HUMAN RESOURCE

MANAGEMENT

UNIT - I : PERCEPTIVE IN HRM

Evolution of HRM The importance of the human
factor objectives of HRM Inclusive growth and
affirmative action Role of human resource
manager.
Human resource polices computer applications in
human resource management Human resource
accounting & audit.

DEFINITION
According to Edwin.B.Flipps HRM is the planning,
organizing, directing and controlling of the
procurement, development, compensation,
integration, maintenance and separation of
human resources to the end that individuals,
organizational and social objectives are
accomplished .
HRM can be defined as a process of procuring,
developing and maintaining competent human
resource in the organisation so that the goals of
an organization are achived in an effetive and
efficient manner.
HRM is an art of managing people at work is such a
manner that they give their best to the
oraganisation for achieving its set goals.

OBJECTIVES :

1. To help the organization to attain its goals

effectively and efficiently by providing
competent and motivated employees.
2. To utilize the available human resources
effectively.
3. To increase to the fullest the employees job
satisfaction and self actualization.
4. To develop and maintains quality of work life
(QWL) which makes employment in the
organization a desirable personal and social
situation.
5. To help in maintain ethical policies and behavior
inside and outside the organization.
6. To establish and maintain cordial relations
between employees and management.

HRM Objective & Supporting Function

Social Objective
Legal Compliance
Benefits
Union_Mgt
relations

Organizational
Objective
HR Planning
Employee relation
Selection
Training &
development

Individual / Personal
Objectives.
Training &
development
Compensation
Assessment

Functional
Objectives.
Appraisal
Placement
Assessment

Nature and Scope Of HRM

1. HRM is a Complex Dynamics.
A close observation of employees reveals its
complex nature dealing with economic
physiological, psychological, socio-logical &
ethical beings.
2. HRM is a Social System.
Management tasks, dealing with human
relationship, moulding & developing the human
behaviour and attitude towards job & orgn
requirement.
HR manager involves himself in administering a
social system. In this process the manager has
to see that the economic satisfaction for a
resonable livelyhood, social satisfaction of
working together as members of a group &

3. HRM is a Challenging Task:

The HR manager plays a crucial role in
understanding the changing needs of the
organization and society. Further he faces some
challenging tasks in attaining the employee,
organizational and social objective with the
available resources.
HR manager should equip himself with good
knowledge of disciplines economics, commerce
management, sociology, psychology, engineering
& technology & laws.

Scope Of HRM
Control

Acquisition

Human resource
audit
HR Accounting
HR Information
System.

Maintenance
Remuneration
Motivation
Health & Safety
Social Security
Industrial relation
Performance
approvals

HR Planning
Recruitment
Selection
Placement

HR
M
Development
Training
Career
development Org.
Development
Internal Mobility

The scope of HRM is indeed very vast & wide. It includes all
activities staring from manpower planning till employees leaves
the organization. Accordingly, the scope of HRM consist of
acquisition, development, maintenance retention & control of
human resources in the organization.
The National Institute of Personal Management Calcutta has
specified the Scope of HRM as follows.
1. The Labour (or) Personnel Aspect : This is concerned with
manpower planning, recruitment, selection, placement,
transfer, promotion, training and development, lay-off and
retrenchment, remuneration, incentives, production etc.
2. Welfare Aspect : It deals with working conditions and
amenities such as canteen, crches rest and lunch room,
housing, transport, medical assistance, education, health and
safety, recreation facilities etc.
3. Industrial Relations Aspects : This covers union
management relations joint consultation, collective bargaining,
grievance and disciplinary actions, settlements of disputes etc

FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

MANAGERIAL FUNCTION

PLANING
ORGANISING
STAFFING
DIRECTING

CONTROLLING

OPERATIVE FUNCTION

PROCUREME DEVELOPME
NT
NT

COMPENSATIO
N

INTERGISTION MAINTANC
E

JOB ANALYSIS
HR PLANNING
RECUIRIMENT
SELECTION
PLACEMENT
INDUCTION
TRANSFER
PROMOTION
SEPERATION

JOB
EVALUVATION
WAGES &
SALARY
ADMINISTRATIO
N
BONOUS &
INCENTIVES
PAYROLL

MOTIVATION
JOB
SATISFACTION
GRIEVANCE
REDRESSAL.
COLLECTIVE
BARGAINING
CONFLICT
MANAGEMENT
PARTICIPATION
OF EMPLOYEES
DISCIPLINE

PERFORMANC
E
APPRAISAL
TRANNING
EXECUTIVE
DEVELOPMEN
T
CAREER
PLANNING &
DEVELOPMEN
T

HEALTH
SAFETY
SOCIAL
SECURITY
WELFARE
SCHEMES
PERSONNEL
RECORDS
PERSONNEL
RESEARCH
PERSONNEL
AUDIT

The functions of HRM can be broadly classified into

1) Managerial functions and 2) Operative function.
1. Managerial function : Planning : - is a predetermined course of actions. It is
a process of determining the organization goals and
formulation of policies & programs for achieving them.
Forecasting:- is one of the elements of planning
process.
Organizing : - is a process by which the structure &
allocation of jobs are determined.
Staffing : - is a process by which mangers select,
train, promote & retire their subordinates.
Directing & Heading : - is a process of activating
group efforts to achieve the desired goals.
Controlling : - is the process of setting standards for
performance, checking to see how actual performance
compares with these set standards, and taking
corrective actions as needed

2. Operative function : - also called service

functions are those which are relevant to specific
department.
Procurement : - It involves procuring the right
kind of people in appropriate number to be
placed in the organization.
Development:- This function involves activities
meant to improve the knowledge, skills,
aptitudes & values of employees so as to enable
them to perform their jobs in a better manner in
future.
Compensation : - function involves
determination of wages & salaries matching with
contribution made by employees to
organizational goals
Maintenance: - It is concerned with protecting
& promoting employees while at work.

ROLE OF HRM
ROLE :The behavioural paterns
expected by a manager within an
organisation or a unit.

THE ROLE OF THE PERSONNEL

MANAGER
MAIN ROLE
1. The Conscience role.
2. The Counselor.
3. The Mediator.
4. The Spokesman.
5. The Problem Solver.
6. The Change Agent.

HR ROLE

WELFARE ROLE

CLERICAL
ROLE

LEGAL ROLL

1. GRIEVANCE
HANDLING

ADVISERY ADVISING
MANAGEMENT OF
EFFECTIVE USE OF
HR RESOURCES.

1. RESEARCH IN
PERSONNEL
&
ORGANIZATIONAL
PROBLEMS.

1. TIME
KEEPING.

MANPOWER
PLANNING
RERUITMENT
SELECTION

2. MANAGING SERVIES,
CANTEENS, GRAIN
SHOP, TRANSPORT
COOPERTIVES ETC.

2. SALARY &
2. SETTLEMENTS
WAGES,
OF DISPUTES
ADMINISTARTIO
N INCENTIVES.

TRAINING &
DEVELPOMENT OF
LINE MAN

3. GROUP DYNAMICS
GROUP COUNSELLING,
MOTIVATION,
LEADERSHIP,
COMMUNICATION etc.

3. MAINTANCE
OF RECORD.

MEASUREMENT OF
ASSESSMENT OF
INDIVIDUAL &
GROUP BEHAVIOUR

3. HANDLING
DISCIPLINARY
ACTIONS.

4. HUMAN
4. COLLECTIVE
ENGINEERING BARGAINING.
MAN-MACHINE
RELATIONSHIP.
5. JOINT

Qualities of a Manager :
In order to succeed in Managing ,a Manager
should possess the following qualities:
1.Education
2.Training
3.Intelligence
4.Leadership
5.Foresight
6.Maturity

7.Technical knowledge
8.Human relations attitude
9.Self-confidence.

