HUMAN RESOURCE MANAGEMENT UNIT I HRM- meaning, nature, scope and objective Functions of Personnel department the role

ole of Personnel manager - Organization of Personnel department - personnel Policies and procedures. UNIT II Manpower Planning -Job description - Job analysis Job specification recruitment and Selection -Training and development. UNIT III Performance appraisal - Job evaluation and merit rating - promotion Transfer and demotion human relations approaches to good human relation - Punishment. UNIT IV Wages and salary administration Incentive system Labour welfare and social security safety, health and security retirement benefits to employees. UNIT V Industrial relation - Trade unionism Grievance handling collective bargaining and workers participation. Reference Books:1. Tripathy - Personnel Management and Industrial Relations. 2. Bhagoiwal - Personnel Management and Industrial Relations. 3. Memoria - Personnel Management and Industrial Relations.

UNIT -I What Is Human Resource Management? Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. Human Resource Management can also be performed by line managers. Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training. DEFINITION:

1. The personnel function is concerned with the procurement, development,

compensation, integration, and maintenance of organization for the purpose of contributing towards that organizations major goals or objectives. management is the planning, organizing, directing, performance of those operative functions. the personnel of an the accomplishment of Therefore, personnel and controlling of the

--- Edwin B. Flippo, Principles of Personnel Management. 2. Personnel management is that part of management process which is primarily concerned with the human constituents of an organization. --- E.F.L. Brech(ed), Principles and Practice of Management. 3.Personnel management is that part of the management function which is primarily concerned with human relationships within an organization. Its objective is the maintenance of those relationships on a basis which, by consideration of the well-being of the individual, enables all those engaged in the undertaking to make their maximum personal contribution in the effective working on the undertaking. --- Indian Institute of Personnel Management, Calcutta. Human Resource Management: Nature Human Resource Management is a process of bringing people and organizations together so that the goals of each are met. The various features of HRM include: It is pervasive in nature as it is present in all enterprises. Its focus is on results rather than on rules. It tries to help employees develop their potential fully.

It encourages employees to give their best to the organization. It is all about people at work, both as individuals and groups. It tries to put people on assigned jobs in order to produce good results. It helps an organization meet its goals in the future by providing for competent and well-motivated employees. It tries to build and maintain cordial relations between people working at various levels in the organization. It is a multidisciplinary activity, utilizing knowledge and inputs drawn from psychology, economics, etc. Human Resource Management: Scope The scope of HRM is very wide: 1. Personnel aspect-This is concerned with manpower planning, recruitment, selection, placement, transfer, promotion, training and development, layoff and retrenchment, remuneration, incentives, productivity etc. 2. Welfare aspect-It deals with working conditions and amenities such as canteens, creches, rest and lunch rooms, housing, transport, medical assistance, education, health and safety, recreation facilities, etc. 3. Industrial relations aspect-This covers union-management relations, joint consultation, collective bargaining, grievance and disciplinary procedures, settlement of disputes, etc. Human Resource Management: Objectives To help the organization reach its goals. To ensure effective utilization and maximum development of human resources. To ensure respect for human beings. To identify and satisfy the needs of individuals. To ensure reconciliation of individual goals with those of the organization. To achieve and maintain high morale among employees. To provide the organization with well-trained and well-motivated employees. To increase to the fullest the employee's job satisfaction and self-actualization. To develop and maintain a quality of work life. To be ethically and socially responsive to the needs of society. To develop overall personality of each employee in its multidimensional aspect. To enhance employee's capabilities to perform the present job. To equip the employees with precision and clarity in transaction of business. To inculcate the sense of team spirit, team work and inter-team collaboration. FUNCTIONS OF PERSONNEL MANAGEMENT:

Basic managerial functions Planning, Organizing, Motivating, and controlling are common to all managers including personnel managers and are performed by all of them.

Planning: Planning is specifying the goals to be achieved and deciding in advance the appropriate actions taken to achieve those goals. Planning activities include analyzing current situations, anticipating the future, determining objectives, deciding what types of activities the company will engage in, choosing corporate and business strategies, and determining the resources needed to achieve the organization's goals. The outcome of the planning process is the organizations strategy. Organizing Organizing is assembling and coordinating the human, financial, physical, informational, and other resources needed to achieve goals. Activities include attracting people to the organization, specifying job responsibilities, grouping jobs into work units, marshalling and allocating resources, and creating conditions so that people and things work together to achieve maximum success. The outcome of organizing is an organizational structure. Leading Leading is stimulating people to be high performers. It is directing, motivating, and communicating with employees, individually and in groups. Leading involves close day-to-day contact with people, helping to guide and inspire them toward achieving team and organizational goals. Leading takes place in teams, departments, divisions, and at the tops of entire organization. The outcome of leading is a high level of motivation and commitment.

Controlling Comprehensive plans; solid organization, and outstanding leaders do not guarantee success. The fourth functional controlling, monitors progress and implements necessary changes. When managers implement their plans, they often find that things are not working out as planned. The controlling function makes sure that goals are met. It asks and answers the question, "Are our actual outcomes consistent with our goals?" It makes adjustments as needed. Specific controlling activities are to set performance standards that indicate progress toward long-term goals; to identify performance problems by comparing performance data against standards; and to take actions to correct problems. Budgeting, information systems, cost cutting, and disciplinary action are just a few of the tools of control. Successful organizations, large and small, pay close attention to how well they are doing. They take fast action when problems arise, and are able to change as needed. The outcome of controlling is an accurate measurement of performance and regulation of efficiency and effectiveness. Effectiveness & Efficiency Productivity = Efficiency x Effectiveness Efficiency is the ratio of outputs to inputs. Effectiveness is the degree to which the organizations output correspond to the need and wants of the external environment that include customers suppliers competitors and regulatory agencies.

Efficiency: A measure of how well resources are used to achieve a goal. Doing Things Right Effectiveness: A measure of the appropriateness of the goals chosen (are these the right goals?), and the degree to which they are achieved. Doing the Right Things Right Manager The member of the organization who participates in the management process by planning, organizing, leading, or controlling the organization's resources. Types of Mangers There are three types of mangers.

1. Strategic Manager: Strategic managers are the senior executives of an organization and are responsible for its overall management. Major activities include developing the company's goals and plans. Typically strategic managers focus on long-term issues and emphasize the survival, growth, and overall effectiveness of the organization. 2. Tactical Managers: Tactical managers are responsible for translating the general goals and plans developed by strategic managers into objectives that are more specific and activities. 3. Operational Managers: Operational managers are lower-level managers who supervise the operations of the organization. These managers often have titles such as supervisor or sales manager. They are directly involved with non-management employees, implementing the specific plans developed with tactical managers. This role is critical in the organization, because operational managers are the link between management and non-management personnel. The Managerial Skills Managers need three basic sets of skills: technical, interpersonal, and conceptual. a. Technical Skills The skills that include knowledge of and proficiency in a certain specialized field Managers need to be technically competent. They need to know how to plan, organize lead and control. Line managers need this skill the most while top manager will need minimum of technical skills. b. Interpersonal Skills/Human Skills Interpersonal skills include the ability to work well with other people both individually and in a group. Mangers need good interpersonal skills, knowledge

about human behaviors and group processes, ability to understand the feelings, attitudes and motives of others, and ability to communicate, clearly and persuasively. Human skills are very important at each level of management. c. Conceptual Skills Conceptual skills include the ability to think and to conceptualize about abstract and complex situations, to see the organization as a whole, and to understand the relationships among the various subunits, and to visualize how the organization fits into its broader environment. Conceptual skills include analytical ability, logical thinking, concept formation, and inductive reasoning. They manifest themselves in things like good judgment, creativity, and the ability to see the big picture. Top mangers/CEO needs this type of skill the most. Levels of Management: Three level in the organization can classify managers, particularly for traditionally structured organizations.

First-line managers are the lowest level of management. Theyre often called supervisors. Middle managers include all levels of management between the first-line level and the top level of the organization. Top managers include managers at or near the top of the organization who are responsible for making organization wide decisions and establishing the plans and goals that affect the entire organization.

Functions of HRM department: Staffing: An organization must have qualified individuals, in specific jobs at specific places and times, in order to accomplish its goals. Obtaining such people involves job analysis, human resource planning, recruitment, and selection. Job analysis is the systematic process of determining the skills, duties, and knowledge required for performing specific jobs in an organization. Human resource planning (HRP) is the process of systematically reviewing human resource requirements to ensure that the required numbers of employees, with the required skills, are available when needed. Recruitment is the process of attracting such individuals in sufficient numbers and encouraging them to apply for jobs with the organization. Selection is the process through which the organization chooses, from a group of applicants, those individuals best suited both for open positions and for the company. FUNCTIONS OF HRM DEPARTMENT

Human Resource Development A major HRM function that consists not only of training and development but also individual career planning and development activities and performance appraisal, an activity that emphasizes T&D needs. Training is designed to provide learners with the knowledge and skills needed for their present jobs. Development involves learning that goes beyond todays job; it has a more longterm focus. Human resource development (HRD) helps individuals, groups, and the entire organization become more effective. It is essential because people, technology, jobs, and organizations are always changing.

Career planning is an ongoing process whereby an individual sets career goals and identifies the means to achieve them. Career development is a formal approach used by the organization to ensure that people with the proper qualifications and experiences are available when needed. Through performance appraisal, employees and teams are evaluated to determine how well they are performing their assigned tasks. Compensation and Benefits The term compensation includes all rewards that individuals receive as a result of their employment. The reward may be one or a combination of the following: Pay: The money that a person receives for performing a job. Benefits: Additional financial rewards other than base pay include paid vacations, sick leave, holidays, and medical insurance. Non financial rewards: Non monetary rewards, such as enjoyment of the work performed or a pleasant working environment. Safety and Health: Safety involves protecting employees from injuries caused by work-related accidents. Health refers to the employees freedom from illness and their general physical and mental well-being. These aspects of the job are important because employees who work in a safe environment and enjoy good health are more likely to be productive and yield long-term benefits to the organization. Employee And Labor Relations Since 1983, union membership has fallen approximately 8 percent, to only 13.9 percent of the workforce, the lowest level since the Great Depression. Subtracting government employees, unions represent only 9.5 percent of the private industry workforce. Even so, a business firm is required by law to recognize a union and bargain with it in good faith if the firms employees want the union to represent them. In the past, this relationship was an accepted way of life for many employers. But most firms today would like to have a union-free environment. Human Resource Research Although human resource research is not listed as a separate function, it pervades all HRM functional areas, and the researchers laboratory is the entire work environment. Interrelationships of HRM Functions All HRM functional areas are highly interrelated. Management must recognize that decisions in one area will affect other areas. The interrelationships among the five HRM functional areas will become more obvious. Human Resource Management: Major Influencing Factors In the 21st century HRM will be influenced by following factors, which will work as various issues affecting its strategy:

Size of the workforce. Rising employees' expectations Drastic changes in the technology as well as Life-style changes. Composition of workforce. New skills required. Environmental challenges. Lean and mean organizations. Impact of new economic policy. Political ideology of the Government. Downsizing and rightsizing of the organizations. Culture prevailing in the organization etc. Role of Personnel Manager Personnel manager is the head of personnel department. He performs both managerial and operative functions of management. His role can be summarized as: Personnel manager provides assistance to top management- The top management are the people who decide and frame the primary policies of the concern. All kinds of policies related to personnel or workforce can be framed out effectively by the personnel manager. -- He advices the line manager as a staff specialist- Personnel manager acts like a staff advisor and assists the line managers in dealing with various personnel matters. -- As a counsellor- As a counsellor, personnel manager attends problems and grievances of employees and guides them. He tries to solve them in best of his capacity. -- Personnel manager acts as a mediator- He is a linking pin between management and workers. -- He acts as a spokesman- Since he is in direct contact with the employees, he is required to act as representative of organization in committees appointed by government. He represents company in training programmes. ORGANIZATION PERSONNEL DEPARTMENT Organization An organization is not a random group of people who come together by chance. They consciously and formally establish it to accomplish certain goals that its members would be unable to reach individually. A manager's job is to achieve high performance relative to the organization's objectives. For example, a business organization has objectives to (1) make a profit (2) furnish its customers with goods and services; (3) provide an income for its employees; and (4) increase the level of satisfaction for everyone involved. An organization is a social entity, which is goal orients and deliberately structured. Organizations are not functioning in isolated but are linked to external dynamic

environment. Virtually all organization combines (1) Raw material, (2) Capital and (3) labor & knowledge to produce Goods and Services. TYPES OF ORGANIZATION a) Formal: The part of the organization that has legitimacy and official recognition. b) Informal: The unofficial part of the organization. COMPONENTS OF ORGANIZATION: 1. 2. 3. 4. Task People Structure Technology

Task: This component can be defined as a mission or purpose of the existence of organization. Every organization is having a purpose of existence that is accomplished by producing certain goods and services as an output, which is termed as task. People: The workforce or human part of organization that performs different operations in the organization. Structure: Structure is the basic arrangement of people in the organization. Technology: The intellectual and mechanical processes used by an organization to transform inputs into products or services. The Challenges of todays organization Organizations are facing different challenges in todays environment like: Technology Only 20 years ago, few workers used fax machines or e-mail, and computers occupied entire rooms, not desktops. Advances in information and communication technology have permanently altered the workplace by changing the way information is created, stored, used, and shared. Diverse Workforce A diverse workforce refers to two or more groups, each of whose members are identifiable and distinguishable based on demographic or other characteristics like gender, age group, education etc. Several barriers in dealing with diversity include stereotyping, prejudice, ethnocentrism, discrimination, tokenism, and gender-role stereotypes. Multiple Stakeholders Stakeholders are those who have interests in the organization. Multiple stakeholders for an organization include the customers, suppliers, consumers, investors, lenders, etc.

