expected results. ___________________
4. Sense of Responsibility Excellence Very high sense of
___________________
Ability to handle given responsibility; can
assignments handle assignments
independently or with independently; displays ___________________
UP
minimum supervision; rare initiative and drive.
degree of chasing or ___________________
control required from
superiors; setting of
self-targets and their ___________________
completion; seeking
information on problems; ___________________
willingness to take a
decision or do a job
without passing the buck.
___________________
Good Is willing to shoulder

greater responsibility than
the job demands; displays
considerable initiative.
Satisfactory Takes on responsibilities of

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his job and copes with
routine problems. Takes
routine decisions.
Unsatisfactory Does assigned tasks

reluctantly; requires
constant direction and
supervision.
5. Maintaining Discipline Excellent Maintains high standards or

Sense of organizational organizational discipline
discipline and ability to and sets personal example
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maintain it in the to his men.

workforce; punctuality;
on the job presence;
setting of personal
example to subordinates;
firmness in dealings with
subordinates; standards
of cleanness, safety and
housekeeping in the
work place; willingness to
accept the consequence
of unpleasant decisions
made by superiors
Good Achieves above average

standards of discipline,
safety and housekeeping; is
committed to decisions of
superiors.
Satisfactory Meets and maintains

(c)
expected standards of
discipline and punctuality.
Unsatisfactory Is not punctual and is noted

for unscheduled absences;
talks loosely about
superiors.
Contd…
276
6. Getting Along with People Excellent Has a marked ability for
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Notes Clarity and effectiveness fruitful interaction with
in communicating with people
___________________ superiors, peers and
subordinates; handling of
conflicts, levels of maturity
___________________ in dealing with bosses
and peers, ability to take
___________________ feedback and correct
E
oneself; skill in influencing
others without arousing
___________________ antagonism. Caring
attitude towards colleagues
___________________ and subordinates.
Good Is highly effective in

___________________ understanding, relating and
UP
communicating with people
___________________
Satisfactory Has the ability to
___________________ communicate with people
and influence them to
perform better.
___________________
Unsatisfactory Finds it difficult to relate with
___________________ bosses, peers or
subordinates
7. Teamwork and Co- Excellent Highly productive

operation and successful in working
Ability to work with with colleagues and peers
colleagues, peers and
other departments; kind of
participation in meetings;
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degree of involvement in
team project; willingness to
share one's resources with
others in the department if
needed;. seeking and
offering peer assistance;
degree of sensitivity to
group feelings and
response
Good Positive participation and

integration with team.
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Satisfactory Adequate commitment and

contribute to team efforts.
Notable peer collaboration.
Unsatisfactory Does not function as a team

member. Tends to disrupt
rather than contribute to
team efforts.
8. Identification with the Excellent Thoroughly identifies himself

Company with company's values and
Sense of identification interests and transmits them
with the company's values to peers and subordinates.
and interests; concern for
satisfaction of clients/
customers' needs: pursuit
of excellence in
performance; concern for
cost reduction through
optimum utilisation of men,
(c)
materials or equipment ;
concern for preservation
of company's property
Good Is involved with and loyal

to company's interests. Has
a high sense of
belongingness to the
company
Contd…
277
Satisfactory Shows necessary concern for
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company's values and Notes
interests.
Unsatisfactory Low commitment to ___________________

company's interests. Talks
loosely about the company ___________________
and has no belongingness
to it.
E
___________________
9. Development of Excellent Gives very high priority to
Subordinates development of ___________________
Ability to guide subordinates.
subordinates in their
___________________
work assignments;
delegation of work; steps
taken for training and ___________________
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development of
subordinates; ability to ___________________
get them to accept the
challenge of higher
responsibilities or targets. ___________________
Good Takes positive steps for ___________________

subordinate development
such as training and job
enrichment/ enlargement.
___________________
Satisfactory Shows concern for

development of
subordinates; is able to
motivate them.
Unsatisfactory Has no interest in the

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development of his
subordinates.
10. Approach to Problem Excellent Is extremely resourceful

Solving solves problems.
Ability to seek alternative
ways to solve a problem or
meet a deadline within the
rules of the company;
flexible and practical
approach; ability to cope
with unusual problems
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and situations; generation

of original ideas and
enduring solutions to
problems
Good Is flexible in approach and

successful in finding
solutions to many unusual
problems
Satisfactory Able to find solutions to

routine problems; is
receptive to new ideas
Unsatisfactory Is upset when problems

come. Fails to solve them.
III. A. Training Plans
Please tick below selectively, the type of training courses which you think will help to improve the
ratee's performance.
(c)
1. Technical (please specify the area)
2. Functional (please specify the area)
3. Computers
4. Management Training
Contd…
278
a. General Management Programmes
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Notes
b. Total Quality Management
___________________
c. Problem Solving Skills
___________________ d. Communications Skills
___________________ e. Leadership Skills
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f. Inter-personal/Behavioural Skills
___________________
g. Value Engineering
___________________
5. Any other (please specify)
___________________ III. B. Development Plans
UP
___________________ What are your plans to develop the ratee ? (e.g. special assignments, increased responsibility, etc.)
___________________ I have seen my performance appraisal for the year…… and it has been discussed with me with
respect to my performance and development plans.
___________________
___________________ Date……… Signature of the Ratee
IV. Checklist of Observable Behaviour
Please go through each of the items listed below. Whenever the item description distinctly tallies with
the observable behaviour in the ratee, tick in the column marked 'Yes'. If it is not so, please tick in the
column marked 'No'. This checklist is not an assessment of performance. It is be used for
developmental purposes.
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Sl. No. Description Yes No
1. Pay attention to documentation. Is it systematic in record

keeping for future references.
2. Is it clear and concise in written communication.
3. Has the capacity for self-analysis and correction of

weaknesses.
4. Has the aptitude for systematic and methodical work. Is

patient with minute details
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5. Makes positive attempts to update himself in his professional

field and learn new things
6. Does not accept sub-standard work.
7. Does not lose heart in spite of failures or setbacks.
8. Has a sense of humour.
9. Promotes healthy industrial relations in his department or

workplace.
10. Is skilled in organising complex activities.
11. Is trustworthy. Does not let down colleagues for personal gain.
12. Has the courage of his convictions. Expresses dissent where

he is convinced about a different approach to the task or
problems.
(c)
13. Respectful of elders and superiors. Polite. Does not hurt

colleagues or subordinates
14. Finds it very easy to get to know people and get along with
them.
15. Clear in his verbal communication. Is seldom

misunderstood. Can convey his thoughts precisely and clearly.
Contd…
279
V. Confidential Rating of Overall Performance
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Notes
Please initial in any one of the following
The individual has achieved an exceptionally high standard of Outstanding ___________________

performance. In significant areas of responsibility, he has exceeded
expected standards. Performance is consistently excellent. ___________________
The standard of performance has been consistently above aggregate; Superior
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and in several areas, responsibilities were discharged so as to merit ___________________
favourable comment rather than mere satisfaction.
___________________
The individual has performed well by and large and to the satisfaction Satisfactory
of his superior,
___________________
Not up to the minimum requirements of the position Unsatisfactory
___________________
UP
This employee has worked under my supervision
___________________
From ____________
___________________
to ____________
___________________
Signature of the Rater Date:_________

___________________
Designation
Department
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Signature of the Reviewing Authority Date:_________
Designation
Department
Exhibit 19.3: Behaviourally Anchored Rating Scale
Assessment
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Criteria A B C D E
1. Quality Leaps tall Must take Can only Needs some Can not
building running leap over a improvements recognise
single bound start to leap building building at
over tall with no all, must
building spire less jump
2. Timeliness Is faster Is as fast as Not as fast Would you Wounds self

than a a speeding as speeding believe a slow with bullet
speeding bullet bullet bullet?
bullet
3. Initiative Is stronger Is stronger Is stronger Shoots the bull Smells like

than a loco than a bull than a bull a bull
motive elephant
(c)
4. Adaptability Walks on Walks on Washes Drinks water Passes

water water in with water water in
consistently emergencies emergencies
5. Communication Talks with Talks with Talks with Argues with Loses the
God the Angel himself himself arguments
280
Exhibit 19.4: Feedback Form
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Notes
___________________ Training Program on Strategic Human Resource Management
___________________ 1. What was your expectation in joining the programme? (Indicate your
choice in order of preference, if any).
___________________
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(a) To get some insights to the new concept
___________________
(b) To understand the relevance of the content in the present business
___________________ situation
(c) To apply the learned skill in my present organization

___________________
UP
(d) To have a break and no utilise time for a meaningful cause
___________________
(e) All the above
___________________
(f) None of the above
___________________
2. Do you think your expectations have been fulfilled, (please tick your
___________________ answer)
(a) Very significantly
(b) Significantly
(c) Partially
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(d) Not at all
3. In columns 'b' and 'c' below, select a number that represents your opinion
using the five-point scale (from low to high); also indicate your view on 'd'
and 'e'
A B C D E
Topic Gained new Presentation Time This was
information allotted difficult
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More Less Right Yes No
Topic 1 12345 12345
Topic 2 12345 12345
Topic 3 12345 12345
Case Study 12345 12345
HR Games 12345 12345
4. Indicate three changes you would like to make to the course
5. Which aspects of the process helped you to learn?
6. Which aspects of the process were not liked by you?

(c)
7. How do you rate the course?
(a) Excellent
(b) Good
(c) Moderate
Contd…
281
(d) Average
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Notes
(e) Poor
___________________
8. Any general suggestions?
___________________
E
___________________
Name: Signature with Date
___________________
___________________
___________________
UP
___________________
___________________
___________________
___________________
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(c)
(c)
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UP
ES
UNIT 20: Case Study
Unit 20
283
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Notes
Case Study
___________________
___________________
E
___________________
Objectives
___________________
___________________
UP
Case Study: Training Milieu ___________________
Veriphone India in Bangalore is a software development company
___________________
and it has a turnover of ` 200 crores. It employs 400 persons.
The company is professionally managed. The management team ___________________
is headed by a young dynamic Managing Director. He expects
___________________
high performance at every level and more so at the supervisory
and managerial levels. However, the junior level vacancies are
filled up by different types of trainees who undergo training in the
company.
The company offers a one-year training scheme for fresh computer
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engineers. During the first six months of the training, the
trainees are exposed to different functional areas. This is
considered to be the core training for this category of trainees. By
the end of the training, the trainees are identified for placement
against the available or projected vacancies. Then, further
training in the next quarter is planned according to individual
placement requirements. During the last quarter the training will
be on-the-job. The trainee is required to perform the jobs expected
of him after he is placed there.
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The training scheme is broadly structured keeping in mind the

training requirements of computer engineering graduates. The
company has a reasonably good system of manpower planning.
The intake of trainees is generally planned on the basis of project
requirements.
Mr Anuvab Rao joined the company in 1999 after his B. Tech.
degree from a reputed Institute. He was taken as a trainee
against a projected vacancy in the CAD/CAM Division.
In Verphone, the areas of interest for a trainee in CAD/CAM are
few. Moreover, since Mr. Anuvab Rao specialized in CAD/CAM in
his B. Tech., Mr Rao's training was planned for the first 3 months
only. Thereafter, he was put for on-the-job training in the
CAD/CAM Department. He took interest and showed enthusiasm
(c)
in his work there. The report from his Divisional Head was quite
satisfactory.
The performance of trainees is normally reviewed once at the end
of every quarter. During this review, the Training Manager
personally talks to the trainees about their progress, strengths
and shortcomings.
Contd…
284
At the end of the second quarter, the Training Manager called Mr
S
Notes Rao for his performance review. He appreciated his good
performance and told him to keep it up. A month later Mr Rao
___________________
met the Training Manager. He requested that his training period
___________________ be curtailed to 7 months and he be absorbed as a regular
Computer Engineer. He argued that he had been performing like
___________________ a regular employee in the department for the last one quarter. As
E
such, there was no justification for him to be put on the training
___________________
any more. Further, he indicated that by doing so, he could be
___________________ more effective in the department as a regular engineer. He would
also gain seniority as well as some monetary benefits as the
___________________ regular employees were eligible for many allowances, like
UP
conveyance, dearness, house rent, education, etc. which was a
___________________
substantial amount compared to the stipend paid to him as a
___________________ trainee.
He would be tried in some other department where he could have
___________________
another lease for developing better rapport. But unfortunately, in
___________________ the case of Mr. Rao, there was no other department to which he
could be transferred, since that was the only department where
his specialisation could have been put to proper use. By the time
he completed his training he turned out to be one who was not at
all acceptable in the department for placement due to his
behaviour. In view of this, the Divisional Head recommended that
he be taken out of that department. When Mr. Rao got
E-
information about it, he was thoroughly depressed.
One of the primary objectives of the training department is to
recruit graduates who had good potential and train them to be
'effective' in different departments. They are taken after a
rigorous selection process which includes a written test, a
preliminary and a final interview. During the training period
their aptitudes, strengths and weaknesses are identified.
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Their placement in departments is decided primarily on the basis

of their overall effectiveness. Here is a case where the person
happened to be hard working in the beginning but turned out to
be a failure in the end. The Training Manager was conscious of
this serious lapse and was not inclined to recommend his
termination. But at the same time it was difficult to retain a
person whose track record was not satisfactory. He still felt that a
fresh look be given to this case but was unable to find a way out.
He was faced with a dilemma - whether to terminate or retain Mr.
Rao.
Questions
1. Where did things go wrong?
2. Who is responsible for this episode?
(c)
3. Should the Training Manager concede to Mr. Rao's demand

for appropriate placement?
4. What options are available to the Training Manager other
than the termination of Mr Rao's services?
5. Did the Divisional Head of CAD/CAM handle the trainee
properly? How could he have put Mr. Rao back on to the right
track?
UNIT 21: Promotion
285
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Notes
___________________
___________________
E
___________________
___________________
___________________
___________________
UP
___________________
___________________
___________________
___________________
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BLOCK-V
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(c)
Detailed286Contents
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Notes
___________________
UNIT 21: PROMOTION z Wage and Salary Administration
___________________
z Introduction z Factors Influencing Compensation Levels
___________________
Promotion Wage Policy
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z z
z Forms of Promotion
___________________ z Wage Policy in India
z Elements of Promotion
___________________ z State Regulation of Wages
z Objectives of Promotion z Bonus
___________________
Promotion Policy Wage Differentials
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z z
___________________
z Basis of Promotion z Choices in Designing a Compensation System
z Promotion Alternatives
___________________ z Managerial Compensation
UNIT 22: TRANSFER
___________________ z Indian Practices
z Introduction UNIT 24: HR AUDIT
___________________
z What is Transfer? z Introduction
z Transfer Policy z Concept of HR Audit
z Limitations of Transfer z Scope of HR Audit
z Lateral and Horizontal Transfer z Methods of HR Audit
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z Job Rotation: Job Mobility z Tools of HR Audit
UNIT 23: COMPENSATION ADMINISTRATION z Process of HR Audit
z Introduction z Benefits of HR Audit
z Compensation UNIT 25: CASE STUDIES
z Components of Pay Structure in India
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(c)
UNIT 21: Promotion
Unit 21
287
S
Notes
Activity
Promotion
Define term promotion
___________________
___________________
E
___________________
Objectives
___________________
topics: ___________________
\ The objectives of promotion ___________________
UP
\ Different basis of promotion ___________________
\ Forms of Promotion
___________________
Introduction ___________________
___________________
HRM at the enterprise level is integrated with transfer, promotion
and job rotation. For internal staffing of vacancies, suitable policies
on the above areas must exist, or else, the organization would be
constrained to frequently go for redundancy, leaving its fate only to
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external hiring. For managerial and executive levels, this is
addressed by succession planning. For non-executive positions,
suitable policies on promotion and transfer and also job rotation,
facilitate restructuring of manpower and their redeployment to
meet the requirements of HRP. In this unit, we have discussed the
basic concepts and pointed out their importance for HRM.
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Promotion
Promotion basically is a reward for efficiency. It is conferment of
additional benefits, usually in the form of higher pay, for an
increase in responsibility or skill which is formalized by an
increase in status or rank. Yet, in another way, promotion can be
defined as advancement of an employee in an organization to
another job, which commands better pay/wages, better
status/prestige and higher opportunities/ challenges and
responsibilities, a better working environment, hours of work and
facilities, etc. Thus, it has been observed that promotion is usually
(c)
associated with the assignment of an individual to a position of

more responsibility or to one which requires the application of his
particular education or experience in a better way.
'Promotion from within' as a system in an organization outlines the
policies and procedures for internal promotion of personnel. The
288 basic difference between 'promotion' and 'promotion from within
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Notes lies in the fact that promotion policy in an organization, as such,
___________________ may incorporate provisions for recruitment from the outside to
man promotional vacancies but 'promotion from within' policy in
___________________
an organization strictly provides for internal recruitment only to
___________________
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man such vacancies.
___________________
From the legal standpoint, however, no distinction, as such, is
___________________ made between 'promotion' and `promotion from within' and these
___________________ two terms are interchangeably used.
UP
___________________
Check Your Progress
___________________
Fill in the blanks
___________________
1. HRM at the enterprise level is __________ with transfer,
___________________ promotion and job rotation.
2. 'Promotion from within' as a system in an organization
outlines the policies and procedures for ___________
promotion of personnel
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Forms of Promotion
Informal and Formal

The two major forms of promotion are:
i. Informal promotion, and
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ii. Formal promotion

The informal form of promotion or the promotion at the discretion
of the employer is the oldest form of promotion, which enables the
employer (s) concerned to promote those employees who have the
requisite ability and merit.
The real problem of the informal form of promotion is that the
senior managers may recommend for promotion only those
individuals with whom they have already worked, or who, for one
reason or the other, have impressed them by their activities or
presence. This may sometimes result in promotion on the basis of
(c)
prejudices of the employer and specialized knowledge and the

abilities of the employees (which should form the basis of
promotion) may be overlooked.
UNIT 21: Promotion
289
The formal form of promotion, contrarily, ensures objective
S
Notes
evaluation of the responsibilities and duties vis-à-vis different
levels of an organization. The significance of all the positions in the ___________________
organization structure is considered with a view to facilitate the ___________________
objective appraisal of the capabilities of the individuals in the
E
___________________
context of promotion. The formal form of promotion is also known
as the standardised or systematic form. Seniority and length of ___________________
service serve as the criteria to qualify for promotion under this ___________________
form. ___________________
UP
This form of promotion is strictly followed in the organizations ___________________
having the 'promotion from within' policy.
___________________
Open and Close ___________________
Promotion may also be classified in a different manner, ___________________
i. Open form, and
ii. Close form

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In case of the open form of promotion, organizations do not restrict
themselves to the existing employees only for the purpose of filling
promotional vacancies. They announce such vacancies in order to
harvest from the nation's 'personnel-crop' and to attract the best
talents to the maximum extent possible. But the closed form of
'promotion from within' policy restricts the candidacy for filling
promotional vacancies to the existing employees only of the
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organization concerned.
Other Forms
Promotion can be grouped according to the following four forms:
i. Movement to an authoritative position;
ii. Movement to a highly-skilled and highly-evaluated job;
iii. In-grade progression (upgradation), and
iv. Widening of duties and responsibilities associated with the
existing job with some increase in payment.
(c)
290
S
Activity
List___________________
various elements of Fill in the blanks
promotion.
___________________ 1. The ___________ form of promotion, contrarily, ensures
___________________ objective evaluation of the responsibilities and duties
E
vis-à-vis different levels of an organization.
___________________
2. In case of the __________ form of promotion,
___________________
organizations do not restrict themselves to the existing
___________________
employees only for the purpose of filling promotional
UP
___________________ vacancies.
___________________
___________________ Elements of Promotion

___________________ We can deduce the following elements of promotion from the
definition contents of promotion and `promotion from within':
1. Upward Advancement: Whatever may be the form of

promotion, it necessarily implies upward advancement, i.e.
movement of employees to higher positions in the
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organizational hierarchy. Although there are some promotions
which, in reality, indicate upgradation or in-grade progression
(i.e. promotion-in-situ), e.g. promotion of a clerk form Grade II
to Grade I, strictly speaking, such promotions also imply
upward advancement because the promoted employees now
occupy positions higher than juniors in the organization
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structure.
2. Enhanced Responsibilities, Status and Prestige: Since

change of job(s), consequent upon promotion, is quite common,
the promoted employees are normally expected to assume
higher responsibilities on being promoted. However, where
promotion is somewhat in the nature of upgradation, the
nature of the job being unchanged, responsibilities of the
promoted employees mostly remain the same. In all other
cases, enhanced responsibilities, status and prestige together
constitute an element of promotion.
3. Better pay and wages: It is the next important element of

(c)
promotion. But, promotion may not always entitle the

promoted employees to higher emoluments, even though their
responsibilities, status and prestige may be enhanced. In
order to encourage creative behaviour in his functional area,
an employee, whose contentment has almost reached a
plateau, may be entrusted with a qualitatively different job
UNIT 21: Promotion
which demands increased responsibilities and which enhances 291
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his status and prestige but not his emoluments. Notes
Activity
4. Other Elements: Better working environment, functional ___________________
Trace the new objectives of
promotions.
autonomy, scope for application of specialized knowledge, skill ___________________
(s) and work experience, etc., are certain other important
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___________________
elements of promotion.
___________________
Check Your Progress
___________________
Fill in the blanks
___________________
UP
1. Whatever may be the form of promotion, it necessarily
___________________
implies ______________ advancement.
___________________
2. Promotion is somewhat in the nature of _____________.
___________________
___________________
Objectives of Promotion
Promotion serves one important purpose of the employer, i.e., it
enables him to adjust his workforce to the changing requirements.
Moreover, from an employer's point of view, promotion is an
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important motivational tool as it can reduce employees' discontent
and unrest.
Promotion can, therefore, improve the effectiveness of an

organization's structure in order to meet the targets and, at the
same time, can considerably increase the effectiveness of its
employees through assignment of suitable positions.
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According to an expert in this field, the main purpose of promotion

is to staff a vacancy that, in general, is worth more to the
organization than to the incumbent's present position.
In a more comprehensive manner, the purposes of promotion can

be stated as follows:
1. To put an employee in a position where he will be of greater

use to the organization and where he is expected to derive
increased personal satisfaction and have an increase in his
emoluments;
(c)
2. To recognise an individual's performance and reward him for

his work so that he may have an incentive to forge ahead;
3. To boost morale and encourage loyalty and help develop a

sense of belongingness so far as an employee is concerned;
292
4. To promote job satisfaction and to motivate an employee to
S
Notes
Activity
continue in the organization;
What___________________
are promotional
disputes?
___________________
5. To attract suitable and competent employees to the
organization and finally;
___________________
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6. To provide opportunities to an employee (who has not
___________________
succeeded in gaining promotion) to enhance his skills and
___________________ abilities required for superior performance.
___________________
It is important to note here that all the above mentioned purposes
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___________________ are equally served by the 'promotion from within' policy as well.
___________________
That apart, the 'promotion from within' policy serves the following
important purposes.
___________________
i. It reduces employee-turnover and consequently reduces
___________________
replacement cost;
ii. It maintains high employee morale and productivity, and

finally;
iii. It maximise utilisation of human resources.