QUALITIES OF A HR MANAGER

1. Personal Attributes.
Intelligence.
Educational Skills.
Discriminating Skills b/w wrong / merit/
demerit.
Executing Skills.
Experience & Training.

2. Professional Attitudes.
3. Qualifications: - MHRM, MA CIIR& PM , PGDPM.

Every manager is concerned with

1.Management of ideas - implies
use of conceptual skills.
-distinct and scientific process.
-Planning phase of management
-creativity and innovation.

2.Management of things( nonhuman resources):

-Deals with the design of production
system and acquisition, allocation
and conversion of physical resources
to achieve certain goals.
3.Management of people :
-is concerned with the procurement ,
development, maintenance and
integration of human resources in
the organisation.

 Conceptual skills;
Ability to see the organisation as a
whole to recognise interrelationships among different
functions of the business and
external force to guide.
Conceptual skills are used for
abstract thinking and concept
development involved in planning
and strategy formulation

Human skill:
Ability to work with , understand and
motivate other persons.
Technical skill:
Ability to use the procedure ,
techniques and knowledge of
specialised field.

Careers in HRM:
Supervisors / Officer Level
Junior Management Level Jobs.
Middle Management Level Jobs.
Senior Management Level.
General Management Level / CEO /President Of The
Company

EVOLUTION AND DEVELOPMENT

1. Trade Union Movement Era.
2. Social Responsibility Era.
3. Scientific Management Era.
4. Human Relation Era.
5. Behavioral Science Era.
6. Systems Approach Era,

HRM MODELS
The Fomburn,Tichy and Devanna
Model
The Harvard Model:Beer. Etal.
The Guest Model
The Warwick Model

THE FOMBRUN MODEL OF HRM

Human Resource
Development

Selection

Appraisal

Rewards

Organisati
onal
Effectiven
ess

THE HARVARD MODEL OF HRM

Stakeholder
Interests
Shareholders
Management
Employee groups
Government
Community
unions
Situational factors
Workforce
characteristics
Business
strategy&philoso
phy
Labour market
Unions
Task technology
Laws and societal
values

HRM policy
choices
Employe
e
influence
Human
resource
flow
Reward
system
Work
systems

Human
resource
outcomes
Commitme
nt
Competen
ce
Congruenc
e
Cost
effectiven
ess

Long term
conseque
nce
Individu
al well
being
Organis
atio-nal
effectiven
es
Societal
well
being

THE GUEST MODEL OF HRM

HRM
Strat
egies

HRM
practices
Hiring
Training
Apprais
al
Compen
sati-on
relation

HR
outcom
es
Comm
itment
Qualit
y
flexibil
ity

Behavio
u-ral
outcom
es
Motiv
atio-n
Coope
ration
Organ
isationa
l
citizen
ship

Performa
nce
outcomes
Positive
Producti
vit-y
Innovati
on
Quality
Negativ
e
Low
Producti
vity
Absent
eeis-m
turnove
r

Financia
l
outcom
es
Profits
ROI

THE WARWICK MODEL OF HRM

Outer context
Socio economic
Technical
Political-legal
competitive

Business
strategy
content
Objectives
Product
market
Strategy&ta
ctis

Inner context
Culture
Structure
Politics/leadership
Task technology
Business outputs

HRM content
HRflows
Work system
Reward systems
Employee
relations

HRM context
Role
Definition
Organisation
HR outputs

Human Resource
Accounting
Human resource accounting is the
measurement of cost and value of the
people for the organisation.
Flamholtz
Human resource accounting is the
measurement and quantification of
human organisational inputs such as
recruiting,training experience and
commitment
Stephen Knauf

Features of HR Accounting:
1. System of identification of HR
2. Investments made in HR are
recorded.
3. Measurement of cost and value of
HR.
4. Records the changes occurring in
HR.
5. Information generated about HR is
communicated through financial
statements to the parties.
6. HRA is a part of MIS.

OBJECTIVES:
1.To furnish cost value information for
making management decision and
maintaining human resources in order to
attain cost effective organisational
objectives.
2.To allow management personnel to
monitor effectively the use of human
resources.
3.To aid in the development of Mgt
principles by classifying the financial
consequences of various practices.
4.To develop methods of measuring HR cost
and value.
5.To test the valuation of HR varies in
proportion with their contribution to the

METHODS
1.MONETARY MEASUREMENT
Historical cost
opportunity cost
Economic valuation
Replacement cost
Capitalization of salary
2.NON-MONETARY MEASUREMENT
skills inventory
performance evaluation
attitude measurement
assessment of potential

ADVANTAGES
1.Improvement in internal
management decision.
2.Motivation of employees for
production purposes.
3.Saving of time in meeting of the
executive.
4.Indicator of the health of the
enterprise.
5.Impact on investors decisions.
6.Decision about further requirement
7.Assistance in planning.

Disadvantages
1.non-availability of standards
2.opposition of trade union
3.Expenditure on HRA
4.Variety of methods

COMPUTER APPLICATION IN HRM

E-Human resource management.
E-Business / NEURAL NETWORKS.
E- Job design & Job Analysis.
E-Human Resource Planning.
E-Recruitment.
E- Selection.
E- Performance Management.
E- Training & Development.
E- Compensation Management.
E- HR Records.
E- HR Information.
E- HR- Audit.

HUMAN RESOURCE AUDIT

Audit is an examination and verification of
accounts and records.
Hr audit refers to an examination and
evaluation of policies, procedures and
practices to determine the effectiveness
and efficiency of HRM.

AREAS OF HR AUDIT
Include :
1.
2.
3.
4.

Mission statement relating to HR management.

Objectives, goals & strategies of HR management.
Accomplishment of HR management.
Programmes of HRM including the detailed practices
& procedures.
5. HRM Policies.
6. Role of HRM in TQM.

OBJECTIVES OF HR AUDITS
1. To review the whole system of management
programmes'.
2. To seek explanations & information's.
3. To evaluate the implemented policies.
4. To evaluate the personnel staff & employees.

NEED FOR HR AUDIT

1. The No: of Employees.
2. Organisational Structure.
3. Communication & Feedback,
4. Location and Dispensing.
5. Status of an Industrial Relation Manager.
6. Administrative Style.

Types of audit
Internal audit
External audit

HR Audit Process

Pre audit information

Pre-audit self assessment
On site review
Record review
Audit report

Benefits
1.Fostering strategic business plan
2.Clarity of role of HR function
3.Organisational competency analysis
4.Hr system analysis
5.Changes in the styles of top mgt
6.ROI analysis
7.Performance improvement
mechanism.

HR POLICIES
A Policy is a Plan Of Action.
According to Brewster & Richbell defined HRM policies as
a set of proposals and actions that act as a reference
point for managers in their dealing with employees.
HR policies constitute guides to action & guides the
course of action intended to accomplish personnel
objectives.
Eg: HRM policy in Indian railways'.
One of the personnel objectives of Indian Railways is to
provide equal employment opportunities to the people of
minority sections.
Personnel policy of Indian railways relating to be above
objectives is to fill 15% &7.5% of vacancies from those
candidates belonging to scheduled castes and scheduled
tribes respectively

CHARACTERISTICS OF HRP
1.Related to objectives
2.Easy to understand
3.Precise
4.Based on facts
5.Review

Objectives of HR policies
1.maximum use of human resource
2.Personnel development
3.Sound Industrial Relation
4. Proper recognition of work force
and protection of their prestige.
5.Safeguarding the interests of labour
and management.

Need of HR policies
1.To achieve the objectives of the
organisation.
2.To achieve uniformity in decision.
3.To delegate authority.
4.To achieve better control.
5.Evaluate efficiency.
6.To motivate and create confidence
among employees.
7.To guide the management.