Responsiveness An organization has to be responsive to the challenges and threats that it faces from within the internal or external environment. It requires quick responsiveness to meet the challenges and opportunities arising out of these changes. Rapid Changes Due to changing internal and external environment, rapid changes in the organization occur. Organization has to be flexible to adjust to those changes. Globalization Managers are faced with a myriad of challenges due to an array of environmental factors when doing business abroad. These managers must effectively plan, organize, lead, control, and manage cultural differences to be successful globally. PERSONNEL POLICIES AND PROCEDURES The dictionary meaning of policy is a plan of action and that plan is a policy. According to Flippo is a ma-made rule of pre-determined course of action that is established to guide the performance of work toward the organization objectives. It is a type of standing plan that serves to guide subordinates in the execution of their tasks. According to Calhoon, Personnel policies constitute guides to action. They furnish the general standards or bases on which decisions are reached. Their genesis lies in an organizations values, philosophy, concepts, and principles. Personnel policies refer to principles and rules of conduct which formulate, redefine, break into details and decide a number of actions that govern the relationship with employees in the attainment of the organization objectives. Personnel policies are, 1. The key stone in the arch of management and the life- blood for the successful functioning of the personnel management. 2. A positive declaration and a command to an organization. 3. It suggests the values and viewpoints which dominate the organizations actions. AIMS AND OBJECTIVES OF PERSONNEL POLICIES 1. To enable an organization to fulfill or carry out the main objectives. 2. To ensure the employees are informed of these items of policy and to ensure their co-operation for their attainment. 3. To provide conditions of employment and procedures 4. To provide adequate and trained personnel for all levels and type of management and motive them. 5. To protect the common interest of all parties and recognizes the trade unions in the organizations.

6. To provide for a consultative participation by employees in the management of an organization. 7. To establish the conditions for mutual confidence and avoid confusion and misunderstanding. 8. To provide security of employment to workers. 9. To provide an opportunity for growth within the organization to persons who are willing to learn. 10. To provide for the payment of fair and adequate wages and salary to workers. 11. To recognize the work and accomplishments of the employees by offering non-monetary incentive rewards. 12. To create a sense of responsibility PRINCIPLES OF PERSONNEL POLICIES 1. Put the right man in the right place by a careful selection and placement. 2. Train everyone for the job to be done, so that they qualify for the better jobs. 3. Make the organization a co-coordinated team through a proper co-ordinate and administration of different departments. 4. Supply the right tools and the right conditions of work for the better the tools. 5. Give security with opportunity, incentive, and recognition. 6. Look ahead, plan ahead for more and better things. ESSENTIAL CHARACTERISTICS OF A SOUND PERSONNEL POLICY 1. The statement of any policy should be definite, positive, clear and easily understood by everyone in the organization. 2. It should be written in order to preserve it against loss, to stimulate careful consideration before its formulation. 3. It must be reasonably stable but not rigid. 4. It must be supplementary to the over-all policy of an organization. 5. It should indicate that the management knows that workers prefer to deal with the management on an individual basis. 6. It should recognize the desire of many workers for recognition as groups in many of their relationships. 7. It should be the result of a careful analysis of all the available facts. 8. It must provide two-way communication system between the management and the employees. 9. It should be consistent with public policy. 10. It should be generally known to all interested parties. 11. It must have not only the support of the management but the cooperation of employees.

COVERAGE OF THE POLICIES 1. 2. 3. 4. 5. 6. History of the companys growth Employment practices and conditions of employment Grievance redressal procedure Safety rules and regulations and responsibilities of employees General practices Mutuality of interests and need for co-operation between management and men. 7. Employee financial aids 8. Educational opportunities 9. Employees news sheet and house journals 10. Communication media, and suggestion system, employee motivation and involvement. 11. Health and hospitalization 12. Vacation with pay 13. Sickness, death, and maternity benefits or allowances 14. Freedom of employees to discuss any item of interest with the management 15. Companys policy on compensation, rewards 16. Public relations 17. Labour management relations and union-management co-operation 18. Prohibited activities

UNIT-II MANPOWER PLANNING Manpower Planning which is also called as Human Resource Planning consists of putting right number of people, right kind of people at the right place, right time, doing the right things for which they are suited for the achievement of goals of the organization. Human Resource Planning has got an important place in the arena of industrialization. Human Resource Planning has to be a systems approach and is carried out in a set procedure. The procedure is as follows:

1. Analyzing the current manpower inventory

2. Making future manpower forecasts 3. Developing employment programmes 4. Design training programmes Steps in Manpower Planning

1. Analyzing the current manpower inventory- Before a manager makes

forecast of future manpower, the current manpower status has to be analyzed. For this the following things have to be noted-

Type of organization Number of departments Number and quantity of such departments Employees in these work units

Once these factors are registered by a manager, he goes for the future forecasting.

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

Expert Forecasts: This includes informal decisions, formal expert

surveys and Delphi technique.

Trend Analysis: Manpower needs can be projected through

extrapolation (projecting past trends), indexation (using base year as basis), and statistical analysis (central tendency measure). Work Load Analysis: It is dependent upon the nature of work load in a department, in a branch or in a division. Work Force Analysis: Whenever production and time period has to be analyses, due allowances have to be made for getting net manpower requirements. Other methods: Several Mathematical models, with the aid of computers are used to forecast manpower needs, like budget and planning analysis, regression, new venture analysis.

3. Developing employment programmes- Once the current inventory is

compared with future forecasts, the employment programmes can be framed and developed accordingly, which will include recruitment, selection procedures and placement plans. 4. Design training programmes- These will be based upon extent of diversification, expansion plans, development programmes, etc. Training programmes depend upon the extent of improvement in technology and advancement to take place. It is also done to improve upon the skills, capabilities, knowledge of the workers. Importance of Manpower Planning 1. Key to managerial functions- The four managerial functions, i.e., planning, organizing, directing and controlling are based upon the manpower. Human resources help in the implementation of all these managerial activities. Therefore, staffing becomes a key to all managerial functions.

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

JOB ANALYSIS Job Analysis is the process of describing and recording aspects of jobs and specifying the skills and other requirements necessary to perform the job. A job analysis is the process used to collect information about the duties, responsibilities, necessary skills, outcomes, and work environment of a particular job The main purpose of conducting job analysis is to prepare job description and job specification which in turn helps to hire the right quality of workforce into the organization. The general purpose of job analysis is to document the requirements of a job and the work performed. Job and task analysis is performed as a basis for later improvements, including: definition of a job domain; describing a job; developing performance appraisals, selection systems, promotion criteria, training needs assessment, and compensation plans. Job analysis is primary tool in personnel management. In this method, a personnel manager tries to gather, synthesize and implement the information available regarding the workforce in the concern. A personnel manager has to undertake job analysis so as to put right man on right job. There are two outcomes of job analysis: 1. Job description 2. Job specification Job Analysis Definition:

Job Analysis is the SYSTEMATIC process of collecting and making judgments about all the important information related to a job. Job analysis is the procedure through which you determine the duties and nature of the jobs and the kinds of people who should be hired for them. You can utilize the information it provides to write job descriptions and job specifications that are utilized in recruitment and selection, compensation, performance appraisal, and training. Advantages of Job Analysis 1. Job analysis helps the personnel manager at the time of recruitment and selection of right man on right job. 2. It helps him to understand extent and scope of training required in that field. 3. It helps in evaluating the job in which the worth of the job has to be evaluated. 4. In those instances where smooth work force is required in concern. 5. When he has to avoid overlapping of authority- responsibility relationship so that distortion in chain of command doesnt exist. 6. It also helps to chalk out the compensation plans for the employees. 7. It also helps the personnel manager to undertake performance appraisal effectively in a concern. REASONS FOR CONDUCTING JOB ANALYSIS A sound job analysis system is extremely critical for numerous reasons. 1. StaffingAll areas of staffing would be haphazard if the recruiter did not know the qualifications needed to perform the job. 2. Training and Developmentif the specification suggests that the job requires a particular knowledge, skill, or abilityand the person filling the position does not possess all the qualifications requiredtraining and/or development is probably in order. 3. Compensation and Benefits the relative value of a particular job to the company must be known before a dollar value can be placed on it. From an internal perspective the more significant its duties and responsibilities, the more the job is worth. 4. Safety and HealthInformation derived from job analysis is also valuable in identifying safety and health considerations. 5. Employee and Labor RelationsRegardless of whether the firm is unionized, Information obtained through job analysis can often lead to more objectives human resource decisions. 6. Legal Considerationshaving properly accomplished a job analysis is particularly important for supporting the legality of employment practices.

Uses of Job Analysis Information Recruitment and Selection Job descriptions and job specifications are formed from the information gathered from a job analysis, which help management decide what sort of people to recruit and hire. Compensation The estimated value and the appropriate compensation for each job is determined from the information gathered from a job analysis. Performance Appraisal Managers use job analysis to determine a jobs specific activities and performance standards. Training Based on the job analysis, the job description should show the jobs required activities and skills. Discovering Unassigned Duties Job analysis can help reveal unassigned duties. METHODS OF COLLECTING JOB ANALYSIS INFORMATION The Interview 1. The three types of interviews managers use to collect job analysis data are: individual (to get the employees perspective on the jobs duties and responsibilities, group (when large numbers of employees perform the same job), and supervisor (to get his/her perspective on the jobs duties and responsibilities). 2. The pros of using an interview are that it is: simple, quick, and more comprehensive because the interviewer can unearth activities that may never appear in written form. 3. The following questions are some examples of typical questions. What is the job being performed? In what activities do you participate? What are the health and safety conditions? 4. The following are interview guidelines: a) the job analyst and supervisor should identify the workers who know the job best and would be objective; b) establish a rapport with the interviewee; c) follow a structured guide or checklist; d) ask worker to list duties in order of importance and frequency of occurrence; and e) review and verify the data. Observation 1. Direct observations are useful when jobs consist of mainly observable physical activity as opposed to mental activity. 2. Reactivity can be a problem with direct observations, which is where the worker changes what he/she normally does because he/she is being watched. 3. Managers often use direct observation and interviewing together. Participant Diary / Logs

1. The employee records every activity he/she engages in, in a diary or log along with the amount of time to perform each activity to produce a complete picture Of the job. 2. Employees may try to exaggerate some activities and underplay others. Problems with Job Analysis Time consuming and requires much patience Might be a reflection of stereotypes

JOB DESCRIPTION Job description is a written statement showing job title, tasks, duties and responsibilities involved in a job. It also prescribes the working conditions, hazards, stress and relationship with other jobs. Thus, a job specification contains the following information: 1. 2. 3. 4. 5. 6. 7. Job title, code number, and department / division. Job contents in terms of activities or tasks performed. Job responsibilities towards effective performance of the job. Working conditions specifying specific hazards/stress. Social environment prevailing at the workplace. Extent of supervision given and received. Relationship with other jobs-vertical, horizontal, and diagonal.

JOB SPECIFICATION Job specifications, also known as man or employee specifications, is prepared on the basis of job specification. It specifies the qualities required in a job incumbent for the effective performance of the job. A job specification is a document containing the minimum acceptable qualifications that a person should possess in order to perform a particular job. Items typically included in the job specification are educational requirements, experience, personality traits, and physical abilities. Basic contents of a job specification are as follows: 1. Personal characteristics such as education, job experience, age, sex, and extra co-curricular activities. 2. Physical characteristics such as height, weight, chest, vision, hearing, health, voice poise, and hand and foot coordination, (for specific positions only).

3. Mental characteristics such as general intelligence, memory, judgment, foresight, ability to concentrate, etc. 4. Social and psychological characteristics such as emotional ability, flexibility, manners, drive, conversational ability, interpersonal ability, attitude, values, creativity etc. Various contents of a job specification can be prescribed in three terms: (1) Essential qualities which a person must possess (2) desirable qualities which a person may possess and (3) contra-indicators which are likely to become a handicap to successful job Performance. Example for Job Specification Education : MBA with specialization in HRM/MA in social work/PG Diploma in HRM/MA in industrial psychology. : A degree or diploma in Labor Laws is desirable. Experience : At least 3 years experience in a similar position in a large manufacturing company.

Skill, Knowledge, Abilities: Knowledge of compensation practices in competing industries, of job analysis procedures, of compensation survey Techniques, of performance appraisal systems. Skill in writing job descriptions, in conducting job analysis interviews, in making group presentations, in performing statistical computations, ability to conduct meetings, to plan and priorities work. Work Orientation Factors: The position may require up to 15 per cent travel. Age : Preferably below 30 years.

RECRUITMENT According to Edwin B. Flippo, recruitment is the process of searching the candidates for employment and stimulating them to apply for jobs in the organization. Recruitment is the activity that links the employers and the job seekers.

