Course code : MSW3Course tittle : Human resource management

UNIT - II

Personnel Policies

Personnel policies(HR Policy)

• The basic aim of Personnel Management is to get the work done by all the employee working in an organization so that the objectives of organization may be achieved in the best possible manner.

• To perform their functions and responsibilities effectively and successfully, personnel policies must be prepared by all personnel executives before hand.

• In order to achieve organizational objective, it has become necessary that there must be some pre-determined and accepted course of action so that the management may keep the employees on task.

• Such pre-determined course of action is known as personnel policy

Meaning • The term ‘ personnel policy’ is an amalgam of two words:

‘personnel’ and ‘policy’.• ‘personnel’ refers ‘relating to personnel’ or employee and ‘policy’

denotes ‘man-made rules’, procedures, etc.• Personnel policies are the rule and directions that guide the

management in achieving the objectives of the organization.• Thus, personnel policies help in decide line of action.

Definitions • According to Edwin B Flippo “ A policy is a man-made rule or

pre-determined course of action that is established to guide the performance of work towards the organization objectives”

• According to R.P Kalhoom “Personnel policies constitute guide to action. They give the general standard or basic which could give the decisions. Their genesis lies in values, philosophy, concepts and principles of an organization”

Characteristics Personnel polices are the statement objectives. Personnel polices guide the management with regard to

Personnel problems Personnel polices is a pre-determined and accepted course of

action. It reflects the intention of top management to direct the

subordinate to discharge their responsibilities preperly and most effectively.

Personnel polices provides the basis on which personnel decision are taken.

Objectives of personnel policies To enable the organization to achieve its goal. To make aware all employees about and organization's goal,

function rules, regulation and managerial. To project common interest of all concerned. To provide adequate, competent & trained personnel for all levels. To provide consultative participation and secure co-operation of all

employees. To provide effective leadership, soon moral behavior and

motivation. To enforce discipline and happy relationship among employees. To provide security, opportunity fair treatment to all. To provide appropriate wages so per job or work activities.

Types of personnel policesInternal PoliciesExternal PoliciesAppealed Policies

Basic Policies General PoliciesSpecific Policies Explicit PolicesImplied Policies

Types of personnel policesInternal Policies• There are initiated by

manager at various level to guide the subordinate.

• Internal policies are closely related to the organizational objectives.

• They include basic, general and departmental policies.

External policies• These policies are formulated

to meet the various pressure and requests of the forces outside of the organization such as Government, trade union, and trade associations.

• Some of the external polices are forced upon as they have to be followed under from the government

Types of personnel policesAppealed polices • These polices come into

existence from appeal of an exceptional problem by a subordinate to his superior regarding how to handle it.

• The need for such a policy may arise because the particular case has not been covered by easier policies

• Basic Policies • Basic policies affect and

relate to the top most level of managerial hierarchy.

• These are used by the top management for taking various decisions in the future

Types of personnel polices

General policies• General polices affect the

middle level managers.• There are not relate to any

specific issues in particular.• Rather they represent the

basic philosophy and priorities of top management.

Specific polices• These polices related to

specific issues like staffing, compensation collective bargaining , etc.

• All specific policies must conform to the board pattern laid down by the general policies

Types of personnel polices

Explicit policies• Such policies are usually in

writing and form a part of the organization manual.

• They are define and generally rigid.

Implied Policies• These policies are not recorded

in writing even though they are followed at every level.

• Sometimes, they are not stated orally but are inferred from the behaviour of the managers.

• That is why they are known as implied policies.

• The implied policy is generally flexible in nature.

Principles of Personnel Policies

1. Principle of Mutual Interest Personnel policies must be

based on the principle of mutual interest.

The workers should feel that interest of management is common with the workers.

This will provide motivation to the workers to put in hard work which will entitle them to earn higher wages and non-monetary benefits.

2.Principle of Development All workers should be given

the opportunity to develop so that their monetary position as well as their social status is enhanced.

Workers tend to be more sincere and hard working when they are aware of the chances of promotion in the organization.

Principles of Personnel Policies

3.Principle of Participation Workers should be allowed to

participate not only in the formation of these policies but in the management also.

This will solve many problems properly and quickly.

Modernization, automation and other problems can be minimized with the co-operation of workers.

4. Principle of Recognition• For good industrial relations,

recognition of trade union is must now-a-days.

• The works liabilities, responsibilities and the part played by the labour unions should be appreciated

• The human dignity of workers should always honored.

Principles of Personnel Policies

5. Principle of Good Working Conditions Worker not only want security of

work but also they desire good pay, satisfaction of work and appraisal of their work

Hence, policy should be provide good working conditions, and adequate wages and there should be impartial appraisal of their work to the workers

6. Principle of Flexibility Personnel policies can develop

the sense of belief in opposition of labour, trust and awakening.