Scope of HR policies
1.Recriutment /hiring of employees.
2.Formulating terms and conditions of
employment.
3.Manpower planning and
development.
4. Industrial relations.
5.Communication with employees.

Types of HR policies
1.originated policies
2.Appealed policies
3.Imposed policies
4.General policies
5.Specific policies
6.written/implied policies

Factors affecting Hr Policies

1.Laws of the country/social values
and customes
2.Management philosophy
3.Financial position of the organisation
4.Union objectives and practices
5.Type of workforce
6.Stages of development

UNIT:II-HUMAN RESOURCE
PLANNING
Human resource planning is the
process by which an organisation
ensures that it has the right
number and the kind of people ,at
the right time, capable of effectively
and efficiently completing those task
that will help the organisation
achieve its over all objectives.
Decenzo and Robbins

According to Bruce. P.ColemanMan power planning is the process of

determining manpower requirements
in order to carry out the integrated
plan of the organisation.

Need/Reasons for increasing focus on

human resource planning:
1.Employment growing
unemployment situation.
2.Technological changes.
3.Organisational changes.
4.Demographic changes.
5.Skill shortages
6.Governmental influences
7.Legislative controls

8.Rise in employee turnover.

9.To meet the needs of expansion and
diversification programmes of
organissation.
10.To identify area of surplus personnel
area in which there is a shortage of
personnel.

Scope of HRP:
1. Listing of current manpower/HR
with the organisation.
2. Assessing the extent to which the
current manpower is utilised to the
advantage of the organisation.
3. Phasing out the surplus manpower
,if any.
4. Analysing the requirements of
manpower in future in the lights
of expansion plans , retirement of
personnel etc.

5.Making manpower procurement

plans.
6.Designing training programmes for
different categories of manpower.

HRP activities:
Forecasting
Inventoring
Anticipating man power
problems
Planning

Importance of HRP
1. Forecasting HR requirements .
2. Checks the corporate plan of the
organisation , and makes effective
management of changes.
ie.market conditions
technology /product
govt regulation
allocation of skills to persons.

3.Helps to improve overall business

planning process.
4.Effective utilization of Human
resources.
5.Helps in filling the gaps.
6.Facilitates economic development.
7. It serves as a tool to evaluate the
effect of alternative manpower
action and policies.

Objectives
1. To ensure adequate supply of
manpower as and when required .
2. To ensure proper use of existing
human resources in the
organisation.
3. To forecast future requirements of
human resources with different
levels of skills.
4. To assess surplus or shortage , if
any of hr available over a specified
period of time.
5. To anticipate the impact of

6.To control the human resources

already deployed in the
organisation.
7.To provide lead time available to
select and train the required
additional human resources over a
specified time period.
8.To estimate the cost of Human
resources.
9.To maintain industrial relations.
10.To obtain a good business
environment.

Levels of human resource

management
HRP is useful at different levels
1.At the national level:
HRP by government at the national level
covers
Population projections
Programme of economic development
Educational and health facilities
Occupational distribution and growth
Mobility of personnel across industries
and geographical region.

2.At the sector level:

This would cover manpower
requirements of the
agricultural sector
Industrial sector
Service sector

3. At the industry level:

This would forecast man power need
for specific industries , such as
Engineering
Heavy industires
Textile industries
Plantations industries
4.At the level of industrial unit:
It relates to the manpower needs of a
particular enterprise.

FACTORS AFFECTING HRP

EXTERNAL

INTERNAL

Government policies
. strategies of the company
Level of economic
. HR Policy of the company
development including
. formal and informal groups
future supply of HRS
. job analysis
Business envt
. time horizons
Information technology
. type and quality of
Level of technology
information .
International factors
. companys production
operations policy
. trade unions

Process of HRP
Objectives of human resource planning
Inventory of human resources skills(finding
gaps)
Demand and supply forecasting
Determine net manpower requirements
Redeployment and redundancy plan
Employment program
Training and development program
Appraisal of human resource planning

Problems in HRP:
1.Lack of understanding of rationale of
planning.
2.Insufficient top managements support.
3.Insufficient initial efforts.
4.Lack of coordination with other functions.
5.Lack of integration with organisational
plans.
6.non-cooperation of operating managers.
7.Expensive and time consuming.
8.Resistance by employers and employees.
9.uncertainties.
10.Inadequacies of information system.

How to make HRP effective?

Following are some of the steps that
may improve the effectiveness of
HRP:
1. HR plans must be viewed as an
integral part of corporate
planning.
HR plans should be tailored with the
objectives, strategies and overall
environment of the particular
organisation.
2. The support and commitment of
the top management be ensured
before starting the process of hrp

3. Personnel records must be

complete, up-to-date and reality
available to ensure an adequate
and strong date base serves as
backbone for HRP.
4.The time horizon of the HRP should
be appropriate to accommodate the
changing needs and circumstances
of the particular organisation.
5.Both quantitative and qualitative
aspects of HR plans should be
stressed in a balanced manner
inorder to avoid conflicts between
the two.

Forecasting for human

resources requirement.
The demand for HR in organisation is
subject to vary from time to time,
depending upon both external and
internal factors.

INTERNAL FACTORS:

EXTERNAL

Growth and expansion 1.Competition

Design and structure changes 2.economic
&
Management philosophy
political
climate
Change in leadership style
3.technological
Employees resignation
changes.
Retirement
4.government
Termination
death
Therefore while forecating future demand
for human resources in the organisation,

Purpose of forecasting HR needs:

Forecasting demand for human resources
is good for several reasons, because it
can help:
1. To Quantify the number of jobs required
at given time for producing a given
number of goods (or) offering a given
amount of services.
2. To Ascertain a staff-mix needed at
different points time in the future.
3. To Ensure adequate availability of people
with varying qualification and skills as
and when required in the organisation.

The various techniques employed in

HR forecasting are as follows :
Management judgement
Work- study method
Ratio trend analysis
Delphi technique
Flow models
Mathematical models
Computerized forecast

1.Management judgement:
This technique is very simple and time
saving.
Under this technique either a bottom-up or
a top-down approach is employed for
forecasting future HR requirement of an
organisation.
In case of bottom- up approach, the line
managers prepare departmental
requirements for HR and submit it to the
top manager for their review and
consideration.
In case of top-down approach the top
managers prepare the departmental
forecasts which are reviewed with the
departmental heads .

2. Work- study method:

This method can be used when it is
possible to measure work and set
standards and where job method do
not change frequently.
In this method , as used by F.W. Taylor
in his scientific management, time
and motion study are used to
ascertain standard time for doing a
standard work.
Based on this,the number of workers
required to do standard work is
worked out.

3. Ratio-trend analysis:
This is one of the quickest forecasting
technique.
Under this method forecasting for future
HR requirement is made on the basis of
time series data.
This technique involves studying past
ratio(eg: total out-put/no:of workers , total
sales volume /number of sales
persons)and based on these forecasting is
made for future ratios.
While calculating future ratios, allowances
can be made for expected changes in
the organisation, methods and job.
The demand for HR is calculated on the
basis of established ratios between two

4. Delphi technique:
This is one of the judgemental
methods of forecasting HR needs.
It is a more complex and time
consuming technique which does
not allow group members to meet
face-to-face .
Therefore ,it does not require the
physical presence of the group
members.

5. Flow model:
Is the simplest one and called as the Markov
model.This model involves the following:
1.Determination of time period that will be
covered under forecast.
2.Establishment of employees
categories,also called states.There should
not be overlapping among the various
categories.
3.Enumeration of annual flow among
various categories or states for several
time periods.
4.Estimation of probability of flow or
movements from one category to another
based on past trends in this regards.

6. Mathematical model:
Mathematical model express
relationship between independent
variable (production /sales) and
dependent variable.(no: of workers
required).