Types of Recruitment Recruitment is of Two types

1. Internal Recruitment is a recruitment which takes place within the

concern or organization. Internal sources of recruitment are readily available to an organization. Internal sources are primarily three Transfers, promotions and Re-employment of ex-employees. Re-employment of exemployees is one of the internal sources of recruitment in which employees can be invited and appointed to fill vacancies in the concern. There are situations when ex-employees provide unsolicited applications also. Internal recruitment may lead to increase in employees productivity as their motivation level increases. It also saves time, money and efforts. But a drawback of internal recruitment is that it refrains the organization from new blood. Also, not all the manpower requirements can be met through internal recruitment. Hiring from outside has to be done. Internal sources are primarily Three 1. Promotion from with in. 2. Job posting. 3. Contacts and referrals 1. Promotion from within: Promoting entry level employees to more responsible positions is one of the best ways to fill job vacancies and important reason why company should have a human resource planning system. An organization that has human resource planning system uses succession plans and replacement charts to identify and prepare individuals for upper level positions. Skills inventories are useful in identifying individuals who have the potential for advancement, and individuals desire to be promoted can be assessed in the performance appraisal review. A promotion from within policy is intrinsic to career development and human resource planning. A promotion from within policy can stimulate great motivation among employee, and this motivation is often accompanied by a general improvement in the employee morale. 2. Job posting An organization can also use the policy of job posting as a internal recruitment source. In the job posting system the organization notifies its present employees about job openings through the use of bulletin boards, company publications, or personal letters. The purpose of the job posting is to communicate that the job opening exists. An effective job posting system involves the following guidelines: Job posting should be prominent. Clear job specification should be communicated so that applicants assess themselves either they are eligible to apply or not. Once the decision is made, all applicants should be informed about the decision. Job posting systems generally work quite well.

3. Contacts and Referrals: Many firms have found that their employees can assist in the recruitment process. Employees may actively solicit applications from their friends and associates. Before going outside to recruit employees, many organizations ask present employees to encourage friends or relatives to apply for the job openings. Contacts and referrals from the present employees are valuable sources of recruits. Employee referrals are relatively inexpensive and usually produce quick responses. However some organizations are concerned about problems that result from hiring friends of employees for example, the practice of hiring friends and relatives favoritisms, cliques etc. ADVANTAGES OF INTERNAL RECRUITMENT: 1. Provides greater motivation for good performance. 2. Provides greater opportunities for present employees 3. Provides better opportunity to assess abilities 4. Improves morale and organizational loyalty 5. Enables employees to perform the new job with little lost time Disadvantages of Internal Recruitment: 1. Creates a narrowing thinking and stale ideas 2. Creates pressures to compete 3. Creates homogeneous workforce 4. Chances to miss good outside talent Requires strong management development programs specially to train for technology. EXTERNAL RECRUITMENT External sources of recruitment have to be solicited from outside the organization. External sources are external to a concern. But it involves lot of time and money. The external sources of recruitment include Employment at factory gate, advertisements, employment exchanges, employment agencies, educational institutes, labour contractors, recommendations etc. 1. Employment at Factory Level This a source of external recruitment in which the applications for vacancies are presented on bulletin boards outside the Factory or at the Gate. This kind of recruitment is applicable generally where factory workers are to be appointed. There are people who keep on soliciting jobs from one place to another. These applicants are called as unsolicited applicants. These types of workers apply on their own for their job. For this kind of recruitment workers have a tendency to shift from one factory to another and therefore they are called as badli workers. 2. Advertisement It is an external source which has got an important place in recruitment procedure. The biggest advantage of advertisement is that it covers a

wide area of market and scattered applicants can get advertisements. Medium used is Newspapers and Television.

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3. Employment Exchanges There are certain Employment exchanges which are run by government. Most of the government undertakings and concerns employ people through such exchanges. Now-a-days recruitment in government agencies has become compulsory through employment exchange. 4. Employment Agencies There are certain professional organizations which look towards recruitment and employment of people, i.e. these private agencies run by private individuals supply required manpower to needy concerns. 5. Educational Institutions There are certain professional Institutions which serve as an external source for recruiting fresh graduates from these institutes. This kind of recruitment done through such educational institutions is called as Campus Recruitment. They have a special recruitment cell which helps in providing jobs to fresh candidates. 6. Recommendations There are certain people who have experience in a particular area. They enjoy goodwill and a stand in the company. There are certain vacancies which are filled by recommendations of such people. The biggest drawback of this source is that the company has to rely totally on such people which can later on prove to be inefficient. 7. Labour Contractors These are the specialist people who supply manpower to the Factory or Manufacturing plants. Through these contractors, workers are appointed on contract basis, i.e. for a particular time period. Under conditions when these contractors leave the organization, such people who are appointed have to also leave the concern. ADVANTAGES OF EXTERNAL RECRUITMENT: 1. provides new ideas and new insights 2. Provides greater diversity and helps achieve EEO goals by making affirmative action easy 3. Provides opportunities to handle rapid growth if the organization 4. Opportunities to get people with up-to-date knowledge education and training DISADVANTAGES OF EXTERNAL RECRUITMENT: 1. It is more expensive and time consuming 2. Destroys incentives of present employees to strive for promotion 3. More chances to commit hiring mistakes due to difficult applicant assessment that Will lead to wastage of resources. EMPLOYEE SELECTION:

Employee Selection is the process of putting right men on right job. It is a procedure of matching organizational requirements with the skills and qualifications of people. Effective selection can be done only when there is effective matching. By selecting best candidate for the required job, the organization will get quality performance of employees. Moreover, organization will face less of absenteeism and employee turnover problems. By selecting right candidate for the required job, organization will also save time and money. Proper screening of candidates takes place during selection procedure. All the potential candidates who apply for the given job are tested. But selection must be differentiated from recruitment, though these are two phases of employment process. Recruitment is considered to be a positive process as it motivates more of candidates to apply for the job. It creates a pool of applicants. It is just sourcing of data. While selection is a negative process as the inappropriate candidates are rejected here. Recruitment precedes selection in staffing process. Selection involves choosing the best candidate with best abilities, skills and knowledge for the required job. The Employee selection Process takes place in following order:

1. Preliminary Interviews- It is used to eliminate those candidates who do

2.

3.

4.

5.

not meet the minimum eligibility criteria laid down by the organization. The skills, academic and family background, competencies and interests of the candidate are examined during preliminary interview. Preliminary interviews are less formalized and planned than the final interviews. The candidates are given a brief up about the company and the job profile; and it is also examined how much the candidate knows about the company. Preliminary interviews are also called screening interviews. Application blanks- The candidates who clear the preliminary interview are required to fill application blank. It contains data record of the candidates such as details about age, qualifications, reason for leaving previous job, experience, etc. Written Tests- Various written tests conducted during selection procedure are aptitude test, intelligence test, reasoning test, personality test, etc. These tests are used to objectively assess the potential candidate. They should not be biased. Employment Interviews- It is a one to one interaction between the interviewer and the potential candidate. It is used to find whether the candidate is best suited for the required job or not. But such interviews consume time and money both. Moreover the competencies of the candidate cannot be judged. Such interviews may be biased at times. Such interviews should be conducted properly. No distractions should be there in room. There should be an honest communication between candidate and interviewer. Medical examination- Medical tests are conducted to ensure physical fitness of the potential employee. It will decrease chances of employee absenteeism.

6. Appointment Letter- A reference check is made about the candidate

selected and then finally he is appointed by giving a formal appointment letter.

RECRUITMENT NEEDS ARE OF THREE TYPES -- PLANNED the needs arising from changes in organization and retirement policy. -- ANTICIPATED Anticipated needs are those movements in personnel, which an organization can predict by studying trends in internal and external environment. -- UNEXPECTED Resignation, deaths, accidents, illness give rise to unexpected needs. DIFFERENCE BETWEEN RECRUITMENT AND SELECTION Both recruitment and selection are the two phases of the employment process. The differences between the two are: 1. The recruitment is the process of searching the candidates for employment and stimulating them to apply for jobs in the organization WHEREAS selection involves the series of steps by which the candidates are screened for choosing the most suitable persons for vacant posts. 2. The basic purpose of recruitments is to create a talent pool of candidates to enable the selection of best candidates for the organization, by attracting more and more employees to apply in the organization WHEREAS the basic purpose of selection process is to choose the right candidate to fill the various positions in the organization. 3. Recruitment is a positive process i.e. encouraging more and more employees to apply WHEREAS selection is a negative process as it involves rejection of the unsuitable candidates. 4. Recruitment is concerned with tapping the sources of human resources whereas selection is concerned with selecting the most suitable candidate. TRAINING: MEANING Training of employees takes place after orientation takes place. Training is the process of enhancing the skills, capabilities and knowledge of employees for doing a particular job. Training process moulds the thinking of employees and leads to quality performance of employees. It is continuous and never ending in nature.

The heart of a continuous effort designed to improve employee competency and organizational performance. Training typically focuses on providing employees with specific skills or helping them correct deficiencies in their performance. IMPORTANCE OF TRAINING Training is crucial for organizational development and success. It is fruitful to both employers and employees of an organization. An employee will become more efficient and productive if he is trained well. Training is given on four basic grounds:

1. New candidates who join an organization are given training. This training

familiarizes them with the organizational mission, vision, rules and regulations and the working conditions. 2. The existing employees are trained to refresh and enhance their knowledge. 3. If any updations and amendments take place in technology, training is given to cope up with those changes. For instance, purchasing new equipment, changes in technique of production, computer implantment. The employees are trained about use of new equipments and work methods. 4. When promotion and career growth becomes important. Training is given so that employees are prepared to share the responsibilities of the higher level job. The benefits of training can be summed up as:

1. Improves morale of employees- Training helps the employee to get job

2. 3.

4. 5.

security and job satisfaction. The more satisfied the employee is and the greater is his morale, the more he will contribute to organizational success and the lesser will be employee absenteeism and turnover. Less supervision- A well trained employee will be well acquainted with the job and will need less of supervision. Thus, there will be less wastage of time and efforts. Fewer accidents- Errors are likely to occur if the employees lack knowledge and skills required for doing a particular job. The more trained an employee is, the less are the chances of committing accidents in job and the more proficient the employee becomes. Chances of promotion- Employees acquire skills and efficiency during training. They become more eligible for promotion. They become an asset for the organization. Increased productivity- Training improves efficiency and productivity of employees. Well trained employees show both quantity and quality performance. There is less wastage of time, money and resources if employees are properly trained.

Ways/Methods of Training Training is generally imparted in two ways:

1. On the job training- On the job training methods are those which are given
to the employees within the everyday working of a concern. It is a simple and cost-effective training method. The in proficient as well as semiproficient employees can be well trained by using such training method. The employees are trained in actual working scenario. The motto of such training is learning by doing. Instances of such on-job training methods are jobrotation, coaching, temporary promotions, etc. 2. Off the job training- Off the job training methods are those in which training is provided away from the actual working condition. It is generally used in case of new employees. Instances of off the job training methods are workshops, seminars, conferences, etc. Such method is costly and is effective if and only if large number of employees have to be trained within a short time period. Off the job training is also called as vestibule training,i.e., the employees are trained in a separate area( may be a hall, entrance, reception area,etc. known as a vestibule) where the actual working conditions are duplicated. PHASES OF TRAINING Phase 1: Needs Assessment & Establishing Objectives In order to compete effectively, firms must keep their employees well trained. The first step in the Training process is to determine Training needs. The overall purpose of the assessment phase is to determine if training is needed and, if so, to provide the information required designing the training program. Assessment consists of three levels of analysis: organizational, task, and person. Organizational Analysis: It is an examination of the kinds of problems that an organization is experiencing and where they are located within organization. Task/Operational Analysis: An operational analysis identifies the kinds of the skills and behaviors required of the incumbents of a given job and the standards of performance that must be met. Personal Analysis: The objective of the personnel analysis is to examine how well individual employees are performing their jobs. Training should be given to those who need it. Assigning all employees to a training program, regardless of their skill levels, is a waste of organizational resources and create a unpleasant situation for employees who do not need training. The objectives of training must be clarified, related to the areas identified in the task analysis, and should be challenging, precise, achievable, and understood by all. Mostly when there is a performance gap i.e. the performance is not up to the specified standards training is required to improve the performance there are certain factors that should be kept in mind before conducting training ,lets consider these factors: Number of employees experiencing skill deficiency: Number of employees supposed to be trained.

Severity of skill deficiency: What are the cons or advantages that are being faced by the organization due to absence of that skill? Importance of skill: How important is skill to be possessed by workforce. Extent to which skill can be improved with Training: Would there be real difference in skill level in case the training program is conducted. Determining Training Needs: Following sources can help organization to assess either there is a need for Training or not. Self-assessments Company records Customer complaints New Technology Employee grievances Interviews with managers Customer satisfaction surveys Observation Establishing Training Objectives Objectives are desired end results. In human resource, clear and concise objectives must be formulated Phase 2: Delivering the Training The training program that results from assessment should be a direct response to an organizational problem or need. Approaches vary by location, presentation, and type. These are summarized below: 1. Location Options On the job: Training is at the actual work site using the actual work. Off the job: Training away from the actual work site. Training is at a Training Facility designed specifically for Training Phase 3: Training Methods Lecture The Lecture is an efficient means of transmitting large amounts of factual information to a relatively large number of people at the same time. It is traditional method of teaching and is used in many training programs. A skilled lecture can organize material and present it in a clear and understandable way. How ever a lecture doesnt allow active participation by learners. Case method A Training method in which trainees are expected to study the information provided in the case and make decisions based on it. Simulations

Simulators are training devices of varying degrees of complexity that duplicate the real world. Simulation refers to creating an artificial learning environment that approximates the actual job conditions as much as possible.