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Check Your Progress
Fill in the blanks
1. Promotion enables to adjust ______________ to the
changing requirements.
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2. The main purpose of promotion is to staff a _________

that, in general, is worth more to the organization than
to the incumbent's present position.
Promotion Policy
Promotional disputes in the recent years have become important
causal factor vis-à-vis industrial disputes in India (as these form
an important part of the personnel related disputes and the
disputes arising out of indiscipline and violence). Therefore, in
order to avoid any possible complications in future and it’s
consequential adverse effects on industrial relations, union-
(c)
participation, as far as possible and should be encouraged by

management while formulating promotion policies.
UNIT 21: Promotion
293
Some of the important requirements of an effective promotion
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Notes
policy are presented below:
___________________
i. Preparing a statement showing ratios of internal promotions
to direct recruitments at each level, mentioning the method(s) ___________________
of selection (e.g., trade test and interview) and indicating the
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___________________
qualifications desired;
___________________
ii. Identifying the network of the related jobs and the ___________________
promotional channels for each job, taking into account the job
___________________
relatedness, the opportunities for interacting with the
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executive placed in the higher levels with a view of fostering ___________________
job learning and the qualifications (both academic and ___________________

professional) and the work experience required.
___________________
iii. Developing the procedural norms for determining employees' ___________________
seniority and deciding whether it should be considered in a
plant-wise or unit-wise or an occupation-wise manner and,
iv. Developing the relationship between disciplinary action and
promotions.
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The Indian Institute of Personnel Management (now renamed as
the National Institute of Personnel Management) has suggested
that the following statements, etc., should be included in any
standard promotion policy:
i. A statement regarding promotion from within the organization
with a view to filling vacancies in higher posts;
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ii. A statement regarding the promotional bases like ability and

seniority;
iii. A well-drawn organization chart in order to help all concerned
understand the ladder of promotion; as well as the structural
relationship of the employees working in the different
positions among various professions/functions and within their
own profession/function;
iv. A statement clearly mentioning the officials who may initiate
and handle cases of promotion in order to help all concerned,
(c)
and;
v. A statement regarding provision for reversion in case a
promotee's performance is not satisfactory.
294
Check Your Progress
S
Notes
Fill in the blanks
___________________
___________________
1. Promotional disputes in the recent years have become
an important ___________ factor.
___________________
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2. The Indian Institute of Personnel Management is now
___________________
renamed as the __________________
___________________
___________________ Basis of Promotion
UP
___________________
After formulation and acceptance by management of a sound
___________________
promotion policy the next question that an organization faces is
___________________ "What should be the basis for such promotions?' A decision in this
___________________
regard is of utmost importance. In promotional decisions, the most
important base is seniority. The Japanese concepts of Nenko Seido
(i.e. promotion on the basis of age and length of service) and Shike
Seido (i.e. status ranking), reflect nothing but seniority
considerations in promotional decisions. In the USA and in the
UK, seniority is an important factor of promotion. In India,
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seniority consideration in promotional decisions has not received
much cognizance from organizations until recently. But, due to
pressure from unions and subsequent changes in the government
policies regarding promotional matters, seniority is fast emerging
as an important consideration in the public sector. Different basis
of promotion, however, are discussed as follows:
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Seniority
Seniority refers to the relative length of service of employees. It
may also be determined in relation to the age, occupation,
department or organization, of an employee. Basically, seniority
implies skill formation through experiential learning. Seniority
being quantifiable provides an objective means of identifying the
personnel eligible for promotion. Since biased managerial decisions
on promotion can be averted to the fullest extent, seniority-
criterion is widely accepted by employees. As promotion is
predictable under the seniority system, it greatly reduces
employee-turnover.
(c)
However, the seniority system has many disadvantages as well.

Since merit or ability is altogether ignored, it does not guarantee
quality staffing of promotional vacancies. Even though it is
believed that, through experiential learning an individual develops
his knowledge that aids in 'skill formation', during his long tenure
UNIT 21: Promotion
of service, due to 'trained incapacity', he may be incapable of 295
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undertaking new assignments. Notes
Moreover, what should be the basis of such seniority? Is it the total ___________________
number of years of experience of the employee in the organization ___________________
plus the experience already gained in his past employments with
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___________________
other organizations or the experience (length of service) in the
present organization only? Would the experiences unrelated to the ___________________
promotional vacant post be taken into account?
___________________
Mere consideration of seniority in the context of promotion, in ___________________
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reality discourages creativity and innovation. Despite, the above
___________________
demerits, the seniority-based promotion system is widely
prevalent. ___________________
Merit Rating ___________________
___________________
The weaknesses of the seniority-based promotion system have
resulted in developing the merit-based promotion system because
that encourages excellence in an organization. Merit is defined as
efficiency and capacity of an individual judged in the light of his
past performance. The obvious advantages of the merit-based
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promotion system are that it enhances organization efficiency and
maximizes utilization of talent (as only the deserving employees
are promoted after thorough assessment of their abilities and
performance). However, integrity of managerial personnel vis-à-vis
determination of merit-criteria objectively is suspect from the
employees' side in general. And, that defers most of the
organizations from using merit as the sole criterion in promotional
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decisions.
Even though the seniority-based promotion system is largely

followed in the public sector organizations in India, the merit-cum-
seniority approach plays a major role in promotional decisions in
the private-sector organizations.
Quota System
This system of promotion is mainly practiced in government
departments and public sector undertakings. The Government of
India has framed rules/regulations regarding promotion of SC/ST
employees who enjoy fixed quota. The organizations have to
(c)
prepare and maintain rosters for this purpose and whenever the
turn comes, the existing SC/ST candidates have to be promoted
without consideration of either seniority or merit.
296
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Notes Trade Tests
___________________ For staffing certain vacancies through promotion, specific trade
___________________ tests are conducted in order to rate the candidates' trade-specific
knowledge and skills. The ultimate promotional decisions are
___________________
E
taken only after the candidates qualify in the specific trade test(s).
___________________ For certain posts like fitter, turner, welder, etc. (technical) and
___________________ stenographer, typist, etc. (non-technical), specific knowledge and
skills are important prerequisites. Thus, effecting promotion to
___________________
these posts is subject to the candidates' ability to acquire such
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___________________ knowledge and skills. While some organizations stipulate
___________________ minimum qualifying service vis-à-vis one's eligibility to appear for
such trade tests, most of the organizations usually allow their
___________________
employees, irrespective of their length of services, to compete for
___________________ such posts. In a strict sense, selection of an existing employee
(after qualifying the stipulated trade test(s) is not considered as
promotion and can better be termed as reappointment (without
break of service).
Promotion by Examinations
E-
Examinations also play a major role in promotional decisions.
Examinations, to a large extent, supplement the merit-rating
system and provide opportunities to the talented employees for
getting promoted to the higher posts without waiting for a long
time. In some organizations, a minimum qualifying-service is
stipulated vis-à-vis one's eligibility to appear for such
CC
examinations. In other organizations, qualifying in such

examinations helps employees become eligible for promotion to
certain posts. The Subordinate Accounts Services (SAS)
Examination and Limited Departmental Section Officers'
Examination for certain categories to the Central Government
employees, the CAIIB Examination for the bank employees, the
Associateship Examination (conducted by the Institute of
Actuaries) for the employees in the insurance companies, etc. are
some examples of these types of examinations. However, the scope
for promotion based on examinations is very limited because only a
few departments of the Central Government and a handful of
(c)
private organizations practice this.
Age-group Preference
In many organizations, a particular age-group is preferred to other
age-groups for staffing vacancies. The idea of preference for a
particular age-group is based on following considerations:
UNIT 21: Promotion
297
1. Expected number of years of services;
S
Notes
2. Professional source of supply of required manpower in future,
___________________
and;
___________________
3. Personality, dynamism, initiative, challenging attitude, etc.
E
___________________
Age is used as an index of stamina and flexibility and for
___________________
determining the possible length of service before retirement.
Although, no empirical support, as such, is available to relate ___________________
promotion to preference for age-group, many organizations, as a ___________________
UP
matter of policy, follow some norms regarding age groups vis-à-vis
___________________
staffing of certain vacancies from within. In some cases, where the
existing employees also contest with the outsiders for a particular ___________________
vacancy, some relaxation in age is given to them. Thus, for the ___________________
reasons stated earlier, preference for age group also influences ___________________
promotional decisions.
Personal Attributes
Personal attributes like intelligence, health, energy, stamina,
E-
inherent attitudes, interest and preferences, taken together, also
form an important basis for promotional decisions. Since these
attributes are not quantifiable in the strict sense, rating by the
superior is usually considered as a yardstick. More job experience,
acquired knowledge and strong educational background may not
make one competent or eligible for promotion. For example, certain
jobs demand aptitude for figure work, which can only be found
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among those employees who have an inherent interest in doing

figure work. Similarly, poor health, lack of energy and stamina,
etc. makes one unsuitable for sales jobs, supervisory jobs; requiring
dealings with the public and leadership quality. Inherent
attitudes, interests and preferences also, at the same time, act, in
one way or the other, as important prerequisites for certain jobs. In
many organizations, the system of writing annual confidential
reports about employees exists. Certain columns in this report
pertain to personal attributes. This report which is usually written
by the superior concerned, thus, serves an important purpose of
the management, i.e., considering the personal attributes of an
(c)
employee for the purpose of taking promotional decisions.
Performance Appraisal
Performance appraisal, in reality, is an important variable in
promotional decisions. However, the term merit-rating is quite a
narrow one and limited in approach. Performance appraisal has
298
wider applicability in the context of evaluation of employee’s vis-à-
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Notes
Activity vis their characteristics, qualifications, traits, capacities,
___________________
What are different promotion proficiencies and abilities for the purpose of, inter alia, taking
alternatives. promotional decisions. Performances appraisal is basically a formal
___________________
exercise in an organization with a view to evaluating the
___________________ employee’s performance in a documented form at periodic
E
___________________ intervals. A leading management theorist has identified the
following three basic purposes of formal performance appraisal:
___________________
i. To provide systematic judgements on salary increases,
___________________
promotions, transfer, etc;
UP
___________________
ii. To make an employee know 'where he stands' with respect to
___________________ his boss; and,
___________________
iii. To provide a basis for coaching and counselling of an employee
___________________ by his superior.
Although there are various methods of performance appraisal, the

most widely used method is ranking. Under this method, ranking
of an employee is done on the basis of comparison with others. An
employee who gets the highest numerical value to his credit as
E-
compared to other employees is generally considered most suitable
for promotion.
Because of its simplicity and objective, the performance appraisal

system is widely used throughout the world. An Indian study,
covering 60 organizations, has indicated that companies, both in
the public and private sectors, give considerable weightage (58 per
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cent) to performance appraisal for effecting promotional decisions
Check Your Progress

Fill in the blanks
1. Seniority refers to _______________
2. The performance appraisal system is ___________ used
throughout the world
Promotion Alternatives
(c)
'Promotion from within' as a regular process, apart from resulting

in in-breeding, lack of dynamism and innovativeness, etc., has an
inevitable danger of overstaffing of an organization. Japanese
organizations, which follow this system compulsorily even without
'objective assessment of employees' performance, have introduced
an excellent promotion alternative, known as "status ranking
UNIT 21: Promotion
system", in order to obviate the problems of overstaffing. Under 299
S
this system, a worker, who is otherwise eligible for promotion but Notes
cannot be promoted because of the problems of overstaffing is ___________________
awarded a status rank with increased allowances so as to make his
___________________
pay almost at par with that of the promotable post. Thus, without
actually promoting the eligible employees, this system ensures
E
___________________
increased status for them in order to maintain their motivation ___________________
levels and ensure their loyalty towards the organization.
___________________
Inability to promote the eligible employees, for one reason or the
___________________
other (e.g. the problem of overstaffing), is a problem of structural
UP
nature (because most of the employees have reached a plateau) ___________________
before the management in any organization. While job enrichment, ___________________
job enlargement, lateral transfer, horizontal transfer, etc., which
___________________
focus primarily on the change of work content, can in one way or
the other, fulfil the intrinsic needs of the employees, these, in ___________________
reality, reduce only the stresses resulting form content-plateauing.
The problem of structure-plateauing remains unless suitable
restructuring of the organization, with due emphasis on reducing
the importance of promotion and increasing the value of challenge,
E-
is attempted.
Since, temporary measures, job enrichment, job enlargement,

lateral transfers and horizontal transfers can successfully reduce
the stress of the employees, who are otherwise promotable, but are
not promoted for the obvious inability of the organizations; these
are considered as promotion alternatives. Ensuring timely
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promotion of employees is a major problem even for well organised

and professionally-managed organizations in India. Government
organizations, for the low-paid white-collar employees, relate their
promotional decisions to the availability of vacancies, while, for the
direct recruits in the officers' cadre, they have a system of
promotion based on time-scale. This clearly indicates poor career
planning, which results in serious motivational problems in the
government organizations. Stagnation in different cadres for years
together is a result of such ill-framed policy. Commercial banking
organizations have made some progress in this matter, i.e. in the
case of senior employees; the probability of getting promotion after
completion of a certain number of years of service is quite high.
(c)
But such types of measures are not at all adequate. However, job
enrichment, job enlargement, lateral transfer and horizontal
transfers can, to a large extent, alleviate the motivational
problems of employees, in such cases, at least, for the time being.
Thus, an organization gets an opportunity to restructure itself and
300
can take some provisions for promotion during the intervening
S
Notes period.
___________________
Two other promotion alternatives are lateral and horizontal
___________________ transfer, which we will discuss in next unit.
___________________
E
Check Your Progress
___________________
Fill in the blanks
___________________
1. _________ in different cadres for years together is a
___________________ result of such ill-framed policy.
UP
___________________
2. Two promotion alternatives are ________ and
___________________ _________transfer.
___________________
___________________ Summary
'Promotion from within' as a regular process, apart from resulting
in in-breeding, lack of dynamism and innovativeness, etc., has an
inevitable danger of overstaffing of an organization. Japanese
organizations, which follow this system compulsorily, even without
E-
'objective assessment of employees' performance, have introduced
an excellent promotion alternative, known as "status ranking
system",
Lesson End Activity

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Collect more information on promotional alternatives.
Keywords
Promotion: It is reward for efficiency. It is conferment of
additional benefits, usually in the form of higher pay, for an
increase in responsibility or skill which is formalized by an
increase in status or rank.
Seniority: It refers to the relative length of service of employees.
Merit: It is defined as efficiency and capacity of an individual

judged in the light of his past performance.
(c)

1. What is promotion? In what way does it differ from 'promotion
from within'? What are the different forms of promotion?
UNIT 21: Promotion
301
2. Briefly state the elements and purposes of promotion.
S
Notes
3. You have been asked by an organization to draft a promotion
___________________
policy for their employees. What are the areas, you think you
should consider, while drafting such a policy? ___________________
E
___________________
4. Briefly state the different basis of promotion. Identify at least
three factors, which you think are important while taking a ___________________
promotion decision. ___________________
5. Is it possible to ensure increased status for employees without ___________________
UP
actually promoting them? Select at least three promotion
___________________
alternatives, which can confer increased status and job
satisfaction to plateaued employees. ___________________
___________________
Further Readings ___________________
Books
E-
Web Readings
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http://humanresources.about.com/od/glossaryp/g/promotion.htm
http://www.csb.gov.hk/english/publication/files/e-hrmguide.pdf
http://www.harzing.com/download/hrmtransfer.pdf
http://www.websukat.com/HRM-transfer.htm
(c)
302
Appendix 1
S
Notes
___________________ Sample Promotion Policy in Commercial Banks
___________________ A commercial bank considers the following common factors in

order to effectuate promotional decisions for the existing
___________________ employees:
E
___________________ a. Seniority and/or length of service,
b. Professional qualifications,
___________________
c. Knowledge of practical banking,
___________________
d. Performance on the job and
UP
___________________
e. Potential for development and growth
___________________ However, weights assigned to each of the above factors vary from
one bank to another and also depend on the levels of promotion.
___________________
For each such factor, a maximum weight is assigned (stipulating
___________________ certain conditions). The total score of each employee (applying for
a higher post) is computed and the highest scorer is given the
promotion. For example, for effecting promotion from the Junior
Management Scale I post to the Middle Management (Lower)
Scale II post, a maximum weightage for each one of the above
factors is fixed as follows:
E-
a. Seniority and/or length of service - maximum weightage is 20
per cent (special weightage is given to those who are posted
in the rural areas);
b. Professional qualifications - maximum weightage is 15 per
cent;
c. Knowledge of practical banking (evaluated through a process
of written examination) - maximum weightage is 20 per cent.
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d. Performance on the job (assessed on the basis of evaluation of

the performance of officers) - weightage varies from 10 per
cent to 50 per cent depending on the ranks; and,
e. Potential for development and growth (assessed through a
process of interview) - weightage varies from 15 per cent to
20 per cent.
Guidelines like these are followed in the case of effecting
promotion from within for officers in the general stream.
However, for officers in the specialists' stream like law officer,
engineers, economists, personnel officers, etc. the policy of direct
recruitment is followed.
For effecting promotion from the clerical cadre to the officers'
cadre (Junior Management, Scale I), factors like service-seniority,
educational attainments and performance in the written test are
(c)
given weightage.
For such promotion, commercial banks have introduced the
following quotas for all the declared vacancies.
i. 20 per cent of the declared vacancies are to be filled by direct
recruitment through the Banking Service Recruitment
Board;
Contd…
UNIT 21: Promotion
303
ii. 50 per cent of the declared vacancies are to be filled on the
S
basis of merit-cum-seniority from amongst the members of Notes
the clerical staff;
___________________
iii. 30 per cent of the declared vacancies are to be filled on the
basis of seniority from amongst the senior clerical staff ___________________
(including the employees holding the special allowance
E
posts). ___________________
Usually, the maximum age limit for promotion of the ___________________

departmental candidates is fixed at 56 years both for promotion
___________________
from the Junior Management Scale I post, to the Middle
Management (Lower) Scale II post and promotion from the ___________________
UP
clerical cadre to the officers cadre (Junior Management, Scale I).
___________________
However, the above promotion policy of commercial banks, is
likely to get altered and changed, The Narsimhan Committee ___________________
Report of 1992 inter alia suggested that individual banks should
be free to make their own requirement, instead of the present ___________________
common recruitment system. The committee suggests that there
is no need for setting up a Banking Service Commission for ___________________
centralized recruitment of officers. This will provide scope for the
banks to scout for talent and impart new skills to their personnel.
The committee, however, predicts this recommendation on the
assumption that the banks will set up objective, fair and
impartial recruitment procedures and, wherever appropriate,
E-
they could voluntarily come together to have a joint recruitment
system. As regards clerical grades, the present system of
recruitment through Banking Service Recruitment Boards may
continue but we could urge that the appointment of the Chairman
of these boards should be totally left to the coordinating banks.
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(c)
304
Appendix 2
S
Notes
___________________ Promotion Policy of Steel Authority of

India (SAIL) Executives
___________________
Policy Objectives:
___________________
E
a. To man executive posts in the company with competent
___________________ personnel having growth potential and to utilise their
capability in the working environment to the maximum
___________________ through opportunities available for advancement.
___________________ b. To provide for a system which is conducive to equity, fairness
UP
and objectivity in matters concerning promotion of
___________________ executives.
___________________ c. To ensure uniformity and consistency, to the extent possible
in the promotion of executives of all units of the company.
___________________
d. To motivate executives of the organization for better
___________________ performance, by rewarding their contribution to the growth
of the organization, in deciding promotions on the basis of
overall merit.
SCOPE
The policy shall cover all promotions made in executive posts
E-
(other than promotions from non-executive posts to executive
posts) and shall apply to all units of Steel Authority of India
Limited. For the purpose of promotion and career planning, all
executives of SAIL will be classified as under:
Cadres Grade Code
Jr. Managerial E-0 to E-3 (B)
Managerial E-4, E-5
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Sr. Managerial E-6(A), E-6(B) and E-7

Top Managerial E-8
The executives will have to pass through all the standard scales
without skipping any grade in accordance with this policy.
Minimum qualifications and eligibility criteria are different for
different levels.
(c)
UNIT 21: Promotion
305
Appendix 3
S
Notes
Promotion System ___________________
Vacancy Promotion System
___________________
This will apply in all grades except from E-1 to E-2. Subject to
E
minimum requirements of promotion and fulfilments of criteria of ___________________
promotion, the executives will be promoted to the next higher
___________________
grade on availability of vacancies. Eligibility will be two years
from (E-3(A) to E-3(B), E-6(A) to E-6(B), E-6(B) to E-7 and E-7 to ___________________
E-8 will be through interview. Out of the candidates found
suitable, promotion will be effected in order of seniority. ___________________
UP
___________________
Standardised Strokes Grade System ___________________
Promotion from E-1 to E-2 would be on the basis of appraisal
reports and qualifications as prescribed irrespective of vacancy. ___________________
The eligibility for professionally qualified executives and ___________________
management trainees (both technical and administrative) would
be 4 ½ years including the period of training of management
trainees. For others, eligibility would be after completion of
minimum 5 ½ years service in E-1 grade. This selection will be
subject to personal review/interview by the competent authority
from amongst those who have the prescribed appraisal rating.
E-
The prescribed appraisal rating will be three consecutive
confidential reports being minimum C+ both under performance
rating and potentiality rating.
Promotion from E-3(A) to E-3(B) would be on the basis of
appraisal reports and qualifications only as prescribed, subject to
completion of two years service in E-3(A). Individuals will get the
monetary benefits, but not the designation which will be against
the vacancy only.
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Executives in E-6(A) will be eligible for promotion to E-6 (B)

provided they have put in two years service in the grade of E-6 (A)
on the basis of appraisal reports and qualifications only as
prescribed. Individuals will get the monetary benefits but not the
designation till a vacancy arises.
Criteria for Promotion
Following criteria for promotion would be followed:
z Appraisal reports, as prescribed,
z Qualification, as prescribed,
z Interviews, as prescribed,
z Eligibility, as prescribed,
(c)
z Discipline – clearance for vigilance and disciplinary angle.

