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UNIVERSITY SCHOOL OF BUSINESS

MBA

HUMAN RESOURCE

MANAGEMENT

SUBJECT CODE-

BAT-656

DR. APOORVA

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Vision and Mission of the Department

Vision of the Department

To create excellence in business management for nurturing value driven business leaders with

analytical and entrepreneurial mindset to foster innovative ideas in order to transform the

world and serve the society.

Mission Statements of the Department

M1 : Design a unique competency directed and industry relevant curriculum with outcome

oriented teaching learning process facilitated by world class infrastructure.

M2 : Enhance students’ cognitive, research, analytical, ethical and behavioral competencies

through programs that equip them to meet global business challenges in the professional

world.

M3 : Facilitate student centric sound academic environment with co-curricular and extra-

curricular activities to groom and develop future ready business professionals.

M4 : Design a transparent evaluation system for objective assessment of the program

learning.

M5 : Align meaningful interactions with the academia, industry and community to facilitate

value driven holistic development of the students.

M6 : Develop ethical and socially responsible entrepreneurial attitude for harnessing the

environmental opportunities through creativity and innovation for a vibrant and

sustainable society.

UNIVERSITY

SCHOOL OF BUSINESS

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Program Educational Objectives (PEOs)

Program Educational Objectives (PEOs) are the broad statements that describe career and

professional accomplishments that graduates will attain within a few years of graduation. After

successful completion of MBA program from Chandigarh University, the graduates will:

PEO1: Make significant impact as successful management professionals with a sound business

and entrepreneurial acumen leading to a promising career in the various management

domains.

PEO 2: Develop the professional competence for astute decision making, organization skills,

planning and its efficient implementation, research, data analysis and interpretation with a

solution finding approach.

PEO 3: Be known for their team player qualities to handle diversity and the leadership skills to

make sound decisions while working with peers in an inter-disciplinary environment with

people of cross-cultural attributes

PEO 4: Be adaptable to new technology, innovations and changes in world economy that

positively impacts and contributes towards industry, academia and the community at large.

PEO 5: Be responsible citizens with high ethical conduct that will empower the business

organizations with high integrity, moral values, social effectiveness and legal business

intelligence.

UNIVERSITY

SCHOOL OF BUSINESS

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Program Outcomes (POs)

Program

Outcome

After completing the program, the students will be able to:

PO1 Apply knowledge of management theories and practices to solve business

problems.

PO2 Foster Analytical and critical thinking abilities for data-based decision making

PO3 Ability to develop Value based Leadership ability

PO4 Ability to understand, analyze and communicate global, economic, legal, and

ethical aspects of business.

PO5 Ability to lead themselves and others in the achievement of organizational

goals, contributing effectively to a team environment.

PO6 Ability to develop innovative and entrepreneurial mindset.

UNIVERSITY

SCHOOL OF BUSINESS

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Unit-1

Introduction to Human Resource Management

Human resource management can be defined as the total knowledge, skills,

competencies, intelligence, values, attitudes and aptitudes of the employees working

in an organization.

With the growing importance of manpower in the organization, its management is

also crucial to retain good skill and talent.

Therefore it is a management function that help managers recruit, select, train and

develops manpower for an organization. Also HRM includes employee remuneration,

motivation and growth.

Scope of HRM

The scope of HRM is very wide. It consists of all the functions that come under the banner

of human resource management. The different functions are as follows −

a. Human Resources Planning

It is the process by which a company identifies how many positions are vacant and

whether the company has excess staff or shortage of staff and subsequently deals with

this need of excess or shortage.

ii. Job Analysis Design

Job analysis can be defined as the process of noticing and regulating in detail the

particular job duties and requirements and the relative importance of these duties for a

given job.

Job analysis design is a process of designing jobs where evaluations are made regarding

the data collected on a job. It gives an elaborate description about each and every job in

the company.

iii. Recruitment and Selection

With respect to the information collected from job analysis, the company prepares

advertisements and publishes them on various social media platforms. This is known

as recruitment.

A number of applications are received after the advertisement is presented, interviews

are conducted and the deserving employees are selected. Thus, recruitment and selection

is yet another essential area of HRM.

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iv. Orientation and Induction

After the employees are selected, an induction or orientation program is organized.

The employees are updated about the background of the company as well as culture,

values, and work ethics of the company and they are also introduced to the other

employees.

v. Training and Development

Employees have to undergo a training program, which assists them to put up a better

performance on the job. Sometimes, training is also conducted for currently working

experienced staff so as to help them improve their skills further. This is known

as refresher training.

vi. Performance Appraisal

After the employees have put in around 1 year of service, performance appraisal is

organized in order to check their performance. On the basis of these appraisals, future

promotions, incentives, and increments in salary are decided.

Vii. Compensation Planning and Remuneration

Under compensation planning and remuneration, various rules and regulations regarding

compensation and related aspects are taken care of. It is the duty of the HR department to

look into remuneration and compensation planning.

Features of HRM

Human Resource Management as a discipline includes the following features −

It is pervasive in nature, as it is present in all industries.

It focuses on outcomes and not on rules.

It helps employees develop and groom their potential completely.

It motivates employees to give their best to the company.

It is all about people at work, as individuals as well as in groups.

It tries to put people on assigned tasks in order to have good production or

results.

It helps a company achieve its goals in the future by facilitating work for

competent and well-motivated employees.

It approaches to build and maintain cordial relationship among people working at

various levels in the company.

Basically, we can say that HRM is a multi-disciplinary activity, utilizing knowledge and

inputs drawn from psychology, economics, etc.

Functions and objectives of HRM

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To provide effective, efficient and talented manpower to the organizations.

To create opportunities for employees to develop and grow.

To maintain employees by encouraging value system and creating

environment of trust by way of rewards and facilities.

