Fundamental of HRM

FUNDAMENTALS OF HUMAN RESOURCE MANAGEMENT
BASIC HUMAN RESOURCE MANAGEMENT
Definition of HRM:
Human resource management is a management concerning with people aspect of an

organization.
- De Cenzo
Human resource management is the philosophy, policy, procedure and practice related
to the management of people within an organization.
- Wendell French
Features of Human Resource Management:
1. HRM is people oriented management
HRM is all about people at work, both as individuals and groups. It tries to put people
on assigned jobs in order to produce good results. The resultant gains are used to
reward people and motivate them further improvement in productivity.
2. HRM is global-oriented management.
3. HRM is an action-oriented management
HRM focuses attention on action, rather than on record keeping, written procedure or
rules. The problems of employees at work are solved through rational policies.
4. It is future-oriented management.
Features of Human Resource Management:
1. Pervasive Force: HRM is pervasive is nature. It is present is all enterprises. It

permeates all levels of management in an organization.
2. Action Oriented: HRM focuses attention on action, rather than on record
keeping, written procedure or rules. The problems of employees at work are solved
through rational policies.
3. Individually Oriented: It tries to help employees develop their potential fully. It
encourages then to give out their best of the organization. It motivates employees
through a systematic process of recruitment, selection, training and development
coupled with fair wage policies.
4. People Oriented: HRM is all about people at work, both as individuals and
groups. It tries to put people on assigned jobs in order to produce good results. The
resultant gains are used to reward people and motivate them further improvement in
productivity.
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5. Development Oriented: HRM intends to develop the full potential of employees.

The reward structure is tuned to the needs of employees. Training is offered to
sharpen and improve their skills. Employees are rotated on various jobs so that they
gain experience and exposure. Every attempt is made to use their talents fully in the
service of organizational goals.
6. Integrating Mechanism: HRM tries to build and maintain relations between
people working at various levels in the organization. In short, it tries to integrate
human assets in the best possible manner in the service of an organization.
7. Comprehensive Function: HRM is, to some extent, concerned with any
organizational decision which has an impact on the workforce or the potential
workforce.
8. Auxiliary Service: HR departments exist to assist and advise the line or operating
managers to do their personal work more effectively. HR manages is a specialist
advisor. It is a staff function.
9. Inter Disciplinary Function: HRM is a multi-disciplinary activity, utilizing
knowledge and inputs drawn from psychology, sociology, anthropology, economics,
etc. To unravel the mystery surrounding the human brain, managers, need to
understand and appreciate the contributions of all such Soft disciplines.
10. Continuous Function: According to Terry, HRM is not a one short deal. It
cannot be practiced only one hour each day or one day a week. It requires a constant
alertness and awareness of human relation and their importance in every day
operations.
Functions of Human Resource Management:
1. Human resources planning

2. Job and work design
3. Job analysis
4. Staffing- Recruitment, Selection and Placement
5. Training and development
6. Performance appraisal and review
7. Compensation and reward
8. Protection and representation
9. Organization Development
- Wendell French
1. Acquisition
2. Development
3. Motivation
4. Maintenance
- De Cenzo and Robbins
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Job Design (JD)

JD can be defined as the function of arranging tasks duties and responsibilities in to an
organizational unit of work for the purpose of accomplishing a certain objective.
Techniques of JD
Scientific Techniques: This is done by observing past performances.
Job Enlargement: Adding more duties to a job that is related to the current duties of
involved (Horizontal Loading)
Job Rotation: Shifting an employee from one job to another periodically.
Job enrichment: Increasing the depth of a job by increasing authority and responsibility
for planning
Group Technique: The job ids designed so that a group of individuals can perform it, the
job being a collective job.
Job Analysis
This includes the systematic analysis of the job and the characteristics of the desired job
holders. The information collected through a Job Analysis is of two forms;
Job Description: Describes the job, its tasks, responsibilities and service conditions of a
job.
Job Specification: Describes the requirements of the person for the job, including
abilities, educational qualifications, special physical and mental skills, training,
experience etc.
Human Resource Planning (HRP)

HRP can be identifies as the strategy forecasting the organizations future requirements
for different types of workers, their acquisitions, utilization, improvement, employee cost
control, retention and supply to meet these needs.
The HR Planning Process
HRM Planning Process

Factors considered when forecasting future HR requirements.
Demand for the organizations good/services
Plans goals and objectives
Method of productions
Retirement, transfers, resignations
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Death
Retrenchments
Recruitment
This is the initial attraction and screening of the supply of prospective Human Resources
available to fill a given position/s.
In other words, it is the process of involving the attraction of suitable candidates to vacant
positions from both internal and external sources of the organization.
INTERNAL EXTERNAL
Job posting Advertising
Intranet Job Placement Agencies
Succession plans Internet
Referrals Placement through Colleges and Universities
Selection
This is a systematic process of selecting the most appropriate and suitable person to a
particular job. In other words, Selection is choosing an individual to hire from all those
who have been recruited/ attracted.
Hiring
This is the process of appointing the person selected for a particular job. In this process,
letters of appointments will be prepared, employment contracts will be signed and the
new employee will be sent in for a probationary period.
(Probationary period: the time period where the newly appointed employee will have to
work till he/she is made permanent)
Performance Evaluation
This is a regular systematic assessment of an employees performance in order to review
whether his/her performance matches the expected performance levels. Performance
evaluations are an analysis of an employees recent successes and failures, personal
strengths and weaknesses, and suitability for promotion or further training. It is also the
judgment of an employees performance in a job based on considerations other than
productivity alone.
Compensation Management
The main objective of the function is to develop and maintain a good salaried and wages
system which is reasonable both internally and externally.
Factors affecting Salaries and Wages
Cost of living
Supply and demand of labor
Government requirements (minimum wage rates)
Competitor wage scales
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Trade Union influences

Labor productivity
Training and Development

Training is the process by which the employees are taught skills and given the necessary
knowledge to carry out their responsibilities to the required standard. In other words, it is
the improvement of the performance to carry out the current job.
Development is concerned with the giving the individual necessary knowledge, skills,
attitude and experience to enable an employee to undertake greater and more demanding
roles and responsibilities in the future. Development is concerned with the long term
prospects of a career succession plan.
Methods of training and development
Apprenticing
On the job training
Off the job training
Simulations
Role playing
Case studies
Employee Movements
The movements of employees take place in three methods,
Promotions: this is the re-assignment of an employee to a higher ranked job in
terms of responsibility, respect and salaries. Promotions are usually based on
seniority, competency and merit.
Transfers: this is the movement of an employee from one job to another on the
same occupational level and at the same level of wage or salary.
Lay off: This is the temporary stoppage or suspension of the service of the
employee to various reasons.
Welfare Administration
This refers to all the facilities and comforts given to the employee by the employer apart
from wages, salaries and incentives.
Medical facilities
Canteen facilities
Housing facilities
Transport facilities
Recreation facilities
Loan facilities
Educational facilities
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Health and safety Administration

This is concerned with maintaining required and reasonable levels of professional Health
and safety in the job and its environment. The organization should ensure the employees
physical and mental health. The work place should be free of hazards.
Discipline Administration
It is important to control the performance and behavior of the employees according to the
rules and regulations of the organization. For this very reason it is important to develop,
implement and maintain an appropriate disciplinary system.
Importance of a discipline administration:
To reduce conflicts and confusions
To control the employees in an orderly manner
To ensure employees behavior in accordance with performance standards, rules
and regulations of the organization.
Labor Relations
The continues relationship between the labour force and the management. Since labour
forces are organized as Trade Unions, it is actually a relationship between Trade union
representative and the management. However the Government is also an involved as a
third party in order to regulate this relationship by ways of laws.
This relationship is also more commonly known as a tri-partite relationship.
Reasons for the growing importance of HRM:
1. Technological homogeneity
2. Job humanization
In a broader and more value-oriented sense, the word "humanization" is used to

convey the idea that since it is people who form the very core of the establishment it
is no longer viable to work on the assumption of an unbridgeable clash of interests
between employer and employee. Such divergences as there are should consequently,
it is felt, be resolved informally and as between colleagues.
3. Job enlargement and enrichment
Job Enrichment should be distinguished from enlargement job enlargement attempts

to make a job more varied by removing the dullness associated with performing
repetitive operations. In job enrichment, the attempt is to build in to jobs a higher
sense of challenge and achievement. The accumulation of achievement must lead to a
felling of personal growth accompanied by a sense of responsibility.
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4. Recognition to human and civil rights

5. Emergence of new legislation
6. Globalization
Recent Challenges to HRM:
1) Workforce diversity
-Entry of women into workforce
-Old age people
-Changing education and expectations of workforce
-Pluralism of workforce
2) Quality of work life(QWL)
Elements of QWL
Adequate and fair compensation

Safe and healthy working conditions
Opportunity to use and develop human capacity
Opportunity for continued growth and security
Social integration in the work organization
Constitutionalism
Balanced role of work
Socially beneficial and responsible work
3) Technological change and its adaption in workforce.
4) Influence of external environment