306
Appendix 4
S
Notes
___________________ Minimum Educational Qualifications Required for Promotion

within Executive Posts
___________________
Category of Posts Minimum Qualifications Level
___________________
E
1. Technical (i) Matriculation with pre- selection E-0 to E-2 (up to
___________________ training. and including)
___________________ (ii) B.Sc. or Diploma in Engineering E-3(B) (up to)
(iii) Degree in Engg. or equivalent For E-4 and above

___________________
UP
2. Non-technical (i) Bachelor's degree Up to E-3 (B)
___________________
(ii) Bachelor's degree with E-4 and above
___________________ professional qualification
___________________ 3. Mining (i) Qualification required under Statutory posts

statute
___________________
(ii) Matric with pre-selection training Up to and
including the level
of E-2
(iii) Degree in Geology/Mining Posts in E-3 (B)

and above
E-
4. Finance and (i) Graduation with a pass in the Up to and
Accounts departmental examination for including the
accounts or SAS Accountants level of E-3 (B)
Examination of the government
(ii) Professional Qualifications like Posts in E-4 and

CA/ICWA above
5. Research and (i) Degree in Engg. Or M.Sc. in Up to and

Development related discipline including the level
of E-3 (B)
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(ii) Degree in Engineering Posts in E-4 and

preferably a Master's Degree or above
Doctoral Degree or Ph.D. in
Pure Science
(c)
UNIT 21: Promotion
307
Appendix 5
S
Notes
Schematic Representation of Promotion Systems ___________________
System-A System-B System-C
(Vacancy) (Standardised (Service Linked
___________________
Stroke Grade) Promotion)
E
___________________
1. Interview Interview at job Review/Interview No Interview
change level E-2 to ___________________
E-3(A), E-3 (B) to E-4,
E-4 to E-5, E-5 to ___________________
E-6 (A), E-6 (B) to E-7
and E-7 to E-8
___________________
UP
2. Appraisal Last three appraisals Appraisals with Last three
with minimum 'C' and minimum 'C' and appraisals with ___________________
promotability rating promotability rating. minimum 'C' and
performance ___________________
rating
3. Qualification As stated As stated As stated

___________________
4. Eligibility Three years from E-2 I. E-1 to E-2: 5½ 10 years ___________________

to E-3(A), E-3(B) to years or .
E-4, E-4 to E-5, 4½ years
E-5 to E-6 (A), E-6(B)
to E-7 and E-7 to E-8
II. E-4(A) to E-3 (B):

2 years as E-3 (A).
E-
III. E-6(A) to E-6(B):2
years as E-6(A)
5. Discipline Clear from vigilance Clear from vigilance Clear from

and discipline angle and disciplinary vigilance and
angle disciplinary angle
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(c)
(c)
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E-
UP
ES
UNIT 22: Transfer
Unit 22
309
S
Notes
Activity
Transfer
Define the term ‘transfer’.
___________________
___________________
E
___________________
Objectives
___________________
topics: ___________________
\ The objectives of transfer ___________________
UP
\ Limitations of transfer ___________________
\ Different basis of transfer
___________________
Introduction ___________________
___________________
Organizational environment is dynamic. Besides environmental
changes there are changes in the job, their specifications, the
technology used to execute them and the employees carrying out
various organizational functions. The changes in the employees
E-
can be in the form of their movement within and outside the
organization. The movement of employees within the organization
can be in the form of transfer, promotion or job rotation. Transfer
is movement of employees from one unit to another, the
responsibilities and functions remaining the same. Promotion
relates to vertical movement of employees in the hierarchy
involving better status and increased responsibility. Job rotation is
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movement of the employees from one job to another to break the

job monotony and to enable the employees to understand the total
organizational system.
What is Transfer?
Transfer is the lateral movement of employees from one position,
division, department or unit to another. Such movement of
employees from one job to another may be either due to promotion,
demotion, organizational restructuring or may be for routine
administrative reasons (some organizations do not allow employees
(c)
to remain in the same job for a longer duration, which are sensitive
in nature). Generally transfer does not involve any significant
change in compensation, duties, responsibilities or even status.
310
S
Notes Objectives of Transfer
___________________ The objectives of transfer are to:
___________________ 1. Increase organizational effectiveness
___________________ 2. Add to the versatility and competence of key personnel.
E
___________________ 3. Cope with the fluctuations in work requirements.
___________________
4. Rectify erroneous placement.
___________________
5. Relieve boredom and monotony.
UP
___________________
6. Set right incompatibilities in employees’ relations.
___________________
7. Look after the interests of the employees (their health or age-
___________________
group, family problems etc.)
___________________
8. Provide creative opportunities
9. Train employees for their future advancement or promotion.
Different Types of Transfers

E-
1. Production Transfers: Such transfers are done for
stabilizing employment. In an organization, there may be
several independent plants for different product-mixes or
shopfloors to produce sub-assemblies or components.
Production in any of such plants or shopfloors may get
discontinued, either for dropping of the product or for other
miscellaneous reasons. Such a situation necessitates
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production transfer.
2. Replacement Transfers: Such transfers are effected during
lay-off, when senior employees may be transferred or relocated
to protect their interest against employees with short service.
3. Versatility Transfers: To prevent employees to develop
proprietary interest in the job, materials and equipment used
on the job and workloads, such transfers are effected both for
the benefits of the organization and the employees (employees
gain varied job experience).
4. Personal or Remedial Transfers: Such transfers are
(c)
usually made in the interest of the employees, as they often

may request for transfer on grounds of health, age or family
issues. To correct erroneous placement also such transfers are
made.
UNIT 22: Transfer
311
5. Shift Transfers: Such transfers are effected within the shift
S
Notes
itself (without any change in job etc.), where the shift system Activity
of work is prevalent. Shift system is a regularized rotation of ___________________
What is transfer policy?
employees from one shift to another. ___________________
E
___________________
Transfer Policy
___________________
In order to be impartial and objective, transfer policy and ___________________
procedures must be established and made known to all employees.
___________________
UP
A good transfer policy must answer the following questions:
___________________
1. What type of transfers is to be used? When? ___________________
2. What is the area over which transfers will be effected? ___________________
3. What is the basis used for effecting transfers? ___________________
4. Who is responsible for initiating and approving transfers?

5. Should transfers be permanent or temporary?
6. What is the rate of pay and other facilities the transferred
E-
employee should receive on his new job?
7. Is training necessary to effect a transfer?
However, in India, most of the organizations do not have a well
formulated transfer policy, resulting in its gross misuse (often as
an instrument to victimize the employees). Public sector
enterprises and departmental undertakings (government
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departments) often use this instrument without any regard to the

cost aspect. Recently, Ordinance Factories Board had been
adversely criticized for effecting meaningless transfers of officers
and staff members, which involved crores of rupees of expenditure
from the public exchequer. For such irrational use, transfer related
issues have now become important causal factors of industrial
disputes in India.
Check Your Progress

Fill in the blanks
(c)
1. Organizational environment is _____________.

2. In India, most of the organizations ___________ have a
well formulated transfer policy, resulting in its gross
misuse.
312
Limitations of Transfer
S
Notes
___________________ The right of transferring abroad is not implied. However, in the

absence of a provision in a contract of service to the contrary, a
___________________
firm of Chartered Accountants with accounts in foreign countries
___________________ may order an employee to go into a foreign state to work on a
E
___________________ client's accounts. Many organizations, however, make it a point to
include a paragraph in the terms and conditions of the letter of
___________________
appointment of their would be employee before its issue in a
___________________ language or similar there to "you would be liable to transfer from
UP
___________________
your present place of posting to anywhere in India or abroad". This
often saves the organization from future confusion or
___________________
embarrassment.
___________________
When an employee is hired by a firm with no branches, there is no
___________________ implied contract which permits his transfer to a branch thereafter
established. Although transfer, per se, is not punishment in the
eye of law, transfers are limited by the standard of reasonableness.
For example, although a bank can transfer its employees, it cannot
harass them by doing so repeatedly. An order of transfer cannot be
E-
made which will result in a material change for the worse in the
employee's contractual rights, such as reduction in his amenities
like free quarters, medical assistance, fuel, electricity and cheap
rations. Similarly, a radical change in the employee's duties may
invalidate a transfer. And, in any event, an employee is entitled to
reasonable time upon transfer to wind up his affairs.
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Check Your Progress

Fill in the blanks
1. Transfers are limited by the standard of reasonableness.
2. A radical change in the employee's duties may
invalidate a transfer.
Lateral and Horizontal Transfer

Two other promotion alternatives are lateral and horizontal
transfer. In the strict sense, transfer is the moving of an employee
from one job to another. Such movement may either be horizontal
(c)
or lateral. For internal mobility of the manpower, periodic

transfers of employees are effected by an organization either for
the interests of the organization or for the interests of the
employees or for both. Although need for transfer may arise for one
reason or the other (e.g. fluctuations in work requirements,
UNIT 22: Transfer
increasing versatility and competence of key employees, correcting 313
S
erroneous placement, relieving employees from monotony, Notes
protecting the interests of employees vis-à-vis their health or age ___________________
and providing creative opportunities for employees), Indian
___________________
organizations mostly relate transfer decisions to promotions,
E
excepting cases where transfers of senior employees are affected ___________________
for the maintenance of a tenure system. Since transfers, in most of ___________________

the cases, involve change of place(s) and even, in some cases, result
___________________
in reduction in material gains, transfer-decisions of an
___________________
organization, quite often, are resented by the affected employees.
UP
This is particularly evident in the government and commercial ___________________
banking organizations. Problems of housing, education of children, ___________________
inadequacy of compensation, disruption of family life and social
___________________
life, etc. are some of the common grounds for which even
promotional transfers are not accepted by many employees. In ___________________
order to obviate such problems relating to implementation of

transfer either for routine administrative reasons or for
promotional reasons, transfer liability is usually made a
precondition to employment. Most of the organizations have well
E-
drawn transfer policies in this regard. While, in other
organizations, transfer is still a prerogative of the management.
Lateral transfer is the vertical movement of employees and denotes

significant change in the work content. Cross-functional or cross-
lateral transfers, throughout the career of an employee, keep him
fresh and receptive to new ideas and make him more creative and
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productive.
Horizontal transfer, on the other hand, is the movement within the

same job-family. While job enrichment and job enlargement
exercises do not involve, in reality, any movement from one job to
another, lateral and horizontal transfer indicate physical
movement from one job to another and, thus, have some potential
to motivate employees intrinsically.
Both lateral and horizontal transfer can be effectively used for

structure and content-plateaued employees as temporary
promotion alternatives. In some organizations, such transfers are
(c)
made to equip the employees for assuming higher responsibilities,

consequent upon promotion.
314
Check Your Progress
S
Notes
Activity
Fill in the blanks
___________________
What does job mobility mean?
___________________
1. Transfer is the __________ of an employee from one job
to another.
___________________
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2. Both lateral and horizontal transfer can be effectively
___________________
used for structure and __________ employees as
___________________ temporary promotion alternatives
___________________
UP
___________________ Job Rotation: Job Mobility
___________________ Repetitive tasks develop boredom and jobs become increasingly
___________________ dehumanised and dissatisfying to the employees. Some companies
try to reduce this boredom through job rotation, which is a
___________________
systematic movement of workers from one job to another. Such
movement or rotation in different functions increases the skills
and functional efficiency of the employees as they are exposed to
different business situations. Some companies even encourage
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such movement from one unit to another to enable employees to
understand the organization as a total system. For manning higher
positions in the organization, such knowledge of employees is an
important prerequisite. A staff executive, who is posted in an
office, may be encouraged to move to the factory (which may not be
attached to an office) to get exposed to the intricacies of
functioning, only to promote him later to a more senior position.
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Job rotation, for employees at lower level also, helps in multi-skill

development whereby the organization can get the advantage of
their services at the time of exigency. However, frequent job
rotations do not allow employees to get specialised knowledge and
skill and reduce them to an unskilled functionary or at least 'a jack
of all trades and master of none'. For such obvious disadvantage of
job rotation, other forms of job mobility like; job enlargement and
job enrichment are considered as better alternatives. These two
forms have been discussed below.
Job Enrichment
(c)
Job enrichment is basically the restructuring of a job to make it

more interesting and stimulating. This concept has been developed
by Herzberg. Job enrichment seeks to improve task efficiency and
human satisfaction and to provide greater scope for personal
achievement and recognition, challenging assignments and
UNIT 22: Transfer
opportunities for individual advancement and growth. Enough 315
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experimental supports, like the American Telephone and Notes
Telegraph Company experiment and the ICI experiment, have ___________________
indicated that job enrichment has tremendous motivational
___________________
potential and, if implemented properly, can significantly increase
E
job satisfaction and productivity. ___________________
___________________
Job Enlargement
___________________
Job enlargement is the horizontal regrouping of tasks and implies
___________________
mere addition of more functions and increase in the task variety.
UP
By enlarging job content, dehumanization of work, as a result of ___________________
excessive functional specialisation, can be reduced and the creative ___________________
needs of employees can be satisfied to a large extent.
___________________
Even though job enrichment is a better alternative to job
___________________
enlargement, as the former one is restructuring of a job in order to
make it more interesting and stimulating and the latter is mere
additions to a present job, both of these are considered important
vis-à-vis satisfaction of intrinsic needs of the employees and
fulfilment of their creative urges.
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Check Your Progress
Fill in the blanks
1. Job enrichment is basically the _____________of a job to
make it more interesting and stimulating.
2. Job ___________ is a better alternative to job
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enlargement, as the former one is restructuring of a job

in order to make it more interesting and stimulating
Summary
Transfer, promotion and job rotation are three different types of
employee movement, which facilitate adjustment of manpower
both within and outside the organizations. Today's organizations
are required to frequently restructure the jobs, to keep pace with
the changing technology, systems and practices. This necessitates
restructuring of manpower. Without suitable policies on promotion,
(c)
transfer and job rotation it is difficult for an organization to

enforce them. Again policies need to be periodically reviewed to
ensure their relevance. For HRP, all these three instruments
provide adequate flexibility.
316
Lesson End Activity
S
Notes
Visit the following Company and find out how promotions or
___________________
transfer are done:
___________________
(a) Private Ltd. Company
___________________
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___________________ (b) Manufacturing Company
___________________ (c) Government Company
___________________ (d) Bank
UP
___________________
___________________
Keywords
___________________ Job rotation: It is movement of the employees from one job to
___________________
another to break monotony and to enable the employees to
understand the total organization system.
Transfer: It is the lateral movement of employees from one

position, division, department or unit to another.
Lateral Transfer: It is the vertical movement of employees and

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denotes significant Change in the work content.
Horizontal Transfer: It is the movement within the same job-

family.
Job Enrichment: The restructuring of a job to make it more

interesting and simulating.
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Job Enlargement: It is horizontal regrouping of tasks and implies

mere addition of more functions and increase in the task variety.

1. Define transfer. Why is transfer necessary for an
organization? What are the different types of transfer?
2. Is it necessary for an organization to have a transfer policy?

Justify your answer duly pointing out important components
of a transfer policy. Do you think transfer is absolutely a
management prerogative?
(c)
3. Explain how internal job mobility reinforces HRP in an

organization.

a. Career Plateauing
UNIT 22: Transfer
317
b. Standard Stroke Grade System
S
Notes
c. Lateral Transfer
___________________
d. Job Enlargement
___________________
e. Job Enrichment
E
___________________
f. Trade Tests ___________________
g. Replacement Transfer ___________________
h. Merit Rating ___________________
UP
___________________
Further Readings ___________________
Books ___________________

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Web Readings
http://humanresources.about.com/od/glossaryp/g/promotion.htm
http://www.csb.gov.hk/english/publication/files/e-hrmguide.pdf
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http://www.harzing.com/download/hrmtransfer.pdf
http://www.websukat.com/HRM-transfer.htm
(c)
(c)
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UP
ES
UNIT 23: Compensation Administration
Unit 23
319
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Notes
Activity
Compensation Administration
Define the term
___________________
‘compensation’.
___________________
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___________________
Objectives
___________________
topics: ___________________
\ Nature of compensation ___________________
UP
\ Objectives of compensation planning ___________________
\ Principles and elements of wage and salary administration
___________________
\ Factors influencing compensation
___________________
Introduction ___________________
Compensation is what employees receive in exchange for their

contribution to the organization. Generally, employees offer their
services for three types of rewards. Pay refers to the base wages
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and salaries employees normally receive. Compensation forms such
as bonuses, commissions and profit sharing plans are incentives
designed to encourage employees to produce results beyond normal
expectation. Benefits such as insurance, medical, recreational,
retirement, etc., represent a more indirect type of compensation.
So, the term compensation is a comprehensive one including pay,
incentives, benefits offered by employers for hiring the services of
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employees. In addition to these, managers have to observe legal

formalities that offer physical as well as financial security to
employees. All these issues play an important role in any HR
department’s efforts to obtain, maintain and retain an effective
workforce.
Compensation
Compensation offered by an organization can come both directly
through base pay and variable pay and indirectly through benefits.
(c)
z Base pay: It is the basic compensation an employee gets,

usually as a wage or salary
z Variable pay: It is the compensation that is linked directly to

performance accomplishments (bonuses, incentives, stock
options)
320
Benefits: These are in direct rewards given to an employee or
S
Notes z
group of employees as a part of organizational membership
___________________
(health insurance, vacation, vacation pay, retirement pension
___________________ etc.)
___________________
E
Objectives of Compensation Planning
___________________
The most important objective of any pay system is fairness or
___________________ equity. The term equity has three dimensions.
___________________ (a) Internal equity: This ensures that more difficult jobs are
UP
___________________ paid more.
___________________ (b) External equity: This ensures that jobs are fairly
compensated in comparison to similar jobs in the labour
___________________
market.
___________________
(c) Individual equity: It ensures equal pay for equal work, i.e.,
each individual’s pay is fair in comparison to others doing the
same/similar jobs.
In addition, there are other objectives also. The ultimate goal of
E-
compensation administration (the process of managing a
company’s compensation programme) is to reward desired
behaviours and encourage people to do well in their jobs. Some of
the important objectives that are sought to be achieved through
effective compensation management are listed below:
(a) Attract talent: Compensation needs to be high enough to
attract talented people. Since many firms compete to hire the
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services of competent people, the salaries offered must be high

enough to motivate them to apply.
(b) Retain talent: If compensation levels fall below the
expectations of employees or are not competitive, employees
may quit in frustration.
(c) Ensure equity: Pay should equal the worth of a job. Similar
jobs should get similar pay. Likewise more qualified people
should get better wages.
(d) New and desired behaviour: Pay should reward loyalty,
commitment, experience, risks taking, initiative and other
desired behaviours. Where the company fails to reward such
(c)
behaviours, employees may go in search of greener pastures

outside.
(e) Control costs: The cost of hiring people should not be too
high. Effective compensation management ensures that
workers are neither overpaid nor underpaid.
321
(f) Comply with legal rules: Compensation programmes must
S
Notes
invariably satisfy governmental rules regarding minimum
wages, bonus, allowances, benefits, etc. ___________________
(g) Ease of operation: The compensation management system ___________________

should be easy to understand and operate. Then only it will
E
___________________
promote understanding regarding pay-related matters
___________________
between employees, unions and managers.
___________________
Equity and Pay Rates
___________________
UP
The need for equity is the most important factor in determining ___________________
pay rates. This is achieved through the following steps.
___________________
z Find the worth of each job through job evaluation.
___________________
z Conduct a salary survey to find what other employers are ___________________
paying for comparable jobs.
z Group similar jobs into pay grades.
z Price each pay grade by using wage curves.