To appraise their performance in order to reward them or to take corrective

actions.

Human resource planning

In today’s knowledge economy an organization’s most valuable asset is its human resources – its

employees. Their skills and knowledge, as well as their relationships with key customers, can

often be irreplaceable and can determine an organization’s success. So much so, human resource

planning is now an integral part of an organization’s strategy.

The human resource planning is a four-step process that analyzes current human resources,

forecasts future requirements, identifies areas where there are gaps, and then implements a plan

to tighten up those gaps. Breaking it down, the objectives of human resource planning are to

make sure you have the right number of people in the right jobs at the right time.

It helps the management to anticipate shortages or surpluses of human resource in

future and correct these imbalances before they become unmanageable and

expensive.

Process of HRP:

Step 1: Assess your current human resource capacity

Start by looking at your current human resources state of play. This will involve

analyzing the HR strength of your organization across factors including employee

numbers, skills, qualifications, experience, age, contracts, performance ratings, titles, and

compensations. During this phase, it’s a good idea to gather insight from your managers

who can provide real-world feedback on the human resource issues they face, as well as

areas in which they think changes are necessary.

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Step 2: Forecast future HR requirements

You will then need to look at the future HR needs of your organization and how human

resources will be applied to meet these organizational goals. HR managers will typically

look at the market or sectoral trends, new technologies that could automate certain

processes, as well as industry analysis in order to gauge future requirements. Of course,

there are a number of factors affecting human resource planning such as natural

employee attrition, layoffs, likely vacancies, retirements, promotions and end of contract

terms. Above all of this, you will need to understand the goals of the organization: are

you entering a new market, launching new products or services, expanding into new

areas. Forecasting HR demand is a complex task based on several dynamics. Being

informed and having a seat, or at least an ear, at boardroom level is essential if you are to

make accurate HR projections.

Step 3: Identify HR gaps

An effective human resource plan walks the fine line between supply and demand. By

assessing the current HR capacity and projecting future requirements you should have a

clear picture of any gaps that exist. Using your HR forecast you can better judge if there

will be a skills gap, for example. Should you upskill existing employees or recruit

employees who are already qualified in specific areas? Are all current employees being

utilized in the right areas or would their skills be better suited to different roles?

Step 4: Integrate the plan with your organization’s overall strategy

After you’ve assessed your current human resources capacity, projected future HR

demands and identified the gaps, the final step is to integrate your human resources plan

with your organizational strategy. On a practical level, you will need a dedicated budget

for human resources recruiting, training or redundancies, and you will also need

management buy-in across the business. You will need cooperation and the necessary

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finances in order to implement the plan and a collaborative approach from all

departments to put it into practice. Learn about the benefits of strategic human resource

management.

Job analysis

It is a formal and detailed examination of jobs in order to understand the tasks that

need to be done and the skills required to do these tasks under this job. Job

analysis provides the analyst with basic data related to specific jobs in terms of

duties , responsibilities, skills and knowledge.

Process of job analysis

Identification of Job Analysis Purpose: Well any process is futile until its purpose is

not identified and defined. Therefore, the first step in the process is to determine its need

and desired output. Spending human efforts, energy as well as money is useless until HR

managers don’t know why data is to be collected and what is to be done with it.

Who Will Conduct Job Analysis: The second most important step in the process of job

analysis is to decide who will conduct it. Some companies prefer getting it done by their

own HR department while some hire job analysis consultants. Job analysis consultants

may prove to be extremely helpful as they offer unbiased advice, guidelines and methods.

They don’t have any personal likes and dislikes when it comes to analyze a job.

How to Conduct the Process: Deciding the way in which job analysis process needs to

be conducted is surely the next step. A planned approach about how to carry the whole

process is required in order to investigate a specific job.

Strategic Decision Making: Now is the time to make strategic decision. It’s about

deciding the extent of employee involvement in the process, the level of details to be

collected and recorded, sources from where data is to be collected, data collection

methods, the processing of information and segregation of collected data.

Training of Job Analyst: Next is to train the job analyst about how to conduct the

process and use the selected methods for collection and recoding of job data.

Preparation of Job Analysis Process: Communicating it within the organization is the

next step. HR managers need to communicate the whole thing properly so that employees

offer their full support to the job analyst. The stage also involves preparation of

documents, questionnaires, interviews and feedback forms.

Data Collection: Next is to collect job-related data including educational qualifications

of employees, skills and abilities required to perform the job, working conditions, job

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activities, reporting hierarchy, required human traits, job activities, duties and

responsibilities involved and employee behaviour.

Documentation, Verification and Review: Proper documentation is done to verify the

authenticity of collected data and then review it. This is the final information that is used

to describe a specific job.

Developing Job Description and Job Specification: Now is the time to segregate the

collected data in to useful information. Job Description describes the roles, activities,

duties and responsibilities of the job while job specification is a statement of educational

qualification, experience, personal traits and skills required to perform the job.

Thus, the process of job analysis helps in identifying the worth of specific job, utilizing the

human talent in the best possible manner, eliminating unneeded jobs and setting realistic

performance measurement standards.

Recruitment

It is the process of searching candidates for employment and stimulating them to apply for

the jobs in the organization. It is the linking activity that brings together employer and

seeking employee. To be effective, the recruitment process should attract qualified

applicants and provide enough information for unqualified persons to screen themselves

out.

Sources of recruitment

The candidates may be available inside or outside the organisation. Basically, there are

two sources of recruitment i.e., internal and external sources.

(A) Internal Sources:

Best employees can be found within the organization. When a vacancy arises in the organisation,

it may be given to an employee who is already on the pay-roll. Internal sources include

promotion, transfer and in certain cases demotion. When a higher post is given to a deserving

employee, it motivates all other employees of the organisation to work hard. The employees can

be informed of such a vacancy by internal advertisement.