7. Computerized forecast:
Is the determination of future staff
needs by projecting a firms sales,
volume production and personnel
required to maintain this required
volume of output, using computers
and software packages.

Supply Forecasting
Supply Forecasting measures the number
of people likely to be available from
within and outside an organisation.
Sources of supply
Internal
External
*staffing tables /manning charts.
*colleges/universities
*Markov analysis
*Skill inventories
*replacement and succession planning

Markov analysis
It shows the percentage of
employees who remains in each job
from one year to the
next ,as also the proportion of those
who are promoted or transferred or
who exit the organisation .
This movement of employee among
different job classifcations can be
forecasted based upon past
movement patterns.
Past patterns of employee movement
(transitions)are used to project
future patterns.

 Markov analysis can be used to forecast

employee
movement pattern that may occur
among organisational units, between
oragnisational levels,etc.
The pattern of employee movements
through various jobs is used to establish
transitional probabilities and to develop a
transition matrix.
The transitional probabilities indicate
what will happen to the initial staffing
levels in each job category or the
probability that employees from one
category will move into another job

Transitional probabilities also

determine the forecasted employee
levels at the end of the year.
Transition matrix is used to forecast
employment changes in future .This
matrix can be used to forecast both
demand and supply of labour.
For a Markov analysis to succeed,
there should be enough employees
in each job category , the nature of
jobs should not have changed over
time, and the situation should be
stable.

RECRUITMENT
A process of locating , identifying
and attracting capable applicants.
A process of searching for
prospective employees and
stimulating and encouraging them
to apply for jobs in an organisation.

Factors affecting recruitment

Internal factors
External factors
Size of the organisation
Demographic factors Recruiting policy
labour
market
Image of organisation
unemployment
situation
Image of job
labourlaws
legalconsiderations

Sources of recruitment
Internal sources

External sources

Present employees
Employment
exchange
Employee referrals
Advertisements
FormerEmployees
Employment
Agencies
Previous Applicants
Professional
association
Campus recruitment
Deputation
Words-of-mouth
Jobfair
cyberspace recruiting

Recruitment process

1.Recruitment planning
2.Stategy development
3.Searching
4.Screening
5.Evaluation and control

Recruitment process
Personnel
planning

Job
vacancies

Job analysis

Recruitment
Planning
Numbers
types

Strategy
Development
-where
-how
-when

Employee
requistion

Searching
activation

Applicant
population

Applicant
pool

screening

Potential
hires

Evaluation
and
control

Method of recruitment
1.Direct method
2.Indirect method
3.Third party method

Effectiveness of recruitment
programme:
1.A well defined recruitment policy.
2.A proper organisational structure.
3.A well-laid down procedure for locating
potential job seekers.
4.A suitable method and technique for
tapping and utilizing these candidates.
5.A continuous assessment of effectiveness
of recruitment programme and
incorporation of suitable modifactions
from time to time to improve the
effectiveness of the programme.
6.An ethically sound and fool-proof
practice telling an applicant all about the
job and its position, the firm to enable
the candidate to judiciously decide

SELECTION
Selection is the process of
choosing from among the candidates
from within the organisation or from
the outside,the most suitable person
for the current position or for the
future position
knootz

Selection methods
1.Preliminary interview
2.Application blank
3.Selection tests
4.Selection interview
5.Reference checks
6.Medical examination /physical
examination
7.Final selection.

Preliminary interview:
The purpose of the Preliminary
interview is to eliminate unsuitable
or unqualified candidates form the
selection process.
It is also called courtesy interview.
Application blank: is the commonest
device for getting information from a
prospective candidate.
This serves as a personal record of
the candidate bearing personal
history profile, detailed personal
activities, skills and
accomplishments.

Selection test :
To select right person for the job,
individual differences in terms of
abilities and skills need to be
measured for comparision. This is
done through a process called
selection test.

Tests:
A test is a systematic procedure for
comparing the behavior of two or more
persons.
Selection Tests
Ability tests

Personality tests

Aptitude test
Achievement test
Intelligence test
Judgment test

Interest test
Personality test
Projective test
Attitude test

ABILITY TESTS:
Aptitude Test:
It measure the ability and skills of the
persons. It indicates how well a person
would be able to perform after training.
It is also used to predict the future
ability and performance of a person
Achievement Test:
It is used to measure a persons
potential in a given area or job. They are
usually used for admission to specific
courses in an academic institution.
It is also known as proficiency test or
performance test or occupation or trade
test.

Intelligence Test:
It measures general ability for
intellectual performance and intelligence
quotient of a candidate.
The core concept underlying in
intelligence test is mental age. It is
presumed that with physical age
intelligence also grow.
Mental Age
IQ=
*100
Actual Age

Judgment Test:
This test are designed to know the
ability to apply knowledge in solving
a problem.
PERSONALITY TESTS:
These are tests used for measuring
the interest and motivation of the
people.
Interest Test:
It is designed to identify persons
area of interest and kind of work that

Personality test:
These test are designed to measure the
dimensions and traits of personality. Some
of the personality tests are

Minnesota Multiphasic Personality

Inventory (MMPI),

California Personality Inventory

Projective Test:
Candidates are asked to project their
own interpretation of certain standard
stimulus situation basing on ambiguous
pictures ,figures etc.
E.g. TAT) Thematic Appreciation Test.
(RBT) Rorschach Blot Test.

Attitude Test:
It measures the attitude , tendencies
towards favoring, situation and
action of a person. Test of social
desirability, authoritarianism,
employee morale are well known
examples of attitude test.
Other test:
Graphology,
Polygraph test.

Advantages of testing:
1. Predict future performance.
2. Diagnosis the situation and behavior.
3. Serves as a unbiased tool.
4. Quantify the test results.
Validation of test:
Validity is the most important
criteria for the quality of a test. It is
vital for a test to be valid in order for
the results to be accurately applied
and interpreted.

Interview:
Interview is a face to face
interaction, a powerful exchange of
ideas, answering of questions and
communication between two or
more persons.
Objectives:
1. Judgment of applicant
2. Additional information

TYPES OF INTERVIEW:
Preliminary interview:
The interviews conducted to screen the
applicants to decide whether further
detailed will be required are called
preliminary interview.
Patterned/ Structured/ Formal Interview:
In this type of interview all the
formalities, procedures like fixing the
value, time, panel of interviewers, opening
and closing, intimating the candidates
officially etc are strictly followed in
arranging and conducting the interview.

Depth Interview:
In this interview the candidates
would be extensively in core area of
job skills and knowledge. Experts test
the candidates knowledge in depth.
Depth interviews are conducted for
specialist jobs.
Stress Interview:
This interview aims at testing the
candidates job behavior and level of
withstanding during the period of
stress and strain.

Other Interviews are:

Group Discussion interview
Panel interview
Informal/ unstructured interview
Decision making interview.
Reference checks:
The process of verifying information
and obtaining additional feedback on
an application.

Medical Examination:
It is have proper matching of job
requirement with the physical
abilities of the candidate.
Final Selection:
the candidates who have cleared all
the above hurdles are finally selected
and a letter of job offer is issued to
them.

PLACEMENT
Placement is understood as assigning
jobs to the selected candidates.
the determination of the job to which
an accepted candidate is to be
assigned, and his assignment to that
job.
Pigors and Myers

The importance of placement lies in

the fact
that,
*a proper placement of employees
reduces
employees
turnover,absenteeism,accidents and
dissatisfaction,on the other hand,
and improves their morale,on the
other.

Induction
Induction
Induction is the process of receiving
and welcoming an employee when
he first joins a company and giving
him basic information he needs to
settle down quickly and happily and
start work
Michael Armstrong

Obiectives of induction
Obiectives of induction:
1.To reduce the initial anxiety all new entrants feel
when they join a new job in a new organisation.
2. To familiarize the new employees with the job,
people , work-place ,work environment and the
organisation.
3.To facilitate outsider insider transition in an
intergrated manner.
4.To reduce exploitation by the unscrupulous coworkers.
5.To reduce the cultural shock faced in the new
organisation.