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z Fine tune pay rates.
Job Evaluation
Job analysis offers valuable information for developing a
compensation system in terms of what duties and responsibilities
need to be undertaken. The worth of a job to the organization is as
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ascertained through job evaluation. Since the whole process is

largely subjective, a committee is appointed to collect information
and come up with a hierarchy of jobs according to their value. The
evaluation is done through the use of market pricing or through
the use of ranking, point or factor comparison methods.
Wage and Salary Surveys

While job evaluation ensures internal equity, wage and salary
surveys ensure external equity. A wage and salary survey provides
information as to what other organizations that compete for
employees are paying. The survey could cover all the jobs within
(c)
an organization (obviously costly and hence avoided) or limited to

benchmark jobs, jobs that are used to anchor the company’s pay
scale and around which other jobs are slotted based on their
relative worth to the firm. The benchmark jobs have the following
basic characteristics.
322
z Many workers in other companies have these jobs.
S
Notes
___________________ z They will not be changing in the immediate future in terms of

tasks, responsibilities, etc.
___________________
z They represent the full range in terms of salary such that
___________________
E
some are among the lowest paid in the group of jobs, others
___________________ are in the middle range and some are at the high end of the
___________________
pay scale.
___________________ Formal and informal surveys (through telephone, for example)
UP
could be undertaken to collect data on benefits like insurance,
___________________
medical leave, vacation pay, etc. and so offer a basis on which to
___________________ take decisions regarding employee benefits. Published sources also
___________________ provide valuable information regarding industry-wise trends in
salary structures in and around the country. The published sources
___________________
in India include:
z Reports published by the Ministry of Labour.
z Pay commission reports.
Reports of Wage Bonds appointed by Government.
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z
z Reports of employees and employers’ organizations.

z Trade journals of specific industry groups, etc.
One of the major problems with these sources is the comparability
of jobs in the survey to jobs in the organization. To overcome the
limitations of published surveys, conduct your own surveys of
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important jobs. The following survey methods are generally used to

collect relevant wage-related information:
z Key job matching: Under this method, similar key jobs are
identified between the organizations and the relevant wage
particulars about those comparable jobs are collected.
z Key class matching: Similar classes of jobs are identified
and the necessary data about those classes are collected.
z Occupational method: Certain basic occupational groups
like clerks, officers, managers are identified and then the
necessary data is collected.
(c)
z Job evaluation method: All the parties participating in the

survey method use the same method and same mechanism for
evaluating similar jobs.
z Broad classification method: Under this method, broad
groups of relatively homogeneous jobs, i.e., by industry, by
profession or by geographical area are grouped and the 323
S
relevant information about these jobs is collected. Notes
___________________
Group Similar Jobs into Pay Grades
___________________
In this step similar jobs (in terms of their ranking or number
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___________________
points as ascertained by the job evaluation committee) are grouped
into grades for pay purposes. The organization can now focus on 10 ___________________
to 12 pay grades, instead of hundreds of pay rates. A pay grade ___________________

consists of jobs of approximately equal difficulty or importance as
___________________
determined by job evaluation. If the point method is used, the pay
UP
grade consists of jobs falling within a range of points. Ten to ___________________
sixteen grades per job cluster (factory jobs, clerical jobs) is ___________________
common.
___________________
Price each Pay Grade – Wage Curves ___________________
In the next step pay rates are assigned to pay grades through a
wage curve. The wage curve shows graphically the pay rates
currently paid for jobs in each pay grade relative to the points or
rankings given to each job or grade.
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Figure 23.1: Plotting a Wage Curve
(The average pay rate for jobs in each grade [Grade I = 0-50 points,
(c)
Grade II = 50-100 points, Grade III = 100-150 points] are plotted

and the wage curve fitted in.)
A completed wage curve tells management the average
relationship the pay grade points and wage rates. It will show
which pay is out of the trend line. If a job’s pay rate is very high –
324 where the current rates paid by the company fall well above or
S
Notes
Activity below the wage line – those wage rates are identified as ‘red circle’
___________________
Discuss the components of rates. This only means that pay is frozen or below average
pay structure in India. increases are granted until the structure is adjusted upward to
___________________
place the circled rate within a normal range.
___________________
E
___________________ Fine Tune Pay Rates and Determine Wage Structure
___________________ Here the employees fix a pay range for each grade (Officer Grade I,
___________________ II and III, for example, in banking industry). The wage structure of
a company is nothing but a pay scale showing ranges of pay within
UP
___________________
each grade.
___________________
___________________ Components of Pay Structure in India

___________________
The pay structure of a company depends on several factors such as
labour market conditions, company’s paying capacity and legal
provisions:
Wages
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In India, different Acts include different items under wages,
though all the Acts include basic wage and dearness allowance
under the term wages. Under the Workmen’s Compensation Act,
1923, “wages for leave period, holiday pay, overtime pay, bonus,
attendance bonus, and good conduct bonus” form part of wages.
Under the Payment of Wages Act, 1936, Section 2 (vi), “any award
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of settlement and production bonus, if paid, constitutes wages.”

Under the Payment of Wages Act, 1948, “retrenchment
compensation, payment in lieu of notice and gratuity payable on
discharge constitute wages.”
However, the following types of remuneration, if paid, do not
amount to wages under any of the Acts:
i. Bonus or other payments under a profit-sharing scheme which
do not form a part of contract of employment.
ii. Value of any house accommodation, supply of light, water,
(c)
medical attendance, travelling allowance, or payment in lieu

thereof or any other concession.
iii. Any sum paid to defray special expenses entailed by the
nature of the employment of a workman.
325
iv. Any contribution to pension, provident fund, or a scheme of
S
Notes
social security and social insurance benefits.
___________________
v. Any other amenity or service excluded from the computation of
wages by general or special order of an appropriate ___________________
governmental authority.
E
___________________
The term ‘Allowances’ includes amounts paid in addition to wages ___________________
over a period of time including holiday pay, overtime pay, bonus, ___________________
social security benefit, etc. The wage structure in India may be
___________________
examined broadly under the following heads:
UP
___________________
Basic Wage
___________________
The basic wage in India corresponds with what has been ___________________
recommended by the Fair Wages Committee (1948) and the 15th
___________________
Indian Labour Conference (1957). The various awards by wage
tribunals, wage boards, pay commission reports and job
evaluations also serve as guiding principles in determining ‘basic
wage’. While deciding the basic wage the following criteria may be
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considered: (i) Skill needs of the job; (ii) Experience needed; (iii)
Difficulty of work: mental as well as physical; (iv) Training needed;
(v) Responsibilities involved; (vi) Hazardous nature of
job.
Dearness Allowance (DA)

It is the allowance paid to employees in order to enable them to
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face the increasing dearness of essential commodities. It serves as

a cushion, a sort of insurance against increase in price levels of
commodities. Instead of increasing wages every time there is a rise
in price levels, DA is paid to neutralize the effects of inflation;
when prices go down, DA can always be cut down to size. This,
however, remained a pipe dream as prices never come down to
effect a cut in dearness allowance payable to employees.
DA is linked in India to three factors: the index factor, the time

factor and the point factor.
All India Consumer Price Index (AICPI): The Labour

(c)
z
Bureau, Shimla, computes the AICPI (Base 1960 = 100 points)
from time to time.
z Time Factor: In this case DA is linked to the rise in the All

India Consumer Price Index (AICPI) in a related period,
326
instead of linking it to fortnightly or monthly fluctuations in
S
Notes
Activity index.
___________________
What is sound plan of wage
z Point Factor: Here DA rises in line with a rise in the number
administration?
___________________ of index points – above a specific level.
___________________
Other Allowances: The list of allowances granted by
E
z
___________________ employers in India has been expanding, thanks to the
increasing competition in the job market and the growing
___________________
awareness on the part of employees.
___________________
Table 23.1: List of Allowances in the
UP
___________________ Organized Sector in India
___________________ z Attendance z Night shift z Tiffin

___________________ z Books z Overtime z Transport
z Car z Paternity z Telephone
___________________
z Card (Credit card) z Pension z Uniform
z City Compensatory z Provident Fund
z Club Membership z Relocation
z Computer z Servant
z Deputation
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z Driver
z Education
z ESIS
z Family
z Group Insurance
z Lease Travel
z Lunch
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z Medical
Check Your Progress

Fill in the blanks
1. Compensation is what employees receive in exchange for
their __________ to the organization.
2. ___________ is the allowance paid to employees in order
to enable them to face the increasing dearness of
essential commodities
Wage and Salary Administration

(c)
Employee compensation may be classified into two types – base

compensation and supplementary compensation. Base
compensation refers to monetary payments to employees in the
form of wages and salaries. The term ‘wages’ implies remuneration
to workers doing manual work. The term ‘salaries’ is usually 327
S
defined to mean compensation to office, managerial, technical and Notes
professional staff. The distinction, however, is rarely observed in ___________________
actual practice. Base compensation, it should be noted here, is a
___________________
fixed and non-incentive payment on the basis of time spent by an
E
employee on the job. Supplementary compensation signifies ___________________
incentive payments based on actual performance of an employee or ___________________

a group of employees. The term ‘compensation administration’ or
___________________
wage and salary administration denotes the process of managing a
___________________
company’s compensation programme. The goals of compensation
UP
administration are to design a cost-effective pay structure that will ___________________
attract, motivate and retain competent employees’. ___________________
Objectives ___________________
___________________
A sound plan of compensation administration seeks to achieve the
following objectives:
z To establish a fair and equitable remuneration offering
similar pay for similar work.
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z To attract qualified and competent personnel.
z To retain the present employees by keeping wage levels in
tune with competing units.
z To control labour and administrative costs in line with the
ability of the organization to pay.
z To improve motivation and morale of employees and to
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improve union-management relations.

z To project a good image of the company and to comply with
legal needs relating to wages and salaries.
Principles of Wage and Salary Administration

There are several principles of wage and salary plans and
practices. The important among them are:
1. Wage and salary plans should be sufficiently flexible.
2. Job evaluation must be done scientifically.
3. Wage and salary administration plans must always be
(c)
consistent with overall organizational plans and programmes.

4. Wage and salary administration plans and programmes should
be in conformity with the social and economic objectives of the
country like attainment of equality in income distribution and
controlling inflationary trends.
328
5. Wage and salary administration plans and programmes should
S
Notes
be responsive to the changing local and national conditions.
___________________
6. These plans should simplify and expedite other administrative
___________________
processes.
___________________
E
___________________
The Elements of Wage and Salary System
___________________ Wage and salary systems should have a relationship with the
performance, satisfaction and attainment of goals of an individual.
___________________
Henderson identified the following elements of a wage and salary
UP
___________________ system.
___________________ 1. Identifying the available salary opportunities, their costs,
___________________ estimating the worth of its members, of their salary
opportunities and communicating them to employees.
___________________
2. Relating salary to needs and goals.
3. Developing quality, quantity and time standards related to
work and goals.
4. Determining the effort necessary to achieve standards.
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5. Measuring the actual performance.
6. Comparing the performance with the salary received.
7. Measuring the job satisfaction of the employees.
8. Evaluating the unsatisfied wants and unrealized goals of the
employees.
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9. Finding out the dissatisfaction arising from unfulfilled needs

and unattained goals.
10. Adjusting the salary levels accordingly with a view to enabling
the employees to reach unreached goals and fulfil the
unfulfilled needs.
Check Your Progress

Fill in the blanks
1. The term ‘wages’ implies ___________to workers doing
manual work.
(c)
2. The term ‘salaries’ is usually defined to ___________ to

office, managerial, technical and professional staff.
329
S
Factors Influencing Compensation Levels Notes
Activity
The amount of compensation received by an employee should What___________________
are the Factors
Influencing Compensation
reflect the effort put in by the employee, the degree of difficulty ___________________
Levels?
experienced while expending his energies, the competitive rates
E
___________________
offered by others in the industry and the demand-supply position
within the country, etc. These are discussed below. ___________________
___________________
(a) Job needs: Jobs vary greatly in their difficulty, complexity
and challenge. Some need high levels of skills and knowledge ___________________
UP
while others can be handled by almost anyone. Simple, ___________________
routine tasks that can be done by many people with minimal
___________________
skills receive relatively low pay. On the other hand, complex,
challenging tasks that can be done by few people with high ___________________
skill levels generally receive high pay. ___________________
(b) Ability to pay: Projects determine the paying capacity of a
firm. High profit levels enable companies to pay higher wages.
This partly explains why computer software industry pays
better salaries than commodity based industries (steel,
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cement, aluminum, etc.). Likewise multinational companies
also pay relatively high salaries due to their earnings power.
(c) Cost of living: Inflation reduces the purchasing power of
employees. To overcome this, unions and workers prefer to
link wages to the cost of living index. When the index rises
due to rising prices, wages follow suit.
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(d) Prevailing wage rates: Prevailing wage rates in competing

firms within an industry are taken into account while fixing
wages. A company that does not pay comparable wages may
find it difficult to attract and retain talent.
(e) Unions: Highly unionized sectors generally have higher
wages because well organized unions can exert presence on
management and obtain all sorts of benefits and concessions
to workers.
(f) Productivity: This is the current trend in most private sector
companies when workers’ wages are linked to their
productivity levels. If your job performance is good, you get
(c)
good wages. A sick bank, for example, can’t hope to pay

competitive wages, in tune with profit making banks.
(g) State regulation: The legal stipulations in respect of
minimum wages, bonus, dearness allowance, allowances, etc.,
determine the wage structure in an industry.
330
(h) Demand and supply of labour: The demand for and the
S
Notes
supply of certain skills determine prevailing wage rates. High
___________________
demand for software professionals, R&D professionals in drug
___________________ industry, telecom and electronics engineers, financial
analysts, management consultants ensures higher wages.
___________________
E
Oversupply kills demand for a certain category of employees
___________________ leading to a steep fall in their wages as well.
___________________ Most employers, nowadays, are interested in paying a fair
___________________ wage to all workers which is neither very high (affecting the
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company’s profitability) nor very low (where attracting and
___________________
retaining people becomes difficult).
___________________
Check Your Progress
___________________
Fill in the blanks
___________________
1. The amount of compensation received by an employee
should reflect the __________ put in by the employee.
2. Inflation __________ the purchasing power of employees.
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Wage Policy
A wage bill is an important part of the production cost. For any
reason whatsoever if the wage bill increases beyond the paying
capacity of an employer, the very survival of the firm becomes
difficult.
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Box 23.1: Horror Stories in India

1. Bharat Opthalmic Glasses – Where Employees’
Benefits Exceed Turnover!
During the period 1984-85 to 1990-91, the gross benefits per
annum to 521 employers of Bharat Ophthalmic Glass (BOG)
exceeded the turnover of the company – every year! The
employees have successfully brought down capacity
utilization to just 27% of the achievable capacity. When the
Government released ` 76 lac to buy plant and machinery,
BOG generously diverted 50% of the money to pay salaries
and wages.
2. National Textile Corporation
(c)
NTC has 120 mills and 1.7 lac workers. The accumulated
losses are over 3000 crores; the yearly increase in losses
being over ` 400 crore; 40 mills are totally useless, 40 likely
to become useless very soon and the balance 40 are
terminally sick. During the last 20 years the government
spent nearly ` 2000 crore on protecting jobs!
Contd…
331
3. Hindustan Fertilizer Corporation Ltd, Haldia
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Notes
The plant was shut down in August, 1986, but the 1500
strong employees continue to receive all their salaries and ___________________
wages totalling to ` 150-175 lac per month. The company
seems to run on the principle No work but Full Pay’. Even ___________________
additional installments of DA are payable to them. The
E
accumulated losses up to 1992 were over ` 1400 crore. ___________________
4. Heavy Engineering Corporation ___________________
It is a company producing nothing. It has been established ___________________

just to employ labour (over 17000 employees with annual
losses running to over ` 100 crore) established in ___________________
UP
collaboration with Soviet Union and Czechoslovakia (both
___________________
these countries of course managed to vanish from the world
map by 1992 itself!) ___________________
Source: N J Yasaswy, PSU Stocks, Vision Books, New Delhi 1992.
___________________
From the employee’s point of view ‘wages’ determines his standard
___________________
of living. Wage policy, therefore, is an important issue and
recognizing its importance the Constitution of India guaranteed
‘equal pay for equal work’ for both men and women (Article 39) and
reiterated that the State must endeavour to secure for all workers
a living wage and conditions of work which ensure a decent
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standard of life (Article 43). After Independence the Government
realized that the wages of workers can’t be left to the fluctuations
(in demand and supply of) in labour market conditions. It has
decided to fix statutory minimum wages.
Check Your Progress

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Fill in the blanks

1. A wage bill is an important part of the __________ cost.
2. From the employee’s point of view ‘wages’ determines
his ________________.
Wage Policy in India
Minimum Wage, Fair Wage and Living Wage

Minimum wage: Minimum wage is that wage which must
invariably be paid whether the company, big or small, makes
(c)
profits or not. It is the bare minimum that a worker can expect to

get for services rendered by him. The 15th Indian Labour
Conference (1957) formally quantified the term ‘minimum wage’
thus:
332
z In calculating the minimum wage, the standard working class
S
Notes
family should be taken to comprise three consumption units
___________________
for one earner, the earnings of women, children and
___________________ adolescents being disregarded;
___________________ z Minimum food requirements should be calculated on the basis
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___________________ of a set intake of calories as recommended by Dr Aykroyd for
an average Indian adult of moderate activity;
___________________
z Clothing requirements should be estimated on the basis of per
___________________
capita consumption of 18 yards per annum which would give
UP
___________________
for the average worker’s family of four a total of 72 yards;
___________________
z In respect of housing, the rent corresponding to the minimum
___________________ area provided for under Government Industrial Housing
___________________ Scheme should be taken into consideration in fixing the
minimum wage;
z Fuel, lighting and other miscellaneous items of expenditure
should constitute 20 per cent of the total minimum wage.
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Fair wage: It is that wage which is above the minimum wage but
below the living wage. According to the Committee on Fair Wages,
1948, fair wage should be determined taking the following factors
into account:
z the productivity of labour;
z the prevailing rates of wages in the same or similar

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occupations in the same region or neighbouring regions;
z the level of national income and its distribution;
z the place of industry in the economy of the country; and
z the employer’s capacity to pay.