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Methods of Internal Sources:

The Internal Sources Are Given Below:

1. Transfers:

Transfer involves shifting of persons from present jobs to other similar jobs. These do not

involve any change in rank, responsibility or prestige. The numbers of persons do not increase

with transfers.

2. Promotions:

Promotions refer to shifting of persons to positions carrying better prestige, higher

responsibilities and more pay. The higher positions falling vacant may be filled up from within

the organisation. A promotion does not increase the number of persons in the organisation.

A person going to get a higher position will vacate his present position. Promotion will motivate

employees to improve their performance so that they can also get promotion.

3. Present Employees:

The present employees of a concern are informed about likely vacant positions. The employees

recommend their relations or persons intimately known to them. Management is relieved of

looking out prospective candidates.

The persons recommended by the employees may be generally suitable for the jobs because they

know the requirements of various positions. The existing employees take full responsibility of

those recommended by them and also ensure of their proper behaviour and performance.

Advantages of Internal Sources:

The Following are The Advantages of Internal Sources:

1. Improves morale:

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When an employee from inside the organisation is given the higher post, it helps in increasing

the morale of all employees. Generally every employee expects promotion to a higher post

carrying more status and pay (if he fulfills the other requirements).

2. No Error in Selection:

When an employee is selected from inside, there is a least possibility of errors in selection since

every company maintains complete record of its employees and can judge them in a better

manner.

3. Promotes Loyalty:

It promotes loyalty among the employees as they feel secured on account of chances of

advancement.

4. No Hasty Decision:

The chances of hasty decisions are completely eliminated as the existing employees are well

tried and can be relied upon.

5. Economy in Training Costs:

The existing employees are fully aware of the operating procedures and policies of the

organisation. The existing employees require little training and it brings economy in training

costs.

6. Self-Development:

It encourages self-development among the employees as they can look forward to occupy higher

posts.

Disadvantages of Internal Sources:

(i) It discourages capable persons from outside to join the concern.

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(ii) It is possible that the requisite number of persons possessing qualifications for the vacant

posts may not be available in the organisation.

(iii) For posts requiring innovations and creative thinking, this method of recruitment cannot be

followed.

(iv) If only seniority is the criterion for promotion, then the person filling the vacant post may

not be really capable.

Inspite of the disadvantages, it is frequently used as a source of recruitment for lower positions.

It may lead to nepotism and favouritism. The employees may be employed on the basis of their

recommendation and not suitability.

(B) External Sources:

All organisations have to use external sources for recruitment to higher positions when existing

employees are not suitable. More persons are needed when expansions are undertaken.

The external sources are discussed below:

Methods of External Sources:

1. Advertisement:

It is a method of recruitment frequently used for skilled workers, clerical and higher staff.

Advertisement can be given in newspapers and professional journals. These advertisements

attract applicants in large number of highly variable quality.

Preparing good advertisement is a specialised task. If a company wants to conceal its name, a

‘blind advertisement’ may be given asking the applicants to apply to Post Bag or Box Number or

to some advertising agency.

2. Employment Exchanges:

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Employment exchanges in India are run by the Government. For unskilled, semi-skilled, skilled,

clerical posts etc., it is often used as a source of recruitment. In certain cases it has been made

obligatory for the business concerns to notify their vacancies to the employment exchange. In the

past, employers used to turn to these agencies only as a last resort. The job-seekers and job-

givers are brought into contact by the employment exchanges.

3. Schools, Colleges and Universities:

Direct recruitment from educational institutions for certain jobs (i.e. placement) which require

technical or professional qualification has become a common practice. A close liaison between

the company and educational institutions helps in getting suitable candidates. The students are

spotted during the course of their studies. Junior level executives or managerial trainees may be

recruited in this way.

4. Recommendation of Existing Employees:

The present employees know both the company and the candidate being recommended. Hence

some companies encourage their existing employees to assist them in getting applications from

persons who are known to them.

In certain cases rewards may also be given if candidates recommended by them are actually

selected by the company. If recommendation leads to favouritism, it will impair the morale of

employees.

5. Factory Gates:

Certain workers present themselves at the factory gate every day for employment. This method

of recruitment is very popular in India for unskilled or semi-skilled labour. The desirable

candidates are selected by the first line supervisors. The major disadvantage of this system is that

the person selected may not be suitable for the vacancy.

6. Casual Callers:

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Those personnel who casually come to the company for employment may also be considered for

the vacant post. It is most economical method of recruitment. In the advanced countries, this

method of recruitment is very popular.

7. Central Application File:

A file of past applicants who were not selected earlier may be maintained. In order to keep the

file alive, applications in the files must be checked at periodical intervals.

8. Labour Unions:

In certain occupations like construction, hotels, maritime industry etc., (i.e., industries where

there is instability of employment) all recruits usually come from unions. It is advantageous from

the management point of view because it saves expenses of recruitment. However, in other

industries, unions may be asked to recommend candidates either as a goodwill gesture or as a

courtesy towards the union.

9. Labour Contractors:

This method of recruitment is still prevalent in India for hiring unskilled and semi-skilled

workers in brick klin industry. The contractors keep themselves in touch with the labour and

bring the workers at the places where they are required. They get commission for the number of

persons supplied by them.

10. Former Employees:

In case employees have been laid off or have left the factory at their own, they may be taken

back if they are interested in joining the concern (provided their record is good).

11. Other Sources:

Apart from these major sources of external recruitment, there are certain other sources which are

exploited by companies from time to time. These include special lectures delivered by recruiter

in different institutions, though apparently these lectures do not pertain to recruitment directly.

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Then there are video films which are sent to various concerns and institutions so as to show the

history and development of the company. These films present the story of company to various

audiences, thus creating interest in them.