Apprenticeship This type of training refers to the process of having new worker, called an apprentice, work alongside and under the direction of skilled technician. Internships Internships and assistantships provide training similar to apprenticeship training; however assistantships and internships typically refer to occupations that require a higher level of the formal education than that required by the skilled trades. Many colleges and universities used to develop agreements with organizations to provide internships opportunities for students. Coaching And Mentoring Some organizations assign an experienced to serve as a mentor for new employees. Effective mentors teach their protgs job skills, provide emotional support and encouragement. Coaching and mentoring are primarily on-the-job development approaches emphasizing learning on a one-to-one basis. Coaching is often considered a responsibility of the immediate boss who has greater experience or expertise and is in the position to offer sage advice. The same is true with a mentor, but this person may be located elsewhere in the organization or even in another firm. The relationship may be established formally or it may develop on an informal basis. Discussions Conferences and group discussions, used extensively for making decisions, can also be used as a form of training because they provide forums where individuals are able to learn from one another. A major use of the group discussion is to change attitudes and behaviors. Games Simulations that represent actual business situations are referred to as business games. These simulations attempt to duplicate selected parts of a particular situation, which are then manipulated by the participants. Role playing A Training method in which participants are required to respond to specific problems they may actually encounter in their jobs. Computer-based Computer based training is a teaching method that takes advantage of the speed, memory, and data manipulation capabilities of the computer for greater flexibility of instruction.

 Multimedia Multimedia is an application that enhances computer-based learning with audio, animation, graphics, and interactive video. Video Training The use of videotapes continues to be a popular Training method. An illustration of the use of videotapes is provided by behavior modeling. Behavior modeling has long been a successful Training approach that utilizes videotapes to illustrate effective interpersonal skills and how managers function in various situations. Phase 4: Evaluating Training The credibility of training is greatly enhanced when it can be shown that the organization has benefited tangibly from such programs. Organizations have taken several approaches in attempting to determine the worth of specific programs. In this phase, the effectiveness of the training is assessed. Effectiveness can be measured in monetary or non-monetary terms. It is important that the training be assessed on how well it addresses the needs it was designed to address. 1. Participants Opinions: Evaluating a training program by asking the participants opinions of it is an inexpensive approach that provides an immediate response and suggestions for improvements. The basic problem with this type of evaluation is that it is based on opinion rather than fact. In reality, the trainee may have learned nothing, but perceived that a learning experience occurred. 2. Extent of Learning: Some organizations administer tests to determine what the participants in training program have learned. The pretest, posttest, control group design is one evaluation procedure that may be used. 3. Behavioral Change: Tests may indicate fairly accurately what has been learned, but they give little insight into desired behavioral changes. 4. Accomplishment of Training Objectives: Still another approach to evaluating training programs involves determining the extent to which stated objectives have been achieved. 5. Benchmarking Benchmarking utilizes exemplary practices of other organizations to evaluate and improve training programs. It is estimated that up to 70 percent of American firms engage in some sort of benchmarking. 6. A Case for Simplicity: Value is the measure of impact and positive change elicited by the training. The most common approaches used to determine the effectiveness of training programs are as under: TRAINING AND DEVELOPMENT

Training vs. Development Although training is often used with development, the terms are not synonymous. Training typically focuses on providing employees with specific skills or helping them to correct deficiencies in their performance. In contrast, development is an effort to provide employees with the abilities that the organization will need in the future. Training is a process of learning a sequence of programmed behaviour. It improves the employee's performance on the current job and prepares them for an intended job. Development not only improves job performance but also brings about the growth of the personality. Individuals not only mature regarding their potential capacities but also become better individuals.

Difference between Training & Development: Training: 1. It's a short term process. 2. Refers to instruction in technical and mechanical problems 3. Targeted in most cases for non-managerial personnel 4. Specific job related purpose Development: 1. It is a long term educational process. 2. Refers to philosophical and theoretical educational concepts 3. Managerial personnel 4. General knowledge purpose PURPOSES OF TRAINING & DEVELOPMENT The most prominent changes affecting T&D that have been prophesied and that are actually occurring today in business include: Orient new employees and preparing them for promotion Satisfy personal growth needs Improve performance Avoid Managerial Obsolescence Solve organizational problems Changes in organization structure caused by mergers, acquisitions, rapid growth, downsizing, and outsourcing Changes in technology and the need for more highly skilled workers Changes in the educational level of employees Changes in human resources; a diverse workforce consisting of many groups Competitive pressures necessitating flexible courses and just-in-time and just-whats-needed training. Increased emphasis on learning organizations and human performance management.

SELECTING T & D PROGRAM While selecting the training ad development programs and selecting training and development methods to be used, following factors should be kept in mind in order to have more effective utilization of resources that are supposed to be spent on proposed training and development programs. 1. Cost Effectiveness: Any training or development implemented in an organization must be cost effective. That is the benefits gained by such programs must outweigh the cost associated with providing the learning experience. If measured the effectiveness of the training process, there should be air justification of assigning training programs in the organization because if organizations are not able to have advantages or development and enhancement of the performance after training it is only wastages of the resources. 2. Desired Program Content: Contents of the training program and the methods used to deliver the training should be in relevance to training objectives and need assessed for training. 3. Learning Principles: Learning principals should be implemented to have more effective training. 4. Appropriateness of the Facilities: Factors that are supposed to facilitate the training program should be appropriate and available. 5. Trainee Performance and Capabilities: There is chance and enough probability that training will lead to the enhancement of the trainees. 6.Trainer Performance and Capabilities: Trainers or people who are assigned responsibility to train the trainees are having enough experience, skills, capabilities and past trends that show that they can be effective trainers. Trainers themselves are required to be well trained in order to provide the training. STEPS IN TRAINING PROCESS: -- Discovering or Identifying Training needs: A training program is designed to assist in providing solutions for specific operational problems or to improve performance of a trainee.

Organizational determination and Analysis: Allocation of resources that relate to organizational goal. Operational Analysis: Determination of a specific employee behaviour required for a particular task. Man Analysis: Knowledge, attitude and skill one must possess for attainment of organizational objectives

-- Getting ready for the job: The trainer has to be prepared for the job. And also who needs to be trained - the newcomer or the existing employee or the supervisory staff. -- Preparation of the learner:

Putting the learner at ease Stating the importance and ingredients of the job Creating interest Placing the learner as close to his normal working position Familiarizing him with the equipment, materials and trade terms

-- Presentation of Operation and Knowledge: The trainer should clearly tell, show, illustrate and question in order to convey the new knowledge and operations. The trainee should be encouraged to ask questions in order to indicate that he really knows and understands the job. -- Performance Try out: The trainee is asked to go through the job several times. This gradually builds up his skill, speed and confidence. -- Follow-up: This evaluates the effectiveness of the entire training effort TRAINING TECHNIQUES: An effective training fulfills the following criteria: 1. 2. 3. 4. Adaptation of the technique/method to the learner and the job Provides motivation to the trainee to improve job performance Creates trainee's active participation in the learning process Provide knowledge of results about attempts to improve

DEVELOPMENT MANAGEMENT DEVELOPMENT Attempts to improve managerial performance by imparting 1. Knowledge 2. Changing attitudes 3. Increasing skills The major objective of development is managerial effectiveness through a planned and a deliberate process of learning. This provides for a planned growth of managers to meet the future organizational needs. DEVELOPMENT PROCESS:

Setting Development Objectives: It develops a framework from which

executive need can be determined.

Ascertaining Development Needs: It aims at organizational planning &

forecast the present and future growth.

Determining Development Needs: This consists of 1.Appraisal of present

management talent, 2.Management Manpower Inventory

The above two processes will determine the skill deficiencies that are relative to the future needs of the organization.

1. Conducting Development Programs: It is carried out on the basis of

needs of different individuals, differences in their attitudes and behaviour, also their physical, intellectual and emotional qualities. Thus a comprehensive and well conceived program is prepared depending on the organizational needs and the time & cost involved. 2. Program Evaluation: It is an attempt to assess the value of training in order to achieve organizational objectives. OBJECTIVES OF TRAINING AND DEVELOPMENT The principal objective of training and development division is to make sure the availability of a skilled and willing workforce to an organization. In addition to that, there are four other objectives: Individual, Organizational, Functional, and Societal. Individual Objectives help employees in achieving their personal goals, which in turn, enhances the individual contribution to an organization. Organizational Objectives assist the organization with its primary objective by bringing individual effectiveness. Functional Objectives maintain the departments contribution at a level suitable to the Organizations needs. Societal Objectives ensure that an organization is ethically and socially responsible to the needs and challenges of the society through various interviews and tests.

UNIT-III PERFORMANCE APPRAISAL: Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does. According to Flippo, a prominent personality in the field of Human resources, "performance appraisal is the systematic, periodic and an impartial rating of an employees excellence in the matters pertaining to his present job and his potential for a better job." Performance appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future.

Performance appraisal is a system of review and evaluation of an individual or teams job performance. An effective system assesses accomplishments and evolves plans for development. Performance management is a process that significantly affects organizational success by having managers and employees work together to set expectations, review results, and reward performance. Its goal is to provide an accurate picture of past and / or future employee performance. To achieve this, performance standards are established. It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals. By focusing the attention on performance, performance appraisal goes to the heart of personnel management and reflects the management's interest in the progress of the employees. OBJECTIVES OF PERFORMANCE APPRAISAL:

To review the performance of the employees over a given period of time. To judge the gap between the actual and the desired performance. To help the management in exercising organizational control. Helps to strengthen the relationship and communication between superior subordinates and management employees. To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future. To provide feedback to the employees regarding their past performance. Provide information to assist in the other personal decisions in the organization. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development. To reduce the grievances of the employees.

PROCESS OF PERFORMANCE APPRAISAL

USES OF PERFORMANCE APPRAISAL: Performance appraisal serves two types of the objectives one is to make the evaluation decisions and other is to provide the need assessment source for the training and development if there is a gap between actual and expected performance. For many organizations, the primary goal of an appraisal system is to improve performance. A system that is properly designed and communicated can help achieve organizational objectives and enhance employee performance. In fact, PA data are potentially valuable for use in numerous human resource functional areas. 1. Human Resource planning in assessing a firms human resources, data must be available that describes the promotability and potential of all employees, especially key executives.

2. Recruitment and SelectionPerformance evaluation ratings may be helpful in Predicting the future performance of job applicants. 3. Training and DevelopmentA performance appraisal should point out an employees specific needs for training and development. By identifying deficiencies that adversely affect performance, human resource and line managers are able to develop T&D programs that permit individuals to build on their strengths and minimize their deficiencies. 4. Career Planning and DevelopmentCareer planning and development may be viewed from either an individual or organizational viewpoint. 5. Compensation ProgramsPerformance appraisal results provide the basis for decisions regarding pay increases. 6. Internal Employee RelationsPerformance appraisal data are also frequently used for decisions in areas of internal employee relations including motivation, promotion, demotion, termination, layoff, and transfer. 7. Assessment of Employee Potential Some organizations attempt to assess employee potential as they appraise job performance. PROBLEMS IN PERFORMANCE APPRAISAL Many performance appraisal methods have been severely criticized. Many of the problems commonly mentioned are not inherent in the method but, rather, reflect improper usage. 1. Lack of Objectivity A potential weakness of traditional methods of performance appraisal is that they lack objectivity. Some subjectivity will always exist in appraisal methods. However, the use of job-related factors does increase objectivity. 2. Halo ErrorOccurs when the evaluator perceives one factor as being of paramount importance and gives a good or bad overall rating to an employee based on this factor. 3. Leniency/Strictness The giving of undeserved high or low ratings. 4. Central TendencyOccurs when employees are incorrectly rated near the average or middle of the scale. 5. Recent Behavior Bias It is only natural to remember recent behavior more clearly than actions from the more distant past. However, performance appraisals generally cover a specified period of time, and an individuals performance should be considered for the entire period.

6. Personal BiasSupervisors doing performance appraisals may have biases related to their employees personal characteristics such as race, religion, gender, disability, or age group. 7. Manipulating the Evaluation in some instances, supervisors control virtually every aspect of the appraisal process and are therefore in a position to manipulate the system. ESSENTIALS OF GOOD APPRAISAL SYSTEM 1. Easily understandable 2. Support of all line people 3. Open and participative 4. Valid and Reliable 5. Built-in incentive 6. Follow-up mechanism 7. Employee feel that he has been in a supportive manner 8. It should be periodically evaluated PERFORMANCE APPRAISAL METHODS:

1. 2. 3. 4. 5. 6. 7. 8. 9.

Ranking method Rating-scale method Check-list method Forced- choice method Field review Critical incident technique Confidential report Essay appraisal Assessment centre

1. Ranking Method:
The oldest and simplest method of performance appraisal is to compare one man with all other men and place him in a simple rank order. In this way ordering is done from best to worst of all individuals comprising the group. The method is simple and natural.

Disadvantages: It is highly subjective Comparison of the various components of a persons performance is not done. People are compared as a whole. The magnitude of differences in ability between ranks is not equal at different positions. Its use is difficult in large groups when the rater cannot compare several people simultaneously. 2. Rating-scale method In this method, an employees quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal characteristics and characteristics related to the on the job performance of the employees. For example a trait like Job Knowledge may be judged on the range of average, above average, outstanding or unsatisfactory.

3. Check-list method The rater is given a checklist of the descriptions of the behaviour of the employees on job. The checklist contains a list of statements on the basis of which the rater describes the on the job performance of the employees. 4. Forced- choice method

To eliminate the element of bias from the raters ratings, the evaluator is asked to distribute the employees in some fixed categories of ratings like on a normal distribution curve. The rater chooses the appropriate fit for the categories on his own discretion. 5. Field review In this method, a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. A major drawback of this method is that it is a very time consuming method. But this method helps to reduce the superiors personal bias. 6. Critical incident technique In this method of Performance appraisal, the evaluator rates the employee on the basis of critical events and how the employee behaved during those incidents. It includes both negative and positive points. The drawback of this method is that the supervisor has to note down the critical incidents and the employee behaviour as and when they occur. 8. Essay appraisal This traditional form of appraisal, also known as "Free Form method" involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. A major drawback of the method is the inseparability of the bias of the evaluator. 9. Assessment centre An assessment centre typically involves the use of methods like social/informal events, tests and exercises, assignments being given to a group of employees to assess their competencies to take higher responsibilities in the future. Generally, employees are given an assignment similar to the job they would be expected to perform if promoted. The trained evaluators observe and evaluate employees as they perform the assigned jobs and are evaluated on job related characteristics. The major competencies that are judged in assessment centre are interpersonal skills, intellectual capability, planning and organizing capabilities, motivation, career orientation etc. assessment centre are also an effective way to determine the training and development needs of the targeted employees. MANAGEMENT BY OBJECTIVES The concept of Management by Objectives (MBO) was first given by Peter Drucker in 1954. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed.