Benefits of induction
programme
1. A well designed induction programme
reduces anxiety,
nervousness,absenteesim and employee
turnover.
2. Induction helps minimize the reality or
cultural shock new employees undergo
on joining a new organisation.
3. Effective induction also helps integrate
the new employees into the
organisation and fosters feeling of
belongingness to new organisation.
4. Induction also binds the newcomer and
the present employees in a team.

The induction programme may be formal

and informal.
Informal-unplanned induction programme.
*supervisory systemThe immediate job supervisor conducts the
induction programme for the new
entrants.
*buddy or sponsor systemThe immediate supervisor assigns the
responsibility of induction of the new
entrant to an old employee.
Formal-planned programme HR specialists

PHASES OF INDUCTION
A carefully designed induction
programme consists of the
following three phases:
1.General induction
2.Specific induction
3.Follow-up induction

Socialisation
Socialisation is the process of
adaptation.
Socialisation is the process of
adaptation
that takes place as individuals
attempt to learn the values and
norms of work roles.
Socialisation is the process of
adaptation.

Feldoman
acquisition of work skills and
abilities , adoption of appropriate role
behaviour and adjustment to the
norms and values of the work
group.

Phases of socialisation
process
1.Pre arrival :Refers to all the learning that
occurs before a new member joins the
organisation.
2.Encounter :The new member enters the
organisation and role playing starts here.The
member starts comparing expectations the
image of the organisation which he had formed
during pre-arrival phase with reality.
3.Metamorphosis : The member- masters the
Skills required to adjust with the organisations
norms and values. This is a stage going through
changes.hence ,this is called metamorphosis
stage.

Contents of socialization:
*Preliminary Learning.
*Learning about the organisation.
*Learning to function in the work
group.
*Learning how to perform the job.
*Personal Learning.

1.
2.
3.
4.
5.

Benefits:
Helps in understanding
organisation culture.
Contributes to employees longterm success.
Helps in adjustment
Helps in employee engagement.
Provides job satisfaction.

Unit: III
TRAINING AND EXECUTIVE
DEVELOPMENT
Types of training methods, purpose,
benefits resistance,executive
development programmes , common
practices, benefits self
development, knowledge
management.

Training is the act of increasing the

knowledge and skills of an
employee for doing a particular job
Edwin B.Flippo
Training is the systematic
modification of behaviour through
learning which occurs as a result of
education,instruction ,development
and planned experience

Need for training:

Specifically , the need for training arises
due to the following reasons:
1. To match the employee specifications
with the job-requirements and
organisational needs.
2. Organisational viability and the
transformation process.
3. Technological advances
4. Organisational complexity
5. Human relations
6. Change in the job assignment
7. To meet challenges posed by the global
competition.

The need for training also arises to :

1.Increase productivity
2.Improve quality of the
product/service.
3.Help a company to fulfil its future
personnel needs.
4.Improve organisational climate .
5.Improve health and safety.
6.Prevent obsolescence.
7.Effect personal growth.
8.Minimise the resistance to change
9.To act as mentor.

Objectives of training :
1. Enhancing employee
performance .
2. Updating employee skills .
3. Avoiding or delaying managerial
obsolescence
4. Preparing for promotion and
managerial succession.
5. Motivating employees .
6. Gaining organizational excellence.

Importance of training :
1. Better performance
2. Improved quality
3. Less supervision
4. Less learning period
5. High morale
6. Personal growth
7. Favourable organisational climate.

Methods of training
On-the job training

off-the job training

1.On-the-training(OJT)
2.Job Instruction training(JIT)

Simulation methods

Experiential methods

3.Coaching
4.Job Rotation

Knowledge based methods

1.Role Play
1.Lectures
1. Sensitivity training
2.case study method
2. Conference &
2. Transaction
analysis
3.Management games
seminars
4.In basket exercise
3. Programmed
5.Vestibule training

Instruction

On-the-job oriented training method:

Are very popular and are widely used by
majority organisations. The main
objectives are centered around the job.
(ie) learning on the job itself by a variety
of methods.
1.On-the-job Training (OJT) :
In this method , the new employee is
placed on a job and taught the skills
necessary to perform it. A trainer or
superior teaches the employee.
Since trainee learns by observing and
handling the job, this method is also
termed as observing, and copying or

2.Job Instruction Training (JIT):

In this method,a trainer or supervisor gives
instructions to an employee how to
perform his job. (actual work site)
This method of training is appropriate for
acquisition or improvement of motor
skills and routine and repetitive
operations.

3.Coaching:
In this method , the superior teaches
or guides the new employee about
the knowledge and skills of a
specifcally defined job.The
supervisor points out the mistakes
committed by the new employee
and then also gives suggestions to
improve upon.
For coaching the trainee or new
employee effectively, the superior
must have interpersonal
competence and be able to

4.Job rotation:
In this method , a trainee moves
from one job to another and from
one department /division to another.
This type of training is more
appropriate for developing
multiskilling, operational flexibility,
providing satisfaction from routine
jobs and broading the overall
persepective of the trainee.

Off the- job training

Are the Training given to the
employee away from the work
place.
Simulation , knowledge -based and
experiential methods are some of the
off-the-job training methods.
I. Simulation methods:
Is a techniques which duplicates ,the
actual conditions encountered on a
job.
These methods have been most

1. Role play:
This is just like acting out a given role
as in a stage play.
In this method of training , the
trainees are required to enact
defined roles on the basis of oral or
written description of a particular
situation.
This method is mostly used for
developing interpersonal
interaction and relations among
the employees working in sales,
marketing , purchasing and the

2.Case study method:

The case is an actual event or
situation on organsational problems
which is a written description for
discussion purpose.
Trainees are asked to analyse the
events or circumstances with an
objective to identify the problems
,trace out the causes for it and find
out the solution to solve the
problems.
This method is suitable for developing
decision-making skills among the

3.Management games :
The games is devised on the model of a
business situation.
Then, the trainees are divided into groups
who represent the management of
competing companies.
They make decisions just like these are
made in real-life situations.
Decisions made by the groups are
evaluated and the likely implications of
the decisions are fed back to the groups.
The games goes on in several rounds to
take the time dimension into account.

4.In-Basket Exercise:
This is also called in-tray method of training.
This is built around the incoming mail of a
manager.
The trainee is presented with a pack of papers
and files in a tray containing administrative
problems and are asked to take decision on
these within aspecified time limit.
The decisions taken by the trainees are
compared with one another .
The trainees are provided feedback on their
decisions .
This forces them to reconsider their administrative
actions and behavoiural style .
Here occurs the learning of trainee.

5.Vestibule training:
This is a system in which employees
learn their jobs on the equipment
they will be using, but the training is
conducted away from the actual
work floor.
This type of training is commonly
used for training personnel of
clerical and semi-skilled grades.
The duration of training ranges from
few days to a few weeks.
This method relates theory with

II.Knowledge-based method :
In this method, an attempt is made to
impart employees knowledge in
any subject area covering the
aspects like its concepts and
theories , basic principles and pure
and applied knowing of the subject.
1.Lectures: is a common method.In this
method the trainer provides knowledge
to the trainees usually from prepared
notes.
Notes are also given to the trainees.This
method is found more appropriate in

It is a low cost method.