Various firms organise trade shows which attract many prospective employees. Many a time

advertisements may be made for a special class of work force (say married ladies) who worked

prior to their marriage.

These ladies can also prove to be very good source of work force. Similarly there is the labour

market consisting of physically handicapped. Visits to other companies also help in finding new

sources of recruitment.

Merits of External Sources:

1. Availability of Suitable Persons:

Internal sources, sometimes, may not be able to supply suitable persons from within. External

sources do give a wide choice to the management. A large number of applicants may be willing

to join the organisation. They will also be suitable as per the requirements of skill, training and

education.

2. Brings New Ideas:

The selection of persons from outside sources will have the benefit of new ideas. The persons

having experience in other concerns will be able to suggest new things and methods. This will

keep the organisation in a competitive position.

3. Economical:

This method of recruitment can prove to be economical because new employees are already

trained and experienced and do not require much training for the jobs.

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Demerits of External Sources:

1. Demoralisation:

When new persons from outside join the organisation then present employees feel demoralised

because these positions should have gone to them. There can be a heart burning among old

employees. Some employees may even leave the enterprise and go for better avenues in other

concerns.

2. Lack of Co-Operation:

The old staff may not co-operate with the new employees because they feel that their right has

been snatched away by them. This problem will be acute especially when persons for higher

positions are recruited from outside.

3. Expensive:

The process of recruiting from outside is very expensive. It starts with inserting costly

advertisements in the media and then arranging written tests and conducting interviews. In spite

of all this if suitable persons are not available, then the whole process will have to be repeated.

4. Problem of Maladjustment:

There may be a possibility that the new entrants have not been able to adjust in the new

environment. They may not temperamentally adjust with the new persons. In such cases either

the persons may leave themselves or management may have to replace them. These things have

adverse effect on the working of the organisation.

Suitability of External Sources of Recruitment:

External Sources of Recruitment are Suitable for The Following Reasons:

(i) The required qualities such as will, skill, talent, knowledge etc., are available from external

sources.

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(ii) It can help in bringing new ideas, better techniques and improved methods to the

organisation.

(iii) The selection of candidates will be without preconceived notions or reservations.

(iv) The cost of employees will be minimum because candidates selected in this method will be

placed in the minimum pay scale.

(v) The entry of new persons with varied experience and talent will help in human resource mix.

(vi) The existing employees will also broaden their personality.

(vii) The entry of qualitative persons from outside will be in the long-run interest of the

organisation.

Selection

The Selection is a process of picking the right candidate with prerequisite qualifications and

capabilities to fill the jobs in the organization.

The selection process is quite lengthy and complex as it involves a series of steps before making

the final selection. The procedure of selection may vary from industry to industry, company to

company and even from department to department. Every organization designs its selection

process, keeping in mind the urgency of hiring people and the prerequisites for the job vacancy.

It is the process of picking individuals who have relevant qualifications and experience to

fill jobs in an organization.

Selection process

1. Preliminary Interview: The preliminary interview is also called as a screening interview

wherein those candidates are eliminated from the further selection process who do not meet the

minimum eligibility criteria as required by the organization.

Here, the individuals are checked for their academic qualifications, skill sets, family

backgrounds and their interest in working with the firm. The preliminary interview is less formal

and is basically done to weed out the unsuitable candidates very much before proceeding with a

full-fledged selection process.

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2. Receiving Applications: Once the individual qualifies the preliminary interview he is

required to fill in the application form in the prescribed format. This application contains the

candidate data such as age, qualification, experience, etc. This information helps the interviewer

to get the fair idea about the candidate and formulate questions to get more information about

him.

3. Screening Applications: Once the applications are received, these are screened by the

screening committee, who then prepare a list of those applicants whom they find suitable for the

interviews. The shortlisting criteria could be the age, sex, qualification, experience of an

individual. Once the list is prepared, the qualified candidates are called for the interview either

through a registered mail or e-mails.

4. Employment Tests: In order to check the mental ability and skill set of an individual,

several tests are conducted. Such as intelligence tests, aptitude tests, interest tests, psychological

tests, personality tests, etc. These tests are conducted to judge the suitability of the candidate for

the job.

5. Employment Interview: The one on one session with the candidate is conducted to gain

more insights about him. Here, the interviewer asks questions from the applicant to discover

more about him and to give him the accurate picture of the kind of a job he is required to

perform.

Also, the briefing of certain organizational policies is done, which is crucial in the performance

of the job. Through an interview, it is easier for the employer to understand the candidate’s

expectations from the job and also his communication skills along with the confidence level can

be checked at this stage.

6. Checking References: The firms usually ask for the references from the candidate to

cross check the authenticity of the information provided by him. These references could be from

the education institute from where the candidate has completed his studies or from his previous

employment where he was formerly engaged. These references are checked to know the conduct

and behavior of an individual and also his potential of learning new jobs.

7. Medical Examination: Here the physical and mental fitness of the candidate are checked

to ensure that he is capable of performing the job. In some organizations, the medical

examination is done at the very beginning of the selection process while in some cases it is done

after the final selection.

Thus, this stage is not rigid and can take place anywhere in the process. The medical examination

is an important step in the selection process as it helps in ascertaining the applicant’s physical

ability to fulfill the job requirements.

8. Final Selection: Finally, the candidate who qualifies all the rounds of a selection process

is given the appointment letter to join the firm.

Thus, the selection is complex and a lengthy process as it involves several stages than an

individual has to qualify before getting finally selected for the job.

Training and development

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In the present day knowledge based environment, things are changing at a very fast pace. Even to

maintain its position, an organization has to do a lot as well as act very fast. Organization

achieves strategic advantages only due to its core competencies and core competence is

developed only by the employees of the organization. Hence for achieving a level of excellence,

organizations are to invest in updating the skills of its employees. This is done through training

and development process

Training and development process is an organizational activity aimed at improving the

performance of the individuals and groups of employees in the organizational settings. It is an

organized activity for increasing the knowledge and skills of the employees. It involves

systematic procedures for transferring technical and management skills to the employees.