The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employees actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities. THE MBO PROCESS

UNIQUE FEATURES AND ADVANTAGES OF MBO The principle behind Management by Objectives (MBO) is to create empowered employees who have clarity of the roles and responsibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals. Some of the important features and advantages of MBO are:

Clarity of goals With MBO, came the concept of SMART goals i.e. goals that are:
1. Specific 2. Measurable 3. Achievable

4. Realistic, and 5. Time bound. The goals thus set are clear, motivating and there is a linkage between organizational goals and performance targets of the employees. The focus is on future rather than on past. Goals and standards are set for the performance for the future with periodic reviews and feedback.

Motivation Involving employees in the whole process of goal setting and

increasing employee empowerment increases employee job satisfaction and commitment.

Better communication and Coordination Frequent reviews and

interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period. JOB EVALUATION AND MERIT RATING Job evaluation means systematically determining relative worth of jobs to create job structure. An attempt to identify inputs that are most valuable to the organization & to develop job hierarchy based on which jobs have more or less of those dimensions In Job Evaluation process the worth of job is identified based upon job comparability and according to worth, importance of job and relative value Compensation is designed and selected. MERIT RATING Merit-rating is associated with performance appraisal of an employee. This is a systematic approach for evaluating the performance of an employee on the job, which he performs. This is also called as performance appraisal, personnel rating and employee evaluation. Merit-rating is a formal, objective procedure for evaluating personality, contributions and potentials of employees in a working organization. Job Evaluation Vs Merit Rating: Job-evaluation and merit-rating are compared in the following ways: Job Merit Rating Evaluation (1) It evaluated a job or work (1) It evaluated a worker It is for the purpose of deciding

(2) It is for the purpose of fixing a(2)

base-wage for a job. (3) It is independent of operator or(3) worker. It is impersonal in nature. (4) Useful for decision regarding wage(4) and salary administration, skill match, etc. (5) It considers requirement of job. (5)

reward for exceptional merit of worker. It is independent of job. It is impersonal in nature. Useful for decision regarding training, placement, promotion, counseling, etc. It considers ability performance of individual. and

PROMOTIONS, DEMOTION AND TRANSFER DEFINITIONS 1. Promotion: A promotion is a change for an individual (as opposed to a position) in duty assignments and title to another in a higher pay grade, which involves significantly higher level of responsibility and requires higher qualifications. 2. Demotion: A demotion is a change in duty assignment from a position in one classification to a position in another classification in a lower pay grade, which involves a lower level of responsibility or requires lower qualifications. 3. Lateral Transfer: A lateral transfer is considered to be a move to another position with the same classification level (pay grade) and salary range. There is no change of compensation associated with this change. HUMAN RELATIONS Human relations seem to be an easy and a common sense subject. It can make our lives easy and comfortable or difficult and miserable. Human relations are at work not only in our work lives but also in our family and in our personal lives. The term Human Relations in its broadest sense covers all types of interactions among people. It is a study of WHY our beliefs, attitudes and behaviors some times cause interpersonal conflicts in our personal lives and in work related situations. This subject focuses on the systematic analysis of human behavior, preventing conflict, and resolution of behavioral problems. The subject can help in the development of interpersonal relations and produce those abilities which promote good working relations with people at work and also in personal life. This course aims to develop the abilities to resolve conflicts amicably and to address the various interpersonal issues congenially. An American research suggests that for personal success, only 15 percent contribution comes

from technical skills and 85 percent contribution comes from interpersonal skills. This finding from a Western environment may not be that applicable to Pakistani environment but it is quite certain that the major contribution towards personal success comes from interpersonal skills. In an organization, managers are concerned with three types of resources, 1. Physical resources; 2. Financial resources; 3. Human resources; Physical and Financial resources are the building, furniture, environment, money etc. Human resource is the most important resource that managers have to deal with efficiently and effectively. Good human resource is capable and will be profitable for the organization. Suppose a situation arises that people within an organization dont get along with one another. There are conflicts over small and large issues, day in and day out. Resolving these conflicts uses most of the energy of the employees and as a result physical and financial resources are not used to the optimum level. How human relations or interpersonal skills affect the people in an organization and how they relate to one another and get things done in a congenial manner, not only affects its work environment but also have an impact for the profits/outcomes of the company. There are three aspects of a person: 1. Private Self: The personal life of a person. 2. Projected Self: What the person would like to project in public. 3. Perceived Self: The way people see us. Some Guidelines for Effective Human Relations: 1. 2. 3. 4. 5. 6. 7. 8. 9. Keep a positive approach. Be an optimistic person. Be genuinely interested in others. Call people politely by name. Help other people whenever possible. Create a Win-Win situation. Think before you act. Have open communication. Develop a pleasant work environment. themes in Effective Human Relations: Self awareness. Self acceptance. Motivation. Trust. Self discourse.

Major

 Conflict management. Communication. Major forces Influencing Worker Behavior: 1. Organizational culture mission value standards. 2. Work group Influence Social support. 3. Personal characteristics of worker abilities interests, Aptitudes, Value expectations. 4. Supervisory management influence, philosophy leadership Style. 5. Job influence meaningfulness responsibility knowledge of results. KINDS OF PUNISHMNET HOT STOVE RULE Draws an analogy between touching a hot stove and undergoing discipline: when a person touches a hot stove:The burn is immediate He had warning. Particularly if the stove was red hot he knew what would happen if he touched it. The effect is consistent. Everyone who touches a red hot stove would be burned. The effect is impersonal. A person is burned not because of who he is but because he touched the hot stove. The effect is commensurate with the gravity of misconduct. A person who repeatedly touches the hot stove is burnt more than one who touched it only once. The same should be with discipline. The disciplinary process should begin immediately after the violation is noticed. It must give a clear warning that so many penalties would be imposed for a given offence. The same kind of punishment should be consistently imposed for the same offence. Punishment should be imposed regardless of status different. In other words, it should be commensurate with the gravity of the offence. An employee found guilty of an act of minor misconduct like unpunctuality or irregular attendance should not be awarded the same punishment as may justifiably be awarded to an employee found guilty of an act of , major misconduct like the theft of employers property. KINDS MINOR PUNISHMENTS Oral reprimand Written reprimand Loss of privileges Fines

Punitive suspension MAJOR With holding of increments Demotion Discharge Dismissal ORAL REPRIMAND This punishment is gingerly given for some offences such as failure to obey safety rules, smoking in prohibited area, sleeping on the job. Issue of reprimand does not involve loss of status, or wages to the employees and therefore though it amounts to disciplinary action, it is not deemed to be a substantive punishment. WRITTEN REPRIMAND An oral reprimand may not be sufficient in case of habitual misconduct or inefficiency. In such a situation it is desirable that it is issued in writing and brought on record so that it may have to be given to the employee in future. A written reprimand may state that certain privileges would be with held or withdrawn if the subordinate continues with his present conduct. LOSS OF PRIVILEGES For such offences as tardiness or leaving work without permission, the employee may be put loss of various privileges such as good job assignment, rights to select machinery or equipment and freedom of movement about the work place or company. FINES Fine means deduction from the remuneration of the employee by way of punishment.Power to make penal deductions from the remuneration of the employee is not an implied term of ordinary contract. It can be exercised only if especially reserved to the employer under contract of employment or a statue. PUNITIVE SUSPENSION It is different from the suspension pending an enquiry. It is inflicted on the workman as a punishment for some misconduct whereas suspension pending an PUNISHMENTS

enquiry is only an expedient action which a manger may find necessary to take following commission of grave and serious misconduct. WITH HOLDING OF INCREMENTS Withholding of annual increment of an employee in a graded scale is a major punishment and the acts of misconduct for which this punishment may be awarded are the same as those for which the extreme punishment of dismissal may be awarded. DEMOTION Demotion means reduction of an employee to a lower grade. Demotion should be used only in a case when an employee does not meet present job requirements or in the event of a cut back in the work force. DISCHARGE In common law, if both parties to an agreement have performed what they have agreed to do, the conduct is discharged. Thus in a contract of service if both parties have agreed to terminate the contract by giving stipulated amount of notice or by paying money in lieu thereof the contract of service can be terminated in the agreed manner for reasons which do not imply any act of misconduct. DISMISSAL Dismissal is the ultimate penalty which is rarely resorted to nowadays. Though discharge and dismissal both have the same result, namely the termination of service of the employee, there are some vital differences between two: While dismissal is always a punishment, discharge may or may not be a punishment. A dismissal is more severe punishment than discharge. A dismissal is usually summary, that is immediate action is taken to terminate the employment contract of the employee without notice. But in case of discharge an agreed amount of notice may have to be given. In cases of dismissal the employee is not usually entitled to provident fund or gratuity benefits but this is not so in the case of a discharge.

UNIT IV WAGE AND SALARY ADMINISTRATION INTRODUCTION Wage and salary administration refers to the establishment and implementation of sound policies and practices of employee compensation. It includes areas such as job evaluation, survey of wage and salaries, analysis of relevant organizational problems, development and maintenance of wage structure, establishing rules for administering wages, wage payment incentives, wage changes and adjustment. NATURE AND PURPOSE The basic purpose of Wage and salary administration is to establish and maintain an equitable wage and salary structure. Its secondary objective is the establishment and maintenance of an equitable labour-cost structure. (ie) an optimal balancing of conflicting personnel interests so that the satisfaction of employees and employers is maximized and conflicts minimized. The wage and salary administration is concerned with the financial aspects of needs, motivation and rewards SOUND WAGE AND SALARY ADMINISTRATION TRIES TO ACHIEVE THE FOLLOWING OBJECTIVE FOR EMPLOYEES Employees are paid according to requirements of their jobs. The chances of favoritisms are greatly minimized . Job sequences and lines of promotion are established whenever they are applicable. Employees morale and motivation are increased because a wage programme can be explained and is based up on facts.

TO EMPLOYERS In dealing with the trade union, they can explain their wage programme because it is based up on a systematic analysis of job and wage facts. A wage and salary administration reduces the likelihood of friction and grievances over wage inequities. It enhances an employees morale and motivation because adequate and fairly administered wages are basic to his wants and needs. It attracts qualified employees by ensuring and adequate payment for all the jobs. WAGE AND SALARY PROGRAMME PURPOSE To recruit persons for a firm. To control payroll costs. To satisfy people, to reduce the incidence of quitting grievances and fractions over pay. To motivate people to perform better WAGES A wage or pay is the remuneration paid , for the service of labour in production periodically to an employee / workers. Wages usually refers to the hourly rate or daily rate paid to such groups as production and maintenance. SALARY Salary refers to the weakly or monthly rates paid to clerical, administrative and professional employees (white collar employees) WAGE STRUCTURE The wage structure is used to describe wage/salary relationship within particular grouping . The grouping can be classified according to occupation or organization, such as wage structure of craftsman (carpenters, mechanics, bricklayers etc) WAGE DETERMINATION PROCESS STEPS 1. PROCESS OF JOB ANALYSIS

A job analysis describes the duties, responsibilities, working condition and inters relationship between job as it is and the other jobs with which it is associated. A job is rated in order to value relative to all the other jobs in the organization which are subject to evaluation. 2. WAGE SURVEYS Once the relative worth of jobs has been determined by job evaluation, the actual amounts to be paid must be determined. This is done by making wage or salary surveys in the area concerned. There are various ways to make such a survey. Most firms either use the results of packaged surveys available from the research bodies , employers association , government labour bureaus etc. or they participate in wage surveys and receive copies of results or else they conduct their own. These surveys may be carried out by mailed questionnaire, telephone or personal interview with other managers. 3. RELEVANT ORGANISATIONAL PROBLEMS In addition to the results of job analysis and wage surveys several other variables have to be given due consideration in establishing wage structure. Example: whether there exists well established and well accepted relationships among certain jobs, whether organization would recruit new employees after revised wage structure etc.. 4. PREPARATION OF WAGE STRUCTURE The next step is to determine the wage structure. For this several decisions need to be taken such as: Whether the organization wishes or is able, to pay amounts above, below or equal to the average in the community or industry. Whether wage ranges should provide for merit increases or whether there should be single rates. Which jobs are to be placed in each of the pay grades? FACTORS INFLUENCING ADMINISTRATION WAGE AND SALARY STRUCTURE AND

The wage policies of different organization vary somewhat, factors such as changes in the cost of living, supply and demand of labour, and ability to pay. Besides the basic factors provided by a job description and job evaluation, those that are usually taken in to consideration for wage and salary administration are The organizations ability to pay.