- Economic and political conditions
- Differential industry growth
- Globalization
- Concerns for quality and productivity
- Innovations in management
5) Regularity measures and affirmative actions

i. Women benefit
ii. Polygraph test
iii. Drug abuse
iv. Major laws- pension with disables
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Differences between Personnel Management & HRM

Content Personnel Management HRM
Beliefs and assumptions

Contract Careful delineation of Aim to go beyond contract
written contracts
Rules Importance of devising Can-do-outlook;
clear rules/ mutuality impatience with rule
Guide to management Procedures Business-need
Behavior referent Norms/custom and practice Values/mission
Nature of relations Pluralist Unitarist
Conflict Institutionalized De-emphasized
Strategic Aspects
Key relations Labor-management Customer
Initiatives Piecemeal Integrated
Corporate plan Marginal to Central to
Speed of decision Slow Fast
Line Management
Management role Transactional Transformational leadership
Key managers Personnel/IR Specialists General/business/line
managers
Communication Indirect Direct
Standardization High Low
Prized Management Skills Negotiation Facilitation
Key Levers
Selection Separate, marginal task Integrated, key task
Pay Job evaluation(fixed grades) Performance-based
Conditions Separately negotiated Harmonization
Labor Management Collective Bargaining Towards individual
Contracts contracts
Job categories and grades Many Few
Communication Restricted flow Increased flow
Job design Division of labor Team work
Conflict Handling Reach temporary truces Manage climate and culture
HUMAN RESOURCE PLANNING
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Definition:
Human Resource Planning is a process of assessing the organizations human resources

needs in the light of organizational goals and making plans to ensure that a competent
stable workforce is employed.
-Wendell French
Human Resource Planning is a process of analyzing and organizations human resource

needs under changing conditions and developing the activities necessary to satisfy these
needs.
- J.W.Walker
Why do we make Human Resource Plan?
1. Human Resource Plan is needed to select right person for the right position.
2. It is done to achieve the operational goals of the organization effectively.
3. It is required to meet changing needs of the environment by selecting the best feed
human resources through appropriate culture.
4. It helps developing a talent-pool of qualified persons for future contingencies.
5. It helps developing company strengths for maintaining competitively with
increasing competition for talent hunting.
6. It helps making human resource budget in terms of number and financial units.
7. Human resource planning is make to utilize human resources in more efficient
and effective manner by providing scope for require training and development,
safety design motivational schemes and retirement programmes etc.
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Process of Human Resource Planning:
Organizations mission, vision, goals

and objectives and values of key
executives i.e. organizational internal
political environment
External environmental Strategic choices of organizational Perceived market

analysis growth activities Opportunities
Determine Human Resources

Objectives
Job design and structuring
Human resource demand Determining Human Resource Human Resource

analysis Needs: Surplus or Shortage Supply analysis
Set plan, policies, goals and rules of

each function of HRM
Implementation, Evaluation and

Follow up
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INTERVIEW
An interview is a conversation between two people (the interviewer and the interviewee)
where questions are asked by the interviewer to obtain information from the interviewee.
OBJECTIVES OF INTERVIEW:
1. To understand the hidden qualities of a candidate which have not been disclosed by
other means.
2. To exchange information.
3. To motivate candidate to take favorable decision.
4. To negotiate issues of employment.
5. To help firm to have fair selection.
ERRORS/PITFALLS/PROBLEMS/FLOWS OF INTERVIEW:
1. Bias
-Is a consideration of such factors that are irrelevant to the decision situation.
2. Halo error
On good performance of a candidate in any particular area is taken as conclusion that
the candidate is all together good in all other areas too.
3. Horn effect
On bad performance of a candidate in any particular area is taken as conclusion that
the candidate is all together bad in all other areas too.
4. Central tendency
In the simplest cases, the measure of central tendency is an average of a set

of measurements, the word average being variously construed as mean, median, or other
measure of location, depending on the context. However, the term is applied to
multidimensional data as well as to unvaried data and in situations where
a transformation of the data values for some or all dimensions would usually be
considered necessary: in the latter cases, the notion of a "central location" is retained in
converting an "average" computed for the transformed data back to the original units. In
addition, there are several different kinds of calculations for central tendency, where the
kind of calculation depends on the type of data (level of measurement).
5. Leniency error
Leniency error is defined as the tendency for a raters overall positive impression of an
individual to influence performance ratings. Hence, the positive impression impacts the
ratings provided by the rater. When a ratee receives this feedback, he/she has no reason
or motivation to improve or develop performance. Raters should focus on each goal,
objective, responsibility, or competency separately and identify independent areas of both
strengths and development needs.
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6. Strictness error
A frequently-occurring management mistake, in which a manager is too strict in
evaluating the performance of employees, leading to decreases in motivation and
performance. The strictness error is the inverse of the leniency error, in which a manager
does not enforce a suitable level of performance and compliance with standards from
employees.
7. Similar-to-me error
8. Talk down
9. Playing attorney
10. Irrelevant question.
HOW TO OVERCOME:
1. Interviewer training on how to take interview.

2. Provide job analysis information to interviewer.
3. Discussion about interviewing pattern or structure among interviewers.
4. Develop a neutral mind among interviewers.
5. Prepare ideal interview situation.
ORIENTATION/INDUCTION/TNDOCTRINATION/SOCIALISATION:
CONCEPT:
It is mechanism by which new entrance are familiarized with the organizational

environment.
OBJECTIVES OF ORIENTATION:
1. To help overcoming first day jitter.

2. To make new entrance acquainted with organizational culture and members.
3. To satisfy inquiries of new entrance with company information.
4. To help the candidate to settle down with the organization.
DURATION:
FROM A FEW MINUTE TO A FEW YEAR.
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PROCESS OR STEPS OF ORIENTATION:
1. Welcome to the candidate in the organization by a responsible person.

2. Offer tea or refreshment.
3. Distribution of company information booklets or leaflets.
4. Discussion session
Welcome address by HR manager
Speech of key executives
Question-answer session
5. Lunch
6. In house tour
7. Evening refreshment
8. Out house tour
9. Interview about the orientation programme with the candidate.
10. Follow up the programme for improvement.
JOB ANALYSIS OR WORK STUDY
Job Analysis:
Job analysis is a systematic process for exploring activities within a job and to determine
requires responsibilities and qualities that are needed to perform those activities in a job.
- De Cenzo and Robbins
Job analysis is the procedure through which one determines the duties of the positions
and the characteristics of the people who should be hired for those positions.
- Gary Dessler
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Process of Performing Job Analysis:
1. Determine the objectives, criteria, policy and rules of job analysis.

2. Form a job analysis committee consisting of heterogeneous people.
3. Select representative jobs to be analyzed.
4. Review the existing job analysis information if any.
5. Collect information about company, missions, visions, objectives, cultures,
products and activities.
6. Collect job information.
7. Check summarized job information with job incumbents or experts.
8. Develop job description and job specification for given jobs.
Methods of collecting job data/information:
1. Observation method
The observation method involves human or mechanical observation of what people
actually do or what events take place during a buying or consumption situation.
2. Individual interview method

Individual interviews typically refer to talking with one user at a time (for 30 minutes
to an hour) face to face, by telephone, or with instant messaging or other computer-
aided means. These interviews do not involve watching a user work. Thus, this is
different from interviewing users in a usability testing session or
conducting contextual interviews.
3. Group interview method

The group interview is a qualitative method of collection of data, where 6 to 12 people
are gathered either physically or online to discuss an issue. The respondents in the group
interview are composed on the basis of criteria, which are established before the
respondents are invited to participate. Therefore it is a relative homogeneous group of
people, which achieve a feeling of community around the issue that is the centre of the
discussion. When a group of people exchange point of views and experiences under
regulation of a moderator from MEGAFON, a useful group dynamic is being created,
which give a very varied and detailed knowledge about a clearer defined issue.
4. Diary
5. Technical conference
The technical conference method of job analysis involves qualified people collaborating
to provide information about a specific job. Select subject matter experts for the technical
conference method of job analysis. Experts include supervisors, human resource analysts
and other individuals who have expertise in the job and know the requirements.
Document the functions and tasks of the job. Prioritize them by placing the most
important tasks at the top of the list. Describe the data flow using verbs such as compile,
copy, analyze and compare. Explain the job's people interaction requirements using verbs
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such as negotiate, supervise, persuade, mentor and instruct. Outline how tasks should be
handled using verbs such as arrange, manipulate, feed, handle and operate.
6. Performance method
7. Questionnaire method
There are two types of questionnaires: structured questionnaire and open-ended
questionnaire. The structured questionnaire uses a standardized list of work activities,
called a task inventory, then jobholders or supervisors may identify as related to the job.
It must cover all job related to tasks and behavior. Each task or behavior should be
described in terms of features such as difficulty, importance, frequency, time spent and
relationship to performance. The open-ended questionnaire asks the jobholder to
describe the work in his or her own words.
8. Critical incident method

Critical incident is a method used for many sectors. Critical incident method- Recording of events
by appraiser. An incident is critical when it illustrates what the employers has done or failed to do
The critical incidents for performance appraisal is a method in which the manager writes down
positive and negative performance behavior of employees throughout the performance period.
Each employee will be evaluated as such and ones performance appraisal will be based on the
logs that are put in the evaluation form. The manager maintains logs on each employee, whereby
he periodically records critical incidents of the workers behavior. At the end of the rating period,
these recorded critical incidents are used in the evaluation of the workers performance. The
critical incidents file of performance appraisal is a form of documentation that reflects all data
about employee performances.
Outcomes of Job Analysis:
1. Job Description
2. Job Specification
Job Description:
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It is a written statement of duties and responsibilities being performed in a given job.
Job Description
Job Title.. Occupational Code
Job Grade Scale.
Reports to Supervises.
Date
Duties

..
Resposibilies

...
Working conditions
..

