Human Resources Management

MBA 2ND SEMESTER - HUMAN RESOURCES MANAGEMENT
PALVIELA PG COLLEGE, PALIVELA, KOTHAPETA -533229, PHONE NO:08855-244771/774
HUMAN RESOURCES MANAGEMENT
Unit-1: Introduction: Definition and Function of HRM; Principles of HRM; Changing

Environment of HRM; Challenges; Ethical aspects of HRM
Unit-2: HR Planning; Concepts; Factors influencing; HR Planning; HR Planning Process;

job analysis; Recruitment and selection; Tests and interview techniques
Unit-3 Training and development-Need, Process, Methods and Techniques, Evaluation,

Management development; Evaluating Employee Performance; Career development and
counseling.
Unit-4 Compensation –Concepts and Principles; Influencing Factors; Current Trends in
Compensation – Methods of payment –Incentives and Rewards.
Unit-5 Managing Industrial Relations – Trade Unions- Employee Participation Schemes –

Collective Bargaining – Marketing Knowledge Workers
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Unit-1: Introduction: Definition and Function of HRM; Principles of HRM; Changing

Environment of HRM; Challenges; Ethical aspects of HRM
IMP Questions
1. Definition and Functions of HRM.

2. Principles of HRM.
3. Changing Environment of HRM; Challenges.
Introduction of HRM:
HRM is concerned with the human beings in an organization. “The

management of man” is a very important and challenging job because of the dynamic
nature of the people. No two people are similar in mental abilities, tacticians,
sentiments, and behaviors; they differ widely also as a group and are subject to many
varied influences. People are responsive, they feel, think and act therefore they cannot
be operated like a machine or shifted and altered like e template in a room layout. They
therefore need a tactful handing by management personnel.”
HRM is the process of managing people of an organization with a human

approach. Human resources approach to manpower enables the manager to view the
people as an important resource. It is the approach through which organization can
utilize the e manpower not only for the benefits of the organization but for the growth,
development and self satisfaction of the concerned people. Thus, HRM is a system that
focuses on human resources development on one hand and effective management of
people on the other hand so that people will enjoy human dignity in their employment.
Definition:
HRM is the planning, organizing, directing and controlling of the procurement,

development, compensation integration, maintenance and separation of human
resource to the end those individual, organizational and social objectives and
accomplished. --Edwin B.Flippo

Functions of HRM:
Human Resource Management is a management function concerned

with hiring, motivating, and maintaining workforce in an organization. Human resource
management deals with issues related to employees such as hiring, training,
development, compensation, motivation, communication, and administration. Human
resource management ensures satisfaction of employees and maximum contribution of
employees to the achievement of organizational objectives.
According to Armstrong (1997), Human Resource Management can be

defined as “a strategic approach to acquiring, developing, managing, motivating and
gaining the commitment of the organization’s key resource – the people who work in
and for it.”
Functions of Human Resource Management

Human Resource Management functions can be classified in following three
categories.
 Managerial Functions,
 Operative Functions, and
 Advisory Functions
The Managerial Functions of Human Resource Management are as follows:
1. Human Resource Planning - In this function of HRM, the number and type of
employees needed to accomplish organizational goals is determined. Research is an
important part of this function, information is collected and analyzed to identify current
and future human resource needs and to forecast changing values, attitude, and
behaviour of employees and their impact on organization.

2. Organizing - In an organization tasks are allocated among its members,

relationships are identified, and activities are integrated towards a common objective.
Relationships are established among the employees so that they can collectively
contribute to the attainment of organization goal.
3. Directing - Activating employees at different level and making them contribute

maximum to the organization is possible through proper direction and motivation.
Taping the maximum potentialities of the employees is possible through motivation and
command.
4. Controlling - After planning, organizing, and directing, the actual performance of

employees is checked, verified, and compared with the plans. If the actual performance
is found deviated from the plan, control measures are required to be taken.
The Operative Functions of Human Resource Management are as follows:
1. Recruitment and Selection - Recruitment of candidates is the function preceding

the selection, which brings the pool of prospective candidates for the organization so
that the management can select the right candidate from this pool.
2. Job Analysis and Design - Job analysis is the process of describing the nature of a
job and specifying the human requirements like qualification, skills, and work
experience to perform that job. Job design aims at outlining and organizing tasks,
duties, and responsibilities into a single unit of work for the achievement of certain
objectives.
3. Performance Appraisal - Human resource professionals are required to perform

this function to ensure that the performance of employee is at acceptable level.
4. Training and Development - This function of human resource management helps

the employees to acquire skills and knowledge to perform their jobs effectively. Training
an development programs are organized for both new and existing employees.