Supply and demand of labour The prevailing market rate The cost of living Living wage Productivity Trade unions bargaining power Job requirements Managerial attitudes PRINCIPLES OF WAGE AND SALARY ADMINISTRATION There should be definite plan to ensure that differences in pay for jobs are based upon variations in job requirements. The general level of wages and salaries should be reasonably in line with that prevailing in the labour market. The plan should carefully distinguish between jobs and employees. Equal pay for equal work. There should be a clearly established procedure for hearing and adjusting wage complaints. The wage should be sufficient to ensure for the worker and his family reasonable standard of living BASIC KINDS OF WAGE PLANS TIME WAGE PLANS Under which remuneration does not vary with output or the quality of output , but depends on the time unit consumed in performing work. PIECE OR OUTPUT WAGE PLANS It is concerned with output or some other measure of productivity during a given period of time ELEMENTS OR INGREDIENTS OF GOOD WAGE PLAN

It should be easily understandable. It should be capable of easy computation It should be capable of effectively motivating the employees. It should provide for remuneration to employees. It should be relatively stable PLANS IN WHICH WORKERS EARNINGS VARY PROPORTIONATELY LESS THAN THEIR OUTPUT HALSEY PLAN Under this plan, a standard time is fixed for the completion of job A worker who completes his job in less than the standard time is paid at his hourly rate for the time actually spent on the job plus a bonus for the time saved. ROWAN PLAN A standard time is determined beforehand and a bonus is paid according to the time saved. The difference between halsey plan and rowan is in the method of bonus determination. Under rowan plan the bonus paid is based on that proportion of the time saved which the time taken bears to be standard time. Bonus = Time saved Time allowed BEDAUX PLAN OR POINTS PLAN The feature of this plan is that the benefit of the value of time saved is given both to the worker and to the foremen in the rate of worker three fourth and foreman one-fourth. As the co-operation of the foreman is necessary to enable the worker to save time, some incentive is provided even to the foreman. PLANS IN WHICH WORKERS EARNINGS VARY PROPORTIONS AT DIFFERENT LEVELS OF OUTPUT TAYLOR DIFFERENTIAL PIECE-RATE Under this plan , a standard task for all workmen is fixed and two piece rates are provided. The higher rate is meant for those who can complete the standard task within the allotted time and the lower rate is for those who cannot complete the standard task within allotted time. MERRICKSS MULTIPLE PIECE RATE IN DIFFERENT * time taken * rate per hour

Under this plan three rates are prescribed. Those whose performance is less than 83% of the standard tasks are paid at a low piece rate. Those producing 83% of the standard tasks are paid at a high piece rate and those attaining or exceeding the standard task are paid at still higher piece rate.

GANTTS TASK AND BONUS PLAN Under this plan a definite output is fixes as a standard daily performance. The worker is also guaranteed a minimum daily wage irrespective of his daily output. A worker achieves or exceeds standard performance also receives a bonus at 20 to 30% of his piece wage in addition to his day rate. EMMERSONS EFFICIENCY PLANS This plan provides for the payment of bonus at an increasing percentage to all workers above a minimum level of efficiency. INCENTTIVES An incentive or reward can be anything that attracts a employees attention and stimulates him to work. An incentive scheme is a plan or programmes to motivate individual or group performance. Incentive system is related with wage payment plans which tie wages directly or indirectly to standards of productivity or to the probability of the organization or to both criteria FEATURES OF INCENTIVE PLAN An incentive plan may consist of both monetary and non-monetary elements. The timing, accuracy and frequency of incentives are the very basis of successful incentive plans. The plans require that it should be properly communicated to encourage individual performance, provide feedback. DETERMI ANTS OF INCENTIVES The effective use of incentives depends on three variables. The individual Work situation Incentive plan INCENTIVE AND INCENTIVE PLANS

Different people value things differently. Enlightened managers realize that all people do not attach the same value to monetary incentives, bonuses, and prizes. Employees view these things differently because of age, marital status, economic need and future objectives. WORK SITUATION This is made up of four important elements. Technology, machine or work system Satisfy job assignments, a workers job may incorporate a number of activities that he finds satisfying. Feedback, a worker needs to be able to see the connection between his work and rewards. Equity worker considers fairness or reasonableness as part of the exchange for his work. CLASSIFICATION OR TYPES OF REWARDS] Rewards or incentives can be classified in to Direct compensation Indirect compensation DIRECT COMPENSATION It includes the basic salary or wage that the individual is entitled to for his job, overtime work and holiday premium, bonuses based on performance profit sharing and opportunities to purchase stock options etc. INDIRECT COMPENSATION It includes protection programme (insurance plans , pensions) , pay for time not worked , services and perquisites . but these are maintenance factors rather than reward components. WAGE INCENTIVE Wage incentive is extra financial motivation. They are designed to stimulate human effort by rewarding the person, over and above the time rated remuneration, for improvements in the present or targeted results. OBJECTIVES OF WAGE INCENTIVES SCHEME To improve the profit of a firm through a reduction in the unit costs of labour and materials. To avoid or minimize additional capital investment for the expansion of production capacity. To increase a workers earnings without dragging the firm in to a higher wage rate structure regardless of productivity.

To use wage incentives as a useful tools for securing a better utilization of man power, better production scheduling and performance control TYPES OF WAGE INCENTIVES PLANS

Plans for blue collar workers Plans for white collar workers Plans for managerial personnel. PLANS FOR BLUE COLLAR WORKERS Halsey premium plan Halsey weir premium plan Rowan premium plan Bedaux point plan Taylors differential piece rate plan Merricks multiple piece rate plan Gannt task plan Emerson efficiency plan PLANS FOR WHITE COLLAR WORKERS STRAIGHT SALARY METHOD

It is not an incentive plan, the salesman is simply paid on weekly , monthly or on yearly basis The advantages are salesmen know in advance what their income will be and expenditure on salesmen is known beforehand. STRAIGHT COMMISSION BASIS Under this method the salesmen are paid on the basis of sales effected. (ie) they are paid for results and only for results. Therefore high performance salesmen are generally attracted. COMBINATION METHOD OF SALARY AND COMISSION BASIS Under this salesman not only get a fixed salary but also a commission in proportion to the sales effected. The advantages are salesmen are assured of minimum earnings; they are relieved of financial worries. The company has more control over its salesmen, as there is sizable salary component in most combination plans. SALARY PLUS COMMISSION Commission plus bonus, where salesmen are paid primarily on the basis of commission but they are also given a bonus for activities like slow moving items and salary plus bonus, where in salesmen are paid a basic salary and also given a bonus for carrying out specified activities.

INCENTIVES FOR MANAGERIAL EMPLOYEES In many organizations, the mangers are paid bonus. There are two types of bonus plans. One determined by formula and by some discretion used in allocation of bonus. The bonus plans are generally reviewed annually to make them more effective. For top level management, bonuses are generally tied to overall corporate results. The size of bonus is much higher for top level executives and lower for the lower level executives. REQUISITES OR GUUIDELINES FOR EFFECTIVE INCENTIVE PLAN Insure that efforts and rewards are directly related The reward must be valuable to the employees. The reward must be clearly identifiable. Methods and procedures must be carefully studied. The plan must be understandable and easily calculable by the employees. Effective standard must be set. Standards must be guaranteed. Clear policies and rules must be developed. Rewards must be granted promptly. Employee participation may be useful for increasing the effectiveness of incentive plans. LABOUR WELFARE AND SOCIAL SECURITY Labour welfare and social security measures are also known as employee service programmes or fringe benefits. Employees enjoy these services such as canteens, crches , education etc without any reference to the specific work done by them. In the case of economic benefits such as disablement compensation for employment injury, retirement benefits, medical and maternity benefits etc their amount is not predetermined and can be ascertained only after the event. LABOUR WELFARE Labour welfare defined as efforts to make life worth living for workmen PRINCIPLES OF LABOUR WELFARE SERVICES The service should satisfy real needs of the workers. The service should be such as can be handled by cafeteria approach.

The employer should not assume a benevolent posture. The cost of the service should be calculable and its financing established on a sound basis. There should be periodical assessment or evaluation of the service and necessary timely improvement on the basis of feedback. TYPES OF LABOUR WELFARE SERVICE The services which are provided within the factory are known as intramural it includes safety , health and counseling services. Extramural services are those which are provided outside the factory such as education, housing, transport etc . The three important welfare services are: Safety Health Counseling SAFETY SERVICE Prevention of accident is an objective which requires no explanation. This is one which there is complete identity of employer employee interests the employee does not want to be injured and the employer does not want to be injured and the employer does not want to incur the cost of injuring him. The cost of accidents are enormous in suffering to the injured , in reduction or loss of earnings , in disabilities and incapacities which afflict those involves and ion compensation , insurance and legal costs, filling in reports and attending to enquiries and in spoilage of materials , equipment and tools to management. Accidents are the consequence of two basic factors. Technical factors and Human factors. TECHINCAL FACTORS It include all engineering deficiencies related to plants, tools, materials and general work environment Example: improper lighting, inadequate ventilation, poor machine guarding and careless housekeeping are some hazards which may cause accidents. HUMAN FACTORS Human factors include all unsafe acts on the part of employees. An unsafe act is usually the results of carelessness. In some carelessness can be attributed to the mental condition of employee. Example: an employee emotionally upset, worried or distributed is very often careless. COMPONENTS OF SAFETY SERVICE

APPOINTMENT OF SAFETY OFFICER The head of the safety department, who is usually a staff man, is granted power to inspect the plant for unsafe condition, to promote sound safety practices through posters, to make safety rules, and to report violations to the plant manager. His function includes analyzing the course of accidents, maintaining accident records, purchasing safety equipment and so-on. SUPPORT BY LINE MANAGERS The head of safety department, whether enjoying a staff or a functional position, by himself, cannot make a plant role. This highlights the importance of making safety a line responsibility. To win line people supports they have to encourage them o participate on safety committees, on housekeeping inspections and investigation of accidents. ELIMINATION OF HAZARDS Although complete elimination of all hazards is virtually impossibility but following steps can be taken to help to reduce them. Job safety analysis, placement, safeguarding machinery, materials handling, maintenance, layout and design, housekeeping. SAFETY TRAINING, EDUCATION AND PUBLICITY Safety training is concerned with developing safety skills, whereas safety education is concerned with increasing the employees knowledge about accident prevention. Publicity in the form of contest programmes, safety campaigns, suggestion awards and various audio-visual aids can be considered as different forms of employee education. SAFETY INSPECTIONS An inspection by a trained individual or a committee to detect evidence of possible safety hazards such as poor lighting, slippery floors, faulty electrical installations, poor work methods is a very effective device to promote safety. Safety inspections can take any one of the following four forms. They are periodical safety audit, random spot check, daily check and regular inspection INVESTIGATION OF ACCIDENTS Investigation of an accident usually involves following steps, they are: Define the problem or nature of accident. Collect all relevant facts Determine the cause of accidents

Develop several alternatives to prevent recurrence Select and implement the most effective alternative Suggest disciplinary action. 2. HEALTH Another equally important segment is the employees general health, both physical and mental. The factors which influence the general health of the worker can be divided into two broad groups. First those which are associated with his working environment, second those which he shares with the rest of the community TWO ASPECTS OF INDUSTRIAL HEALTH SERVICES Preventive Curative PREVENTIVE Pre-employment and periodic medical examination Removal or reduction of health hazards. Surveillance over certain classes of workers such as women, young persons.. Training of first aid personnel and education of workers in health and hygiene. Attention to working conditions such as proper lighting, temperature. Ventilation, noise etc. CURATIVE The curative aspect begins only after a worker has fallen ill or caught any diseases. 3. COUNSELLING COUNSELLING SERVICES An employee very often comes across problems which have emotional content. Example: he may be nearing retirement and feeling hesitant to shoulder increased responsibility or he may be worried due to some family problem. In all such cases the employee needs to be counseled by somebody. Counseling may be done by anybody in whom the employee has confidence and trust. Counseling is a discussion of the problem with the employee to help him cope with it better. ADVANTAGES It It It It It improves both upward and downward communication. helps the employees in finding release of emotional tension. clarifies employees thinking. develops courage and confidence in the employee. helps to solve the problem.

LABOUR WELFARE IN INDIA ARTICLE 38

The state shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social , economic and political shall inform all the institutions of the national life.

ARTICLE 41 The state shall within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness. FACTORIES ACT 1948 The act contains detailed provisions about: Appointment of labour welfare officer Health of workers Safety of workers Welfare of workers LABOUR WELFARE OFFICER The factory act provides that in every factory wherein 500 or more workers are ordinarily employed the employer shall appoint atleast one welfare officer. QUALIFICATION AND DUTIES OF WELFARE OFFICER The welfare officer should possess A university degree. Degree or diploma in social service or social work or social welfare from a recognized institution Adequate knowledge of the language spoken by the majority of the workers in the area where the factory is situated.. DUTIES Supervision of safety, health and welfare programmes like housing, sanitarian services etc. Counseling workers in personal and family problems, adjustment to their work environment, understanding their rights and privileges.