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Job Specification:
Written statement about human qualities to be needed to perform jobs in a position.
Job Specification
Job Title.
Grade
1. Basic Education.
2. Physical Quality..
3. Extra Curriculum Activities.
4. Mental Quality.
5. Experience..
6. Language proficiency
7. Special Training.
8. Maturity..
9. Age.
10. Others
Uses of Job Analysis:
1. Organization structure and design

2. Human Resource Planning
3. Job Evaluation
4. Recruitment, Selection and Placement
5. Orientation, training and development
6. Performance appraisal
7. Career path planning
8. Job design
9. Safety measurement planning
10. Vocational guiding and rehabilitation counseling
11. Engineering design and method improvement
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Uses of Job Analysis:

Human resource planning: Job analysis helps in forecasting human resource requirements
in terms of knowledge and skills. By showing lateral and vertical relationships between jobs, it
facilitates the formulation of a systematic promotion and transfer policy. It also helps in
determining quality of human resources needed in an organization.
Recruitment: Job analysis is used to find out how and when to hire people for future job
openings. An understanding of the skills needed and the positions that are vacant in future
helps managers to plan and hire people in a systematic way. For example, a company might
be traditionally hiring MBA students for equity research. A recent job analysis showed that the
positions could be filled by graduates with an analytical mind. Now, this would help the
company hire equity analysts from a greater number of available graduates by offering even
a slightly lesser salary.
Selection: Without a proper understanding of what is to be done on a job, it is not possible to
select a right person. If a Super bazaar manager has not clearly identified what a clerk is to
do, it is difficult to find if the person selected must be able to position stores items, run a cash
register, or keep the account books.
Placement and orientation: After selecting people, we have to place them on jobs best
suited to their interests, activities and aptitude. If we are not sure about what needs to be
done on a job, it is not possible to identify the right person suited for the job. Similarly,
effective job orientation cannot be achieved without a proper understanding of the needs of
each job. To teach a new employee how to handle a job, we have to clearly define the job.
Training: If there is any confusion about what the job is and what is supposed to be done,
proper training efforts cannot be initiated. Whether or not a current or potential job holder
requires additional training can be determined only after the specific needs of the jobs have
been identified through a job analysis.
Counseling: Managers can properly counsel employees about their careers when they
understand the different jobs in the organization. Likewise, employees can better appreciate
their career options when they understand the specific needs of various other jobs. Job
analysis can point out areas that an employee might need to develop to further a career.
Employee safety: A thorough job analysis reveals unsafe conditions associated with a job.
By studying how the various operations are taken up in a job, managers can find unsafe
practices. This helps in rectifying things easily.
Performance appraisal: By comparing what an employee is supposed to be doing (based
on job analysis) to what the individual has actually done, the worth of that person can be
assessed. Ultimately, every organization has to pay a fair remuneration to people based on
their performance. To achieve this, it is necessary to compare what individuals should do (as
per performance standards) with what they have actually done (as per job analysis).
Job design and redesign: Once the jobs are understood properly, it is easy to locate weak
spots and undertake remedial steps. We can eliminate unnecessary movements, simplify
certain steps and improve the existing ones through continuous monitoring. In short, we can
redesign jobs to match the mental make-up of employees.
Job evaluation: Job analysis helps in finding the relative worth of a job, based on criteria
such as degree of difficulty, type of work done, skills and knowledge needed, etc. This, in
turn, assists in designing proper wage policies, with internal pay equity between jobs.
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De- Jobbed Organization:
1. Concept
2. Why are companies becoming de-jobbed today?
Concept:
De-jobbing refers to broadening the responsibilities of organizations jobs and

encouraging employees not to limit themselves to only described jobs.
Why are companies becoming de-jobbed today?
Accelerating the product and technological change

Globalized Competition
De regulation
Political instability
Demographic changes
Information age
Emergence of service society
DEVELOPMENT
Development refers to the program by which executive capabilities to achieve desired

objectives are increased.
- Michael J. Jucius
Management development is any attempt to improve managerial performance by

imparting knowledge changing attitudes or increasing skills.
- Garry Dessler
Therefore, management development is a learning process through which

knowledge and capabilities of executives are changed to make them capable to face
environmental challenges successfully.
Why Development is needed?
Managerial careers are in a state of flux as new jobs situations are opening up and
traditional stable jobs are disappearing.
People want to know more about their immediate jobs other jobs in the organization
and about their organization as a whole which max development necessary.
As more emphasis is palced on team and team-work, inter-disciplinary knowledge
and group decision making i.e. management development has become a pivotal
mechanism for managers to win the situation.
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Managers need their organizations help themselves to be a successful and talented

manager for what management development is needed.
Key success factors:
o Extensive and visible involvement of C.E.O in the development program.

o A clearly articulated (communicate something) and understood development policy
and philosophy.
o Linkage of executive development policies and philosophies to the co-operate
business strategies policies and challenges.
o Use of integrated approach in development program-succession plan, only job
development and customized development program.
o Careful blending of new wages of doing things with organizational norms.
o Ensure competitively between individual development and organizational needs.
o Use existing resources.
o Create multiple feedback loops.
o Promote volunteerism and choice in selecting managers for the development.
o Development program should be the responsibility of line management rather than of
human resource staff.
Methods of Development
- On the job methods

- Off the job methods
On the job methods
- Coaching
- Job rotation
- Understudy assignments
- Committee or junior board
- Mentoring
Off the job development method
a. Seminar, lecture, workshops, symposium etc
b. Laboratory Training
Computer simulation model
Gaming simulation
Case studies
Incidence process
Role playing
c. Transactional analysis
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Who is a Mentor?
A mentor is a wise and trusted counselor for teacher, who has strong personality and
command on relevant knowledge.
Role of a Mentor
o Sponsor
o Coach
o Teacher
o Devils advocate [In common parlance, a devil's advocate is someone who, given a
certain argument, takes a position he or she does not necessarily agree with, just for
the sake of argument. In taking such position, the individual taking on the devil's
advocate role seeks to engage others in an argumentative discussion process. The
purpose of such process is typically to test the quality of the original argument and
identify weaknesses in its structure, and to use such information to either improve or
abandon the original, opposing position. It can also refer (less commonly) to someone
who takes a stance that is seen as unpopular or unconventional, but is actually another
way of arguing a much more conventional stance.]
RECRUITMENT
Definition:
Recruitment is the process of communicating prospective candidates about job

vacancies and attracting and motivating them to apply for the opened jobs of the
organization.
- Robbins
- Wendell French
Objectives of Recruitment:
1. To motivate prospective, talented, qualified candidates.

2. To win competition for talents.
3. To influence people to apply and stay in the organization.
4. To keep morale of the people high.
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Sources of Recruitment:
Internal Sources:
a. Job posting /internal circulation for talents within the organization.

b. Referrals
c. Skill inventory
External Sources:
a. Advertising- local, regional, national and international newspaper, journals etc

Public/Government (PSC)
b. Employment agencies
Private (BAIRA)
c. Field recruits (Army, Police, BGB only recruitment for soldiers)

d. Professional bodies( ICMAB, IEB, BMA, IAB etc)
e. Educational and vocational institutes( USEP, German- Technical, Nursing, etc)
f. New Sources
- Job fair
- Web-site/job-site(own and others)
- Walk-ins
- Internship
- Moving wagon
- Unsought applicants
- Talent scouting( searching/ hunting)
- Out placement firms/offices( Retired govt. persons recruit applicants)
- Telerecruits
- Direct mail
Why are internal sources used?
1. Most reliable source