Training process is an important activity both for the organization as well as for the employees.

Skills acquired by the employees through training are assets for the organization. The

enhancement of the skills also provides the employees job security as well as opportunities for

career advancement.

In the modern industrial environment, where technological development is outpacing all other

things, there is a continuous need for systematic training and development of the employees.

Through ‘training’ employees are taught specific skills while through ‘development’ employee’s

personality and management skills are enhanced. The training in an organization is necessary

since there are:

Advancement in technologies

Demanding customers

Thrusts for boosting productivity

Requirements for improving the motivation levels

Needs for improving the quality of output

Necessities for effectiveness in management.

Training is a continuous process and it should not stop at any stage. The management should

ensure that a training programme should attempt to bring about positive changes in the

knowledge, skills, and attitudes of the employees. The objectives of a training programme are as

follows.

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To prevent obsolescence in the organization

To improve employees knowledge for doing specific job

To impart skills to the employees systematically so that they learn the same quickly

To impart multi skills in the employees so that they become capable of handling different

jobs

To bring about the change in attitude of the employees towards organization and the

fellow employees

To improve the overall performance of the organization by inculcating technological

discipline in the employees

To train the employees in efficient handling of materials, plant and equipment

To educate employees towards conservation of resources, pollution prevention and

avoidance of wastages

To provide safety as well as occupational health training to the employees for man and

equipment health and safety

To develop management skills in the employees so that they are prepared to take up

higher responsibilities and position

Benefits of training

Training of employees is costly but the ultimate cost is much more if an organization

ignores to train its employees. Hence investment in training is necessary since the

training brings a number of benefits to the organization as well as to the employees. The

benefits to the organizations are listed below.

Faster learning of new skills

Increased productivity

Standardization of procedures

Reduced need of supervision

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Increased motivation and morale of the employees

Economy of operations

Managerial development

The benefits to the employees are as follows.

Increase of the confidence level

Learning of new skills

Helps in career advancement and higher earnings.

Developing resilience to change

Improving safety at the workplace

Helping in teamwork and hence improving interpersonal relationship

Training needs of an organization are identified by any of the following analysis:

Organizational analysis – It is basically a systematic study of the organization’s

objectives, resources, resource allocation and utilization, growth potential and its

environment. Its purpose is to determine where the emphasis for training is to be placed

in the organization so that effectiveness of the organization increases.

Task analysis – In task analysis the main focus is on the job. It requires the study of

various types of skills and training required to perform the job effectively. It is systematic

analysis of jobs to identify job contents, knowledge, skills and aptitudes needed to

perform the job. The important aspects are the tasks to be performed, the methods to be

used, the way the employees learn these methods as well as the performance standards

required from the employees.

Manpower analysis – Both the internal and external environments influence the quality of

manpower needed by an organization. The quality of manpower also depends upon the

social, economical, political and technological environments in which the organization

operates. The manpower analysis is done taking into considerations these factors to

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determine the quality of manpower needed. Specific training needs for the manpower are

determined for meeting the quality standards needed as per the manpower analysis. These

needs include (i) specific areas where employees need training, (ii) the capability of

present employees to learn new skills and behaviour, (iii) the time frame for imparting

training, and (iv) designing and redesigning of jobs with introduction of new work

methods and technologies.

Unit-2

Career Planning

Effective HRM encompasses career planning, career development and succession planning. An

organization without career planning and career development initiatives is likely to encounter the

highest rate of attrition, causing much harm to their plans and programmes. Similarly without

succession planning managing of vacancies, particularly at higher levels, become difficult. There

are examples of many organizations that had to suffer for not being able to find a right successor

for their key positions. With the increase scope for job mobility and corporate race for global

headhunting of good performers, it is now a well established fact that normal employment span

for key performers remains awfully short.

The term career planning and career developments are used interchangeably in most of the

organizations. It is also correct that but for their subtle difference in the definitional context, their

process remains the same.

Career is a sequence of attitudes and behaviours associated with the series of job and work

related activities over a person’s lifetime.

Yet in another way, it may be defined as a succession of related jobs, arranged in hierarchical

order, through which a person moves in an organization. As the literal definition of career

focuses on an individually perceived sequence, to be more accurate, career may be either

individual-centred or organizational-centred. Therefore, career is often defined separately as

external career and internal career. External career refers to the objective categories used by

society and organizations to describe the progression of steps through a given occupation,

while internal career refers to the set of steps or stages which make up the individual’s own

concept of career progression within an occupation. For such two different approaches, in

organizational context, career can be identified as an integrated pace of vertical lateral movement

in an occupation of an individual over his employment span.

Objectives of career planning

Career planning seeks to meet the following objectives:

i. Attract and retain talent by offering careers, not jobs.

ii. Use human resources effectively and achieve greater productivity.

iii. Reduce employee turnover.

iv. Improve employee morale and motivation.

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v. Meet the immediate and future human resource needs of the organization on a timely basis

Performance Appraisal

Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development. Performance appraisal is generally done in systematic ways which are as follows:

1. The supervisors measure the pay of employees and compare it with targets and plans. 2. The supervisor analyses the factors behind work performances of employees. 3. The employers are in position to guide the employees for a better performance.

Objectives of Performance Appraisal

Performance Appraisal can be done with following objectives in mind:

1. To maintain records in order to determine compensation packages, wage structure,

salaries raises, etc.

2. To identify the strengths and weaknesses of employees to place right men on right job.

3. To maintain and assess the potential present in a person for further growth and

development.