The major limitation of this method is
that it does not provide for active
involvement of the trainees.
2.Conference /seminars:
In this method , the trainer delivers a
lecture on the particular subject which is
followed by queries and discussions.
The conference leader must have the
necessary
skills to lead the discussion in a meaningful
way without losing sight of the topic or
theme.
This method is used to help employees

3.Programmed Instructions:
This is recently developed technique
based on the principle of positive
reinforcement developed by B.F.Skinner .
This technique is used to teach non-motor
and behavioural skills .
The subject matter to be learned is
prepared and condensed into logical
sequence from simple to more complex.
The trainer monitors trainee,s independent
progress through the programme .
The trainee gets instant feedback on his
learning.
This method is expensive and time

III.Experiential method:
The objective of these method is to
help an individual understand one
-self and others.
This is done through attitudinal
change .
Such understanding helps an
individual understand the dynamics
of human relationships in a work
situation, including at times his
managerial style.

Sensitivity Training:
The objective of sensitivity training is to increase
participants insights into their behaviour and
the behaviour of others by encouraging an open
expression of feelings in the trained guided Tgroup.
This is based on the assumption that newly
sensitized employee will then find it easier to
work together amicably as a group or team.
sensitivity training seeks to accomplish its aim of
increasing interpersonal openness, greater
concern for others, increased tolerance for
individual difference s, enhanced listening
skills,and increased trust and support.
T-group meets continually for period as long as 1
or 2 weeks.

 Transactional analysis:
It is a technique of training developed
by Eric Berne.
It is a tool of improving human
relations and interactions , and of
promoting rational and mature
behaviour.
It identifies 3 main aspects of human
personality.
Parent(taught behaviour)
Adult(thought behaviour)
Child (felt behaviour)

This approach is useful for

understanding peoples behaviour
particularly when they are involved
in inter-personal relationships.
Development of positive thinking ,
improvement in inter-personal
relationship , proper motivation of
people and organizational
development are some of the
important benefits of transactional
analysis ,as a technique of training.

Other methods
*On the training

Apprenticeship training
Under study
*Off the job training
Demonstration
Brainstorming
Field trips

Apprenticeship training:
Is an earning while learning
arrangement for a required term.
(one year or few months)
Training takes place under the
supervision of an experienced
person.
An apprentice receives knowledge
and develops skills associated with
a designated trade through on-thejob training.

Under study:
It is a development technique to prepare a
manager for taking over the charge of his
senior after his retirement, transfer ,
promotion or death.
The executive who is understudy acts as
assistant to the superior executive whom
he will succeed.
Senior manager teaches him all skills and
imparts complete knowledge for the
performance of the job.

 Demonstration:
Is an instructional method in which an
instructor shows and explains .
This method may be uesd to enrich
and increase the learners
understanding.
Practice must be included as a
major component of the method.

Brain storming:
Developed by A.F Osborn
Is a group creativity technique
designed to generate a large
number of ideas for the solution of
a problem.
Provides an opportunity for wide
spread participation and
involvement and stimulated thinking.

Field trips:
A fieldtrip or fieldwork training is a
journey by a group of people to a
place away from their normal
environment.
Field trip provides an understanding
of activities, working procedures or
mgt processes of an organisation.
It enables the participants to interact
with a real field setting or situtation ,
leading to direct learning.

Types of Training
1.Induction or Orientation Training
2.Job Training
3.Apprenticeship Training
4.Internship Training
5.Refresher Training or Retraining
6.Training for Promotion.
TN.229

TRAINING PROCESS
1.Identification of training needs
2.Setting training objectives.
3.Designing training methods.
4.Administration of training
programmes.
5.Evaluation of training.
K.111

Resistance to training
Employee resist training because
they resist change.
Resistance to change involves
employees behaviour designed to discredit, delay (or )
prevent the changes introduced for the development of an
organization.

They resist because they are

afraid of their job security,working
conditions ,status and other factors.

Sources of resistance
Individual resistance
organizational resistance
Habits
Limited focus of change
Security
group inertia
Economic factor
Threat to expertise
Fear of the unknown
Threat to establish
Selective information
power relationships
processing
Threat to establish
resource allocation

Factors that increase resistance to training

Insecurity
Lack of communication
Rapid change
Loss of power and control
Emotional feelings

Managing resistance to
training

Participation and involvement

Good communication and education
Leadership
Negotiation and agreement
Willingness

Executive development
programmes
Any activity designed to improve the
performance of existing managers and to
provide for a planned growth of
managers to meet future organisational
requirements
The process by which managers and
executive acquire not only skills and
competency in their present jobs but also
capabilities for future managerial tasks
of increasing difficulty and scope.

Objectives of executive development

progamme :
1. To improve the performance of
managers at all levels.
2. To identify the persons in the
organisation with the required potential
and prepare them for higher positions
in future.
3. To stimulate creative thinking for
improving methods and procedures and
analytical abilities.
4. Provide opportunities to executives to
fulfill their career aspirations.
5. To understand different function in a

Importance Of EDP
1.There is a rapid pace of technology
change .
Many automatic machines and equipments
have been introduced in modern
organisations.
The manager must have working
knowledge of the use of new technology.
2.socio-cultural environment is changing
at a fast speed.
The manager must have uptodate
knowledge of socio-cultural environment

3.There is a tough competition in the

market and the consumers.
To understand and meet the needs of the
consumers properly , executive
development can be of great help.
4.Increased recognition of social
responsibility by modern business houses
has increased the need of executive
development.
5.In order to satisfy the employee and to
motivate them to contribute to the
achievement of organisational objectives
development of executives is necessary.
6.Frequent labour management conflicts
need trained managers to bring

Executive developments methods

On-the-job methods

off-the-job methods

Coaching
Lecture
Job rotation
Case studies
Understudy assignments
Group discussion
Committee assignments
Transactional analysis
Role playing
Management games
Sensitivity training
In- basket exercise
Organisation development

EDP PROCESS
Identifying development needs
Appraisal of present managerial
talent
Inventory of executive manpower
Developing development
programmes
Conducting development
programmes
Evaluating development programmes

BENEFITS OF EDP
1. It helps manager to develop their skills
to face competition.
2. Developing better relations with the
labour.
3. It helps manager to have broad outlook.
4. It helps in enhancing and motivating the
performance of executive
5. It makes executives to communicate
effectively.

Self development:
Self-Development is taking personal
responsibility for one's own learning and
development through a process of
assessment, reflection, and taking action.
When to use it?
1.To continually update skills and to remain
marketable in the workplace.
2.To determine future career direction.

How to use self development ?

1.Assess your current skills and interest through
paper-and-pencil career tests or through
computer programs that analyze skills and
interests.
2.Maintain a learning log or diary to help you
analyze what you are learning from work
experiences.
3.Write a personal vision and mission statement.
4. Develop a personal development plan that
identifies your learning needs and goals.
5. Find a mentor who can provide you with support,
advice, and assistance in your career direction.
Become involved in professional organizations.
6.Read professional journals and trade magazines to
keep current on the latest developments in your
field.

Knowledge management
(KM)
Knowledge management (KM)
comprises a range of strategies and
practices used in an organization to
identify, create, represent, distribute,
and enable adoption of insights and
experiences.
Such insights and experiences
comprise knowledge, either
embodied in individuals or embedded
in organizations as processes or

KM is the process by which

information is used to create
something actionable.
Knowledge management elements :
Knowledge creation
Knowledge sharing
Knowledge utilization

Significance of KM
Tool for decision making
Provides opportunity for survival.
May reduce training time of new employees .
Promotes Recognisation .

UNIT:IV
What Is Compensation?
Compensation is the total reward
received by an employee in
exchange for services performed for
an organization.
It can include both direct pay (salary
and wages) and indirect pay
(benefits programs).