Employees are prepared for higher level responsibilities through training and
development.
5. Wage and Salary Administration - Human resource management determines

what is to be paid for different type of jobs. Human resource management decides
employees compensation which includes - wage administration, salary administration,
incentives, bonuses, fringe benefits, and etc,.
6. Employee Welfare - This function refers to various services, benefits, and facilities
that are provided to employees for their well-being.
7. Maintenance - Human resource is considered as asset for the organization.

Employee turnover is not considered good for the organization. Human resource
management always try to keep their best performing employees with the organization.
8. Labor Relations - This function refers to the interaction of human resource

management with employees who are represented by a trade union. Employees comes
together and forms an union to obtain more voice in decisions affecting wage, benefits,
working condition, etc,.
9. Personnel Research - Personnel researches are done by human resource

management to gather employees' opinions on wages and salaries, promotions,
working conditions, welfare activities, leadership, etc,. Such researches helps in
understanding employees satisfaction, employees turnover, employee termination, etc,.
10. Personnel Record - This function involves recording, maintaining, and retrieving

employee related information like - application forms, employment history, working
hours, earnings, employee absents and presents, employee turnover and other data
related to employees.

The Advisory Functions of Human Resource Management are as follows:

Human Resource Management is expert in managing human resources and so can give
advice on matters related to human resources of the organization. Human Resource
Management can offer advice to:
1. Advised to Top Management:
Personnel manager advises the top management in formulation and evaluation
of personnel programs, policies, and procedures.
2. Advised to Departmental Heads
Personnel manager advises the heads of various departments on matters such as
manpower planning, job analysis, job design, recruitment, selection, placement,
training, performance appraisal, etc.
Principles of HRM:
1. Principle of scientific selection:
One beneficial result of a scientific employee selection process is the time
savings it generates for human resources professionals. ... This allows workers who
deal in recruitment and selection to contact more candidates and spend more time on
other tasks without sacrificing attention to the employee selection process.
2. Principle of employee development:
Human Resource Development (HRD) is the framework for helping employees
develops their personal and organizational skills, knowledge, and abilities. ... Or, Human
Resource Development can be informal as in employee coaching by a manager or
internal training and development classes taught by internal staff or a consultant.
3. Principle of labor management cooperation:
A process in which employees participate in making decisions, ordinarily made
by managers that affect their work and work environment. Activities may include goal
setting, identification and solution of problems, and developing the earns of
implementing decisions. The goal is to improve the quality of products and services, job
satisfaction, the skills and abilities of workers, etc.

4. Principle of free flow of commutation:

The sampling of various quantities in a repetitive manner for
transmissions over a single channel in telemetering.
5. Principles of fair remuneration:
First, remuneration refers to the pay, or compensation, that you receive for a
job or service performed. Second, Henri Fayol brought the concept of fair and
equitable remuneration to light in the world of management, along with relating that
concept back to employee satisfaction.
6. Principles of incentive
Human Resource Management. Incentives refer to rewards given to
employees in monetary on non-monetary form in order to motivate them to work more
efficiently. ... An employee is paid an incentive in monetary or non-monetary form on
the basis of his individual performance.
7. Principles of dignity of labor:
The dignity of labor dignity of work is the philosophy that all types of jobs
are treated equally, and no occupation is considered superior. Though one's occupation
for his or her livelihood involves physical work or mental labor, it is held that the job
carries dignity compared to the jobs that involve more intellect than body.
8. Principle of participation:
To associate employee representatives at every level of decision
making. Traditionally the concept of Workers' Participation in Management (WPM)
refers to participation of non-managerial employees in the decision-making process
9. Principle of team spirit:
Team spirit is the feeling of pride and loyalty that exists among the
members of a team and that makes them want their team to do well or to be the best.
10. Principle of contribution:
Contribution refers to the act of contributing or the thing contributed
(such as personal time, money, ideas, private property or assistance)