2. Less or no cost source
3. Motivating to incumbents
Merits of External Sources:
1. Injection of new blood into the organization( New ideas can be generated)
2. Wide range of applicants
3. Affirmative action or legal obligation
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Selection
Selection is a process of choosing the most desirable candidate for the

vacant positions from the applicants.
Selection Process
No minimum Quality
Preliminary screening
R
Application blank or Incomplete
application on plain paper
E
Employment test Under Score
J
Unfavorable
Reference check
E
Interview Unimpressive
Under Score
C
Physical Examination Unfit
Probationary selection
T
Induction (Oriented to Dis-interested I

organization) Unfit
Foundation Training
Under Score
O
Placement N
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Employee Selection is the process of putting right men on right job. It is a procedure of
matching organizational requirements with the skills and qualifications of people.
Effective selection can be done only when there is effective matching. By selecting best
candidate for the required job, the organization will get quality performance of
employees. Moreover, organization will face less of absenteeism and employee turnover
problems. By selecting right candidate for the required job, organization will also save
time and money. Proper screening of candidates takes place during selection procedure.
All the potential candidates who apply for the given job are tested.
But selection must be differentiated from recruitment, though these are two phases of
employment process. Recruitment is considered to be a positive process as it motivates
more of candidates to apply for the job. It creates a pool of applicants. It is just sourcing
of data. While selection is a negative process as the inappropriate candidates are rejected
here. Recruitment precedes selection in staffing process. Selection involves choosing the
best candidate with best abilities, skills and knowledge for the required job.
The Employee selection Process takes place in following order-
1. Preliminary Interviews- It is used to eliminate those candidates who do not meet

the minimum eligibility criteria laid down by the organization. The skills,
academic and family background, competencies and interests of the candidate are
examined during preliminary interview. Preliminary interviews are less
formalized and planned than the final interviews. The candidates are given a brief
up about the company and the job profile; and it is also examined how much the
candidate knows about the company. Preliminary interviews are also called
screening interviews.
2. Application blanks- The candidates who clear the preliminary interview are
required to fill application blank. It contains data record of the candidates such as
details about age, qualifications, reason for leaving previous job, experience, etc.
3. Written Tests- Various written tests conducted during selection procedure are
aptitude test, intelligence test, reasoning test, personality test, etc. These tests are
used to objectively assess the potential candidate. They should not be biased.
4. Employment Interviews- It is a one to one interaction between the interviewer
and the potential candidate. It is used to find whether the candidate is best suited
for the required job or not. But such interviews consume time and money both.
Moreover the competencies of the candidate cannot be judged. Such interviews
may be biased at times. Such interviews should be conducted properly. No
distractions should be there in room. There should be an honest communication
between candidate and interviewer.
5. Medical examination- Medical tests are conducted to ensure physical fitness of
the potential employee. It will decrease chances of employee absenteeism.
6. Appointment Letter- A reference check is made about the candidate selected and
then finally he is appointed by giving a formal appointment letter.
24
Selection:
1. Preliminary Screening
-Minimum requirements
-Firms having printed application blank
2. Application blank
An application for employment, job application, or application form (often simply

called an application) is a form or collection of forms that an individual
seeking employment, called an applicant, must fill out as part of the process of informing
an employer of the applicant's availability and desire to be employed, and persuading the
employer to offer the applicant employment.
25
3. Employment Test
Concept:
A test is a mechanism or technique to identify knowledge, abilities or skills that a person

possesses and to find out the level of such traits for performing the job successful.
Types of Test
i. Achievement, knowledge or proficiency Test

An achievement test is a test of developed skill or knowledge. The most common type of
achievement test is a standardized test developed to measure skills and knowledge
learned in a given grade level, usually through planned instruction, such as training or
classroom instruction. Achievement tests are often contrasted with tests that
measure aptitude, a more general and stable cognitive trait.
ii. Aptitude Test

This test refers to measure the ability of a person to learn a new knowledge.
Aptitude tests are structured systematic ways of evaluating how people perform on tasks
or react to different situations. They have standardized methods of administration and
scoring with the results quantified and compared with how others have done at the same
tests. They are increasingly administered on a computer.
Id
iii. Personality Test Ego
Super-ego
Some commonly measured personality traits in work settings are extraversion,
conscientiousness, openness to new experiences, optimism, agreeableness, service
orientation, stress tolerance, emotional stability, and initiative or proactively. Personality
tests typically measure traits related to behavior at work, interpersonal interactions, and
satisfaction with different aspects of work. Personality tests are often used to assess
whether individuals have the potential to be successful in jobs where performance
requires a great deal of interpersonal interaction or work in team settings.
iv. Interest/ knack Test
v. Physical ability Test

A test instrument used to determine an individuals ability to perform the functions or
tasks of a job where physical strength or endurance is required. Have been demonstrated
to produce valid inferences regarding performance of physically demanding tasks. Can
identify applicants who are physically unable to perform essential job functions. Will not
be influenced by test taker attempts to impression manage or fake responses.
26
vi. Medical Test

A medical test is a kind of medical procedure performed to detect, diagnose, or monitor
diseases, disease processes, susceptibility, and determine a course of treatment. Medical
tests can be classified by what the test result will be used for, mainly including usage for
diagnosis, screening or evaluation,
vii. Polygraph Test/ Honesty Test

A polygraph (popularly referred to as a lie detector) measures and records several
physiological indices such as blood pressure, pulse, respiration, and skin
conductivity while the subject is asked and answers a series of questions. The belief is
that deceptive answers will produce physiological responses that can be differentiated
from those associated with non-deceptive answers.
viii. Substance abuse Test

A substance abuse test is a technical analysis of a biological specimen for example
urine, hair, blood, sweat, or oral fluid / saliva to determine the presence or absence of
specified parent drugs or their metabolites. Major uses of substance abuse testing are to
detect the presence of performance enhancing steroids in sport or for drugs prohibited by
laws, such as cannabis, cocaine and heroin.
ix. Work sample Test

Work sample is a method of testing ability by giving the candidate a sample of typical
work to do and evaluating their performance. Work samples may appear as short
questions along the lines of 'What would you do in this situation' or more complex
scenarios to analyze. At its most naturalistic, the candidate is put into a the actual job
where they may spend some time actually doing real work. The normal situation
however is for the person to be given a role-play or real-life situations where the
candidate acts out a realistic situation. This creates a repeatable pattern whereby multiple
candidates can be given the same test and hence more easily compared.
x. Intelligence Test
An intelligence quotient, or IQ, is a score derived from one of several
different standardized tests designed to assess intelligence. The term "IQ" comes from
the German Intelligenz-Quotient. When modern IQ tests are constructed, the mean
(average) score within an age group is set to 100 and the standard deviation (SD) to
15.[1] Today almost all IQ tests adhere to the assignment of 15 IQ points to each standard
deviation, but this has not been the case historically.
4. Reference Check:
Method:
i. Telephone Check
ii. Structured form check
iii. Un-structured form check
iv. Re-reference check with structural/ un-structural form
27
Referees should be unrelated with the candidate but know the candidate.
5. Interview:
Face to face conversation with the candidates to unveil such qualities which are not
discovered by other means.
Interview Administration Method:
a. Panel/ Board interview

In a panel interview (also called committee interview), you will meet with several
individuals at one time, typically sitting around a conference table. Many of these
interviewers will be your supervisors and colleagues; they may take turns asking you
prepared questions. And generally, other candidates will be asked the same questions so
that their answers can be compared. Panel interviews were first used in academia and
health care industries, but are becoming more popular in corporate sector nowadays. The
advantage of committee interviews is that they are more reliable and job-related since
panel members are accountable to each other, and interviewer can make their decisions
on the same sample of behavior. To the applicants, the committee interview is less time-
consuming, and can give you an opportunity to see how the staff works together.
However, it can be more stressful since several interviewers are involved and the
interview questions may be more rapidly paced.
b. Group interview
Group interview, which is much more common than a candidate group interview, you
will most likely be interviewed individually by a panel of two or more people. This type
of group interview is almost always a question and answer session, but you might also be
asked to participate in some type of exercise or test that simulates your potential work
environment.
c. One-one interview
d. Computer Aided interview
e. Video interactive
Techniques of Interview:
Structured interview
Unstructured interview
Problem solving interview
28
Training
Training is a learning process by which employees are being taught the way of doing a
particular job.
Training is a process by which the aptitudes, skills and abilities of employees to perform
specific jobs are increased.
- Michael J. Jucius
How to identify Training Needs Analysis (TNA):
Work breakdown/errors in work

Frequent complaints
Interpersonal problem
Promotion problem
Special situation to be handled
Objectives of Training:
Deficient skill
Organizational culture
Human Relation
Communication
Language
Selection of Trainees:
Skill deficient employees

Promotees
Problem child
New recruits
Special assignies
Training Methods:
a. On the job training methods:

- Apprenticeship training
- Vestibule training
- Pre-employment training
- Job Instruction training
b. Off the job training methods:
- Lecture method - Simulation exercise
- Workshop, conference etc. method - Experimental exercise
- Video interactive method
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- Programmed instruction(manual) method

Training Process:
Need Analysis
R
Set Objectives F
E
E
V
Select Trainees
E
A
L
U
A
Determine Curricula
E
T
I
O
Select training methods
and media D
N Develop budget
B
Validate Programme
Select Trainers
A
Implementation
C
Evaluation
K
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Special Training Programme:
o Literacy training
o AIDS training
o International Business Training
o Value Training
o Diversity Training
o Customer service training
o Team work training
o Employment training( Make a person to analysis a situation and take decision
independently)
Training Media:
- Oral media
- Written media
The media of instruction must be a language in which trainees are familiar.
Training Budget:
- Time Budget
- Financial Budget
- HRM Budget
An example of Financial Budget related to Training:
Items TK
Trainee Allowance 200
Food and lodging allowance 500
Trainer cost 3000
Stationary and support service cost 1000
Transport cost 100
Ceremony cost 2000
Miscellaneous 1000
N.B: The financial budget must be changed according to companys rules and
regulations.
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Training Process
Validation:
Validity refers to the consistency of same type of results over the period as desired.
A training program must be valid in the sense that it will provide expected results i.e. it
will satisfy the objectives of training.
How the training process:
1. Verify the contents of the training program with their trainees.