Living wage: According to the Committee on Fair Wages, the
living wage is the highest among the three. It must provide (i)
basic amenities of life, (ii) efficiency of worker and (iii) satisfy
social needs of workers such as medical, education, retirement, etc.
‘Living Wage’ is a dynamic concept, which grows in line with the
(c)
growth of the national economy.
State Regulation of Wages

The Government has adopted various methods to regulate wages
in India such as prescribing minimum rates of wages, regulating
payment of wages, settlement of wage related disputes through 333
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adjudication process, setting of wage boards, etc. Notes
Table 23.2: Institutions Involved in Fixation of Wages ___________________
___________________
z Employer
Collective Bargaining
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z ___________________
z Legislation z Minimum Wages Act
___________________
z Wage Boards z Payment of Wages Act
z Pay Commissions z Adjudication Machinery ___________________
___________________
Minimum Wages Act, 1948
UP
___________________
The Act prescribes minimum rates of wages certain sweated and
___________________
unorganized sectors covered under the Act. The minimum wages
can be fixed by hour, day, month or any other longer period. The ___________________
Act provides for setting up a tripartite body consisting of
___________________
employees, unions and the government, to advise and assist in
fixing and revising minimum wage rates. The rates could be
subjected to revision at intervals not exceeding 5 years. The Act
has not been able to prevent exploitation of labour due to a variety
of reasons:
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z The Vidyasagar Committee, 1965, pointed out that the desired
objective of the Act could not be realized due to inadequate
and improper organization of the administrative machinery.
z Minimum wages have not been revised as stipulated in the

Act. They are revised after much longer intervals.
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z The Act did not define minimum wages nor specified any
norms for its determination.
A. The supreme court has held (in 1992) that the appropriate
authorities should take into consideration the components such as
children's education allowance, medical needs, minimum
revelation, provision for marriage, old age etc. while minimum
wages are calculated.
The Payment of Wages Act, 1936

The main objective of the Act is to provide for regular payment of
(c)
wages without any unauthorised reductions to persons who are

employed in any industrial establishment or factory or railway or
by a railway contractor whose monthly wages are less than ` 1600.
The Act prescribes the following permissible deductions to be made
from the employee’s salary: fines, deductions for absence,
deductions for (i) loss of goods entrusted to worker, (ii) house given
334
by employer, (iii) services provided by employer, (iv) advances
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Notes given to worker, (v) tax payable by employer, (vi) deductions under
___________________ court orders, cooperative society. PF, insurance premium, etc.
___________________ Adjudication of Wage Disputes
___________________
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Collective bargaining is a procedure through which employee
___________________ problems relating to various issues including wages are settled
___________________ through the process of joint consultation, in an atmosphere of ‘give
and take’, trust and mutual confidence. If these problems are not
___________________ settled through collective bargaining, they may be settled through
UP
___________________ voluntary arbitration or adjudication. The awards given or reached
by or through the arbitrator or adjudicator or collective bargaining
___________________
agreements form the basis for fixing wages in various
___________________ organizations.
___________________
Wage Boards
This is one of the important institutions set up by the Government
of India for fixation and revision of wages. Separate wage boards
are set up for separate industries. Government of India started
E-
instituting Wage Boards in accordance with the recommendations
of Second Five-year Plan, which were reiterated by the Third Five-
year Plan. Wage Boards are not governed by any legislation but
are appointed on an adhoc basis by the Government.
Each Wage Board consists of one neutral Chairman, two

independent members and two or three representatives of workers
and management each. The Wage Boards have to study various
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factors before making any recommendations. The

recommendations of Wage Board are first referred to the
Government for acceptance. The Government may accept with or
without modification or reject the recommendations of the Wage
Board. The recommendations accepted by the Government are
enforceable by the parties concerned.
The Wage Boards take the following factors into consideration for
fixing or revising the wages in various industries:
(i) Job evaluation, (ii) Wages rates for similar jobs in comparable
industries, (iii) Employees’ productivity, (iv) Firms ability to pay,
(v) Various wage legislations, (vi) Existing level of wage
(c)
differentials and their desirability, (vii) Government’s objectives

regarding social justice, social equality, economic justice and
economic equality, (viii) Place of the industry in the economy and
the society of the country and the region, (ix) Need for incentives,
improvement in productivity, etc.
335
The Wage Boards fix and revise various components of wages like
S
Notes
basic pay, dearness allowance, incentive earnings, overtime pay, Activity
house rent allowance and all other allowances. ___________________
Define the term bonus
___________________
Pay Commissions
E
___________________
Wages and allowances of Central and State government employees
___________________
are determined through the pay commissions appointed by the
appropriate government. So far the Central Government has ___________________
appointed five pay commissions. The disputes, arising out of pay ___________________
UP
commission awards and their implementation are decided by
___________________
commissions of inquiry, adjudication machinery and the joint
consultative machinery. ___________________
___________________
Check Your Progress
1. _____________ wage is that wage which must invariably

be paid whether the company, big or small, makes
profits or not.
E-
2. The Wage Boards ______ and __________ various
components of wages like basic pay, dearness allowance,
incentive earnings, overtime pay, house rent allowance
and all other allowances.
Bonus
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An important component of employees’ earnings, besides salary, is

bonus. Starting as an adhoc and ex-gratia payment, bonus was
claimed as dearness allowance during the World War II. In the
course of labour history, it has taken the shape of something in the
nature of a just claim. Subsequently, under the Payment of Bonus
Act, 1965, it secured the character of a legal right. The dictionary
meaning of ‘bonus’ is an extra payment to the workers beyond the
normal wage. It is argued that bonus is a deferred wage payment
which aims at bridging the gap between the actual wage and the
need based wage. It is also said that bonus is a share of the
workers in the prosperity of an organization. The third argument
(c)
is that bonus is primarily a share in the surplus. But it is only

incidentally treated as a source of bridging the gap between the
actual wage and the need based wage.
336
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Notes The Payment of Bonus Act, 1965
___________________ The Act defines an employee who is covered by it as one earning
___________________
` 2,500 p.m. (w.e.f. 1.4.93) basic plus dearness allowance and
specifies the formula for calculating the allocable surplus from
___________________
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which bonus is to be distributed. The minimum bonus to be paid
___________________ has been raised from 4 per cent to 8.33 per cent (w.e.f. 25.9.75) and
___________________ is sought to be linked to increased productivity in recent times.
Through collective bargaining, the workers, through their
___________________
representative union, can negotiate for more than what the Act
UP
___________________ provides and get the same ratified by the government, if necessary.
___________________ In the absence of such a process, the Act makes it mandatory to
___________________
pay bonus to employees (who have worked in the unit for not less
than 30 working days in a year) following a prescribed formula for
___________________
calculating the available surplus. The available surplus is
normally the gross profits for that year after deducting
depreciation, development rebate/investment
allowance/development allowance, direct tax and other sums
referred to in Sec. 6 The Act applies to every factory or
E-
establishment in which 20 or more persons are employed in an
accounting year. Currently the position is such that even if there is
a loss, a minimum bonus needs to be paid treating the same as
deficiency to be carried forward and set off against profits in
subsequent years (Sec. 15). The Act is proposed to be changed since
the amount of bonus, the formula for calculating surplus, the set
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off provisions have all been under serious attack from various
quarters.
Table 23.3: Bonus Calculations in India
z Bonus is calculated on a salary of ` 2,500 per month.
z Bonus is to be paid at a minimum of 8.33 per cent of the salary of an

employee.
z The bonus is to be paid within 8 months from the close of an accounting

year.
z If in any year the available surplus exceeds the amount of minimum

bonus payable to an employee, the employer shall pay a higher bonus
(c)
subject to a minimum of 20% of salary or wage.
z Bonus is paid out of available surplus of an accounting year after

deducting the sums referred to in Sec. 6. If there is no surplus, even then
bonus has to be paid treating it as ‘deferred wage’.
z To claim bonus, the employee must have worked for 30 days in that year.
337
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Activity
What is wage differential
means?
1. An important component of employees’ earnings, besides ___________________
salary, is __________.
E
___________________
2. Starting as an adhoc and __________ payment, bonus ___________________
was claimed as dearness allowance during the World
___________________
War II
___________________
UP
Wage Differentials ___________________
___________________
Differentials in wages for jobs are inevitable in any industry. The
reasons are not far to seek: ___________________
Table 23.4: Reasons for Wage Differentials ___________________
Wage differentials Reasons
Interpersonal differentials Differentials in sex, skills, age,

knowledge, experience
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Inter-occupational differentials Varying requirements of skill,
knowledge, demand-supply situation
Inter-area differentials Cost of living, ability of employees’ to

pay, demand and supply situation,
extent of unionization
Inter-firm differentials Ability of employer to pay, employees’

bargaining power, degree of
unionisation, skill needs, etc.
CC
Wage differentials perform important economic functions like

labour productivity, attracting the people to different jobs. Since
most of the workers are mobile with a view to maximising their
earnings, wage differentials reflect the variations in productivity,
efficiency of management, maximum utilization of human force,
etc. Attracting efficient workers, maximization of employee
commitment, development of skills, knowledge, utilizations of
human resources, maximization of productivity can be fulfilled
through wage differentials as the latter determines the direct
allocation of manpower among different units, occupations and
regions so that the overall production can be maximized. Thus,
(c)
wage differentials provide an incentive for better allocation of

human force – labour mobility among different regions and the
like.
Wage differentials play a pivotal role in a planned economy in the
regulation of wages and development of national wage policy by
338 allocating the skilled human force on priority basis. Development
S
Notes of new skills, knowledge, etc., is an essential part of human
___________________ resource development. Shortage of technical and skilled personnel
is not only a problem for industries but it creates bottlenecks in the
___________________
attainment of planned goals. Thus, wage differentials, to a certain
___________________
E
extent, are desirable from the viewpoint of national interest. As
___________________ such, they probably become an essential part of national wage
___________________ policy. Complete uniform national wage policy is impracticable and
undesirable.
___________________
UP
___________________ Are Wage Differentials Justified?
___________________ Wage differentials on the basis of occupations, units and areas
(when real wages are taken into account) can be justified on the
___________________
basis of equal pay for equal work among workers. They are also
___________________ justified in view of varying conditions of demand and supply and
varied job requirements like skill, knowledge, aptitude, ability,
experience, etc. But the object of the Government is to minimize
income inequalities and inequalities in the distribution of wealth.
Thus, wage differentials are not desirable in a socialistic pattern of
E-
society. However, formulating a uniform wage policy ignoring
differences in individual skills, knowledge, etc., units the ability to
pay of a unit, varying living costs in different regions, varying
demand and supply conditions, differences in occupations, etc., is
practically not possible. Hence, a compromise between uniform
wage policy and wage differentials has to be developed in view of
the principles of socialistic pattern of society.
CC
Interpersonal, inter-unit, inter-occupational wage differentials are

more predominant in unrecognized sector of Indian economy. But
even in organized sector and public sector units, wage differentials
are quite common. But the tendency appears to be towards
minimization and regularization of wage differentials and to
narrow down the gap between maximum and minimum wage in a
unit. Wage differentials on the basis of sex are however common,
mainly in unorganized sector of the economy. It is observed that
certain industrial tribunals had awarded different wages for male
and female workers not on the ground that the work done is
unequal but on the grounds that the wages of female employees
have always been somewhat lower than those of male workers,
(c)
that women workers support a smaller family and that the cost of
employing women workers is higher. However, it is felt that
further steps should be taken in order to minimize wage
differentials not only in unrecognized sector but also in organized
and public sector undertakings.
339
S
1. Wage differentials play a _________ role in a planned ___________________
economy in the regulation of wages and development of
E
___________________
national wage policy by allocating the skilled human
force on priority basis. ___________________
2. Development of new skills, knowledge, etc., is an ___________________
essential part of ___________. ___________________
UP
___________________
Choices in Designing a Compensation System
___________________
The compensation system that is followed by a firm should be in
___________________
tune with its own unique character and culture and allow the firm
to achieve its strategic objectives. A wide variety of options ___________________
confront a firm while designing such a system.
1. Internal and External Pay: Pay equity, as stated

previously, is achieved when the compensation received is
equal to the value of the work done compensation policies are
E-
internally equitable when employees believe that the wage
rates for their jobs approximate the job's worth to the
organization. Perceptions of external equity exist when the
firm pays wages that are relatively equal to what other firms
are paying for similar types of work.
2. Fixed vs. Variable Pay: Nowadays variable pay programmes

CC
are widely followed throughout many organizations and for all

levels of employees widespread use of various in entire plans,
team bonuses profits sharing programmes have been
implemented with a view to link growth in compensation to
results of course, while using variable pay systems,
management must look into issues carefully:
z should performance be measured and rewarded based on

individual, group or organizational performance?
z should the length of time for measuring performance be

short-term or long-term.
(c)
3. Performance vs Membership: Knowledge-based

organizations these days follow a performance-based payment
plan offering awards to employees for cost saving suggestions,
bonuses for perfect attendance or merit pay based on
supervisory appraisals. 3 M's encouragement of innovation
through this route, for example, has paid off in what has
340 become a legend in the field of product development (one of its
S
Notes chemists developed the immensely popular product post-it
___________________ when 3M gave time for the employee and announced a
handsome bonus for the final results. Most organizations,
___________________
however, still pay their employees based on the number of
___________________
E
home of work for week compiled with certain serving the
___________________ company loyalty for a particular period.
___________________
Box 23.2: Guidelines for Effective Performance-based
___________________ Pay Systems
UP
___________________ To be fair to employees, organizations should keep the following
guidelines in mind while instituting merit-pay systems
___________________
z Establish high standards of performance, so that only the truly
___________________ outstanding employees emerge as winners.
___________________ z Development accurate performance appraisal systems. The

forms the must be on job-specific, results-oriented criteria as
well as employee behaviours.
z Train supervisions in the mechanics of carrying out appraisals
and offering feedback to employees in a proper way.
Tie rewards closely to performance.
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z
z Use a wide range of increases. Also, make pay increases

meaningful.
4. Job vs Individual Pay: Most traditional organizations-even

today decide the minimum and maximum values of each job
independently of individual workers (who are placed in
between these two extremes) - ignoring their abilities,
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potential and the ability to take up multiple jobs. Such job-

based pay system may, in the end force workers to leave the
company in frustration. To avoid such unfortunate situations,
knowledge-based pay systems have been followed increasingly
in modern organization. In this case employees are paid on
the basis of the jobs they can handle or the talents they have
that can be successfully exploited in various job and
situations.
Box 23.3: Suitability of Job-based and Knowledge-based
pay systems
(c)
A job based-pay system is Individual-based pay system

suitable when: is suitable when:
z Jobs do not change often· z The firm has relatively
z Technology is stable· educated employees with both
the ability and willingness to
z Lot of trainers is required to learn different jobs
learn a given job· participation are encouraged.
Contd…
341
z Turnover is relatively how· z The firm's technology
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z Employees are expected to procurement are subject to Notes
move up through the ranks frequent change·
___________________
over z Vertical growth opportunities
time. and limited.· ___________________
z Jobs are fairly standardize z Opportunities to learn new
E
___________________
within the industry nulls exist.
z Teamwork and employee ___________________
Organizations will grant an in-house in pay after the employee ___________________
masters various nulls and demonstrates these according to a ___________________
UP
predetermined standard one of the important limitations of ___________________
this method is that employees can became discouraged when
___________________
they acquire new nulls but find very few rewarding growth
opportunities or high-rated jobs where they can use their ___________________
talents successfully. ___________________
Box 23.4: Broad banding vs Competency Based pay System

Organizations that follow a still-based or competency based pay
system frequently use broad banding to structure their
compensation payments to employees. Blood branding simply
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collapses many traditional salary grades (say 15 to 20 grades) into
a few wide salary bands (three or four grades). By having
relatively few job grades, this approach tries to downplay the
value of promotions. Depending on changing market conditions
and organizational …., employees move from one position to
another without raising objectionable questions, (such as when
the new grade is available, what pay adjustments are made when
duties change etc. As a result movement of employees between
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departments, divisions and locations becomes smooth. Employees

with greater flexibility and product set of capabilities can always
go in search of other departments jobs in other departments of
locations that allow them to use their potential fully. Broad
banding, further, helps reduce the emphasis on hierarchy and
status. However, broad banding can be a little unsettling to a new
recruit when he is made to roll on various jobs. Most employees
still believe that the existence of many grades helps them great
promotional opportunities over a period of time. Any organization
having fewer grades may be viewed negatively - as having fewer
upward promotion opportunities. Moreover, a number of
individuals may not want to move across the organization into
other areas.
5. Below Market vs Above Market Compensation: In high

(c)
tech firms R&D workers might be paid better than their

counterparts in the manufacturing division. Blue chip firms
such as HLL, Nestle, Procter & Gamble, TCS, Hughes
software system might pay above market compensation to
certain groups in order to attract (and retain) 'the mean of the
crop'. To grow rapidly and to get ahead of others in the race,
342
especially in knowledge-based industries, most companies
S
Notes that prefer to pay above-market salaries. At market wages are
___________________ typical in well-established manufacturing units operating in a
highly competitive environment. Firms paying below market
___________________
tend to me small, young and non-unionized.
___________________
E
6. Open vs Secret Pay: In the real world, the issue of paying
___________________
compensation openly or in a secret way may often become a
___________________ bone of contention between employees and the employer(s).
___________________
Current research evidence indicates that pay openness is
likely to be more successful in organizations with extensive
UP
___________________
employee involvement and an egalitarian culture that
___________________ encourages trust and commitment. Open pay eliminates
doubts in the minds of employees regarding equity and
___________________
fairness - because there is equal pay for equal work. But open
___________________ pay has a downside. First managers are forced to defend their
compensation decisions publicly. The question of how much
pay one should get is more or less decided by the manager -
based on his own subjective assessment of various factors. In
such decision, it is not easy to please everyone. Second, the
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cost of making a mistake in a pay decision increases when pay
is open. Third, to avoid never-ending and time-wasting
arguments with employees, managers may eliminate pay
differences among subordinates despite differences in
performance levels. This may, in the end, force talented people
to leave the organization. Pay secrecy Involves withholding
information from the recruits regarding how much others
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make, what raises others have received and even what pay
grades and ranges exist within an organization, pay secrecy
gives managers same amount of freedom in compensation
management, since pay decisions are not disclosed and there
is no need to justify or defend them. Employees who do not
know how much others are getting have no objective vase for
pursuing complaints about their own pay. Secrecy also serves
to cover up inequities prevailing within the internal pay
structure. Again, secrecy surrounding compensation decisions
may lead employees to believe that tune is no direct
relationship between pay and performance. Pay secrecy,
however, is a difficult policy to maintain because most of the
(c)
pay-related information is now available on the web. Anyone

with access to the internet can easily find out what a position
is worth in the job market.
343
Check Your Progress
S
Notes
Fill in the blanks Activity
___________________
Discuss the extent of
1. Most traditional organizations-even today decide the managerial compensation
___________________
minimum and __________ values of each job
independently of individual workers.
E
___________________
2. In high tech firms R&D workers might be paid better ___________________

than their counterparts in the manufacturing division. ___________________
Managerial Compensation ___________________
UP
___________________
Organizations decide executive compensation packages, consisting
___________________
of basic pay, allowances, perquisites, stock options, etc., based on a
number of factors. The United States Compensation institutes’ ___________________
Phoenix plan uses 28 compensable factors: ___________________
Table 23.5: Phoenix Plan – Compensable Factors
z Job-related experience z Time spent in planning

z Training time required z Contact with suppliers
customers
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z Frequency of review of work z Impact on departmental
budget
z Utilizations of independent choice z Directing of others.
z Frequency of reference to guidelines z Training of staff physical
experienced stress
z Frequency of work transferred through z Time spent working under
supervisor deadlines
CC
z Analytical complexity z Time spent in hazardous

conditions
z Time spent in processing information
z Supervisors reporting to position
z Travel outside work location
z Salary grade to which this position reports
z Salary grade of positions supervised
z Management responsibility
z Revenue size
z Asset size
z Employment size
z Budget size
(c)
z Payroll size
The Hay Group, another specialized US Agency, uses three

compensable factors: accountability, problem-solving and know-
how. Sibson and company determines base compensation
depending on the market value of the job, its relationship to other
344 positions in the organization and the person’s value to the
S
Notes organization based on long-term performance and experience. The
___________________ Compensation Survey Report of Business International Asia –
Pacific Limited, Hong Kong considered the following factors to
___________________
determine the executive compensation: education, experience,
___________________
E
scope of activities, need to negotiate, type of problems handled,
___________________ decision making authority, influence on results, size of the unit
___________________ managed, number of people supervised, number of reporting steps
to the head of unit.
___________________
UP
___________________ 1. Organizations decide _________ compensation packages.
___________________ 2. The United States Compensation institutes’ Phoenix
plan uses __________compensable factors.
Indian Practices
E-
Executive compensation in India is basically built around three
important factors: job complexity, employers’ ability to pay and
executive human capital. The complexity of a chief executive’s job
would depend on the size of the company as measured by its sales
volume, earnings and assets’ growth, the geographic dispersal of
the unit, etc. The employer’s ability to pay is also a major factor to
be considered while deciding executive compensation. A sick bank,
CC
for instance, cannot afford to pay the same kind of salary to its
executives as that of a healthy and growing bank. This partly
explains why executive compensation in public sector undertakings
is less when compared to private sector units.
Box 23.5: Executive Compensation: Private

Sector vs Public Sector
In a well publicized front page news sometime bulk The Economic
Times mentioned about the miserable salary levels of top
executives in public sector units in India. For example the State
Bank of India chief is paid 10% of HDFC Bank Managing
Director, BHEL's chief getting about ` 10 to 12 lakhs per year as
(c)
against ABB's MD getting nearly ` 40 to 50 lakhs; Indian Oil

Corporation's chief getting ` 10 to 15 lakhs per annum as against
Reliance Industries' Ambanis getting a package of over ` 10 crore
per annum. Salary levels in 'hot' private sector such as BPO,
hospitality, biotechnology 'Media' IT, Telecommunications, Oil
Automobiles and Insurance are way above the packages offered to
executives in public sector for various seasons such as:
Contd…
overstaffing, inefficient processes, pressure on managers due to 345
S
competition, appointmentz of people without requisite skills at Notes
the top level, political interference especially in pricing the Activity
products or services, legal constraints etc. ___________________
Discuss recent trends in
The economic theory of human capital says that the compensation salary administration in India.
___________________
of a worker should be equal to his marginal productivity. The
productivity of an executive, like wise, depends on his
E
___________________
qualifications, job knowledge, experience and contribution. Indian
companies usually structured executive compensation along the ___________________
following factors: salary, bonus, commission, PF, family pension,
___________________
superannuation fund, medical reimbursement, leave travel
assistance, house rent allowance and other perquisites. In recent ___________________
UP
years, instead of increasing the base compensation, companies
have been enhancing the worth of an executive job through novel ___________________
payment plans based on earnings/assets or sales growth of the
___________________
company over a period of time, well-supported by an ever-
expanding list of allowances and perquisites including stock ___________________
options, educational, recreational, academic allowances and
several other developmental initiatives aimed at improving the ___________________
overall personality of an executive.
Check Your Progress