They will have to bear the loss caused due to scientific and technical changes.

The policies should be flexible enough to cope with the change in technical, economic an social factors

Sources of Personnel Policies

The following are the principal sources of Personnel Policies:1. Traditions and past experience.2. Personnel Policies of similar concerns.3. The philosophy of Board of Directors.4. Suggestions of employees.5. Labour Legislation and policies of the Government.6. Trade Union and collective bargaining.7. Objectives of organization.8. International conditions.9. Business environment.10. Day to day experience of dealing with personnel problems.

Formulation of personnel policies

Identifying need Gathering information

Examine policy alternatives

Getting approval Communicating policy

Evaluating policy

STEPS1. Identifying needs

• First of all the areas requiring personnel policy are identified.

• Policies are required in various area of personnel management such as hiring, training, compensation, industrial relation, etc.

• Need for a new policy or revision of an existing policy may be voiced by the company’s staff or by a trade union

2. Gathering information

• Once the need for a policy has been accepted, the next step to collect necessary information for formulation.

• A committee may be assigned the task of collecting the required information from inside and outside of the organization.

• It is necessary to monitor and predict thoroughly the internal and external environment of the firm.

• Widespread consultation and discussion at this stage are helpful in developing personnel polices

STEPS3. Examining policy alternatives

• On the basis of data collected, alternatives are appraised in term of their contribution to organizational objectives.

• It is necessary to secure active participation of those who are to use and live with the policies.

• The chosen policy is then put in writing in appropriate form.

4. Getting approval

• The personnel department will send the policy draft at the right time to top level management for its approval.

• Top management has the final authority to decide whether a policy adequately represents the organization’s objectives.

STEPSCommunicating the policy

• The approval policy needs to be communicated throughout the organization.

• Policy manual, house journal, meeting and other methods may be employed for this purpose.

• In addition, an educational programme may be arranged to teach people how to apply the enunciated policy.

Evaluating the policy

• From time to time the policy needs to be evaluated in terms of experience of those who are affected by it.

• Environmental change should also be considered.

• Any serious difficulty with a policy along with suggestions should be reported to the top management.

• Such knowledge will enable the management to decide whether there is need to restate or reformulate the policy.

HR policy A HR policy is simply a directive, usually written, which aids the HR department in accomplishing its functions effectively

HR policy must cover all areas of manpower management. Usually personnel policies are framed with regard to:

1. Recruitment and Selection (Employment) Policy

2. Promotion policy

3. Training policy

4. Wage policy

5. Demotion and termination policy

6. Working conditions and motivation policy

7. Welfare policy

8. Integration policy

Coverage of HR policy • The subject matter of human resource policies is as wide as the scope of

human resource management. • In most companies, policies are established regarding various functions of

human resource management which are as follows.1. Employment 2. Training and development3. Transfer and promotion4. Wage and Compensation5. Working conditions6. Employee services and welfare7. Industrial relations

Employment All policies concerning recruitment, selection and separation of employees

are included in this function. Employment policies should provide clear guidelines on the following points:

a) Minimum hiring qualifications.b) Preferred sources of recruitment.c) Reservation of seats for scheduled castes, scheduled tribes

handicapped persons and ex-servicemen.d) Employment of local people and relations of existing staff.e) Reliance on various selection devices such as university degrees,

tests, interviews, reference checks, physical examination, etc.f) Basis (length of service or efficiency) to be followed in discharging

an employee.g) Probation period.h) Layoff and retiring.

Training & developmenta) Attitude towards training-

whether it is regarded as a device to overcome specific problems or as a continuing relationship between superior and subordinate.

b) Objectives of trainingc) Opportunities for career

development.d) Basis of traininge) Methods of training – on the job

or off the job.f) Programmes of executive

development.g) Orientation of new employees.

Transfers and promotions

a) Rationale of transfer.b) Periodically of transfer.c) Promotion from within or outside the organization.d) Seniority required for promotion.e) Relative weight age to seniority and merit in organization.f) Seniority rights.g) Channels of promotion.

Wage and compensation a) Job evaluation system.b) Minimum wages and salaries.c) Method of wage payment.d) Profit sharing and incentive plans.e) Non-monetary rewards.f) Executive stock option plan.g) Procedure for getting pay.h) Whether to pay prevailing or more than prevailing salary scales.

Working conditiona) Working hoursb) Number and duration of rest intervals.c) Overtime work.d) Shift work.e) Safety rules and regulations.f) Leave rules.

Employee service and welfare

a) Types of service – housing , transportation, medical facilities education of children, group insurance, credit facilities ,purchase of company ‘s products at discount, company stores, social security, etc.

b) Financing of employee servicesc) Incentives to motivate

Industrial relationsa) Handling of grievances.b) Recognition of trade union.c) Suggestions schemes.d) Discipline and conduct rules.e) Worker’s participation in management.f) Employees’ news sheet and house journals.