Advising management in matters of formulating labour and welfare policies, apprenticeship training programmes, developing fringe benefits etc. Establishing liaison with workers so that they may understand various limitations under which they work, interpret company policies correctly. Establishing; liaison with management. Working with management and workers to improve productivity. Welfare officer is expected to render three different types of functions. Labour welfare Labour administration Labour relations LABOUR WELFARE functions include advice and assistance in implementing statutory provisions relating to workers health, safety, and welfare. LABOUR ADMINISTARTION function includes maintenance of discipline, wage and salary administration. LABOUR RELATIONS function includes settlement of grievances, increase in productive efficiency, promotion of harmony and powerful settlement of disputes. HEALTH OF WORKERS It includes cleanliness, disposal of wastes, ventilation and temperature , dust and fume , overcrowding , lighting , drinking water , latrines and urinals etc. SAFETY OF WORKERS It includes fencing of machinery , work on or near machinery in motion , prevent the employment of young persons on dangerous machines , device for cutting off power, proper construction and maintenance of floors and stairs , no excessive weights , safety of building and machinery. WELFARE OF WORKERS There shall be separate and adequately screened washing facilities for the use of male and female workers. There shall be suitable places provided for clothing not worn during working hours and for the drying of wet clothing. There shall be suitable arrangement for all workers to sit for taking rests . There shall be provided the required number of first aid boxes

There shall be provided sufficiently lighted and ventilated lunch room. SOCIAL SECURITY The term social security varies from country to country with different ideologies. The goal is to give complete protection to every citizen from the cradle to the grave COMPONENTS OF SOCIAL SECURITY Medical care Sickness benefit Unemployment benefit Old-age benefit Employment injury benefit Family benefit Maternity benefit Survivors benefit SOCIAL SECURITY IN INDIA

Under which the state finances the entire cost of the facilities and benefits provided. Here benefits are paid after testing the financial position of the beneficiary. SOCIAL INSURANCE Under which the state organizes the facilities financed by contributions from both the workers and employers, with or without a subsidy from the state. The social insurance method, which has gained much wider acceptance than the social assistance, consists of following enactments. The The The The The The workmens compensation act 1923 employees state insurance act 1948 employees provident funds act 1952 maternity benefit acct 1961 payment of gratuity act 1972 industrial disputes acct 1947

THE WORKMENS COMPENSATION ACT 1923 This act covers all workmen employed in factories, mines, plantations, transport undertakings, construction works, railways, ships and other hazardous occupation. BENEFITS The compensation is payable by the employer to a workman for all personal injuries caused to him by accident arising out of and in the course of his employment which

disable him for more than 3 days. If the workman dies, the compensation is to be paid to his dependants. EMPLOYEE STATE INSURANCE ACT 1948 This act covers all workers whether manual, supervisory or salaried employees whose wages excluding remuneration for overtime work do not exceed Rs.6500 per month and who are employed in factories. The act is administered by the ESI Corporation. BENEFITS An injured person is entitled to receive the following the benefits. They are medical benefits, sickness benefit, maternity benefit, disablement benefit, and dependants benefits THE EMPLOYEES PROVIDENT FUND ACT 1952 This act applies to every establishment which the central government notifies in the official gazette and in which 20 or more persons are employed. BENEFITS There are 3 types of benefits. Provident fund Pension Deposit linked-insurance Under provident fund scheme an employee can avail himself of non- refundable withdrawals or take advances from his provident fund account for construction of house , sickness , marriage of self \ dependants, higher education of his children etc.. THE MATERNITY BENEFIT ACT 1961 This act applies to all factories, establishments, plantations, mines and shops where 10 or more persons are employed and which are not covered by the ESI act. BENEFITS The act entitles a woman employee to claim maternity leave from her employer if she has actually worked for a period of atleast 80 days in the 12 months immediately preceding the day of her expected delivery. The maximum period for which any woman is entitled to maternity leave is 12 weeks (ie) 6 weeks up to and including the day of her delivery and 6 weeks immediately following the day. PAYMENT OF GRATUITY ACT 1972

The act applies to every factory, mine, oil field, plantation, and railway, company in which 10 or more persons are employed or were employed, on any day of the preceding 12 months. BENEFITS Under the act gratuity is payable to an employee on the termination of his employment after he has rendered continuous service for not less then 5 years. The amount of gratuity payable to an employee shall not exceed Rs.3.5 lakhs. INDUSTRIAL DISPUTE ACT 1947 The act applies to all workmen employed in any private or government owned industry to do any manual, clerical, skilled, unskilled, technical or supervisory job excluding those drawing wages exceeding Rs.1600 per month RETIREMENT BENEFITS The major retirement benefits are the federal social security program and employer pension\ retirement plans. SOCIAL SECURITY Federal program that provides three types of benefits. Retirement income at the age of 62 and thereafter Survivors or death benefits payable to the employees dependents regardless of age at time of death. Disability benefits payable to disabled employees and their dependents. These benefits are payable only if the employee is insured under the social security. Act. Full retirement age was 65 the usual age for retirement. PENSION PLANS

Plans that provide a fixed sum when employees reach a predetermined retirement age or when they can no longer work due to disability. Pensions provide income to individuals in their retirements. CONTRIBUTORY AND NON CONTRIBUTORY PLANS The employees contribute to the contributory pension plan, while the employer makes all contributions to the non- contributory plan. QUALIFIED AND NON QUALIFIED PLANS

Employers derive certain tax benefits from contributing to qualified pension plans, such as tax deductions for contributions: Non- qualified pension plans get less favorable tax treatment for employees and employers. DEFINED BENEFITS PLANS With defined benefits plans the employee knows ahead of the time the pension benefits he or she will receive. A plan that contains formula for determining retirement benefits. The defined pension benefit itself is usually set by a formula that ties the persons retirement pension to an amount equal to the percentage of the persons pre retirement pay (for instance , to an average of his or her last five years he or she worked for the company. DEFINED CONTRIBUTION PLANS This plan specifies what contribution the employee and employer will make to the employees retirement or savings fund. In other words contribution is defined and not the pension. The persons pension will depend on the amounts contributed to the funds and on the retirement funds investment earning.

UNIT-V INDUSTRIAL RELATIONS Industrial relations are used to denote the collective relationships between management and the workers. Traditionally, the term industrial relations is used to cover such aspects of industrial life as trade unionism, collective bargaining, workers participation in management, discipline and grievance handling, industrial disputes and interpretation of labor laws and rules and code of conduct. In the words of Lester, "Industrial relations involve attempts at arriving at solutions between the conflicting objectives and values; between the profit motive and social gain; between discipline and freedom, between authority and industrial democracy; between bargaining and co-operation; and between conflicting interests of the individual, the group and the community. The National Commission on Labor (NCL) also emphasize on the same concept. According to NCL, industrial relations affect not merely the interests of the two participants- labor and management, but also the economic and social goals to which the State addresses itself. To regulate these relations in socially desirable channels is a function, which the State is in the best position to perform. In fact, industrial relation encompasses all such factors that influence behavior of people at work. A few such important factors are below: Institution: It includes government, employers, trade unions, union federations or

associations, government bodies, labor courts, tribunals and other organizations which have direct or indirect impact on the industrial relations systems. Characters: It aims to study the role of workers unions and employers federations officials, shop stewards, industrial relations officers/ manager, mediator/conciliators / arbitrator, judges of labor court, tribunal etc. Methods: Methods focus on collective bargaining, workers participation in the industrial relations schemes, discipline procedure, grievance redressal machinery, dispute settlements machinery working of closed shops, union reorganization, organizations of protests through methods like revisions of existing rules, regulations, policies, procedures, hearing of labor courts, tribunals etc. Contents: It includes matter pertaining to employment conditions like pay, hours of works, leave with wages, health, and safety disciplinary actions, lay-off, dismissals retirements etc., laws relating to such activities, regulations governing labor welfare, social security, industrial relations, issues concerning with workers participation in management, collective bargaining, etc. Industrial relations has become one of the most delicate and complex problems of modern industrial society. Industrial progress is impossible without cooperation of labors and harmonious relationships. Therefore, it is in the interest of all to create and maintain good relations between employees (labor) and employers (management). Concept of Industrial Relations: The term Industrial Relations comprises of two terms: Industry and Relations. Industry refers to any productive activity in which an individual (or a group of individuals) is (are) engaged. By relations we mean the relationships that exist within the industry between the employer and his workmen. The term industrial relations explain the relationship between employees and management which stem directly or indirectly from union-employer relationship. Industrial relations are the relationships between employees and employers within the organizational settings. The field of industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union. Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated. The term industrial relations has a broad as well as a narrow outlook. Originally, industrial relations were broadly defined to include the relationships and interactions between employers and employees. From this perspective, industrial relations covers all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations. Now its meaning has become more specific and restricted. Accordingly, industrial relations pertains to the study and practice of collective bargaining, trade

unionism, and labor-management relations, while human resource management is a separate, largely distinct field that deals with nonunion employment relationships and the personnel practices and policies of employers. The relationships which arise at and out of the workplace generally include the relationships between individual workers, the relationships between workers and their employer, the relationships between employers, the relationships employers and workers have with the organizations formed to promote their respective interests, and the relations between those organizations, at all levels. industrial relations also includes the processes through which these relationships are expressed (such as, collective bargaining, workers participation in decision-making, and grievance and dispute settlement), and the management of conflict between employers, workers and trade unions, when it arises IMPORTANCE OF INDUSTRIAL RELATIONS The healthy industrial relations are key to the progress and success. Their significance may be discussed as under -- Uninterrupted production The most important benefit of industrial relations is that this ensures continuity of production. This means, continuous employment for all from manager to workers. The resources are fully utilized, resulting in the maximum possible production. There is uninterrupted flow of income for all. Smooth running of an industry is of vital importance for several other industries; to other industries if the products are intermediaries or inputs; to exporters if these are export goods; to consumers and workers, if these are goods of mass consumption. -- Reduction in Industrial Disputes Good industrial relations reduce the industrial disputes. Disputes are reflections of the failure of basic human urges or motivations to secure adequate satisfaction or expression which are fully cured by good industrial relations. Strikes, lockouts, go-slow tactics, gherao and grievances are some of the reflections of industrial unrest which do not spring up in an atmosphere of industrial peace. It helps promoting co-operation and increasing production. -- High morale Good industrial relations improve the morale of the employees. Employees work with great zeal with the feeling in mind that the interest of employer and employees is one and the same, i.e. to increase production. Every worker feels that he is a co-owner of the gains of industry. The employer in his turn must realize that the gains of industry are not for him along but they should be shared equally and generously with his workers. In other words, complete unity of thought and action is the main achievement of industrial peace. It increases the place of workers in the society and their ego is satisfied. It naturally affects production because mighty co-operative efforts alone can produce great results. -- Mental Revolution The main object of industrial relation is a complete mental revolution of workers and employees. The industrial peace lies ultimately in a

transformed outlook on the part of both. It is the business of leadership in the ranks of workers, employees and Government to work out a new relationship in consonance with a spirit of true democracy. Both should think themselves as partners of the industry and the role of workers in such a partnership should be recognized. On the other hand, workers must recognize employers authority. It will naturally have impact on production because they recognize the interest of each other. -- Reduced Wastage Good industrial relations are maintained on the basis of cooperation and recognition of each other. It will help increase production. Wastages of man, material and machines are reduced to the minimum and thus national interest is protected. Thus, it is evident that good industrial relations is the basis of higher production with minimum cost and higher profits. It also results in increased efficiency of workers. New and new projects may be introduced for the welfare of the workers and to promote the morale of the people at work. An economy organized for planned production and distribution, aiming at the realization of social justice and welfare of the massage can function effectively only in an atmosphere of industrial peace. If the twin objectives of rapid national development and increased social justice are to be achieved, there must be harmonious relationship between management and labor. OBJECTIVES OF INDUSTRIAL RELATIONS The main objectives of industrial relations system are:-- To safeguard the interest of labor and management by securing the highest level of mutual understanding and good-will among all those sections in the industry which participate in the process of production. -- To avoid industrial conflict or strife and develop harmonious relations, which are an essential factor in the productivity of workers and the industrial progress of a country. -- To raise productivity to a higher level in an era of full employment by lessening the tendency to high turnover and frequency absenteeism.

To establish and promote the growth of an industrial democracy based on labor partnership in the sharing of profits and of managerial decisions, so that ban individuals personality may grow its full stature for the benefit of the industry and of the country as well. To eliminate or minimize the number of strikes, lockouts and gheraos by providing reasonable wages, improved living and working conditions, said fringe benefits. To improve the economic conditions of workers in the existing state of industrial managements and political government. Socialization of industries by making the state itself a major employer

Vesting of a proprietary interest of the workers in the industries in which they are employed.

TRADE UNIONISM INTRODUCTION OF TRADE-UNIONS A trade union is an organization of employees formed on a continuous basis for the purpose of securing diverse range of benefits. It is a continuous association of wage earners for the purpose of maintaining and improving the conditions of their working lives. The Trade Union Act 1926 defines a trade union as a combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen, or between employers and employers, or for imposing restrictive condition on the conduct of any trade or business, and includes any federation of two or more trade unions. This definition is very exhaustive as it includes associations of both the workers and employers and the federations of their associations. Here, the relationships that have been talked about are both temporary and permanent. This means it applies to temporary workers (or contractual employees) as well. Then this definition, primarily, talks about three relationships. They are the relationships between the:

Workmen and workmen, Workmen and employers, and Employers and employers.

Thus, a trade union can be seen as a group of employees in a particular sector, whose aim is to negotiate with employers over pay, job security, working hours, etc, using the collective power of its members. In general, a union is there to represent the interests of its members, and may even engage in political activity where legislation affects their members. Trade unions are voluntary associations formed for the pursuit of protecting the common interests of its members and also promote welfare. They protect the economic, political and social interests of their members. FEATURES OF TRADE UNIONS: 1. It is an association either of employers or employees or of independent workers. They may consist of :o o o

Employers association (eg. Employers Federation of India, Indian paper mill association, etc.) General labor unions Friendly societies

2. 3. 4. 5.