- Send a copy to them
- Ask them whether it will fill up their deficient skills
- Get suggestions from them
- Review and revise
2. Discuss with training experts and consultants inside and outside.

- Review and revise
3. Conduct a pilot project.
Select Trainers
Rules:
- Trainers should be experts and knowledgeable in the area of training.

- Trainers may be from outside and inside of the organization.
Conduct Training
- A full proof venue with all facilities.

- Make trainees and trainers available on time.
- Start and end the training session on time.
- Supply materials before session.
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Training Evaluation Methods
o Test-retest method[ Pre-training and post-trainig method]

o Pre-post training performance report/rating[Performance evaluation method]
o Objective achievement method.
Principles of Training
All human beings can learn even if not at the same pace/race.
Individuals must be motivated to learn.
Learning is an action process and it stimulates
The quality of learning improves through guidance.
The process of learning requires time to accumulate action, except and apply what
has been learnt.
Learning methods could be varied to combat boredom.
Learners need to understand the purpose of what they are learning.
Learning should be re-informed with specific and understandable rewards.
Standards of performance should be set for the learner.
Different individuals will be more receptive to learning at different times.
33
PERFORMANCE APPRAISAL
Definition
Performance appraisal is a systematic regular assessment of the performance of

employees on the basis of established standard and communicates back the employee
about his/her level of performance from the point of view of the organization.
A performance appraisal, employee appraisal, performance review, or (career)

development discussion is a method by which the job performance of an employee is
evaluated (generally in terms of quality, quantity, cost, and time) typically by the
corresponding manager or supervisor. A performance appraisal is a part of guiding and
managing career development. It is the process of obtaining, analyzing, and recording
information about the relative worth of an employee to the organization. Performance
appraisal is an analysis of an employee's recent successes and failures, personal strengths
and weaknesses, and suitability for promotion or further training. It is also the judgment
of an employee's performance in a job based on considerations other than productivity
alone.
Performance Appraisal is a process that involves communicating to an employee how

well he/she is performing the job. It also refers to all those procedures that are used to
evaluate the:
Personality
Performance
Potential of individual
Potential of group members
Why Performance Appraisal Needed
Performance appraisal acts as a catharsis for the problem employees.

It recognizes the best performers and bring them out to others and motivator.
It helps rewarding achievers of goals and designing development program for
deviated performers.
It helps selecting employees for promotion, training, disciplining etc.
34
Methods of Performance Appraisal
Traditional method Modern method

1. Check list method 1. Role analysis
2. Confidential report 2. Assessment centers
3. Critical incident method 3. Management by objectives(MBO)
4. Ranking method 4. Behavioral anchored rating scale
5. Graphic rating scale 5. Psychological testing
6. Narrated essay 6. Human resource accounting
7. 360 Appraisal
1. Check list method :-

In this method the senior, the boss is given a list of questions about the junior. These
questions are followed by check boxes. The superior has to put a tick mark in any one of
the boxes
This method can be explained with the following e.g.

Y N
Does the employee have leadership qualities?
Y N
Has the employee shown analytical skills?
As seen in the above e.g. A questioner containing questions is given to the senior. This
method is an extremely simple method and does not involve a lot of time. The same
set of questioners can be given foe every employee so that there is uniformity in selecting
employee.
2. Graphic rating scale :-
Graphic rating scale refers to using specific factors to appraise people. The entire
appraisal is presented in the form of a chart. The chart contains certain columns which
indicate qualities which are being appraised and other columns which specify the rank to
be given.
E.g. Employee A
Quality of work Quantity of work Intelligence
Excellent
Very good
good
satisfactory
poor
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The senior has to put a tick mark for a particular quality along with the ranking. Such
charts are prepared for every employee. According to the department in which they work.
Sometimes the qualities which are judged may change depending upon the department.
3. Narrated essay :-
In this method the senior or the boss is supposed to write a narrative essay describing the
qualities of his junior. He may describe the employees strength and weakness, analytical
abilities etc. the narrative essay ends with a recommendation for future promotion or for
future incentives.
4. Ranking method :-
In this method ranks are given to employees based on their performance.

There are different methods of ranking employees.
Simple ranking method
Alternate ranking method
Paired comparison method
i. Simple ranking method :-
Simple ranking method refers to ranks in serial order from the best employee
e.g. If we have to rank 10 best employees we start with the first best employee
and give him/her the first rank this is followed by the 2nd best and so on until
all 10 have been given ranks.
ii. Alternate ranking :-
In this method the serial alternates between the best and the worst employee.
The best employee is given rank 1 and then we move to the worst employee
and give him/her rank 10 again to 2nd best employee and give him/her rank 2
and so on.
iii. Paired comparison :-
In this method each and every person is the group, department or team is
compared with every other person in the team/group/department. The
comparison is made on certain criteria and finally ranks are given. This
method is superior because it compares each and every person on certain
qualities and provides a ranking on that basis.
36
Critical incident method :-
In this method critical or important incidents which have taken place on this job are noted
down along with employees behavior and reaction in all these situations. Both positive
and negative incidents are mentioned. This is followed by an analysis of the person, his
abilities and talent, recommendations for the future incentives and promotions.
5. Management By Objectives(MBO) method :-

Management by objectives (MBO) is a process of defining objectives within an
organization so that management and employees agree to the objectives and understand
what they need to do in the organization. The term "management by objectives" was first
popularized by Peter Drucker in his 1954 book 'The Practice of Management. The
essence of MBO is participative goal setting, choosing course of actions and decision
making. An important part of the MBO is the measurement and the comparison of the
employees actual performance with the standards set. Ideally, when employees
themselves have been involved with the goal setting and choosing the course of action to
be followed by them, they are more likely to fulfill their responsibilities.
Responsibility of Individuals:
Since individuals are empowered to carry out stretched tasks and responsibilities under
MBO, individual responsibilities play a vital role for the success of MBO. In MBO there
is a link built between the strategic thinking of the upper management and the operational
execution of the lower levels of the hierarchy. The responsibility of achieving the
objectives is passed from the organization to each individual of the organization.
Management by objectives is mainly achieved through self-control. Nowadays, especially
in knowledge-based organizations, the employees are self-managers who are able to
make their own decisions. In such organizations, the management should ask three basic
questions from its employees.
1. What should be your responsibilities?

2. What information is required by you from the management and the peers?
3. What information should you provide the management and peers in return?
6. Behaviorally anchored rating scales:-
This formatted performance appraisal is based on making rates on behaviors or sets of

indicators to determine the effectiveness or ineffectiveness of working performance. The
form is a mix of the rating scale and critical incident techniques to assess performance of
the staff.
37
Each behavior can rate at one of 7 scales as follows (you can set scales depend on your
requirements)
Extremely poor (1 points)
Poor (2 points)
Below average (3 points)
Average (4 points)
Above average (5 points)
Good (6 points)
Extremely good (7 points)
7. 360 Degree performance appraisal Method:-
The style of 360 degree performance appraisal is a method that employees will give
confidential and anonymous assessments on their colleagues. This post also information
that can be used as references for such methods of performance assessments of 720, 540,
180
8. Forced Ranking Method:-
In this style of performance appraisal, employees are ranked in terms of forced

allocations. For instance, it is vital that the proportions be shared in the way that 10 or 20
% will be the highest levels of performances, while 70 or 80% will be in the middle level
and the rest will be in the lowest one.
Assessment Pitfalls/Errors
1. Bias
2. Leniency error
Performance appraisal or interview bias which occurs when a manager or
interviewer rate an employee or the interviewee too positively. Opposite of strictness
error.
3. Strictness error
A frequently-occurring management mistake, in which a manager is too strict in
evaluating the performance of employees, leading to decreases in motivation and
performance. The strictness error is the inverse of the leniency error, in which a manager
does not enforce a suitable level of performance and compliance with standards from
employees.
4. Central tendency error
In performance appraisals or recruitment interviews, tendency of managers and
interviewers to rate all or most of the employees or interviewees as average.
5. Confrontation error
6. Halo effect
7. Horn effect
38
8. Bastardization error
9. Irrelevant measures error
How to overcome these Errors
Rater training
Use of both subjective and objective measures
Reward for good rater
Use of multiple rater
Use of absolute and relative standard
Fine print
Wages and Salary (Pay) Administration
Definition:
1. Wages are daily or weekly payment to employees or operating people.