4. To provide a feedback to employees regarding their performance and related status.

5. To provide a feedback to employees regarding their performance and related status.

6. It serves as a basis for influencing working habits of the employees.

7. To review and retain the promotional and other training programmes.

Advantages of Performance Appraisal

It is said that performance appraisal is an investment for the company which can be justified by

following advantages:

1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion

programmes for efficient employees. In this regards, inefficient workers can be dismissed

or demoted in case.

2. Compensation: Performance Appraisal helps in chalking out compensation packages for

employees. Merit rating is possible through performance appraisal. Performance

Appraisal tries to give worth to a performance. Compensation packages which includes

bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on

performance appraisal. The criteria should be merit rather than seniority.

3. Employees Development: The systematic procedure of performance appraisal helps the

supervisors to frame training policies and programmes. It helps to analyse strengths and

weaknesses of employees so that new jobs can be designed for efficient employees. It

also helps in framing future development programmes.

4. Selection Validation: Performance Appraisal helps the supervisors to understand the

validity and importance of the selection procedure. The supervisors come to know the

validity and thereby the strengths and weaknesses of selection procedure. Future changes

in selection methods can be made in this regard.

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5. Communication: For an organization, effective communication between employees and

employers is very important. Through performance appraisal, communication can be

sought for in the following ways:

a. Through performance appraisal, the employers can understand and accept skills of

subordinates.

b. The subordinates can also understand and create a trust and confidence in

superiors.

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

relationship.

d. It develops the spirit of work and boosts the morale of employees.

All the above factors ensure effective communication.

6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating

performance of employees, a person’s efficiency can be determined if the targets are

achieved. This very well motivates a person for better job and helps him to improve his

performance in the future.

Performance Appraisal Tools and Techniques

Following are the tools used by the organizations for Performance Appraisals of their employees.

1. Ranking

2. Paired Comparison

3. Forced Distribution

4. Confidential Report

5. Essay Evaluation

6. Critical Incident

7. Checklists

8. Graphic Rating Scale

9. BARS

10. Forced Choice Method

11. MBO

12. Field Review Technique

13. Performance Test

We will be discussing the important performance appraisal tools and techniques in detail.

1. Ranking Method

The ranking system requires the rater to rank his subordinates on overall performance. This

consists in simply putting a man in a rank order. Under this method, the ranking of an employee

in a work group is done against that of another employee. The relative position of each employee

is tested in terms of his numerical rank. It may also be done by ranking a person on his job

performance against another member of the competitive group.

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Advantages of Ranking Method

i. Employees are ranked according to their performance levels.

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

Limitations of Ranking Method

1. The “whole man” is compared with another “whole man” in this method. In practice, it is

very difficult to compare individuals possessing various individual traits.

2. This method speaks only of the position where an employee stands in his group. It does not

test anything about how much better or how much worse an employee is when compared to

another employee.

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

issue.

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

system does not eliminate the possibility of snap judgements.

2. Forced Distribution method

This is a ranking technique where raters are required to allocate a certain percentage of rates to

certain categories (eg: superior, above average, average) or percentiles (eg: top 10 percent,

bottom 20 percent etc). Both the number of categories and percentage of employees to be allotted

to each category are a function of performance appraisal design and format. The workers of

outstanding merit may be placed at top 10 percent of the scale, the rest may be placed as 20 %

good, 40 % outstanding, 20 % fair and 10 % fair.

Advantages of Forced Distribution

i. This method tends to eliminate raters bias

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

making use of different raters with different scales is avoided.

Limitations of Forced Distribution

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

morale, low productivity and high absenteeism.

Employees who feel that they are productive, but find themselves in lower grade(than expected)

feel frustrated and exhibit over a period of time reluctance to work.

3. Critical Incident techniques

Under this method, the manager prepares lists of statements of very effective and ineffective

behaviour of an employee. These critical incidents or events represent the outstanding or poor

behaviour of employees or the job. The manager maintains logs of each employee, whereby he

periodically records critical incidents of the workers behaviour. At the end of the rating period,

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these recorded critical incidents are used in the evaluation of the worker’s performance. Example

of a good critical incident of a Customer Relations Officer is : March 12 - The Officer patiently

attended to a customers complaint. He was very polite and prompt in attending the customers

problem.

Advantages of Critical Incident techniques

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

an employees performance.

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

Limitations of Critical Incident techniques

Negative incidents may be more noticeable than positive incidents.

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

incidents during an annual performance review sessions.

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

The recording of incidents may be a chore for the manager concerned, who may

be too busy or may forget to do it.

4. Checklists and Weighted Checklists

In this system, a large number of statements that describe a specific job are given. Each

statement has a weight or scale value attached to it. While rating an employee the supervisor

checks all those statements that most closely describe the behaviour of the individual under

assessment. The rating sheet is then scored by averaging the weights of all the statements

checked by the rater. A checklist is constructed for each job by having persons who are quite

familiar with the jobs. These statements are then categorized by the judges and weights are

assigned to the statements in accordance with the value attached by the judges.

Advantages of Checklists and Weighted Checklists

Most frequently used method in evaluation of the employees performance.

Limitations of Checklists and Weighted Checklists

This method is very expensive and time consuming

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

It becomes difficult for the manager to assemble, analyze and weigh a number of

statements about the employees characteristics, contributions and behaviours.

Performance Appraisal Biases

Managers commit mistakes while evaluating employees and their performance. Biases and

judgment errors of various kinds may spoil the performance appraisal process. Bias here refers to

inaccurate distortion of a measurement. These are:

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1. First Impression (primacy effect): Raters form an overall impression about the ratee on

the basis of some particluar characteristics of the ratee identified by them. The identified

qualities and features may not provide adequate base for appraisal.

2. Halo Effect: The individual’s performance is completely appraised on the basis of a

perceived positive quality, feature or trait. In other words this is the tendency to rate a

man uniformly high or low in other traits if he is extra-ordinarily high or low in one

particular trait. If a worker has few absences, his supervisor might give him a high rating

in all other areas of work.