Fill in the blanks
E-
1. Executive compensation in India is basically built
around ____ important factors.
2. Three important factors are job complexity, employers’
ability to pay and _______________.
Summary
CC
Compensation administration intends to develop the lowest-cost

pay structure that will not only attract, inspire and motivate
capable employees but also be perceived as fair by these
employees.
Establishing pay rates involves five steps: evaluate jobs, conduct
salary survey, develop pay grades, use wage curves, and fine tune
pay rates.
They pay structure of a company depends on several factors such
as labour market conditions, company's paying capacity, legal
(c)
provisions, prevailing wage rats, demand and supply of labour,

degree of unionization etc.
The wage policy in India is built award certain cardinal principles:
(i) equal pay for equal work (ii) living wage for all workers so that
they lead a decent life (iii) payment of wages on appointed dates
346 without unauthorized deductions (iv) Resolving wage related
S
Notes issues through collective bargaining (v) payment of statutory forms
___________________ at 8.33 percent as per legal provisions (vi) ensuring a fair,
equitable wage plan for various employees without significant
___________________
wage differences etc.
___________________
E
While designing a compensation system, every company needs to
___________________
pay attention to: (i) internal as well as external equity (ii) fixed vs
___________________ variable pay (iii) payments based on performance or membership
___________________ (iv) Job-based pay or knowledge-based pay (v) payment as per
UP
market rates (vi) open vs secret pay etc.
___________________
___________________
Executive compensation in India is built around three important
factors: job complexity, employers' ability to pay and executive
___________________
competency levels.
___________________
Lesson End Activities

1. Infotech Enterprises Ltd. has 4000 employees and wishes to
develop a compensation policy in all its divisions [(i)
E-
Engineering design services, (ii) Geographical Information
Systems, and (iii) Software Development and Service] to
correspond to its dynamic business strategy. The company
wishes to employ a high quality workforce capable of
responding to a competitive business environment. Suggest
different compensation objectives to match Infotech's Business
goals.
CC
2. Ram won ` 50 lac Jackpot prize from an online lottery on

Saturday. Why, according to motivation theory, did he quit his
job on Monday?
a. Ram's ability to exert effort had changed
b. Ram's Individual needs changed
c. Ram's individual interests changed
d. Organizational goals changed.
Keywords
(c)
Compensation: It is what employees receive in exchange for their

contribution to the organization.
Wages: The amount paid by the employer for the services of
hourly, daily, weekly, fortnightly employees (ILO).
347
Incentives: Motivations devices used to encourage special work
S
Notes
effort such as bonuses or commissions.
___________________
Salaries: Remuneration paid to the clerical and management
personal employed on a monthly or yearly basis. However the ___________________
distinction between wages and salaries need not be observed in
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___________________
actual usage. Both may mean remuneration paid to an employee
___________________
for services rendered.
___________________
Earnings: Total amount of remuneration received by an employee
___________________
during a given period.
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___________________
Wage Rate: It is the amount of remuneration for a unit of time
excluding in centres overtime pay etc. ___________________
___________________
Wage Policy: Principles acting as guidelines for determining a
wage structure. ___________________
Wage Structure: Consists of various pay scales showing ranges of

pay within each grade.
Minimum Wage: Wage sufficient to sustain and preserve the
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efficiency of the worker and to provide him basic amenities.
Wage Curve: Curve in a scatter diagram representing the
relationship between relative worth of jobs and wage rates.
Pay Equity: An employee's perception that compensation received
is equal to the value of work performed.
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Pay Grades: Groups of jobs within a particular class that are paid
the same rate.
Compensation Administration: Deciding about how much an
employee should be paid observing internal as well as external
equity.
Salary Survey: A survey aimed at finding prevailing wage rates.
Compassable factors: Common job characteristics that an
organization is willing to pay for such as skill, effort, job
responsibility and working conditions.
Benchmark Job: A job that is used to anchor the employee's pay
(c)
scale and around which other jobs are arranged in order of relative
worth.
Comparable work: Equal pay for similar jobs, jobs similar in
skills, responsibility work effort etc; the concept that male and
348 female jobs that are dissimilar, but equal in terms of value or work
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Notes to the employer, should be paid the same.
___________________
Competency-based pay system: A pay system under which
___________________ employees are paid on the basis of the number of jobs they are
___________________ capable of doing, that is, on the basis of their skills or their depth
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of knowledge.
___________________
Broad banding: Competency-based pay system that collapses
___________________
many traditional salary grades (usually 10 to 20) into a few wide
___________________ salary bands (three to four).
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___________________
___________________ Questions for Discussion

___________________
1. What is pay structure? How is it designed?
___________________
2. What are the factors influencing wage structure?
3. Write notes on
(a) Need based wage
(b) Wage boards
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(c) Minimum wages act
4. Define and differentiate between living wage and minimum
wage.
5. Explain the various methods of fixing wages and salaries in
an organization.
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6. Write notes on:

(a) State regulations of wages
(b) Bonus
(c) Time wage plan vs Piece wage plan
7. How does effective compensation management help an
organization achieve its strategic objectives?
8. Critically examine the components of a compensation package
in organized industry in India.
9. What are the principal objectives of wage and salary
(c)
administration? What factors should be taken into account

while deciding executive compensation?
(a) Wage policy in India
(b) Executive compensation
349
(c) Wage differentials
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Notes
11. What are the pros and cons of broad banding, and would you
___________________
recommend your current employer (or some other firm you are
familiar with) use it? Why or Why not? ___________________
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12. What can companies do to ensure internal, external and ___________________
individual equity for all employees? ___________________
___________________
Further Readings
___________________
UP
Books ___________________
Compensation administration, David W. Belcher & Thomas J. ___________________
Atchison, 2nd edition, Prentice-Hall ___________________
Web Readings
http://www.referenceforbusiness.com/encyclopedia/Clo-
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Con/Compensation-Administration.html#b
http://www.sumtotalsystems.com/products/compensation-
management.html
http://www.ioma.com
www.acaonline.org
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(c)
(c)
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UP
ES
UNIT 24: HR Audit
Unit 24
351
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Notes
Activity
HR Audit
Define performance appraisal
___________________
___________________
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___________________
Objectives
___________________
topics: ___________________
\ Concept of HR audit ___________________
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\ Scope of HR Audit ___________________
\ Tools of HR Audit
___________________
\ Process and benefits of HR Audit
___________________
Introduction ___________________
Human resources have a central role in meeting the organization’s

strategic goals and objectives. Organizations are composed of
people, and HR is entrusted with the responsibility of managing
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human resources effectively so that the organization can gain and
sustain its competitive advantage in the global marketplace.
Understanding the organization’s business strategy has strong
implications for planning, staffing, compensation, industrial
relations and other HR activities. HR is effective only when it
contributes to the organization’s strategic goals.
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HR Audit is focused on improving the effectiveness of the HR

function. It provides an overview and evaluation of current HR
policies, systems and practices with an aim to recommend ways in
which they can be improved. Its value lies in providing feedback
both to the HR managers and the organization as to how well the
HR activities support the organization’s overall strategy and
usually encompasses focus on following aspects:
z Organization’s goals and objectives;
z Human resource management philosophy, policy and
practices;
(c)
z Determining human resource management priorities;

z Developing HR strategies;
z Day-to-day HR operations;
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z Identifying and implementing change(s); and
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Notes
Activity
___________________
z Evaluating impact of changes from HR audit.
Analyze the focusing areas of
HR audit
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___________________ 1. HR Audit is focused on improving the effectiveness of
___________________ the _________
___________________ 2. HR provides an overview and evaluation of current HR
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___________________ policies, systems and practices with an aim to _________.
___________________
Concept of HR Audit
___________________
___________________
Following details enlist the concept of HR audit
Definitions of HR Audit
A few noteworthy definitions of HR Audit as follows:
1. “HR Audit is an examination of the human resources policies,
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practices, and systems of a firm (or division) to eliminate
deficiencies and improve ways to achieve goals.”
(Schwind, Das and Wagar)
2. “HR Audit is a tool to (i) measure an employer’s compliance
with its legal obligations in managing its workforce and (ii)
chart any corrective actions that might be needed.”
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(Stephen F. Ruffino)
3. “HR Audit evaluates the HR activities in an organization with
a view to their effectiveness and efficiency.”
(Biles and Schuler)

4. “HR Audit is concerned with the gathering, analyzing
information, and then deciding what actions need to be taken
to improve performance.”
(Storey and Sisson)

(c)
The author defines HR Audit as:

HR Audit is a systematic procedure to evaluate the effectiveness of
various people oriented processes, policies, programmes and
practices for attaining organizational goals and objectives
successfully.
UNIT 24: HR Audit
353
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Objectives of HR Audit Notes
Activity
The main objectives are: ___________________
Search web reports on
z To provide feedback on the value of the contribution of the HR HR___________________
audit.
function to the organisation’s goals and objectives;
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___________________
z To assess the quality of HR policies, programmes and ___________________
practices;
___________________
z To report on extent of statutory HR compliance made and
___________________
remedial action required;
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___________________
z To assess HR and line management relationships and ways
___________________
these can be improved;
___________________
z To set guidelines for establishing HR performance standards;
___________________
z To identify areas for change and improvement with specific
recommendations;
z To review talent management system;
To ensure human resource development programmes and
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z
learning and communication initiatives;
z To institutionalize most appropriate rewards and recognition
systems; and
z To bring about increased financial security.
Check Your Progress

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Fill in the blanks

1. HR Audit __________ the HR activities in an
organization with a view to their effectiveness and
efficiency.
2. HR Audit is concerned with the ______________
Scope of HR Audit
The HR audit is a logical review of the workings of the HR
department. For the audit to be comprehensive, it must review all
(c)
the major areas, such as HR planning, job analysis, compensation

administration, recruitment, selection, socialization, training,
performance appraisals and industrial relations. The best way to
begin the HR audit is based on past audit reports, or based on
functions carried out by the department, the controls in place, and
354 the policies and procedures followed in each case. The HR audit
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Notes team will seek to identify:
___________________
z Who is responsible for each activity;
___________________
z Determine the objectives of each activity;
___________________
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z Review the policies and procedures used;
___________________
z Sample the available records to find if the policies and
___________________ procedures are being followed;
___________________ z Prepare an audit report commending proper objectives,
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___________________ policies and procedures;
___________________ z Develop an action plan to correct errors in objectives, policies

and procedures; and
___________________
z Follow up on the action plan at a later stage, to see if it solved
___________________
the problems found through the audit.
HR audit covers all HR activities and programmes in an
organization including the following critical areas:
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Human Resource Development Systems and Procedures
HR Audit evaluates the integrated use of training and
development, organisation development, and career development
to improve individual, team, and organisational effectiveness.
These three areas use development as their primary process. It
entails examination of the following sub-systems:
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z Training and Development: identifying, examining and

evaluating learning and developmental systems and
procedures employed by the organization to improve the key
competencies that enable individuals to perform current or
future jobs;
z Organisation Development: identifying, examining and
evaluating state of inter-unit and intra-unit relationships and
helping groups initiate and manage change; and
z Career Development: identifying, examining and evaluating
extent of alignment of individual career planning with
(c)
organisation career management processes in order to achieve

an optimal match of individual and organisational needs.
HR Strategy
HR Audit evaluates the HR strategy in view of the organizational
goals and objectives for alignment. An aligned HR strategy
UNIT 24: HR Audit
promotes the employees’ competence, confidence, and performance 355
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standards. These areas are closely related to the three primary HR Notes
areas. It entails examination of the following sub-systems: ___________________
z Organisation/Job Design: Defining how tasks, authority, ___________________
and systems will be organised and integrated across
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___________________
organisational units and in individual jobs;
___________________
z Human Resource Planning: Determining the organisation’s
___________________
major human resource needs, strategies and philosophies;
___________________
Performance Appraisal Systems: Emphasizing alignment of
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z
individual and organisation goals and what individuals do ___________________
everyday to support the organisational goals; and ___________________
z Selection and Staffing: Matching people and their career ___________________

needs and capabilities with jobs and career paths available. ___________________
HR Information System
HR Audit evaluates the human resource information systems to
examine and evaluate the performance indicators and metrices
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used to track HR costs and benefits. It entails examination of the
following sub-systems:
z Compensation and Benefits: Determining fairness and
consistency of compensation and benefits;
z Employee Assistance Programmes: Examining whether
personal problem solving and counselling is given to individual
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employees; and
z Industrial Relations: Determining the adequacy and quality
of relationship between union and management.
HR Research
HR Audit evaluates whether an HR research is undertaken to
generate information base in order to provide timely information to
management and whether HR functional performance indicators
are in place.
Managerial Compliance of HR Policies and Procedures

(c)
The focus of HR Audit on managerial compliance is to find out how

well the managers in other departments comply with HR policies
and procedures. The audit should preferably uncover instances
where managers have ignored or neglected policies and violated
laws. Compliance with laws is especially important, as the
356 government would hold the organization responsible. In ensuring
S
Notes compliance, the HR department improves its image, value and
___________________ contribution to the organization. Conversely, the HR department
will earn the respect of operating managers if it seeks their views
___________________
relating to HR needs in their respective areas. Acting on these
___________________
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discussions will increase its contribution to the organizational
___________________ objectives, while also being seen as being more responsive to
___________________ departmental needs.
___________________ Larger organizations perform HR Audits much in the same
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manner as financial audits, designating a team of experts who are
___________________
likely to have the requisite functional experience in one or more
___________________
specific areas.
___________________
Check Your Progress
___________________
Fill in the blanks
1. The focus of HR Audit on managerial compliance is to
find out ________________.
2. The audit should preferably ___________ instances
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where managers have ignored or neglected policies and
violated laws.
Methods of HR Audit
Common methods of HR Audit are:
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Comparative Method
In this method, another department or organization that has
better practices or results is chosen as the model. The HR audit
team audits and compares the audited organization’s results with
the best practices of the model organization. This approach is
commonly used to compare the results of specific activities or
programmes. This ‘best practices’ approach is often used with
respect to turnover, absence, compensation data and human
resource plans. It helps in detecting areas where improvement is
needed.
(c)
Outside Authority Method

In this method, standards set by a consultant or taken from
published research findings serve as the benchmark for the HR
UNIT 24: HR Audit
audit team. The consultant or research findings may help diagnose 357
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the cause of problems. Notes
Activity
___________________
Statistical Method Compare and Contrast
different HR audit methods.
___________________
This method relies on performance measures drawn from the
organization’s existing information system. From existing records,
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___________________
the HR audit team generates statistical standards against which ___________________
activities and programmes are evaluated. With the mathematical
___________________
standards as a base, the team may uncover errors while they are
still minor. For example, by tracking and managing turnover and ___________________
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absenteeism rates from one period to another, the team can ___________________
compare and analyze the data to see how well HR and operating ___________________
managers control these problem areas. Often, this method is
___________________
supplemented with comparative data from external sources, such
as other organizations, or industry association surveys. The ___________________
information is usually expressed in ratios or formulas that are easy
to compute and use.
Compliance Method
E-
This method reviews past practices, to determine if actions taken
follow legal requirements and organizational policies and
procedures. The HR audit team often examines a sample of
employment, compensation, discipline and employee appraisal
forms. By sampling elements of the human resources information
system, the HR audit team looks for deviations from laws and
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organizational policies and procedures. The team then determines

the degree of compliance achieved.
MBO Method
In management by objectives method, managers and specialists set
objectives in their area of responsibility. Then they create specific
goals against which this performance can be measured. The HR
audit team researches actual performance and compares it with
the previously set objectives. They evaluate the trends in this area.
In actual practice, HR audit teams commonly use several of the
above methods, depending on the specific activities under
(c)
consideration. Feedback is then given to the senior management,

the operating managers and the employees. Unfavourable feedback
leads to corrective action and improvement in the contribution of
the HR department.
358
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___________________ 1. In ____________ method, managers and specialists set
___________________ objectives in their area of responsibility.
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___________________ 2. __________ teams commonly use several of the above
methods, depending on the specific activities under
___________________
consideration.
___________________
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___________________
Tools of HR Audit
___________________
The HR audit team uses a combination of several information
___________________ gathering tools to collect data about the organization’s HR
___________________ activities. These tools include interviews, surveys, historical
analysis, external information, human resource experiments and
international audits. Each tool provides partial insights into the
organization’s activities. By using these tools skillfully, the HR
audit team can get an insight into the effectiveness of the
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organization’s HR activities.
Common tools of HR audit include:
Interview
Interviews of employees and managers often provide HR audit
teams with a powerful tool for collecting information about HR
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activities and identifying areas of improvement. Interviews can be

conducted on both sides to determine the reasons for problems like
turnover or absenteeism. Comments and criticisms from
interviewees can help pinpoint perceptions and causes that forms
the basis for corrective action. Suggestions by interviewees may
reveal ways of better dealing with the issues. Where criticisms are
valid, changes should be made. Where the HR department is
correct however, employees may have to be educated and trained
by explaining the reasons for the procedures in place that are a
cause for concern.
Exit interviews are conducted with departing employees to know
(c)
their views and experiences with the organization. Questions

asked along these lines are reviewed later to find out if there is a
major cause for turnover, absenteeism, dissatisfaction, etc. The HR
department must take an active interest in exit interviews as some
employees may be reluctant to criticize and speak their mind.
UNIT 24: HR Audit
Reasons must be studied to determine if trends exist among 359
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divisions, departments or managers. Notes
___________________
Surveys
___________________
The scope for taking interviews is however, time consuming and
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limited. Therefore, the HR audit team uses questionnaires to ___________________
broaden the scope of their research. Questionnaires may lead to ___________________

more candid answers than face-to-face interviews. Attitude survey
___________________
feedback can find answers to concerns. Trends revealed through
___________________
the questionnaires can then be addressed, in order of importance to
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those surveyed. ___________________
___________________
Historical Analysis
___________________
An analysis of historical records can also reveal important trends.
Compliance with laws and organizational policies and procedures ___________________
can also be determined as well as the success of action plans to

remove points of concern can be deliberated upon. Specific areas
that may be covered include employee safety and health,
grievances, compensation, affirmative action, and other HR
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programmes and policies. There may be a conflict between the law
and the organization’s practices. However, a proper study and
analysis is helpful to iron out these inconsistencies and meet the
organizational goals.
External Information
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External information can be helpful in giving the HR audit team a

perspective against which the organization’s activities can be
evaluated. Such information can be available from various public
and private agencies and government departments. Examples
include compensation surveys, employee turnover rates, workforce
projections, future employment opportunities, and accident rates
that can serve as benchmarks for comparison purposes. Workforce
demographics such as age, sex, education and racial composition
are useful in evaluation of affirmative action programmes. Some
information may also be provided from consultant studies and
research bureaus.
(c)
Human Resource Experiments

For evaluating new programmes and trends on which there is no
available data for comparison purposes, the HR audit team
conducts a field experiment. In using the field experiment, the HR
360 audit team compares an experimental group with a control group,
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Notes under realistic conditions. Such experimentation is usually
___________________ employed in researching absenteeism, turnover, compensation, job
satisfaction and safety activities. For example, in checking the
___________________
effectiveness of a job safety programme, the audit team may
___________________
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implement a safety-training programme to half the supervisors
___________________ (the experimental group). The other group (control group) contains
___________________ supervisors that have not been given this training. The accident
rates and safety records of both groups can be compared at a later
___________________
stage, some time after the safety programme has been concluded.
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___________________ If results reveal that the experimental group has a considerably
___________________ lower accident rate and better safety record, there is evidence that
___________________
the safety programme was effective. A cost benefit analysis will
also be conducted to compare the costs of the training programme
___________________
with the benefits to the workers and the organization. However,
the field experiment method can have some drawbacks. Managers
may be reluctant to experiment with employees because of morale
problems and potential dissatisfaction among those who were not
selected. On the other hand, employees involved in the experiment
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may feel manipulated. The experiment itself may be confounded by
changes in the work environment or simply by the two groups
talking to each other about the experiment.
International Audit
The HR audits of international organizations are more complex.
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Such complexity is due to differences in laws, languages, cultures,

traditional practices, and expectations. There is a tendency for the
HR audit team to use the standards and experiences from their
home countries as a benchmark against which the evaluation is
conducted. The HR auditors must make allowances for variations
in standards and laws followed in the host country. Discrimination
by sex, social status, caste, creed or religion may be allowed and
even encouraged in the lesser developed nations, as a matter of
national practice. This often will make it difficult for the HR
auditors to distinguish and identify areas of variation from
organizational practice that are not justified by the foreign context.
(c)
Variations should be noted however, so that the policymakers can

determine whether such differences may be allowed to continue.
Probing into the reasons of the variations can uncover either
appropriate justification or poor management practices. Unless the
necessities of business justify differences, the goal should be
UNIT 24: HR Audit
uniformity in policies, practices, and procedures throughout the 361
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organization. Such uniformity will facilitate ease of administration Notes
Activity
and re-assignment of personnel. It also makes research into intra- ___________________
Prepare a report on
organizational comparisons easier and more accurate. international audit.
___________________
Check Your Progress
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___________________
1. There is a tendency for the HR audit team to use the ___________________