APPROACHES

OF

HUMAN RESOURCE

MANGEMENT

Approach of HRM• Approach means “ a way of dealing with a situation or problem”.

• Approach of HRM is a method of handling a different situation in management level.

• Some HRM approaches are:• Human relations approach• System approach• Contingency approach

HUMAN RELATION APPROACH

Human Relations• Human relations refers to the interactions of people in all walks of life.• In industrial setting, human relations means the systematic body of

knowledge used to explain the behaviour of people at work.

Definition of Human relation• According to Keith Davis, “Human relation is an area of management

practice which is concerned with the integration of people into a work situation is a way that motivates them to work productively, cooperatively and with economic psychology and social satisfaction”

CHARACTERISTICS Human relation is an integrative process through which the goals of the

organization and interests of the people working in it are harmonized. The basic objective of human relation is to ensure that both employee

satisfaction and company productivity are simultaneously achieved. Human relations recognizes the dignity of the individual as a human

being. Human relations is an action-oriented approach to build human co-

operation towards organizational goals, it seeks to make happy both employee and productive.

Principles of Human Relations Approach

The basic principles of human relations approach are Human beings are not interested only in financial gains. They also need

recognition and appreciation. Workers are human beings. So they must be treated like human beings

and not like machines. Managers should try to understand the feelings and emotions of the workers.

Managers should encourage informal relations with workers in the organization along with formal relations.

Workers need a high degree of job security and job satisfaction. Therefore, management should give job security and job satisfaction to the workers.

Management must encourage workers' participation in decision making management. This will increase productivity and job satisfaction.

Advantages • Human relations is the key to generate willingness among the

employees.• It helps to increase work performance and also motivate the

workers to perform it. • It aims to prevent and resolve the workers problems in the

organization • It aids job satisfaction of employee and improve productivity • It gives importance to human dignity and respect • It helps the manager to understand the attitudes and behaviour of

employees • It improves understanding among workers and employer.

A system is a set of interrelated but separate parts working towards a common purpose. According to R. L. Acoff “ a SYSTEM is the set of interrelated and interdependent elements”.

SYSTEM APPROACH• System approach to management views the organization as a

unified, purposeful system composed of interrelated parts.• This approach also gives the manager to see the organization as a

whole and as a part of the larger external environment.• For Example • In a company a group of division people working for a common

goal or success. So this system for mainly approach to the management

Example

Production Department

Marketing Department

Human Resource

Department

Finance Department

Features of System approach

Features

Dynamic

SocialSystem

Open system

AdaptiveMultivariable

Integrated

Interdependent

Input

Process

Output

ADVANTAGES• It aims at meaningful analysis of organizations and their

management.• It facilitates the interaction between organization and its

environment.• It guide manager to avoid analyzing problems in isolation and to

develop an integrated approach• It gives importance to interdependent of the different parts of an

organization and its environment.• It forecast consequences and plans action.• It is Goal oriented.

DISADVANTAGES • The approach does not recognize the differences in systems.• Over-conceptual• Systems philosophy does not specify the nature of interactions

and interdependencies.• Unpractical: It cannot be easily and directly applied to practical

problems.• Lack of Universality• Complex System

CONTINGENCY APPROACH

CONTINGENCY APPROACH• Contingency approach to management is based on the idea that there is

no single best way to manage.• Contingency refers to the immediate contingent circumstances • Effective organization must be toiler their planning, organizing, leading

and controlling to their particular circumstances.• The basic idea of this approach is that number management technique

or theory is appropriate in all situations.• Contingency approach to management advocates that managerial

actions and organizational design must be appropriate to the given situation and a particular action is valid only under certain conditions

Features of Contingency Approach

Management is externally situational: the conditions of the situation will determine which techniques and control system should be designed to fit the particular situation.

Management is entirely situational. There is no best way of doing anything. One needs to adapt himself to the circumstances. It is a kind of “if” “then” approach. It is a practically suited. Management policies and procedures should respond to

environment. Managers should understand that there is no best way of managing.

It dispels the universal validity of principles.

Factor affected Contingency approach

• Size of the organization• Task technology • Environmental uncertainty • Geographical spread of organization• Type of work being done

Advantages• It empowers management to create specific, integrated solutions to

solve workplace issues.

• It enables management to change employee roles to meet the individual needs of a given work quickly.

• It helps management to make proper decision making.

Limitations • Contingency approach suffers from inadequately of literature

since the approach cannot offer much assistance to the practice of management.

• Practice of contingency approach is complex in nature.

• It is delay decision making in the management level.