3. Horn Effect: The individual’s performance is completely appraised on the basis of a

negative quality or feature perceived. This results in an overall lower rating than may be

warranted. “He is not formally dressed up in the office. He may be casual at work too!”.

4. Excessive Stiffness or Lenience: Depending upon the raters own standards, values and

physical and mental makeup at the time of appraisal, ratees may be rated very strictly or

leniently. Some of the managers are likely to take the line of least resistance and rate

people high, whereas others, by nature, believe in the tyranny of exact assessment,

considering more particularly the drawbacks of the individual and thus making the

assessment excessively severe. The leniency error can render a system ineffective. If

everyone is to be rated high, the system has not done anything to differentiate among the

employees.

5. Central Tendency: Appraisers rate all employees as average performers. That is, it is an

attitude to rate people as neither high nor low and follow the middle path. For example, a

professor, with a view to play it safe, might give a class grade near the equal to B,

regardless of the differences in individual performances.

6. Personal Biases: The way a supervisor feels about each of the individuals working under

him - whether he likes or dislikes them - as a tremendous effect on the rating of their

performances. Personal Bias can stem from various sources as a result of information

obtained from colleagues, considerations of faith and thinking, social and family

background and so on.

7. Spillover Effect: The present performance is evaluated much on the basis of past

performance. “The person who was a good performer in distant past is assured to be okay

at present also”.

8. Recency Effect: Rating is influenced by the most recent behaviour ignoring the

commonly demonstrated behaviours during the entire appraisal period.

Therefore while appraising performances, all the above biases should be avoided.

Compensation Management

Compensation is the results or rewards that the employees receive in return for their work.

Compensation includes payments like bonuses, profit sharing, overtime pay, recognition

rewards and sales commission, etc.

Compensation can also include non-monetary perks like a company-paid car, company-paid

housing and stock opportunities. Compensation is a vital part of human resource management,

which helps in encouraging the employees and improving organizational effectiveness.

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From a manager's point of view, the compensation package offered to a company's employees is

essential not only because it costs money, but because it is likely to be the primary reason the

employees work for the firm.

Compensation packages with good pay and advantages can help attract and retain the best

employees. A quick survey of employees about compensation is likely to expose an expectation

that wages are fair and cover basic living expenses, keep up with inflation, leave some money

for savings (perhaps for retirement) and leisure, increment over time.

A company's compensation scheme also informs a great deal about the firm's values and

cultures. Employees often look at what a company pays rather than what it says. In many

aspects, people behave as they are rewarded.

A compensation scheme projects what the company expects of its employees. For example, if

quality is an essential value, then it should be implemented through some element of the total

compensation system.

Objectives of Compensation Policy

The objectives of compensation policy are as follows −

Allure suitable staff.

Keep qualified personnel.

Develop reward structures that are equitable with logical and fair pay relationships

between differently valued jobs.

Manage pay structures to mirror inflationary effects.

Assure that rewards and salary costs handle changes in market rates or organizational

change.

Appraise performance, duty, and loyalty, and provide for progression.

Abide with legal requirements.

Maintain compensation levels and differentials under review and control salary or wage

costs.

Types of Compensations

When it comes to an organization, be it private or public, compensations are further divided into

the following −

Direct Compensation

It is naturally made up of salary payments and health benefits. The creation of salary ranges and

pay scales for different positions within an organization are the central responsibility of

compensation management staff.

Direct compensation that is in line with the industry standards facilitates employees with the

assurance that they are getting paid fairly. This helps the employer not to worry about the costly

loss of trained staff to a competitor.

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Indirect Compensation

It focuses on the personal encouragements of each individual to work. Although salary is

essential, people are most productive in jobs where they share the company's values and

priorities.

These benefits can include things like free staff development courses, subsidized day care, the

chances for promotion or transfer within the company, public recognition, the ability to effect

change or bring some changes in the workplace, and service to others.

These are the two types of compensation that need to be managed and have its own contribution

in the development of the organization. Moving forward, we will see the different components

of compensation.

Components of Compensation

Compensation as a whole is made up of different components that work as an aid for an

employee after retirement or in case of some accident or injury. Now we shall see the key

elements or components that make compensation.

Wages and Salary

Wages mark hourly rates of pay, and salary marks the monthly rate of pay of an employee. It is

irrelevant of the number of hours put in by an employee working in the firm. These are subject

to annual increase.

Allowances

Allowances can be defined as the amount of something that is allowed, especially within a set

of rules and regulations or for a specified purpose. Various allowances are paid in addition to

basic pay.

Some of these allowances are as follows −

Dearness Allowance − This allowance is given to protect real income of an employee

against price rise. Dearness allowance (DA) is paid as a percentage of basic pay.

House Rent Allowance − Companies who do not provide living accommodation to their

employees pay house rent allowance (HRA) to employees. This allowance is calculated

as a percentage of salary.

City Compensatory Allowance − This allowance is paid basically to employees in

metros and other big cities where cost of living is comparatively more. City

compensatory allowance (CCA) is normally a fixed amount per month, like 30 per cent

of basic pay in case of government employees.

Transport Allowance/Conveyance Allowance − Some companies pay transport

allowance (TA) that accommodates travel from the employee’s house to the office. A

fixed amount is paid every month to cover a part of traveling expenses.

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Incentives and Performance Based Pay

Incentive compensation is performance-related remuneration paid with a view to encourage

employees to work hard and do better.

Both individual incentives and group incentives are applicable in most cases. Bonus, gain-

sharing, commissions on sales are some examples of incentive compensation.

Fringe Benefits/Perquisites

Fringe benefits include employee benefits like medical care, hospitalization, accident relief,

health and group insurance, canteen, uniform, recreation and the likes.