2. Salary is the monthly or yearly payment to employee.
Need for Pay Administration/management
1. Today, there is competitive hunting for talent to ensure advantage in the market. So,
an attractive pay system needs to be made to achieve above target.
2. To retain qualified, talented and committed human resource in the organization.
3. To motivate incumbents to perform best for the organization.
4. To make pay competitive in the market.
Methods to set pay
1. Ranking Method
- Ranking committee with experts
- Select various jobs from each categories of jobs
- Each member will assign pay on his/her judgment
- Make arrange and fix pay for that category of job
- Prepare rank
2. Job Classification Method

- Committee with experts
- Set the number of pay grades(15 or 10)
- Assign a pay range for each class of job[G1-40,000-45,000 & G2-35,000-40,000]
- Take a job and set its grade
- Fine tune the grade
39
Factors considering in setting pay
1. Cost of living/standard of living

2. Legal requirements
3. Worth of job
4. Worth of employee
5. Existing pay
6. Ability to pay of organization
7. Labor market condition
Point Factor Method
Compensable Factor:
1. Knowledge
2. Experience
3. Responsibility
4. Supervision/controlling
5. Working conditions
Factor Points Relatively Levels Point Point in Take Total

value of in each in each this value Value
each factor level category of each
point point
Knowledge 2000 .50 4 2000 1700 10 17000
Experience 1000 .10 1800 600 10 6000
Responsibility 500 .10 1500
Supervision 500 .10
Working 200 .20
condition
4200 1.00
If any candidate have PhD, MBA, BBA or B.Sc Engineering he/she will get 4 points
in Level in each factor.
According to experience
5 years-1000 points
4 years-800 points
3 years-600 points
2 years-400 points
1 year-200 points
0 year-0 point
40
Steps of Point Factor Method
1. Determining cluster of job to be evaluated by the job evaluation committee.

2. Collect job information
3. Select from compensable factors
4. Define compensable factors
5. Define factor degrees
6. Determine relative value of factors
7. Assign point value to factors and degrees
8. Write the job evaluation manual
9. Assign BDT value to each and every category(according to note)
10. Total money value of the job
11. Rank the job according to the value
Determining cluster of job to be evaluated by the job evaluation committee

The first step in the point method of job evaluation is to determine clusters of jobs to be
evaluated. In organizations, jobs vary by departments; typically a manager will not use a
one-point rating plan for all jobs in an organization. Jobs are clustered by type (sales jobs,
factory jobs, clerical jobs), and an evaluation committee develops a point plan for one
cluster or group at a time. After that, managers perform a job analysis, job description
and job specification for each job.
Collect Job Information

Job performance
Personal observation
Critical incidents
Interview
Questionnaire method
Factor Comparison Method
This method tries to compare involved factors in different category of jobs with their
relative positions and assign weight and money value in order to differentiate jobs. It
recognizes different conditions and circumstances involved in different jobs that reflect in
pay.
1. Obtain job information
2. Select key benchmark jobs(minimum marks)

A benchmark job is a job which tends to remain consistent across diverse organizations,
allowing employers in various companies and even different industries to use it as a basis
for evaluation and comparison. Data about such jobs is readily available so that
employers have information which they can use in the development of job descriptions
and salaries. People may also refer to benchmark jobs as key jobs. Several characteristics
define a benchmark job. The first is that it is a job with a clear definition which is also
generally consistent between departments and organizations. Even if the job title varies
slightly, it has enough things in common with other types of positions that it is a fair basis
41
for comparison. In addition, the benchmark job is a common position, which makes data
on the job readily available because numerous people across organizations and industries
occupy similar positions.
3. Rank key jobs on compensable factors

Ranking jobs is the easiest, fastest, and least expensive approach to job evaluation. It is
also most effective in smaller organizations with few job classifications. To rank
positions, order jobs from highest to lowest based on their relative value to your
organization. The process of job ranking typically assigns more value to jobs that require
managerial or technical competencies. More value is also assigned to jobs that supervise,
exercise decision-making authority, or rely on independent judgment. For example, a job-
ranking system might rank the job of CEO as the most valued job within the organization
and the job of product assembler as the least valued.
4. Distribute wage rate by factors

5. Rank key jobs according to wages assign to each factors
6. Compare two sets of ranking to screen out unusual key jobs
7. Construct the job comparison scale
8. Use job comparison scale to determine basic pay
How to Set Pay Scales
Employers use pay scales to determine employees wages and salaries. Pay scales are usually listed in
table form and can take into account education, experience, and other factors. They help employers remain
consistent in setting pay and protect against favoritism.
In order to understand and set pay scales, there are other key terms HR and compensation professionals
should know:
Pay grades compare and rank jobs within the organization. Many employers use a system
such as BLRs nine-factor analysis, a job evaluation tool to rank jobs based on skill,
education, experience, and duties. Based on the factors, a pay grade or job grade is
assigned that correlates to the salary range within which positions with that pay or job grade
will be paid.
Rate range refers to the spread of salaries paid for jobs assigned to the same job grade. The
rate range for a job grade consists of a minimum, midpoint, and maximum rate of pay.
Job pricing involves establishing rate ranges; that is, minimum, midpoint, and maximum
dollar values for each labor grade. By studying wage and salary surveys, employers can
compare wages in the labor market to the jobs within their organization. The result is a scale
of wages that allows the employer to compete in the labor market (external equity) while
ensuring that jobs that are worth more to the organization are paid more than those of lesser
worth (internal equity).
The midpoint is the rate at which an employee who is fully qualified and performing the job
at an acceptable level would be paid. The rate range for a job grade consists of a minimum,
midpoint, and maximum rate of pay. At BLR, the minimum is calculated at 75% of the
midpoint and the maximum at 125% of the midpoint.
42
BENEFITS AND INCENTIVES
Benefits are given and incentives are earned.
Benefits
Benefits are those financial payments that an employee receives for continuing his/her
employment.
Mandatory /Obligatory
Maternity leave
Casual Leave
Benefit Earned leave in cash
Govt. Holiday
Voluntary
How to set benefit

Management
Determine basic pay Collective Bargaining Philosophy
Set benefit structure rules

Analyze relevant data P
A
Y
B
E
N
E
F
Govt. I
Ability to Benefit Employment Law T
Why Benefits are givensurvey
pay Preference
S
To enhance employee morale

Employees spirits can easily fall if their day-to-day responsibilities are monotonous or if
they dont feel valued by their supervisors. Over time, this can translate into an
unmotivated and unproductive staff. Therefore, its important for your company to make
sure that employees are interested in and appreciated for their work.
Recognize birthdays and personal accomplishments. Most employees appreciate it

when their supervisors remember their birthdays or acknowledge personal milestones
such as having a child or finishing a marathon. Some companies even offer employees a
paid day off on their birthdays. Knowing that managers are aware of employees' lives
43
outside of work makes them feel like a valued member of the team rather than just
anonymous workers.
Treat them with respect. This tip sounds like a no-brainer, but it can make a world of difference
to employees. Dont swear, lose your temper or ignore your staff, especially in front of other
employees. Treat employees with the courtesy and respect they deserve say please and thank
you, ask about their weekend, and take an interested in projects that theyre working on.
Establish an employee-recognition program. Employees want supervisors to be aware and

appreciative of their work. Create an employee-of-the-month program or a wall of fame to
recognize workers notable contributions. Such programs demonstrate an employer's appreciation
and also offer incentives for other staff members to increase their productivity.
Check in with staff members. Hold meetings with individual workers or groups of
employees several times throughout the year to address any questions or concerns that
they may have. Even if you dont have a meeting scheduled soon, make sure that
employees know that you are always there to address any problems that may crop up.
Ask for their feedback and reactions to new company policies, and be sure to update them
on what steps you've taken to solve any problems.
Keep training them. In this ever-evolving world of new technologies and ideas,
employees need to stay up-to-date with developments in their field. Staff members can
interpret an employers unwillingness to invest in training as a disregard for their
professional development. Theyll also be less productive than your competitors better-
trained employees. Enroll workers in classes and send them to conferences to keep them
(and your company) on top of the game.
To avoid unionism
The forming of a union can be a precarious situation for employers. Employees form
unions when they are unhappy with the terms of their employment and the direction the
business is taking. Although employers can take certain steps to avoid unions forming
within their place of work, they must follow the law and regulations regarding labor law.
To comply with law
To attract qualified and talented to the jobs of the organization
To make the organization competitive in the organization