Compensation refers to a wide range of financial

and non-financial rewards to employees for their
services rendered to the organisation.
Eg: It is paid in the forms of
*Wages
*Salaries
Employee benefits such as
* paid vacations
*Insurance
*Maternity leave
*Free travel facility
*Retirement benefits
Monetary payment are a direct form of
compensating the employees and have a great
impact in motivating employees.

compensation
Financial
Wage
salary

Non-financial

supplementary compensation

job content
fringe benefits
responsibility
perquisities
recognition
working condition
supervision

The term
wages is used to denote remuneration to workers for doing manual
or physical work.
wages
Hourly daily

weekly even monthly basis

The term
salary is usually defined to mean compensation to office
employees, foreman, managers and professional and technical
staff.
salary
Monthly

yearly

Objectives of compensation
1. Attracting and retaining
personnel:Capable employees are
attracted /retained in organisation
2.Motivating personnel :
The employees are motivated for
better performance .
The employees do not leave the
organisation frequently.

ELEMENTS OF
COMPENSATION
In Industry , workers are compensated in form of
following benefits :
1. Monthly wages and salary (or) total pay
including basic wages , house rent allowances
dearness allowance and city compensatory
allowances.
2. Bonus at the end of the year.
3. Economic benefits such as paid holiday ,
leave travel concession.
4. Contribution towards Insurance premium.
5. Contribution towards Retirement benefits such
as Provident fund.
6. Transport and Medical facilities.

What are the components of a compensation system?

Compensation will be perceived by employees as fair if based on systematic components. Various
compensation systems have developed to determine the value of positions. These systems utilize
many similar components including job descriptions, salary ranges/structures, and written
procedures. The components of a compensation system include:
Job Descriptions A critical component of both compensation and selection systems, job
descriptions define in writing the responsibilities, requirements, functions, duties, location,
environment, conditions, and other aspects of jobs. Descriptions may be developed for jobs
individually or for entire job families.
Job Analysis The process of analyzing jobs from which job descriptions are developed. Job analysis
techniques include the use of interviews, questionnaires, and observation.
Job Evaluation A system for comparing jobs for the purpose of determining appropriate
compensation levels for individual jobs or job elements. There are four main techniques: Ranking,
Classification, Factor Comparison, and Point Method.
Pay Structures Useful for standardizing compensation practices. Most pay structures include
several grades with each grade containing a minimum salary/wage and either step increments or
grade range. Step increments are common with union positions where the pay for each job is predetermined through collective bargaining.
Salary Surveys Collections of salary and market data. May include average salaries, inflation
indicators, cost of living indicators, salary budget averages. Companies may purchase results of
surveys conducted by survey vendors or may conduct their own salary surveys. When purchasing
the results of salary surveys conducted by other vendors, note that surveys may be conducted
within a specific industry or across industries as well as within one geographical region or across
different geographical regions. Know which industry or geographic location the salary results pertain
to before comparing the results to your company.
Policies and Regulations

Concepts of wages
Minimum wages :
Providing for sustenance of life plus for
preservation of the efficiency of worker.
Fair wages :
Equal to the rate prevailing in the same
trade and in the neighbourhood , or
equal to the predominant rate for similar
work throughout the country.
Living wages:
Higher than fair wages. Provides for bare
essentials plus frugal comforts.
A-305

What are different types of compensation?

Different types of compensation include: Base Pay
Commissions
Overtime Pay
Bonuses, Profit Sharing, Merit Pay
Stock Options
Travel/Meal/Housing Allowance
Benefits including: dental, insurance, medical, vacation,
leaves, retirement, taxes...

Factors affecting wages/salary:

1.Demand for and supply of labour.
2.Ability to pay.
3.Cost of living.
4.Productvity of workers.
5.Labour union.
6.Government policy.
7.Prevailing wage rates.
8.Goodwill of the company.
9.Educational qualification.
10.Work experience.
11.Promotion possibilities

Significance of wages and

salary

Act as motivator.
Helps in employee retention.
Provides satisfaction.
Used to attract workers/labour.

system of wages

Time rate system

Piece Rate System

Individual Incentive Plans

Based on time
1.Halsey plan
2.Rowan plan
3.Emerson plan
4.Bedeaux plan

Based on productivity
2.Profit sharing
1.Taylor plan
2.Merrick plan
3.Gantt plan

Wage Incentive Plan

Group Incentive Plan

1.Pristmans plan

Time rate system:

Under this system , the worker is paid
for the amount of time spent on the
job.
The period of time may be an hour, a
day ,a week, a fortnight or a month
and the wage rate will depend
upon the period of time.
Wage=No: of days worked X Rate per
day

ADVANTAGES
DISADVANTAGES
1.Simple
*Inefficiency
2.Feeling of security
* Lack of
motivation
3.Equality of wages
*Increased
supervision
4.Better quality
*fixed wage
bill
5.Less wastage
6.Adaptability
7.Acceptable to trade union

Piece rate system:

Under this system , the output of
work is the basis of wage payment.
A worker is paid according to the
amount of work completed or the
number of units turned out
irrespective of time taken.
Wages=No: of units produced x Rate
per unit.

ADVANTAGES

DISADVANTAGES

1.Incentives for higher production . *Low quality

2.Fairness
*Insecurity to workers
3.Costing
*Poor IR
4.Lesser supervision
*Difficulty in rate fixation
5.Remedial transfer
*More administrative work
6.Economy
*Wastage
*Health hazard
*Opposition by trade unions.

Wage Incentive Plan

An incentive is anything that
attracts a worker and stimulates
him to work.
Wage incentives are 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 result.

Types of incentive
schemes
Individual incentive scheme:
Under this plan , employees are paid on the basis of
individual result

Based on time
productivity

Based on

1.Halsey plan
2.Rowan plan
3.Emerson plan
4.Bedeaux plan

1.Taylor plan
2.Merrick plan
3.Gantt plan

Halsey premium plan:

F. A HALSEY
Under this plan , a guaranteed wage based on
past experience is determined.
If a worker saves time, he gets 50% of wages for
time saved (called premium) in addition to
normal wages .
It is optional for the workers to work on the
premium or not.
Thus, this plan provides incentives to efficient
workers

Halsey or Weir Plan

Total Wages (W) =

T x R + 50% (S-T) x R

T= Time taken
S= Standard Time
R= Rate of Wage
P= Bounce(50%)

Rowan premium plan:D.Rowan 1901

It similar to Halsey plan,the only
difference is in regard to the
determination of the premium.
Unlike a fixed % in case of Halsey
plan, it considers premium on the
basis of the proportion which the
time saved bears to the standard
time.

Rowan Plan

Total Wages (W) = T x R+

[TxRx

Time saved
Standard Time

EMERSONS EFFICIENCY PLAN:

In this plan Emerson suggested guaranteed
wage payment to all workers on time rate
basis.
In addition ,bonus or extra payment was
suggested to those who prove to be
efficient .
For determining efficiency , standard
output per unit of time or standard time
for the job is determined .
Efficiency is to be measured on the basis
of comparsion of actual performance with
the standard fixed .

Bedeaux point plan:

In this plan , every operation or job is
expressed in terms of so many
standard minutes ,which is called
bedeaux points or BS, each
representing one minute through
time and motion study.
Thus there are 60 Bs in one hour.
Each has a standard number of BS.
The rate per hour is determined .

Taylors differential piece rate system:F.W. Taylor in 1880.

According to him , it is possible to calculate
standard workload for every worker on the basis
of time and motion studies .
In this plan he suggested two piece rates for
workers .
The lower rate to those who are average or less
efficient and give production below the standard
workload fixed.
The higher piece rate is suggested for those who
are above average or efficient and give
production over and above the standard workload
fixed.
Naturally an efficient and sincere worker will be paid
at a higher rate and an inefficient worker will be

Merricks multiple piece rate plan:

According to this plan three pieces for a job is fixed.
Rates

Bonus Incentives

Up to 83%

Normal

Above 83% to 100%

110% of normal rate

Above 100%

120% of normal rate

Gantt Task- H.L.Gantt:

under this system bonus % is multiplied by the
value of standard time. Under this system fixed
time rates are guaranteed. Output standards and
time standards are established for the
performance of each job.