Changing environment of HRM:
The five factors involved in the changing environment of HRM are as follows:
1. Work force Diversity
2. Economic and Technological Change
3. Globalization
4. Organizational Restructuring
5. Changing Nature of Work.
Business environment is changing environment and so is HR environment. The

changing environment of HRM includes work force diversity, economic and
technological change, globalization, organizational restructuring, changes in the nature
of jobs and work and so on.
1. Work force Diversity:

Diversity has been defined as any attribute that humans are likely to use to tell
themselves, that person is different from me and, thus, includes such factors as race,
sex, age, values, and cultural norms’. The Indian work force is characterized by such
diversity that is deepening and spreading day by day.
2. Economic and Technological Change:

Along with time, several economic and technological changes have
occurred that have altered employment and occupational pattern. In India too, there is
a perceptible shift in occupational structure from agriculture to industry to services.

The New Economic Policy, 1991 has led to liberalization and globalization
giving genesis to multinational organizations with their multicultural dimensions having
certain implications for HRM.
3. Globalization:
The New Economic Policy, 1991 has, among other things, globalized the
Indian economy. There has been a growing tendency among business firms to extend
their sales or manufacturing to new markets aboard. The rate of globalization in the
past few years in India has been nothing short of phenomenal.
4. Organizational Restructuring:
Organizational restructuring is used to make the organization competitive.
From this point of view, mergers and acquisitions of firms have become common forms
of restructuring to ensure organizational competitiveness. The mega-mergers in the
banking, telecommunications and petroleum companies have been very visible in our
country. Downsizing is yet another form of organizational restructuring.
5. Changing Nature of Work:

Along with changes in technology and globalization, the nature of jobs and
work has also changed. For example, technological changes like introduction of fax
machines, information technology, and personal computers have allowed companies to
relocate operations to locations with lower wages. There is also a trend toward
increased use of temporary or part-time workers in organizations.
Challenges of HRM:
HRM can be a challenge for small businesses especially, which typically don’t
have an HR department to rely on. They may be limited to one HR person, or this
responsibility may still belong to the CEO. Regardless, small business owners need to
understand the challenges facing them so they’re prepared to tackle HR issues as their
company, and workforce, grows.

Here are 10 of today’s most common human resource challenges along

with solutions you can quickly implement in your business.
1 Compliance with Laws and Regulation:
Keeping up with changing employment laws is a struggle for business

owners. Many choose to ignore employment laws, believing they don’t apply to their
business. But doing so could mean audits, lawsuits, and possibly even the demise of
your company.
2 Management Changes
As a business grows, its strategies, structure, and internal processes grow

with it. Some employees have a hard time coping with these changes. A lot of
companies experience decreased productivity and morale during periods of change.
3 Leadership Development
A recent study showed more than a third of companies are doing an average
job, at best, at implementing leadership development programs. Thirty-six percent of
companies surveyed in Brandon Hall Group’s State of Leadership Development Study
admitted that their leadership development practices are below average.
4 Workforce Training and Development
Investing in the training and development of lower-level employees is

another common HR problem. Some businesses have trouble finding the resources to
do so. Employees on the front lines are some of your hardest workers, and may not
have the time to take a training course.
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5 Adapting to Innovation
Technology is constantly changing. Businesses must be quick to adapt, or

risk being left in the dust by their competitors. The challenge for small business owners
is getting employees to embrace innovation and learn new technology.
6 Compensation
Many companies are struggling with how best to structure employee

compensation. Small businesses have to compete not only with businesses of a similar
size, but also with corporations with big payroll budgets. Plus, you have to factor in the
cost of benefits, training, taxes, and other expenses, which can range from 1.5 to 3
times the employee’s salary.
7 Understanding Benefits Packages
The Affordable Care Act has been a pain point for many small businesses
in the past few years. Rising healthcare costs mean companies must either pass these
costs on to employees, or take a hit to their bottom line. Since good benefits packages
can be a deciding factor for potential hires, understanding them is key.
8 Recruiting Talented Employees
Attracting talent is a huge investment of time and money. It’s difficult for
entrepreneurs to balance between keeping a business running, and hiring the right
people at the right time. In addition, it’s impossible to know whether a candidate will
actually be a good fit until they’ve worked for you for a period of time.
9 Retaining Talented Employees
Competition for talented employees is fierce. Startups and small companies

don’t have big budgets for retirement plans, expensive insurance plans, and other