Organizations use competitive intelligence to compare themselves to other organizations
("competitive benchmarking"), to identify risks and opportunities in their markets, and to
pressure-test their plans against market response (war gaming), which enable them to
make informed decisions. Most firms today realize the importance of knowing what their
competitors are doing and how the industry is changing, and the information gathered
allows organizations to understand their strengths and weaknesses. The actual importance
of these categories of information to an organization depends on the contestability of its
markets, the organizational culture, and personality and biases of its top decision makers,
and the reporting structure of competitive intelligence within the company.
44
To be fair and just to human resource in order to retain into organization.
Companies provide their employees and workers with a variety of benefits. These
benefits are basically forms of value or services that are provided by an employer to his
employees for their contribution in the performance of the organisation. Such benefits are
an important component of a company's remuneration package for attracting and
retaining its employees. The benefits serve as incentives to the employees and encourage
them to work harder for the organisation. These also help in building up employee job
satisfaction.
These benefits may be financial or non-financial, long term or short term, free or at
confessional rates. They may include educational, residential, medical, or recreational
facilities. Such facilities may be provided individually or collectively and inside or
outside the organization. Thus the employee benefits are the comforts and the facilities
given to employees to enable them to work in a healthy and peaceful atmosphere.
What is incentive?
Incentive is financial and non-financial rewards to the employee for their achievements.
In economics and sociology, an incentive is any factor (financial or non-financial) that
enables or motivates a particular course of action, or counts as a reason for preferring one
choice to the alternatives. It is an expectation that encourages people to behave in a
certain way. Since human beings are purposeful creatures, the study of incentive
structures is central to the study of all economic activity (both in terms of individual
decision-making and in terms of co-operation and competition within a larger
institutional structure). Economic analysis, then, of the differences between societies (and
between different organizations within a society) largely amounts to characterizing the
differences in incentive structures faced by individuals involved in these collective
efforts. Ultimately, incentives aim to provide value for money and contribute to
organizational success.
45
Types of incentive
Class Definition
Remunerative
incentives
are said to exist where an agent can expect some form of material reward
especially money in exchange for acting in a particular way.
financial
incentives
are said to exist where a particular choice is widely regarded as the right thing
to do, or as particularly admirable, or where the failure to act in a certain way is
Moral condemned as indecent. A person acting on a moral incentive can expect a
incentives sense of self-esteem, and approval or even admiration from his community; a
person acting against a moral incentive can expect a sense of guilt, and
condemnation or even ostracism from the community.
are said to exist where a person can expect that the failure to act in a particular
Coercive way will result in physical force being used against them (or their loved ones)
incentives by others in the community for example, by inflicting pain in punishment, or
by imprisonment, or by confiscating or destroying their possessions.
such as curios nation, mental or physical exercise, admiration, fear, anger,

Natural
pain, joy, or the pursuit of truth, or the control over things in the world or people
Incentives
or oneself.
Individual Inceptive Scheme
Product sales commission

Achievement of Professional Qualification
46
Group Incentive Plan
Profit-sharing scheme
Profit sharing, when used as a special term, refers to various incentive plans introduced
by businesses that provide direct or indirect payments to employees that depend on
company's profitability in addition to employees' regular salary and bonuses. In publicly
traded companies these plans typically amount to allocation of shares to employees. The
profit sharing plans are based on predetermined economic sharing rules that define the
split of gains between the company as a principal and the employee as an agent. For
example, suppose the profits are x, which might be a random variable. Before knowing
the profits, the principal and agent might agree on a sharing rule s(x). Here, the agent will
receive s(x) and the principal will receive the residual gain x-s(x).
Suggestions scheme(QC Circle)

Quality Circles are (informal) groups of employees who voluntarily meet together on a regular
basis to identify, define, analyze and solve work related problems. Usually the members of a
particular team (quality circle) should be from the same work area or who do similar work so that
the problems they select will be familiar to all of them. In addition, interdepartmental or cross
functional quality circles may also be formed. An ideal size of quality circle is seven to eight
members. But the number of members in a quality circle can vary.
Ownership sharing
Group Incentive Scheme
Group pay schemes include those based on the performance of the team, plant or
company. They also include 'gain sharing', which is a form of added-value scheme which
links pay to the achievement of organizational goals. Share incentive plans involve the
provision of shares to employees - either by giving them direct or allowing them to be
bought - and can be related to performance. Some organizations utilize pay systems based
on the performance of the team, or group. Sometimes it may be the performance of the
whole plant or enterprise that is the trigger for the performance elements of pay.
Team-based pay
While team-based pay has been around for some time - in the shape of departmental or
group bonus systems - it has taken on more importance with the increased interest in
team working. In team-based pay systems the payments reflect the measurable goals of
the team. Team working may be most effective in situations involving high task
interdependence and creativity, although it can be difficult to define the team, the goals,
and the appropriate reward. Schemes can be divisive if they are not open and transparent.
Goals should not be shifted once agreed - they need to be achievable. The aim of team-
based pay is to strengthen the team through incentives - building a coherent, mutually
supportive group of people with a high level of involvement. The team achievements are
recognized and rewarded. Peer group pressure can also be helpful in raising the
performance of the whole team.
47
Plant or company based pay
Plant or company based performance pay schemes are based on larger groups than teams,
for instance, divisional, plant or the whole organisation. They may well use the same
factors as team-based or individual performance schemes, or perhaps total sales within a
set period, or comparative reductions in labour costs. The most common forms of plant or
company based payment systems tend to be based on overall profits (profit sharing), or
alternatively on schemes that owe more to the improvements within the direct control of
the workforce, such as added value or similar types of gain sharing systems. Overall
profitability in an organisation is subject to factors outside the workforce's control, such
as depreciation, economic changes, taxation, as well as the productivity improvements of
individuals and therefore may not reflect real efficiency gains by the workforce.
Plant/company based pay schemes are generally most effective in organisations where
the workforce can clearly see the results of their efforts. They are successful where
communications and employment relations are good and where the performance
measurement is not subject to major changes arising from external causes.
Gainsharing
Gainsharing is a form of added-value pay scheme linking workers' pay to the

achievement of organisational goals by rewarding performance above a pre-determined
target. This may be in the form of a share in the profits generated by sales, or on
measures of customer satisfaction, but is almost always led by measures of productivity,
performance and quality. Gainsharing schemes have to be based on factors that are in the
workers' control. Gainsharing should be part of a long-term strategy to improve
communications, staff involvement and teamwork. The goal is not to work harder,
but more effectively. It may be used as a replacement for bonus/piecework schemes,
where quality is sometimes lost to quantity. All workers and management who have any
involvement in the product of the organisation should be included in any gainshare plan.
In this way their support is encouraged so that they can feel a direct responsibility for the
plan's success. Performance measures and results should be made available and everyone
encouraged offering suggestions for improvements. Open communications and exchange
of information are crucial.
48
CAREER TRANSITION
Changes over career of a person during work life.
Forms of Career Transition
Orientation
Job orientation is an essential activity that every new hire should go through. It doesn't
matter if you're just working for a part-time or a full time job; you need to go through job
orientation or else face bad remarks from your boss and/or employer.
Promotion
A promotion is the advancement of an employee's rank or position in an
organizational hierarchy system. Promotion may be an employee's reward for good
performance i.e. positive appraisal. Before a company promotes an employee to a
particular position it ensures that the person is able to handle the added responsibilities by
screening the employee with interviews and tests and giving them training or on-the-job
experience. A promotion can involve advancement in terms of designation, salary and
benefits, and in some organizations the type of job activities may change a great deal.
Transfer
Demotion
A demotion is a reduction in an employee's rank or job title within the
organizational hierarchy of a company, public service department, or other body. A
demotion may also lead to the loss of other privileges associated with a more senior rank
and/or a reduction in salary or benefits. An employee may be demoted for violating the
rules of the organization by a behavior such as excessive lateness, misconduct,
or negligence. In some cases, though, an employee may be demoted as an alternative to
being laid off, if the company is facing a financial crisis. A move to a position at the same
rank or level elsewhere in the organization is called a lateral move or deployment.
Separation
Resignation
A resignation is the formal act of giving up or quitting one's office or position. It can also
refer to the act of admitting defeat in a game like chess, indicated by the resigning player
declaring "I resign", turning his king on its side, extending his hand, or stopping the chess
clock.[1]A resignation can occur when a person holding a position gained by election or
appointment steps down, but leaving a position upon the expiration of a term is not
considered resignation. When an employee chooses to leave a position it is considered a
resignation, as opposed to termination, which occurs when the employee involuntarily
loses a job. Whether an employee resigned or was terminated is sometimes a topic of
dispute, because in many situations, a terminated employee is eligible for severance
pay and/or unemployment benefits, whereas one who voluntarily resigns may not be
eligible. Abdication is the equivalent of resignation of a reigning monarch or pope, or
other holder of a non-political, hereditary or similar position.
49
Retirement
Retirement is the point where a person stops employment completely. A person
may also semi-retire by reducing work hours. Many people choose to retire when
they are eligible for private or public pension benefits, although some are forced
to retire when physical conditions don't allow the person to work any more (by
illness or accident) or as a result of legislation concerning their position. In most
countries, the idea of retirement is of recent origin, being introduced during the
19th and 20th centuries. Previously, low life expectancy and the absence of
pension arrangements meant that most workers continued to work until death.
Germany was the first country to introduce retirement in the 1880s.
Termination
Termination is the employee's departure at the hands of the employer. There are
two basic types of involuntary termination, known often as being "fired" and "laid
off." To be fired, as opposed to being laid off, is generally thought of to be the
employee's fault, and therefore is considered in most cases to be dishonorable and
a sign of failure. Often, it may hinder the new jobseeker's chances of finding new
employment, particularly if he/she has been fired from earlier jobs. Jobseekers
sometimes do not mention jobs which they were fired from on their rsums;
accordingly, unexplained gaps in employment and refusal to contact previous
employers are often regarded as "red flags". Being successively fired from several
jobs has the possibility of preventing jobseekers from obtaining gainful
employment for a long time.
Discharge
Dismissal
Dismissal (referred to informally as firing or sacking) is the termination of
employment by an employer against the will of the employee. Though such a decision
can be made by an employer for a variety of reasons, ranging from an economic
downturn to performance-related problems on the part of the employee, being fired has a
strong stigma in many cultures. To be fired, as opposed to quitting voluntarily (or
being laid off), is often perceived as being the employee's fault, and is therefore
considered to be disgraceful and a sign of failure. Finding new employment may often be
difficult after being fired, particularly if there is a history of being fired from previous
jobs, if the reason for firing is for some serious infraction, or the employee did not hold
the job very long. Job seekers will often not mention jobs that they were fired from on
their resumes; accordingly, unexplained gaps in employment are often regarded as a red
flag.
50
Promotion
Movement of an employee from lower level to upper level with increased benefits,
authorities and responsibilities.
Why Promotion is needed
To reward talented and better performers.