Unions of intellectual labor (eg, All India Teachers Association) It is formed on a continuous basis. It is a permanent body and not a casual or temporary one. They persist throughout the year. It is formed to protect and promote all kinds of interests economic, political and social-of its members. The dominant interest with which a union is concerned is, however, economic. It achieves its objectives through collective action and group effort. Negotiations and collective bargaining are the tools for accomplishing objectives. Trade unions have shown remarkable progress since their inception; moreover, the character of trade unions has also been changing. In spite of only focusing on the economic benefits of workers, the trade unions are also working towards raising the status of labors as a part of industry.
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OBJECTIVES OF TRADE UNIONS Trade unions are formed to protect and promote the interests of their members. Their primary function is to protect the interests of workers against discrimination and unfair labor practices. Trade unions are formed to achieve the following objectives: Representation Trade unions represent individual workers when they have a problem at work. If an employee feels he is being unfairly treated, he can ask the union representative to help sort out the difficulty with the manager or employer. Unions also offer their members legal representation. Normally this is to help people get financial compensation for work-related injuries or to assist people who have to take their employer to court.

Negotiation Negotiation is where union representatives, discuss with management, the issues which affect people working in an organization. There may be a difference of opinion between management and union members. Trade unions negotiate with the employers to find out a solution to these differences. Pay, working hours, holidays and changes to working practices are the sorts of issues that are negotiated. In many workplaces there is a formal agreement between the union and the company which states that the union has the right to negotiate with the employer. In these organizations, unions are said to be recognized for collective bargaining purposes.

Voice in decisions affecting workers

The economic security of employees is determined not only by the level of wages and duration of their employment, but also by the managements personal policies which include selection of employees for lay offs, retrenchment, promotion and transfer. These policies directly affect workers. The evaluation criteria for such decisions may not be fair. So, the intervention of unions in such decision making is a way through which workers can have their say in the decision making to safeguard their interests.

Member services During the last few years, trade unions have increased the range of services they offer their members. These include:

Education and training - Most unions run training courses for

their members on employment rights, health and safety and other issues. Some unions also help members who have left school with little education by offering courses on basic skills and courses leading to professional qualifications. Legal assistance - As well as offering legal advice on employment issues, some unions give help with personal matters, like housing, wills and debt. Financial discounts - People can get discounts on mortgages, insurance and loans from unions. Welfare benefits - One of the earliest functions of trade unions was to look after members who hit hard times. Some of the older unions offer financial help to their members when they are sick or unemployed. FUNCTIONS OF TRADE UNIONS Trade unions perform a number of functions in order to achieve the objectives. These functions can be broadly classified into three categories: (i) Militant functions, (ii) Fraternal functions Militant Functions One set of activities performed by trade unions leads to the betterment of the position of their members in relation to their employment. The aim of such activities is to ensure adequate wages secure better conditions of work and employment get better treatment from employers, etc. When the unions fail to

accomplish these aims by the method of collective bargaining and negotiations, they adopt an approach and put up a fight with the management in the form of goslow tactics, strike, boycott, gherao, etc. Hence, these functions of the trade unions are known as militant or fighting functions. Thus, the militant functions of trade unions can be summed up as:

To achieve higher wages and better working conditions To raise the status of workers as a part of industry To protect labors against victimization and injustice

Fraternal Functions Another set of activities performed by trade unions aims at rendering help to its members in times of need, and improving their efficiency. Trade unions try to foster a spirit of cooperation and promote friendly industrial relations and diffuse education and culture among their members. They take up welfare measures for improving the morale of workers and generate self confidence among them. They also arrange for legal assistance to its members, if necessary. Besides, these, they undertake many welfare measures for their members, e.g., school for the education of children, library, reading-rooms, in-door and out-door games, and other recreational facilities. Some trade unions even undertake publication of some magazine or journal. These activities, which may be called fraternal functions, depend on the availability of funds, which the unions raise by subscription from members and donations from outsiders, and also on their competent and enlightened leadership. Thus, the fraternal functions of trade unions can be summed up as:

To To To To To

take up welfare measures for improving the morale of workers generate self confidence among workers encourage sincerity and discipline among workers provide opportunities for promotion and growth protect women workers against discrimination

IMPORTANCE OF TRADE UNIONS The existence of a strong and recognized trade union is a pre-requisite to industrial peace. Decisions taken through the process of collective bargaining and negotiations between employer and unions are more influential. Trade unions play an important role and are helpful in effective communication between the workers and the management. They provide the advice and support to ensure that the differences of opinion do not turn into major conflicts. The central function of a trade union is to represent people at work. But they also have a wider role in protecting their interests. They also play an important educational role, organizing courses for their members on a wide range of matters. Seeking a healthy and safe working environment is also prominent feature of union activity. Trade unions help in accelerated pace of economic development in many ways as follows:

by helping in the recruitment and selection of workers. by inculcating discipline among the workforce by enabling settlement of industrial disputes in a rational manner by helping social adjustments. Workers have to adjust themselves to the new working conditions, the new rules and policies. Workers coming from different backgrounds may become disorganized, unsatisfied and frustrated. Unions help them in such adjustment.

Trade unions are a part of society and as such, have to take into consideration the national integration as well. Some important social responsibilities of trade unions include:

Promoting and maintaining national integration by reducing the number of industrial disputes Incorporating a sense of corporate social responsibility in workers Achieving industrial peace

REASONS FOR JOINING TRADE UNIONS The important forces that make the employees join a union are as follows: 1. Greater Bargaining Power The individual employee possesses very little bargaining power as compared to that of his employer. If he is not satisfied with the wage and other conditions of employment, he can leave the job. It is not practicable to continually resign from one job after another when he is dissatisfied. This imposes a great financial and emotional burden upon the worker. The better course for him is to join a union that can take concerted action against the employer. The threat or actuality of a strike by a union is a powerful tool that often causes the employer to accept the demands of the workers for better conditions of employment. 2.Minimize Discrimination The decisions regarding pay, work, transfer, promotion, etc. are highly subjective in nature. The personal relationships existing between the supervisor and each of his subordinates may influence the management. Thus, there are chances of favoritisms and discriminations. A trade union can compel the management to formulate personnel policies that press for equality of treatment to the workers. All the labor decisions of the management are under close scrutiny of the labor union. This has the effect of minimizing favoritism and discrimination. 3. Sense of Security The employees may join the unions because of their belief that it is an effective way to secure adequate protection from various types of hazards and income insecurity such as accident, injury, illness, unemployment, etc. The trade union secure retirement benefits of the workers and compel the management to invest in welfare services for the benefit of the workers.

4. Sense of Participation The employees can participate in management of matters affecting their interests only if they join trade unions. They can influence the decisions that are taken as a result of collective bargaining between the union and the management. 5. Sense of Belongingness Many employees join a union because their co-workers are the members of the union. At times, an employee joins a union under group pressure; if he does not, he often has a very difficult time at work. On the other hand, those who are members of a union feel that they gain respect in the eyes of their fellow workers. They can also discuss their problem with the trade union leaders. 6. Platform for self expression The desire for self-expression is a fundamental human drive for most people. All of us wish to share our feelings, ideas and opinions with others. Similarly the workers also want the management to listen to them. A trade union provides such a forum where the feelings, ideas and opinions of the workers could be discussed. It can also transmit the feelings, ideas, opinions and complaints of the workers to the management. The collective voice of the workers is heard by the management and give due consideration while taking policy decisions by the management. 7. Betterment of relationships Another reason for employees joining unions is that employees feel that unions can fulfill the important need for adequate machinery for proper maintenance of employer-employee relations. Unions help in betterment of industrial relations among management and workers by solving the problems peacefully. COLLECTIVE BARGAINING Collective bargaining is process of joint decision making and basically represents a democratic way of life in industry. It is the process of negotiation between firms and workers representatives for the purpose of establishing mutually agreeable conditions of employment. It is a technique adopted by two parties to reach an understanding acceptable to both through the process of discussion and negotiation. ILO has defined collective bargaining as, negotiation about working conditions and terms of employment between an employer and a group of employees or one or more employee, organization with a view to reaching an agreement wherein the terms serve as a code of defining the rights and obligations of each party in their employment/industrial relations with one another.

Collective bargaining involves discussions and negotiations between two groups as to the terms and conditions of employment. It is called collective because both the employer and the employee act as a group rather than as individuals. It is known as bargaining because the method of reaching an agreement involves proposals and counter proposals, offers and counter offers and other negotiations. Thus collective bargaining:

Is a collective process in which representatives of both the management and employees participate. Is a continuous process which aims at establishing stable relationships between the parties involved. Not only involves the bargaining agreement, but also involves the implementation of such an agreement. attempts in achieving discipline in the industry Is a flexible approach, as the parties involved have to adopt a flexible attitude towards negotiations.

BARGAINING FORM AND TACTICS A collective bargaining process generally consists of four types of activitiesdistributive bargaining, integrative bargaining, attitudinal restructuring and intraorganizational bargaining. Distributive bargaining: It involves haggling over the distribution of surplus. Under it, the economic issues like wages, salaries and bonus are discussed. In distributive bargaining, one partys gain is another partys loss. This is most commonly explained in terms of a pie. Disputants can work together to make the pie bigger, so there is enough for both of them to have as much as they want, or they can focus on cutting the pie up, trying to get as much as they can for themselves. In general, distributive bargaining tends to be more competitive. This type of bargaining is also known as conjunctive bargaining. Integrative bargaining: This involves negotiation of an issue on which both the parties may gain, or at least neither party loses. For example, representatives of employer and employee sides may bargain over the better training programme or a better job evaluation method. Here, both the parties are trying to make more of something. In general, it tends to be more cooperative than distributive bargaining. This type of bargaining is also known as cooperative bargaining. Attitudinal restructuring: This involves shaping and reshaping some attitudes like trust or distrust, friendliness or hostility between labor and management. When there is a backlog of bitterness between both the parties, attitudinal restructuring is required to maintain smooth and harmonious industrial relations. It develops a bargaining environment and creates trust and cooperation among the parties.

Intra-organizational bargaining: It generally aims at resolving internal conflicts. This is a type of maneuvering to achieve consensus with the workers and management. Even within the union, there may be differences between groups. For example, skilled workers may feel that they are neglected or women workers may feel that their interests are not looked after properly. Within the management also, there may be differences. Trade unions maneuver to achieve consensus among the conflicting groups. CHARACTERSTICS OF COLLECTIVE BARGAINING It is a group process, wherein one group, representing the employers, and the other, representing the employees, sit together to negotiate terms of employment. Negotiations form an important aspect of the process of collective bargaining i.e., there is considerable scope for discussion, compromise or mutual give and take in collective bargaining. Collective bargaining is a formalized process by which employers and independent trade unions negotiate terms and conditions of employment and the ways in which certain employment-related issues are to be regulated at national, organizational and workplace levels. Collective bargaining is a process in the sense that it consists of a number of steps. It begins with the presentation of the charter of demands and ends with reaching an agreement, which would serve as the basic law governing labor management relations over a period of time in an enterprise. Moreover, it is flexible process and not fixed or static. Mutual trust and understanding serve as the by products of harmonious relations between the two parties. It a bipartite process. This means there are always two parties involved in the process of collective bargaining. The negotiations generally take place between the employees and the management. It is a form of participation. Collective bargaining is a complementary process i.e. each party needs something that the other party has; labor can increase productivity and management can pay better for their efforts. Collective bargaining tends to improve the relations between workers and the union on the one hand and the employer on the other. Collective Bargaining is continuous process. It enables industrial democracy to be effective. It uses cooperation and consensus for settling disputes rather than conflict and confrontation. Collective bargaining takes into account day to day changes, policies, potentialities, capacities and interests. It is a political activity frequently undertaken by professional negotiators.

COLLECTIVE BARGAINING PROCESS Collective bargaining generally includes negotiations between the two parties (employees representatives and employers representatives). Collective bargaining consists of negotiations between an employer and a group of employees that determine the conditions of employment. Often employees are represented in the bargaining by a union or other labor organization. The result of collective bargaining procedure is called the collective bargaining agreement (CBA). Collective agreements may be in the form of procedural agreements or substantive agreements. Procedural agreements deal with the relationship between workers and management and the procedures to be adopted for resolving individual or group disputes. This will normally include procedures in respect of individual grievances, disputes and discipline. Frequently, procedural agreements are put into the company rule book which provides information on the overall terms and conditions of employment and codes of behavior. A substantive agreement deals with specific issues, such as basic pay, overtime premiums, bonus arrangements, holiday entitlements, hours of work, etc. In many companies, agreements have a fixed time scale and a collective bargaining process will review the procedural agreement when negotiations take place on pay and conditions of employment. The collective bargaining process comprises of five core steps:

1. Prepare: This phase involves composition of a negotiation team. The

negotiation team should consist of representatives of both the parties with adequate knowledge and skills for negotiation. In this phase both the employers representatives and the union examine their own situation in order to develop the issues that they believe will be most important. The first thing to be done is to determine whether there is actually any reason to negotiate at all. A correct understanding of the main issues to be covered

2.

3.

4. 5.

and intimate knowledge of operations, working conditions, production norms and other relevant conditions is required. Discuss: Here, the parties decide the ground rules that will guide the negotiations. A process well begun is half done and this is no less true in case of collective bargaining. An environment of mutual trust and understanding is also created so that the collective bargaining agreement would be reached. Propose: This phase involves the initial opening statements and the possible options that exist to resolve them. In a word, this phase could be described as brainstorming. The exchange of messages takes place and opinion of both the parties is sought. Bargain: negotiations are easy if a problem solving attitude is adopted. This stage comprises the time when what ifs and supposals are set forth and the drafting of agreements take place. Settlement: Once the parties are through with the bargaining process, a consensual agreement is reached upon wherein both the parties agree to a common decision regarding the problem or the issue. This stage is described as consisting of effective joint implementation of the agreement through shared visions, strategic planning and negotiated change.