Group incentive :
1.Profit sharing :
profit sharing is a scheme whereby,
a certain percentage of the profits is
distributed at fixed intervals,
usually annually in some definite
ratio to all the employees who
have been the employees of the
firm for a stated term.

2.ESOP:
Employee stock ownership plan is a
defined
contribution of employee benefit that
allows employees to become
owners of stock on the company
they work for.
Companies allow executives to
purchase their shares at fixed prices
. Stock options are valuable as long
as the price of share keeps
increasing.
The share price crashes when the
company starts incurring loss, and

Methods of Wage Payment

1. Payment by time
2.Payment by result (PBR)
i)Straight piece work
ii)Differential piece work system
3. Balance or Debt Method

K-169

Wage legislation in India

The Minimum Wages Act, 1948

The Payment of Wages Act, 1936
The Payment of Bonus Act,1965
The Equal Remuneration Act, 1976
Pay Commissions

Supplemenrary
compensation
Modern organisation use
supplementary compensation to
retain the employees on a long-term
basis.
The supplementary compensation
involves fringe benefits offered
through several employee services
and benefits such as housing,
medical care & aid canteen uniform
recreation,p.f,gratuity,health and
group insurance,accident relief.

Fringe benefits refers to various

extra benefits provided to
employees , in addition to the
compensation paid in the form of
wages or salary.
Fringe benefits may be defined as
wide range of benefits and services
that employees receive as an
intergral part of their total
compensation package.

 Supplementary compensation has

been given different titles in
industry . Such a
Service programmes
Employee benefits
Non-wage payment

Purpose :
1.To attract and maintain efficient
human resources with the
organisation .
2.To motivate the employees.

Types of supplementary
compensation:
Payment for time not worked.
Hazards protection
Employee services
Legal payments.

Perquisities
Are benefits initiated by industrial
giants particularly for the
executives.
Include company car, club
membership, paid holidays, furnished
home,stock option schemes.
Perquisites are offered to retain
competent executives.

Reward
Reward can be defined as
something which is offered or given
to the employees, in return for some
service or attainment.
Reward is a dynamic instrument.
It motivates employees higher
performance.

Objectives of reward:
1.Improves individual and
organsational performance.
2.Motivates employees.
3.To achive integration.
4.To encourage value added
performance.
5.To increase commitment.
6.To enhance performance .
7.To promote teamwork and quality.

Classification of reward
1.Monetary reward 2.non monetary
reward
1.eg:cash , cheque , direch cash
deposite
2.gifts, trophies, desk items,personal
gift items etc.

Types of rewards
1.Financial rewards:
Financial reward are the direct
monetary reward encompassing the
payment of cash compensation to
employees for work accomplishment
or effort.
Eg:Paid leave,Progression through
the salary
Merit .

 2.NON-FINANCIAL REWARD:
Reward given to the worker other
than the money.
Eg:Recognition,Achievement,
responsibility,job enrichment,Workers
participation in management.

3.Organisational reward:
People join organsations expecting
rewards.
Firms distribute money and other
benefits in exchange for the
employees availability ,
competencies, and behaviour.
1.Membership and seniority based
reward.
2.Task performance based reward.
3.Competency based reward.
4.Job status based reward.

CAREER MANAGEMENT
A Career can be defined as all the
jobs held by a person during his
working life.
According to Edwin Flippo
a career is a sequence but related
work activities that provides
continuity, order,and meaning in a
persons life.

Career Management:
Is the process of designing and
implementing goals,plans and
strategies to enable the organisation
to satisfy employee needs while
allowing individuals to achieve their
career goals.

Factors
A persons career is shaped by many
factors.
Education
Experience
Performance
Parents
Caste links and some occasional
luck.

Career stages:
1.Exploratory stage
2.Establishment stage
3.Mid career stage
4.Late career stage
5.Decline stage.

 Careering planning can be defined

as a systematic process by which
one decides his/her career goals
and the path to reach these goals.
Career planning is a managerial
technique for mapping out the entire
career of employees from the
employment stage to the retirement
stage.It involves
discovery,development,planned
employment and reemployment

Career goal:
The future positions one strives to
reach in his career.
Career path:
The sequential and progressive path
or line through which one moves
towards his/her career goal.

Career Anchors:
Are the basic drives acquired by an individual
during the socialisation process which urge him to
take up career of certain types.
Five career anchors identified are :
1.Managerial competence
2.Technical functional competence
3.Security
4.Creativity
5.autonomy-independence
Career Progression:
Making progress in ones career through a series of
right moves in the form of promotion.

Mentor and porteges relationship

Mentor and the proteges are the two
participants in mentoring relationships in
the work place .
The supervisors , reporting officer
Mentoring :
A process wherein a senior employee
serves in an informal way as a teacher ,
guide,friend, philosopher and confidante
to the new employee in the organisation

Mentoring process
1.
2.
3.
4.
5.

Need assessment
Program design
Training
Pairing
evaluation

Classification of mentoring
programs
Formal mentoring
Informal mentoring
Career mentoring
Psycho-social mentoring
One-to one mentoring
Group mentoring
Team mentoring
Peer mentoringe-mentoring

Mentors and proteges

relationship
Proteges are individuals who receive
guidance, coaching, and support
from the mentor.
The supervisors and reporting officer
of the protege , plays a crucial role
for the success of a mentoring
programme.
They give Guidance, and cooperation.

Different roles of mentor :

Teacher ,guide,friend, philosopher ,advisor ,counselor.
Benefits of mentoring and proteges relationship:
1. Improves self confidence and self esteem.
2. Increases motivation
3. Helps in interpersonal skill development .
4. Helps in shared learning .

Unit v:
Performace appraisal
is a systematic evaluation of the individual
with regards to his/her performance on
the job and potential development.
It is also called merit rating

Objectives:
1.Facilitating promotion decisions.
2.Encourages performance
improvement
3.Deternmining compensation
changes.
4.Improving overall organisational
performance

Uses:
1. Performance improvement
2. Compensation adjustment
3. Placement decision
4. Career planning and development
5. Training and development
6. Employment opportunity.

Methods of performance appraisal

Traditional method s
Modern methods
1Ranking method
1.Management by objectives
2Paired comparison
2.Behaviourally anchored rating
scales
3.Grading
3.assessment centres
4.Forced choice method
4.360-degree appraisal
5.Forced distribution method
5.cost accounting method
6.Checklist method
7.Critical incidents methods
8.Graphic scale method
9.Essay method
10.Field review method
11.Confidential report

Promotion
Promotion is the vertical movement
of an employee within the
organisation.
promotion refers to the upward
movement of an employee from one
job to another higher one, with
increase in salary, status, and
responsibilities.

Types of promotion
1.Horizontal promotion:
when an employee is shifted in the same category
it is called horizontal promotion
Eg: a junior clerk promoted to senior clerk
2.Vertical promotion:
When an employee is promoted from a lower
category to higher category involving incrase in
salary, status ,authority and responsibility.
3.Dry promotion :
When promotion is made without increase in
salary is called dry promotion.
Eg:A lower level manager is promoted to senior
mgr without increase in salary or pay.

BASIS FOR PROMOTION

Promotion on merit
Promotion on the basis of seniority
Promotion on merit cum seniority
basis

Benefits :
1.Provides personal satisfaction.
2.Provides recognition
3.Lesser cost of training
4.Improves morale of employees.

Promotion policies:
1.Informal promotion system
2.Open versus closed promotional
systems.

Demotion
the assignment of an individual to a
job of lower rank and pay usually
involving lower level of difficulty and
responsibility

Causes :
1.Incompetence
2.Adverse business conditions
3.Disciplinary measures