In recent years, a great deal of attention has been directed to the development of compensation

systems that go beyond just money. We can say that all the components of compensation

management play a very important role in the life of an employee.

In particular, there has been a marked increase in the use of pay-for-performance (PrP) for

management and professional employees, especially for executive management and senior

managers. Compensation is a primary motivation for most employees.

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Unit-3

Industrial Disputes

• According to Sec. 2 of the Industrial Dispute Act, 1947, “Industrial dispute means any

dispute or difference between employers and employers or between employers and

workmen or between workmen and workmen, which is connected with the employment

or non-employment or the terms of employment or with the conditions of labour of any

person”

Causes of Industrial Disputes

We can classify the causes of industrial disputes into two broad groups:

(i) Economic causes, and

(ii) Non-economic causes.

Economic causes include:

(i) Wages,

(ii) Bonus,

(iii) Dearness allowance,

(iv) Conditions of work and employment,

(v) Working hours,

(vi) Leave and holidays with pay, and

(vii) Unjust dismissals or retrenchments.

Non-economic causes include:

(i) Recognition of trade unions,

(ii) Victimisation of workers,

(iii) Ill-treatment by supervisory staff,

(iv) Sympathetic strikes,

(v) Political causes, etc.

Types of Industrial Disputes

• Interest disputes- These refer to the disputes relating to the economic interest of the

employees.

• Rights disputes- These involve disputes over the understanding, interpretation, and

application of the rules and regulations which protect the rights of the employees.

The outcomes of disputes are:

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• Strike: A cessation of work by a body of persons employed in any industry acting in

combination or a concerted refusal, or a refusal under a common understanding, of any

number of persons who are or have been so employed to continue to work or to accept

employment. -Industrial disputes act, 1947

• Picketing: It is a form of protest by employees in which the primary intention is to

prevent or dissuade the non-striking employees from attending to their work during the

strike period.

Picketing may be held at the workplace or even at some other prominent places to attract

the attention of the public and the government.

• Gherao : It is a form of protest in which employees encircle their employers or top

managers at the workplace with a view to restricting their movements. The purpose of a

gherao is to force the employer or managers to concede the demands of the workers. The

wrongful confinement of any person is not legally tenable.

• Lock-out: A lock-out is the employer’s response to the employees’ continued protest in

the form of strike. In a lock-out, the employer closes the workplace with the aim of

preventing the employees from entering the factory premises and performing their job.

The temporary closing of a place of employment or the suspension of work, or the refusal

by an employer to continue to employ any number of persons employed by him.

Trade Union

Labour unions or trade unions are organizations formed by workers from related fields that work

for the common interest of its members. They help workers in issues like fairness of pay, good

working environment, hours of work and benefits. They represent a cluster of workers and

provide a link between the management and workers.

The purpose of these unions is to look into the grievances of wagers and present a collective

voice in front of the management. Hence, it acts as the medium of communication between the

workersandmanagement.

Regulation of relations, settlement of grievances, raising new demands on behalf of workers,

collective bargaining and negotiations are the other key principle functions that these trade

unionsperform.

The Indian Trade Union Act, 1926, is the principle act which controls and regulates the

mechanism of trade unions.

Objectives of trade unions:

Following are the objectives of trade unions:

1. Ensure Security of Workers:

This involves continued employment of workers, prevent retrenchment, lay off or lock-outs.

Restrict application of “fire” or dismissal or discharge and VRS.

2. Obtain Better Economic Returns:

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This involves wages hike at periodic intervals, bonus at higher rate, other admissible allowances,

subsidized canteen and transport facilities.

3. Secure Power To Influence Management:

This involves workers’ participation in management, decision making, role of union in policy

decisions affecting workers, and staff members.

4. Secure Power To Influence Government:

This involves influence on government to pass labour legislation which improves working

conditions, safety, welfare, security and retirement benefits of workers and their dependents,

seek redressal of grievances as and when needed.

Functions of a Trade Union:

The important basic functions of unions listed by National Commission on labour are:

(i) To secure fair wages to workers.

(ii) To safeguard security of tenure and improve conditions of service.

(iii) To enlarge opportunities for promotion and training.

(iv) To improve working and living conditions.

(v) To provide for educational, cultural and recreational facilities.

(vi) To co-operate in and facilitate technological advance by broadening the understanding of

workers on its underlying issues.

(vii) To promote identity of interests of workers with their industry.

(viii) To offer responsive co-operation in improving levels of production and productivity,

discipline and high standards of quality and

(ix) To promote individual and collective welfare.

(e) Restrict management actions which are against the interest of workers.

Employee Grievance

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Employee grievance refers to the dissatisfaction of an employee with what he expects from the

company and its management. A company or employer is expected to provide an employee with

a safe working environment, realistic job preview, adequate compensation, respect etc. However,

employee grievance is caused when there is a gap between what the employee expects and what

he receives from the employer.

Employee grievances may or may not be justified. However, they need to be tackled adequately

by the leadership team because they not only lower the motivation and performance of the

employee but also affects the work environment. Employee grievances if left unchecked can lead

to large disputes within the company. It can also drop the motivation levels of other employees.

Any company must have a proper channel for employee grievance redressal.

Employee Grievance should be handled in a proper and well defined manner. If an employee

voice is raised or a person reports a matter related to a policy or something he or she is not happy

with or wants to complaint against, a framework defined in policy should be used.

Typical Steps in Employee Grievance Handling:

1. Employee grievance should be submitted in a proper channel.

2. The supervisor of the employee should be informed and spoken to.

3. A review committee should examine the grievance for its validity and against the company's

policy.

4. Resolution should be provided if the grievance is valid.

5. If the employee grievance is not resolved there should be a further body where it can be

appealed.