________and ________from their home countries as a ___________________
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benchmark against which the evaluation is conducted.
___________________
2. The HR auditors must make __________ for variations in
___________________
standards and laws followed in the host country
___________________
Process of HR Audit ___________________
Conducting an HR Audit is often a challenging task given that

managers (i.e. auditees) are very sensitive about their ability to
manage their employees. This sensitivity results from insecurity,
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which is the result of organization’s faulty training and developing
programmes. In the absence of developmental inputs, managers
often over-exert themselves and arrive at formulating their own
rules through a hit and trial approach. Therefore, the skills of HR
auditors assume critical importance. Some of the critical skills
required for HR audit are:
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z Good communication and interpersonal skills, as HR Audit

involves lot of discussions, interactions, persuasions and
recording observations;
z Good planning and coordination skills, as HR Audit involves
planning audit work, setting objectives, activities to be studies,
benchmarks to be compared with and overall approach;
z Analytical skills as HR Audit involves critically evaluating
existing HR processes, systems, policies and practices and
comparing it with certain best practices or benchmarks for
identifying gaps;
(c)
z Good listening skills as HR Audit requires listening to

managers and employees’ viewpoints, opinions, expectations,
etc. on HR related issues; and
362
z Persuasive skills as HR Audit involves bringing the auditees
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Notes
and management closer through HR Audit recommendations
___________________
and suggestions.
___________________
The process of HR Audit involves the following steps:
___________________
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___________________
Data Collection
An HR Audit begins with evaluation of organization’s vision,
___________________
mission, strategy, core competence and values as available in
___________________
various records and documents. An overview of its industry, its
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___________________ regulatory framework, and the organization’s competitive position
___________________ and the environmental constraints under which it competes is
made for better understanding. The primary purpose is to identify
___________________
human resource interventions that will increase the organization’s
___________________ competitive advantage.
The next action involves collecting data, from records of HR
department, on recruitment, separation, turnover, compensation
and benefits, performance appraisal, exit interviews, grievance,
disciplinary actions, instances of strikes and lockouts, career and
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succession planning practices, budgets and expenditures on
various HR administrative activities.
Conducting Interviews
This step begins with an extensive interview of internal customers
of HR department, that is, all managers and employees of other
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departments to assess how HR department is able to meet their

needs and expectations. Usually, interviews focus on:
z Perception about the organization, its image and values;
z Perception about competence level of leadership;
z Perception about the top management’s attitude towards
employees in general;
z Major human resource issues and problems; and
z Perception about the quality and scope of services provided by
HR department, etc.
(c)
The interviews provide direct feedback on the human resource

needs of the organization.
UNIT 24: HR Audit
363
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Regulatory Compliance Notes
Since the organization’s HR policies, systems and processes are ___________________
governed by labour laws (e.g. labour laws relating to termination),
___________________
HR Audit also involves evaluating regulatory compliance status of
E
the organization in order to assess the risks and consequences ___________________
likely to arise due to statutory non–compliances. Often, regulatory ___________________

compliance involves assessment of the following records:
___________________
z Payment of minimum wages; ___________________
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z Availability of clearly written job descriptions that are ___________________
available to concerned employees;
___________________
z Payment of accident and other compensation;
___________________
z Grant of legal fringe benefits; and ___________________
z Timely and accurate submission of various returns and forms
as required under various labour laws.
Report Preparation
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This step involves compilation of all observation, records, data and
opinions and based on this, an analysis is carried out by the HR
auditors. It is also compared with best practices of other
comparable organizations to determine which practices are
effective and which practices need urgent attention for making
improvement. Recommendations are drawn out and appropriate
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suggestions are made for carrying out improvement initiatives.
Presentation of HR Audit Report to Top Management

The report of observations, recommendations and suggestions are
typed and bound for presentation to the top management for
suitable review and reflection. It is often succeeded by a formal
discussion between the CEO and key managers on one hand and
HR Audit team member/s on the other hand to formulate key
issues and strategies for improving effectiveness of HR processes,
policies, systems and practices.
Hence, an HR audit helps organizations by providing valuable
(c)
feedback of the current HR system in order to make continuous

correction and improvement for maximizing HR function’s
effectiveness and contribution towards organization’s goals and
objectives.
364
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Activity
___________________
Discuss in group the functions Fill in the blanks
of CEO?
___________________ 1. The __________ of observations, recommendations and
___________________ suggestions are typed and bound for presentation to the
E
top management for suitable review and reflection.
___________________
2. The report is often succeeded by a formal discussion
___________________
between the _______ and ______ managers on one hand
___________________
and _________ member/s on the other hand .
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___________________
___________________ Benefits of HR Audit

___________________ Major benefits are:
___________________
z Generation of inventory of skills, knowledge, methods,
processes and technologies used by an organization currently
or likely to be used in the foreseeable future;
z An assessment of current and potential developmental needs
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of managers and employees of the organization;
z Development of strategies for effective acquisition, retention
and utilization of human resources for higher productivity;
z Developing awareness of strategic options and re-evaluation of
operational objectives;
Changes in organization’s structural, cultural and strategic
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z
processes;
z A risk/control matrix, which can be very useful tool for top
management to retain a close touch with the major issues.
z Correcting benefit premium errors and overpayments can
generate many substantial monetary savings;
z Initiating a safety programme can reduce workers,
compensation experience modification numbers, reducing
annual premium costs by substantial amount;
z Examining the effectiveness of recruiting tools can pare the
(c)
expense of filling positions;

z Studying retention and turnover, employing a neutral party to
solicit honest feedback from employees, and allowing the
organisation to develop an action plan;
UNIT 24: HR Audit
365
z Examining the organization’s foundation for its compensation
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Notes
philosophies and develop an objective method of grading jobs, Activity
with new ranges that are market competitive and internally ___________________
Read books and magazines
and enlist HR audits
equitable; ___________________
conducted by different
companies.
z Creating or enhancing an employee referral programme or
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___________________
internal jobs board;
___________________
z Improving employee communication and ensuring that the HR ___________________
department is accessible; and
___________________
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z Identifying opportunities to outsource areas within human
___________________
resource management that can offer more value to the
organization. ___________________
___________________
Summary ___________________
HR provides an overview and evaluation of current HR policies,

systems and practices with an aim to recommend ways in which
they can be improved
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An HR Audit begins with evaluation of organization’s vision,
mission, strategy, core competence and values as available in
various records and documents. An overview of its industry, its
regulatory framework, and the organization’s competitive position
and the environmental constraints under which it competes is
made for better understanding. The primary purpose is to identify
CC
human resource interventions that will increase the organization’s

competitive advantage.
An HR audit helps organizations by providing valuable feedback of
the current HR system in order to make continuous correction and
improvement for maximizing HR function’s effectiveness and
contribution towards organization’s goals and objectives.
Lesson End Activity

Select any national or international scholarly and practitioner
journals that have articles addressing various aspects of “HR
(c)
Audit”. Select any one article on the subject and critically analyze
the following:
(a) Relevance/significance of the article;
(b) Quality of articulation of the theme by the author/s; and
366
(c) Summarize the article in about 50 words and present your
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Notes
judgment of strengths and weaknesses of the article based on
___________________
evidence from the article.
___________________
___________________ Keywords
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___________________ HR Audit: refers to the examination of the human resources
___________________ policies, practices, and systems of an organization to eliminate
___________________
deficiencies and improve ways to achieve goals. HR Audit is
undertaken with a view to improve those HR activities, uncover
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___________________
shortcomings and address the deficiencies.
___________________
Comparative Method: The HR audit team audits and compares
___________________ the audited organization’s results with the best practices of a
___________________ model organization.
Outside Authority Method: Standards set by a consultant or
taken from published research findings serve as the benchmark for
the HR audit team.
E-
Statistical Method: HR audit team generates statistical
standards against which activities and programmes are evaluated.
Compliance Method: HR audit team reviews past practices to
determine if actions taken follow legal requirements and
organizational policies and procedures.
MBO Method: Managers and specialists set objectives in their
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area of responsibility. Then they create specific goals against

which this performance can be measured. The HR audit team
researches actual performance and compares it with the previously
set objectives.
Interview Tool: Interviews of employees and managers provide
HR audit teams with a powerful tool for collecting information
about HR activities and identifying areas that need improvement.
Survey Tool: Questionnaires provide more candid answers than
face-to-face interviews.
Historical Analysis: Past compliance with laws and
(c)
organizational policies and procedures can also be determined as

well as the success of action plans to remove points of concern.
External Information Tool: External information such as wages
and salary surveys, employee turnover rates, workforce
projections, future employment opportunities can also be helpful in
UNIT 24: HR Audit
giving the HR audit team a perspective against which the 367
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organization’s activities can be judged. Notes
HR Experiment Tool: HR audit team compares an experimental ___________________

group with a control group, under realistic conditions. Such ___________________
experimentation is usually employed in researching absenteeism,
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___________________
turnover, compensation, job satisfaction and safety activities.
___________________
___________________
1. What do you understand by HR Audit?
UP
___________________
2. Why is it important for organizations to conduct HR Audit?
___________________
3. What are the methods of HR Audit?
___________________
4. Discuss the methods in detail with suitable examples.
___________________
5. Write short notes on: Objectives, Benefits and Scope of HR
Audit.
6. Discuss the process of HR Audit.
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7. Why is it that most of the Indian organizations do not conduct
any HR Audit?
8. “HR Audit is a reflection of HR philosophy, policy and practice
of management”. Critically evaluate the statement.
Further Readings
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Books
Web Readings
(c)
www.hraudit.com/-
www.strategichrinc.com/hr-audit.htm
www.deloitte.com/view/en_BG/bg/services/.../hr-audit/index.htm
wiki.answers.com/Q/What_is_HR_audit
(c)
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UP
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Unit 25
369
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Notes
Case Studies
___________________
___________________
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___________________
Objectives
___________________
___________________
UP
Case Study 1: Relocate or Perish ___________________
Rajeev was recently selected by a MNC to head their Marketing ___________________

function. This MNC has their units in multi locations in India and
in some other parts of the world. Rajeev has a track record of good ___________________
performance in his past jobs and about 15 years experience as
___________________
SBU head with exposure to Marketing, Operations, Corporate
Planning and HR. He is an engineer from IIT and MBA from IIM
with marketing as major and systems as minor specialisation. He
is in his mid forties and very dynamic and proactive with
consistent track of achievement. For any organization, Rajeev is a
prized possession. This MNC has to pay a whooping sum of three
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months pay to a head hunter to whisk away Rajeev from his past
organization. Rajeev has got 50% more than his past salary in the
MNC with other competitive perquisites befitting with the status.
During the first quarter itself Rajeev has showed outstanding
performance, achieving 50% more than the budgeted target.
To reposition them in the world market, this MNC, which is a
world leader in FMCG products, decided to restructure their
business. Their consultant suggested to relocate the corporate
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headquarters from New Delhi to Hong Kong. New Delhi office

would be converted to a country office to overview the India
operation. The Board decided to relocate Rajeev in Hong Kong.
Hong Kong by Indian standards is much more costly and
accommodation itself cost almost 50% of one's salary. The
company decided all the key employees (like Rajeev) at Hong
Kong Headquarter would be given a bachelor type single room
accommodation and other support staff would be put up in
dormitories. All will receive a substantial relocation allowance per
month to compensate the increased cost of living at Hong Kong
and would receive 15 days leave along with return air fare to their
place of residence. Only two Directors of the company would be
given family type accommodation, considering their age and long
association with the organization. The company is all set to shift
(c)
and identified the personnel (along with Rajeev) for relocation to

Hong Kong. A meeting was called to discuss this issue with all
those set to relocate at Hong Kong. The Chairman of the company
asked for the personnel details to HR Chief, who from well
maintained HRIS given the information in the format below:
Contd…
370
With the personnel data, Chairman foresees no problem, per se,
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Notes in relocating to Hong Kong, excepting for support staff as some of
them may ask for separation. As per the standing norms, if
___________________
employees ask for separation themselves, they get only their
___________________ normal entitlements, while in the reverse case, the company pays
to such employees in addition a lump sum of ` 5 lakh each for
___________________ support executives and staff members and ` 8 lakh to senior
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executives up to the level of Directors. The Chairman also
___________________
believes attrition of directors would not threaten the company
___________________ from any competency gap; as such requirements can be met from
local (Hong Kong) hiring on contractual terms. In Hong Kong
___________________ labour laws are much more relaxed and employment is
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contractual. The Chairman convened the meeting and announced
___________________
the names of those who are required to relocate to Hong Kong
___________________ within a month. For such decision, it is not the practice of the
company to reach to any consensus. If any one dissents, he or she
___________________ is free to leave.
___________________ Within next 10 days the company received following documents in
connection with the relocation:
1. Consent from all the Directors, excepting Rajeev.
2. A letter of resignation from Rajeev with a claim of
compensation of ` 10 lakh, alleging this decision is in
contravention with his terms of employment.
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3. A court order for 5 support executives stalling their
relocation to Hong Kong.
4. Letters of resignation, requesting for VRS benefits from 15
support executives.
Questions
1. What went wrong in this plan?
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2. What could have been done to make this plan successful?

3. Assuming you are the Chairman of the company, how will
you now manage the situation?
(c)
Case Study 2: Compensation Crises 371
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Notes
For the Umpteenth time that only day, Ajay Malhotra stared at
the bulky report on his table. And sighed deeply, much too deeply, ___________________
in fact, visibly startling his secretary who was sitting right: across
the table. Ever since the findings of Aman Consultants'' (Amam) ___________________
compensation benchmarking project had reached Malhotra, the
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___________________
45-year-old vice-president (human resources and organizational
development) of the ` 300 crore Cooks Industries (Cooks), he had ___________________
studied it ad nauseam. Invariably, the report generated
contradictory feelings each timer clarity, on the one hand, and ___________________
confusion on the other,
___________________
UP
A Pune-based automobile ancillary firm, Cooks produced key
engine parts—pistons, piston rings, engine valves, fuel pumps, ___________________
carburettors, and bi-metal bearings—for the majors in the
___________________
automobile industry. Set up in 1985, the company had been
promoted by two technocrats, Ram Prakash, 45, and Shantanu ___________________
Kamble, 44, Who had grown Cooks into a profitable entity that
had reported net profit of ` 35 crore in 1995-96 on sales of ` 275 ___________________
crore. Its success Was partly due to a clear delineation of
responsibilities between the two promoters, who had first met as
students at the Indian Institute of Technology at Kanpur. While
Prakash was the expert in metallurgy and mechanical
engineering operations, the cutting-edge was provided by Kamble,
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who had also done his masters in' business administration from
the Indian Institute of Management at Ahmedabad.
Five years ago, from the proceeds of a ` 30-crore public issue,
Cooks had undertaken a major upgradation of its technology,
modernizing its plant and machinery. And, at present, it
employed 450 workmen, who operated in three shifts, as well as
100 managers. In a market dominated by a number of regional
units, Cooks had become one of the few automobile ancillaries in
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the country with a national presence. Of course, the company had

been helped by the resurgence in the auto mobile market, which
had grown at the average rate of more than 25 per cent in the last
three years due to the entry of a large number of transnational,
leading to an upswing in the for tunes of the ancillaries too. In
fact, their growth, at about 33 per cent last year, had outpaced
that of the industry that had spawned them. The reason: in
addition to the Original Equipment Manufacturing segment, the
ancillaries also catered to the requirements of the replacement
market, which accounted for 60 percent of the demand far
automobile parts.
Two additional factors had placed the automobile ancillary
manufacturers on a sound footing. One, they were all driven by
owner-technocrats, who had once worked for automobile-making
(c)
firms and possessed high degrees of hands-on engineering skills.

Secondly, many of their customers had floated joint ventures with
foreign manufacturers with well-structured vendor development
policies. So, they too actively supported firms, like Cooks, with
finance and technology, inviting them to tie up with their global
vendors. No wonder the subject of our case study had been riding
Contd…
372 the crest of a wave of commercial success over the last three
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Notes years.
But every lining had its clouds. In 1996, Cooks' employee turnover
___________________
rate crossed 15 per cent-shooting up from between 2 per cent and
___________________ 3 per cent in the early 1990s. In particular, the expertise required
to manage the production function was becoming rare. Most
___________________ engineers were chucking their jobs up to seek greener pastures
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abroad, particularly in West Asia and Australia. Many were also
___________________
setting up their own units within the country. Both Prakash and
___________________ Kamble were concerned at what they initially thought was a blip,
but had become a trend. More than 30 frontline engineers had left
___________________ Cooks since mid-1995, and even the service functions-like finance-
UP
had had their share of departures.
___________________
That's when Malhotra - who, after an earlier stint as the head of
___________________ personnel for a Pharmaceuticals transnational, had joined Cooks
as general manager (human resources) five years ago - came into
___________________
the picture. When Prakash asked him to examine the issues
___________________ involved, Malhotra had been quick to point out that one of the
reasons for Cooks' high employee turnover was low managerial
compensation. "The grade structure at Cooks, as it has evolved
over the years, is archaic and needs to be improved," he argued
Prakash agreed: "If we have been out of touch with the trends in
managerial compensation, let us set the situation right."
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Which is why Malhotra quickly commissioned Amam to
undertake a salary bench marking study for Cooks in November,
1996. In all, the survey covered 32 firms: 11 from the auto mobile
ancillary sector, six from automobiles, four each from consumer
products and infotech, two from Pharmaceuticals, three from
financial services, and the other two were multi-product
companies in the engineering sector. Of these firms, nine were
transnational, four were family-managed, and the remaining 19
were public limited companies in the private sector. Amam's
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survey provided extensive data-no less than 600 pages-on

compensation trends and salary structures across various levels
of the corporate hierarchy in all these firms. And the analysis
had, of course, been carried out both level-wise and industry-wise.
Moreover, at each stage, there were comparisons high lighting
Cook' ranking vis-a-vis the other companies on parameters like
total employee cost to company, variable pay, and basic salary.
Apart from competitive benchmarking-comparisons with its direct
competitors in the same industry-Malhotra had specifically asked,
for generic benchmarking, or comparisons with similar players in
other industries. After all, Cooks had lost technical talent to the
heavy engineering sector too. And there had also been instances
in the past where Malhotra had tried to recruit professionals for
the service functions, but had been unable, to attract any talent
(c)
The reason: Cooks' inability to offer salaries at par with what they
were already earning in these sectors. As he flipped the pages of
the report, Malhotra tried to cull the highlights from the plethora
of information in front of him.
Based on the total cost to company, the Amam Report placed
Cooks at No. 29 at the lowest level of Grade 10, -and 23rd at the
highest level of Grade 1. The basic issue was that Malhotra
Contd…
needed to upgrade the pay packages that Cooks offered its 373
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managers at every level of its hierarchy. But this was the easy Notes
part as the report was quite insightful at this level. It pointed out,
in unambiguous terms, where Cooks stood on each element of ___________________
managerial compensation in relation to its contemporaries. This
data had enabled Malhotra to understand, for the first time, ___________________
Cooks' position both in terms of competitive as well as generic
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___________________
benchmarking.
But, at another level, Malhotra was clueless since he could not ___________________
find a handle to start formulating an action plan. The more he
___________________
analyzed the report for directions on his future course of action,
the more complicated the issues seemed to be. Even as he ___________________
UP
grappled for a common point of reference, he felt that the survey
Confronted him with five fundamental dilemmas: ___________________
Designations: There were also some hard decisions to be taken ___________________

regarding designations, which had always been a tricky issue at
Cooks. Malhotra recalled how, six months ago, he had tried ___________________
recruiting a manufacturing head for a product group at the Pune
___________________
plant. After an extensive head-hunting exercise spanning six
months, Cools had found the right candidate for the job: Anjan
Kumar Saxena. Employed with a heavy engineering firm in
Mumbai, Saxena was willing to make the move to Pune on a
marginal increase in salary because the city happened to be his
hometown. The only snag: he had already teen designated general
E-
manager by the organization he worked for. Ideally, Cooks would
only offer him the designation of deputy general manager in
Grade 2 which, of course, was quite unacceptable to him.
Rather than lose a good man, Malhotra had taken an on the-spot
decision to by-pass company policy and offer Saxena the
designation of general manager. While this had clinched the deal,
it had also resulted in upsetting all of Cooks' other general
managers. Such instances were fairly frequent in the company,
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and Malhotra knew that he had to do something about bringing