To motivate incumbent for higher performance.
To retain talented employee.
To attract qualified workforce(manpower, hands etc) to the organization
To reduce discontent and unrest.
Bases of Promotion
Seniority basis
Merit performance basis
Mixed basis
Reasons for Seniority Basis Promotion
To ensure commitments and engagement to the job.

It motivates incumbents to stay in the organization for a longer time.
It increases employee morale and sense of belongingness with the organization.
Why Merits/Performance basis is given
o It attracts meritorious and brilliant persons to the organization.

o It enhances organizational dynamism, creativity and innovation that ensure its
sustainability and competitiveness in the market.
o It helps retaining talented employees in the organization.
Types of Promotion
- Benefit Promotion
- Dry Promotion
Dry promotion is an increase in position and responsibility that is not accompanied by an
increase in pay.
51
Transfer
Transfer is a re-assignment of employees from one job to another job, one department to
another department, one shift to another shift or one geographic location to another
geographical location.
Why Transfer
- To make an employee versatile about different job of the organization.

- To ensure a close match between an employees qualification and the position
- To meet an employee on request to place in a comfortable job
- To help employees work according to their convenient.
- To get rid from problem employee
- To adjust wage or salary with the positional status and responsibilities.
Problems related to Transfer
- Cost
- Human problems (like socialization, school life etc.)
- Problem for dual career couples
Retirement
Retirement is the permanent separation of employees from the organization.
Problems with Retirement
- Retirement is a radical change in the life-style of the incumbent that gives a shock to
the person.
- It is an end of a members meaningful relationship and experiences with the
organization that puts a person in embarrassing situation.
- It is a loss of power and status that makes a person unimportant.
52
Retirement Programs
1. Phased Retirement
This retirement scheme is designed to give retirement rehearsal to the retiring employee
to prepare him/her for the final retirement.
Gradual Reduction of work loads from the retiring person

Gradual reduction of work weeks
Progressively longer vacation with pay
Progressively longer leaves without pay
2. Deferred Retirement
This retirement is given one year/six months/three months before the final retirement starts.
Retirement taken after the normal retirement age. For example, if the normal retirement age is 65
or 70 an employee may continue to work beyond those ages. Normally the election of deferred
retirement does not increase the monthly retirement income when the employee actually retires.
3. Direct Retirement
Retirement Benefits Scheme
Gratuity
Gratuity is a lump sum amount given by the organization to the retired person as
recognition for their long standing service to the organization. Gratuity is a sum of
money tendered to certain service sector workers for a service performed or anticipated.
Such payments and their size are a matter of social custom. Tipping varies among
cultures and by service industry. Though a tip is seldom required, and its amount is
usually at the discretion of the patron being served, in some circumstances failing to give
an adequate tip when one is expected is a serious faux pas, and may be considered very
miserly, a violation of etiquette, or unethical. In some other cultures or situations, giving
a tip is not expected and offering one would be considered at best odd and at worst
condescending or demeaning.
Provident Fund
As per amendment-dated 22.9.1997 in Act, both the employees and employer contribute to the fund at the
rate of 12% of the basic wages, dearness allowance and retaining allowance, if any, payable to employees
per month. The rate of contribution is 10% in the case of following establishments:
Any covered establishment with less then 20 employees, for establishments cover prior to 22.9.97.
Any sick industrial company as defined in clause (O) of Sub-Section (1) of Section 3 of the Sick
Industrial Companies (Special Provisions) Act, 1985 and which has been declared as such by the
Board for Industrial and Financial Reconstruction,
53
Any establishment which has at the end of any financial year accumulated losses equal to or
exceeding its entire net worth and
Any establishment engaged in manufacturing of (a) jute (b) Breed (d) coir and (e) Guar gum
Industries/ Factories. The contribution under the Employees' Provident Fund Scheme by the
employee and employer will be as under with effect from 22.9.1997.
Group Insurance Benefit

Group insurance is a health care coverage plan in which individual employees or members are
included under one 'master policy' owned by their employers. Because the group insurance plan has
so many contributors, the policy often provides coverage for more services at a much lower cost per
participant. Group insurance may be provided by other organizations besides for-profit companies.
Labor unions, churches and other service groups can also obtain group insurance for recognized
members and possibly their dependents.
Individual members of a group insurance plan receive insurance certificates which demonstrate their
eligibility for benefits. If the master policy held by the employer requires participation in an HMO (health
maintenance organization), then individuals are also registered as members.
Other group insurance policies may be associated with major medical groups such as Blue Cross/Blue
Shield. A major medical policy may or may not restrict an individual's choice of primary physician and
specialists. HMO policies often require a patient to use a specified physician, who must approve any
visits to eligible specialists.
Pension
In general, a pension is an arrangement to provide people with an income when they are no
[1]
longer earning a regular income from employment. Pensions should not be confused with
severance pay; the former is paid in regular installments, while the latter is paid in one lump sum.
The terms retirement plan or superannuation refer to a pension granted upon retirement.
Retirement plans may be set up by employers, insurance companies, the government or other
institutions such as employer associations or trade unions. Called retirement plans in the United
States, they are commonly known as pension schemes in the United Kingdom and Ireland and
superannuation plans or super in Australia and New Zealand. Retirement pensions are typically in
the form of a guaranteed life annuity, thus insuring against the risk of longevity. A pension created
by an employer for the benefit of an employee is commonly referred to as an occupational or
employer pension. Labor unions, the government, or other organizations may also fund pensions.
Occupational pensions are a form of deferred compensation, usually advantageous to employee
and employer for tax reasons. Many pensions also contain an additional insurance aspect, since
they often will pay benefits to survivors or disabled beneficiaries. Other vehicles
(certain lottery payouts, for example, or an annuity) may provide a similar stream of payments.
Encashment of leave
Retirement Ceremony
Membership of recreational club, health clubs
Club for company employees
54

Fundamental of HRM

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FUNDAMENTALS OF HUMAN RESOURCE MANAGEMENT

BASIC HUMAN RESOURCE MANAGEMENT

Human resource management is a management concerning with people aspect of an

Features of Human Resource Management:

1. HRM is people oriented management

2. HRM is global-oriented management.

3. HRM is an action-oriented management

Features of Human Resource Management:

1. Pervasive Force: HRM is pervasive is nature. It is present is all enterprises. It

5. Development Oriented: HRM intends to develop the full potential of employees.

Functions of Human Resource Management:

1. Human resources planning

Functions of Human Resource Management:

Functions of Human Resource Management:

Job Design (JD)

Human Resource Planning (HRP)

HRM Planning Process

Trade Union influences

Training and Development

Health and safety Administration

Reasons for the growing importance of HRM:

In a broader and more value-oriented sense, the word "humanization" is used to

3. Job enlargement and enrichment

Job Enrichment should be distinguished from enlargement job enlargement attempts

4. Recognition to human and civil rights

2) Quality of work life(QWL)

Adequate and fair compensation

3) Technological change and its adaption in workforce.

4) Influence of external environment

5) Regularity measures and affirmative actions

Differences between Personnel Management & HRM

Beliefs and assumptions

Human Resource Planning is a process of assessing the organizations human resources

Human Resource Planning is a process of analyzing and organizations human resource

Why do we make Human Resource Plan?

Process of Human Resource Planning:

Organizations mission, vision, goals

External environmental Strategic choices of organizational Perceived market

Determine Human Resources

Job design and structuring

Human resource demand Determining Human Resource Human Resource

Set plan, policies, goals and rules of

Implementation, Evaluation and

In the simplest cases, the measure of central tendency is an average of a set

10. Irrelevant question.

1. Interviewer training on how to take interview.

It is mechanism by which new entrance are familiarized with the organizational

1. To help overcoming first day jitter.

FROM A FEW MINUTE TO A FEW YEAR.

PROCESS OR STEPS OF ORIENTATION:

1. Welcome to the candidate in the organization by a responsible person.

JOB ANALYSIS OR WORK STUDY

- De Cenzo and Robbins

Process of Performing Job Analysis:

1. Determine the objectives, criteria, policy and rules of job analysis.

Methods of collecting job data/information:

2. Individual interview method

3. Group interview method

8. Critical incident method