Cooks' designations in line with those in the industry. However,
the very thought of doing so was quite distasteful to him.
Because, together with Prakash and Kamble, Malhotra firmly
believed that a designation must strictly represent the nature of a
job. He was wary of those who viewed designation as a matter of
status. While the Amam Report showed that the rest of the
corporate world was liberal in designating any functional head as
a vice-president, Malhotra thought that Cooks' conservative
approach was bound to make it unattractive to potential
prospects.
Hierarchies: The Amam Report also revealed that Cooks had far
too many hierarchy levels, A 10-grade structure was unnecessary
as the survey showed that the industry norm had become four or
(c)
five levels. For the last one year or so, Malhotra had been toying
with the idea of cutting down the levels to a lesser number.
However, he was only too aware of the fact that this would create
frustration and disgruntlement in managers as a flat structure
would, obviously, reduce their opportunities for quick promotions.
Malhotra recalled a number of companies-particularly Darshan
India, a consumer products company based in Mumbai which had
Contd…
374 squashed its hierarchies five years ago, and had to then cope with
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Notes a managerial exodus of scary proportions-which were facing
problems in retaining key managers for want of growth avenues
___________________ within the organization. Privately, Malhotra did not agree with
the concept of a flat organization.
___________________
However, trends indicated that there was a move to reduce
___________________ organizational levels to five or six-the average level bench marked
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by the survey. Shouldn't Cooks too fail in line by reducing its
___________________
hierarchical levels?
___________________ Salaries: Whenever there was a need to recruit technical people,
Cooks had, traditionally, looked within the engineering industry.
___________________
Of course, this was not so in the case of non-technical personnel—
UP
___________________ maintenance, finance, and human resources—for whom there
were no barriers, for mobility across industries. And this was one
___________________ of the reasons why Malhotra had designed the survey to cover a
representative sample of sectors rather than sticking to the
___________________
engineering industry alone.
___________________ But this had generated another set of issues in terms of the
internal parity of salaries. For instance, in a number of companies
covered by the survey, professionals in staff functions received
higher gross salaries than the technocrats who were, after all, the
lifeline of an engineering business. Malhotra did not miss out the
unstated point of the survey: every technocrat worth his salt
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viewed miss as unfair. Wasn't there a way of creating internal
parity between the various functions within Cooks' organizational
structure?
Taxation Policies: Cooks' salary structure incorporated a high
level of cash reimbursements, paying out cash against the
vouchers submitted by its employees under heads such as
conveyance, education, and periodical Employees found that
attractive, and it was also a well-accepted practice in corporate
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India. However, the Amam Report showed that there was a

discernible trend towards a lesser proportion of salaries being
paid as cash reimbursements.
Increasingly, it was becoming common for companies-particularly
transnationals-to resort to a consolidated salary rather than
breaking it up into various kinds of allowances. And the tax-
burden would then be borne by individual employees themselves.
However, how would Cooks' employees react to a lower level of
cash reimbursement-and a higher incidence of taxation even
though income tax rates were falling?
Leader-follower: Since the Amam Report indicated that the
salaries at Cooks ranked 29th at the lowest levels, and 23rd at the
highest, there was no doubt that Cooks had to undertake a
complete and radical upgradation of managerial remuneration.
(c)
Which raised a new question: should Cooks turn into a leader in

the remuneration game and offer the highest packages in the
industry? Or should it stay a follower?
Of course, the answer was linked to the capacity to pay-another
issue that merited scrutiny by its top managers. No doubt, Cooks
had been generating attractive margins, and would, hope-fully,
continue to do so in future. Being a leader in the market for its
Contd…
products, it did make sense for Cooks to project the image of a 375
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premium pay master in the employment market as well. But Notes
Malhotra was not sure where Cooks should position itself at the
top. ___________________
Questions ___________________
1. Should cooks offer the highest pay packages in the industry
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and create a high wage island so that people would find it ___________________
difficult to leave the company? ___________________
2. Or, should be continue to Peg Cooks' salary structure as
___________________
slightly below average, attracting and retaining people on the
basis of the excellent business processes that the company ___________________
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has already known?
___________________
___________________
___________________
___________________
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(c)
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Case Study 3: Policies and Performance Appraisal
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Notes
Kalyani Electronics Corporation Ltd. recently diversified its
___________________ activities and started producing computers. It employed personnel
at the lower level and middle level. It has received several
___________________
applications for the post of Commercial Manager – Computer
___________________ Division. It could not decide upon the suitability of the candidate
E
to the position, but did find that Mr Prakash is more qualified for
___________________ the position than other candidates. The Corporation has created a
new post below the cadre of General Manager i.e., Joint General
___________________ Manager and asked Mr Prakash to join the Corporation as Joint
___________________ General Manager. Mr Prakash agreed to it viewing that he will be
considered for General Manager’s position based on his
UP
___________________ performance. Mr Anand, the Deputy General Manager of the
Corporation and one of the candidates for General Manager’s
___________________ position was annoyed with the management’s practice. But, he
wanted to show his performance record to the management at the
___________________
next appraisal meeting. The management of the Corporation
___________________ asked Mr Sastry, General Manager of Televisions Division to be
the General Manager in-charge of Computer Division for some
time, until a new General Manager is appointed. Mr Sastry
wanted to switch over to Computer Division in view of the
prospects, prestige and recognition of the position among the top
management of the Corporation. He viewed this assignment as a
chance to prove his performance.
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The Corporation has the system of appraisal of the superior’s
performance by the subordinates. The performance of the Deputy
General Manager, Joint General Manager and General Manager
has to be appraised by the same group of the subordinates. Mr
Anand and Mr Sastry know very well about the system and its
operation, whereas Mr Prakash is a stranger to the system as
well as its modus operandi. Mr Sastry and Mr Anand were
competing with each other in convincing their subordinates about
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their performance and used all sorts of techniques for pleasing

them like promising them a wage hike, transfers to the job of
their interest, promotion etc. However these two officers
functioned in collaboration with a view to pull down Mr Prakash.
They openly told their subordinates that a stranger should not
occupy the ‘chair’. They created several groups among employees
like pro-Anand’s group, pro-Sastry’s group, Anti-Prakash and
Sastry group, Anti-Anand and Prakash group.
Mr Prakash has been watching the proceedings calmly and
keeping the top management in touch with all these
developments. However, Mr Prakash has been quite work-
conscious and top management found his performance under such
a political atmosphere to be satisfactory. Prakash’s pleasing
manners and way of maintaining human relations with different
(c)
levels of employees did, however, prevent the emergence of an

anti-Prakash wave in the company. But in view of the political
atmosphere within the company, there is no strong pro-Prakash’s
group either.
Contd…
377
Management administered the performance appraisal technique
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and the subordinates appraised the performance of all these three Notes
managers. In the end, surprisingly, the workers assigned the
following overall scores. Prakash: 560 points, Sastry: 420 points; ___________________
and Anand: 260 points. ___________________
Questions
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___________________
1. How do you evaluate the worker’s appraisal in this case?
___________________
2. Do you suggest any techniques to avert politics creeping into
the process of performance appraisal by subordinates? Or do ___________________
you suggest the measure of dispensing with such appraisal
systems? ___________________
UP
___________________
___________________
___________________
___________________
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(c)
(c)
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UP
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Glossary
Glossary
379
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Notes
___________________
Apprenticeship: A training method that puts trainees under the ___________________

guidance of a master worker, typically for 2-5 years.
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___________________
Assessment Centre: It is a standardized form of employee appraisal that ___________________
uses multiple assessment exercises such as 'in basket', games, role play,
___________________
etc., and multiple raters.
Benchmark Job: A job that is used to anchor the employee's pay scale ___________________
UP
and around which other jobs are arranged in order of relative worth. ___________________
Broad banding: Competency-based pay system that collapses many ___________________
traditional salary grades (usually 10 to 20) into a few wide salary bands
___________________
(three to four).
___________________
Campus Recruiting: Visiting specific-skill institutes to hire graduates.
Career Anchors: It is a syndrome of talents, motives and values which
gives stability and direction to a person's career.
Career Counselling: It provides guidance to the employees on

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occupational training, education and career goals.
Career Development: The process of increasing an employees' potential

for advancement and career change.
Career Paths: Logical mapping out of jobs, which represent a potential

progression tract that an employee may follow over time.
Career planning and development: It is the planning of one’s career

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and implementation of career plans by means of education, training, job

search and acquisition of work experiences.
Career Planning Process: It evaluates one's abilities and interests,

considering alternatives career opportunities, establishing career goals
and planning practical development activities.
Career Planning: The process of integrating the employee's needs and

aspirations with organizational needs.
Career: It is a sequence of attitudes and behaviours associated with the

series of job and work related activities over a person's life time.
Case: An in-depth description of a particular situation an employee might

(c)
encounter on the job.

Comparable work: Equal pay for similar jobs, jobs similar in skills,
responsibility work effort etc; the concept that male and female jobs that
are dissimilar, but equal in terms of value or work to the employer,
should be paid the same.
380
Comparative Method: The HR audit team audits and compares the
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Notes
audited organization’s results with the best practices of a model
___________________ organization.
___________________ Compassable factors: Common job characteristics that an organization
is willing to pay for such as skill, effort, job responsibility and working
___________________
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conditions.
___________________
Compensation Administration: Deciding about how much an employee
___________________ should be paid observing internal as well as external equity.
___________________ Compensation: It is what employees receive in exchange for their
UP
___________________ contribution to the organization.
___________________ Competency-based pay system: A pay system under which employees

are paid on the basis of the number of jobs they are capable of doing, that
___________________
is, on the basis of their skills or their depth of knowledge.
___________________
Compliance Method: HR audit team reviews past practices to
determine if actions taken follow legal requirements and organizational
policies and procedures.
Controlling: Controlling function of personnel management comprises

measuring the employee’s performance, correcting negative deviations
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and industrial assuring an efficient accomplishment of plans
Development: Broadening an individual's knowledge, skills and abilities

for future responsibilities.
Development: It is the process of improving, moulding, changing and
developing the skills, knowledge, creative ability, aptitude, attitude,
values and commitment based on present and future requirements both
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at the individual’s and organisation’s level.
Directing: This involves supervising and guiding the personnel.
Earnings: Total amount of remuneration received by an employee during

a given period.
Effective: Producing the right goods and services society deems

appropriate.
Efficient: Using the minimum amount of resources needed to produce

goods and service.
Employee Empowerment: An extension of employee participation vis-à-

vis involvement.
(c)
Employee Referral: A recommendation from a current employee

regarding a job applicant.
Employee Welfare: The efforts to make life worth living for workmen.
Glossary
381
Ergonomics: It is a discipline at the service of management from the
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very planning and design stage of a work system. Notes
Executive development: It is a systematic process of developing ___________________
managerial skills and capabilities through appropriate programmes. ___________________
External Information Tool: External information such as wages and
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___________________
salary surveys, employee turnover rates, workforce projections, future
___________________
employment opportunities can also be helpful in giving the HR audit
team a perspective against which the organization’s activities can be ___________________
judged.
___________________
UP
Historical Analysis: Past compliance with laws and organizational
___________________
policies and procedures can also be determined as well as the success of
action plans to remove points of concern. ___________________
___________________
Horizontal Transfer: It is the movement within the same job-family.
HR Audit: refers to the examination of the human resources policies, ___________________
practices, and systems of an organization to eliminate deficiencies and
improve ways to achieve goals. HR Audit is undertaken with a view to
improve those HR activities, uncover shortcomings and address the
deficiencies.
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HR Experiment Tool: HR audit team compares an experimental group
with a control group, under realistic conditions. Such experimentation is
usually employed in researching absenteeism, turnover, compensation,
job satisfaction and safety activities.
HR planning: Process of identifying human resource needs and

formulating plans to meet these needs.
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HR Programme: The entire broad course of action governing employees

at all levels in a firm.
HRD: A planned way of developing individual employees, groups and the

total organization to achieve organizational goals, in an atmosphere of
mutual trust and cooperation.
HRM: A process of bringing people and organizations together so that the

goals of each one are met, effectively and efficiently.
Human resource planning: The process of getting the right number of

qualified people into the right job at the right time, so that an
organization can meet its objectives.
(c)
Human resources planning: It is a process of determining and

assuring that the organisation will have an adequate number of qualified
persons, available at proper times, performing jobs which would meet
their needs and provide satisfaction for the individuals involved.
Incentives: Motivations devices used to encourage special work effort

such as bonuses or commissions.
382
Inducements: Positive features and benefits offered by an organization
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Notes
to attract job applicants.
___________________
Induction and orientation: Induction and orientation are techniques
___________________ by which a new employee is rehabilitated in his new surroundings and
introduced to the practices, policies, and people.
___________________
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___________________
Induction: Introduction of a person to the job and the organization.
___________________ Internal Advertising: Informing employees of vacancies internally.
___________________ Internal Mobility: The movement of employees from one job to another
through transfers and promotions is called internal mobility.
UP
___________________
Interview Tool: Interviews of employees and managers provide HR audit
___________________ teams with a powerful tool for collecting information about HR activities
___________________ and identifying areas that need improvement.
___________________ Interview: It is the oral examination of candidates for employment.

Job analysis: A systematic exploration of the activities surrounding -
and within- a job.
Job analysis: It is the process of collecting information relating to the

operations and responsibilities pertaining to a specific job.
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Job analysis: The process of gathering information about a job.
Job classification: The grouping of jobs on some basis such as the

nature of work done or the level of pay. For example, skilled, semi skilled
and unskilled; Grade I, II and III officers in a bank.
Job Code: It uses numbers, letters or both to provide a quick summary of

CC
a job and its content.


Job description: It is recording of duties, responsibilities and conditions
needed for satisfactory performance of a particular job.
Job Enlargement: It is horizontal regrouping of tasks and implies mere

addition of more functions and increase in the task variety.
Job Enrichment: The restructuring of a job to make it more interesting

(c)
and simulating.
Job rotation: It is movement of the employees from one job to another to

break monotony and to enable the employees to understand the total
organization system.
Glossary
383
Job Rotation: Systematic movement and deliberate reassignment of
S
managerial personnel, carefully selected by a top management committee Notes
into a series of positions. ___________________
Job specification: A profile of the human characteristics (knowledge, ___________________

skills and abilities) needed by a person doing a job.
E
___________________
Job Specifications: Translate job descriptions into human
___________________
qualifications, required for successful performance of a job.
___________________
technical assistants, computer programmers, etc. ___________________
UP
Job: A group of positions similar in their significant duties such as ___________________
___________________
Labour economics: It studies the demand and supply for the important
___________________
factor of production, i.e., human beings.
___________________
Labour turnover index: It indicates the number of leavers
Labour turnover index: It indicates the number of leavers as

percentage to the average number of employees.
Lateral Transfer: It is the vertical movement of employees and denotes

E-
significant Change in the work content.
MBO Method: Managers and specialists set objectives in their area of
responsibility. Then they create specific goals against which this
performance can be measured. The HR audit team researches actual
performance and compares it with the previously set objectives.
Merit: It is defined as efficiency and capacity of an individual judged in

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the light of his past performance.
Minimum Wage: Wage sufficient to sustain and preserve the efficiency

of the worker and to provide him basic amenities.
Motion economy: It is the process of minimizing the physical and

perceptual loads imposed on people engaged in any type of work; whether
it is in the office, the shop-floor, the kitchen or at the driving wheel.
Objectives: These are the specific goals or aims, preferably in

quantitative terms and can be considered as something which an
individual or group seeks to accomplish.
Obsolescence: A condition that results when an employee loses the

(c)
knowledge or abilities to perform successfully due to changes in the field.
On the Job Training: Any training technique that involves allowing the
person to learn the job by actually performing it on the job.
384
Organising: This function is primarily concerned with proper grouping
S
Notes
of personnel activities, assigning of different groups of activities to
___________________ different individuals and delegation of authority.
___________________ Organizational Development: Strategy or an effort, which is planned
and managed from top, to bring about planned organizational changes for
___________________
E
increasing organizational effectiveness through planned interventions
___________________ based on social philosophy.
___________________ Outside Authority Method: Standards set by a consultant or taken from
___________________ published research findings serve as the benchmark for the HR audit
UP
team.
___________________
Pay Equity: An employee's perception that compensation received is
___________________
equal to the value of work performed.
___________________
Pay Grades: Groups of jobs within a particular class that are paid the
___________________ same rate.
Placement: Actual posting of an employee to a specific job - with rank

and responsibilities attached to it.
Placement: It is the process that ensures a 360º fit, matching the
employee’s qualifications, experience, skills and interest with the job on
E-
offer. It is the personnel manager’s responsibility to position the right
candidate at the right level.
Planning: This function deals with the determination of the future

course of action to achieve desired results.
Policy: It is a pre determined established guideline towards the

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attainment of accepted goals and objectives.

Procurement It is concerned with procuring and employing people who
possess necessary skill, knowledge and aptitude.
Promotion: It is reward for efficiency. It is conferment of additional

benefits, usually in the form of higher pay, for an increase in
responsibility or skill which is formalized by an increase in status or
rank.
Recruitment: It is the process of searching for prospective employees
and stimulating them to apply for jobs in the organisation.
Recruitment: The discovering of potential applicants for actual or

anticipated organizational vacancies.
(c)
Recruitment: The process of finding and attracting capable applicants

for employment.
Rhythm: It is the regular repetition of a movement pattern.
Salaries: Remuneration paid to the clerical and management personal

employed on a monthly or yearly basis. However the distinction between
Glossary
wages and salaries need not be observed in actual usage. Both may mean 385
S
remuneration paid to an employee for services rendered. Notes
Salary Survey: A survey aimed at finding prevailing wage rates. ___________________
Selection: It is the process of ascertaining qualifications, experience, ___________________

skill and knowledge of an applicant with a view to appraising his/her
E
___________________
suitability to the job in question.
___________________
Selection: The process of matching the qualifications of applicants with
job needs and choosing the most suitable one. ___________________
Selection: The process of picking individuals who have relevant ___________________
UP
qualifications to fill jobs in an organization. ___________________
Seniority: It refers to the relative length of service of employees. ___________________
Simulation: Any artificial environment that tries to closely mirror an ___________________

actual condition. These include case studies, decision games, role plays
___________________
etc.
Statistical Method: HR audit team generates statistical standards
against which activities and programmes are evaluated.
Stereotyping: Attributing characteristics to individuals based on their

E-
inclusion or membership in a particular group.
Succession Planning: It involves identification of likely vacancies for
higher level executives and locating likely successors to man such
vacancies.
Survey Tool: Questionnaires provide more candid answers than face-to-

face interviews.
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Training: A learning process designed to achieve a relatively permanent

change in an individual that will improve the ability to perform on the
job.
Training: A planned programme designed to improve performance and

bring about measurable changes in skills, attitude and social behaviour of
employees.
Training: Training is a continuous process by which employees learn
skills, knowledge, abilities and attitudes to further organisational and
personnel goals.
Transfer: It is the lateral movement of employees from one position,

(c)
division, department or unit to another.
Vestibule Training: A training method involving the creation of

training facilities separate from the regular production area but with the
same equipment.
386
Wage Curve: Curve in a scatter diagram representing the relationship
S
Notes
between relative worth of jobs and wage rates.
___________________
Wage Policy: Principles acting as guidelines for determining a wage
___________________ structure.
___________________ Wage Rate: It is the amount of remuneration for a unit of time excluding
E
___________________
in centres overtime pay etc.
___________________
Wage Structure: Consists of various pay scales showing ranges of pay
within each grade.
___________________
Wages: The amount paid by the employer for the services of hourly, daily,
UP
___________________ weekly, fortnightly employees (ILO).
___________________
___________________
___________________
E-
CC
(c)

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UNIT 20: Case Study

Dr S R Das Dr Sanjay Mittal Prof V K Nangia

SLM Development Team

Mr Kapil Mehra Mr A N Sinha

Manager – Material Sr Manager – Printing

Course Code: MBCH-732D

Course Name: Human Resource Management

Version: July 2013

© MPower Applied Learning Enterprise

Unit 1 Introduction to HRM and HRD...................................................................................... 3

Unit 6 Job Design..................................................................................................................... 77

Unit 11 Recruitment ................................................................................................................ 169

Unit 16 Succession Planning and Organizational Development ........................................... 239

Unit 17 Management Development ........................................................................................ 245

Unit 22 Transfer....................................................................................................................... 309

Unit 23 Compensation Administration................................................................................... 319

Unit 25 Case Studies................................................................................................................ 369

Glossary ............................................................................................................................................ 379

z Factors that Developed HRM

Introduction to HRM and HRD

\ The factors responsible for development of HRM ___________________

downsizing or rightsizing of manpower, organizational

issues are globally relevant, although their magnitude may differ

___________________ History of HRM

beginning of Human Resource Management for selection, training

Reviewing the history, it is observed that great thrust had been

characterized by slavery, serfdom and the guild system. ___________________

2. Slavery was based on ___________incentive system and ___________________

Factors which are responsible for development of this profession in

International Trade), virtually reduces the profit to the level of

service industries, it is estimated only 50% of the potential is

settle their grievances. The Factories Act, 1948, statutorily made it

Personnel Administration, Human Resource Development (HRD), 7

z Determining and staffing for employment needs,

z Measuring performance and developing employee potential, ___________________

z Preserving effective employee-management relationships, ___________________

z Uncovering and resolving employee problems, ___________________

Human Resource Development

small groups and setting up of National Training Laboratories laid

8 effectively identified problems, acquired the skills and also actively

2. Training and Organization Development has become a

Factors that Developed HRM

Welfare and Personnel Management. These factors are:

Changes in Workforce and the Nature of Work

traditional Personnel Management, which is restricted to

Management, U.K. i.e., employee relations, employee

customers (TQM concepts) and others who are having a variety of 11

Check Your Progress

is concerned with the recruitment, selection, placement,

organization to improve their functional capabilities for their

Even in cases, where an employee may be performing very well,

resources to improve his human resources. However, in most of the

conducted through in-house programmes or by retaining 13

The evaluation of training is done in direct relation to the job. At ___________________

Research, which are relevant to organizational needs. Employees

For example, some organizations with their in-house talents run

14 Business School, International Institute of Management Science,

virtue of experience and educational background) than people at

are considered as new areas of development.

HRD efforts should be in congruence with OD investments. ___________________

1. To develop capabilities of all individuals working in an ___________________

organization in relation to their present role. ___________________

2. To develop capabilities of all such individuals in relation to

2. Slavery was based on _incentive system and _________

To introduce and sustain an objective system of

2. The Goal of HRD is to prevent at all levels. _______