costly items that their larger competitors do—at least, not yet. Employee turnover is
expensive and can negatively impact business growth.
10 Workplace Diversity
Multiple generations Ethnic and cultural differences. These are just a few of
the many factors that make workplace diversity a continual challenge for small
businesses. The risk of lawsuits for failing to protect employees from harassment is
real.
Ethical aspects of HRM:
This article throws light on the seven major issues faced by human resource.
(1) Employment Issue
(2) Cash and Incentive Plan
(3) Employees Discriminations
(4) Performance Appraisal,
(5) Privacy,
(6) Safety and Health,
(7) Restructuring and layoffs
1. Employment Issues:
HR professionals are likely to face maximum ethical dilemmas in the areas
of hiring of employees.
Major challenges in this area are:
a. Pressure to hire a friend or relative of a highly placed executive.
b. Faked credentials submitted by a job applicant.

c. Discovery that an employee who has been with the organization for some time, is
skilled and has established a successful record, had lied about his educational
credentials.
2. Cash and Incentive Plans:

Cash and incentive plans include issues like basic salaries, annual
increments or incentives, executive perquisites and long term incentive plans:
1. Basic Salaries
2. Executive Perquisites
3. Employees Discriminations:
A framework of laws and regulations has been evolved to avoid the
practices of treatment of employees on the basis of their caste, sex, religion, disability,
age etc. No organization can openly practice any discriminatory policies, with regard to
selection, training, development, appraisal etc. A demanding ethical challenge arises
when there is pressure on the HR manager to protect the firm or an individual at the
expense of someone belonging to the group which is being discriminated against.
4. Performance Appraisal:
Ethics should be the basis of performance evaluation. Highly ethical
performance appraisal demands that there should be an honest assessment of the
performance and steps should be taken to improve the effectiveness of employees.
However, HR managers, sometimes, face the dilemma of assigning higher rates to
employees who do not deserve them; based on some unrelated factors e.g. Closeness
to the top management. Some employees are, however, given low rates, despite their
excellent performance on the basis of factor like caste, religion or not being loyal to the
appraiser.

5. Privacy:
The private life of an employee which is not affecting his professional life
should be free from intrusive and unwarranted actions.
HR managers face three dilemmas in this aspect:
(i) The first dilemma relates to information technology. A firm’s need for
information particularly about employees while on job may be at odds with the
employee’s privacy. Close circuit cameras, tapping the phones, reading the computer
files of employees etc. breach the privacy of employees.
(ii) The second ethical dilemma relates to the AIDS testing. AIDS has become
a public health problem. HR managers are faced with two issues: Whether all the new
employees should be subject to AIDS test and what treatment should be melted out to
an employee who is affected with the disease. It is however generally understood that
since AIDS cannot be contracted by casual and normal workplace contract, employees
with this illness should not be discriminated against and they should be allowed to
perform jobs for which they are qualified.
(iii) The third ethical dilemma relates to Whistle Blowing. Whistle blowing
refers to a public disclosure by former or current employees of any illegal, immoral or
illegitimate practices involving their employers. Generally, employees are not expected
to speak against their employers, because their first loyalty in towards the organization
for which they work. However, if the situation is such that some act of the organization
can cause considerable harm to the society, it may become obligatory to blow the
Whistle. The HR manager is in the dilemma how to solve this issue between the
opponents and defenders of whistle blowing.
6. Safety and Health:

Industrial work is often hazardous to the safety and health of the
employees. Legislations have been created making it mandatory on the organizations

and managers to compensate the victims of occupational hazards. Ethical dilemmas of

HR managers arise when the justice is denied to the victims by the organization.
7. Restructuring and layoffs:

Restructuring of the organizations often result in layoffs and
retrenchments. This is not unethical, if it is conducted in an atmosphere of fairness and
equity and with the interests of the affected employees in mind. If the restructuring
company requires closing of the plant, the process by which the plant is chosen, how
the news is to be communicated and the time frame for completing the layoffs is
ethically important.

Unit-2: HR Planning; Concepts; Factors influencing; HR Planning; HR

Planning Process; job analysis; Recruitment and selection; Tests and
interview techniques
IMP Questions
1. Factors influencing; HR Planning

2. HR Planning Process
3. job analysis
4. Recruitment and selection
HR Planning;
Meaning and Nature of Human Resource Planning:

Human resource planning determines the movement of the organization
from the present human resource position to the anticipated one. It is a process which
determines and assures the required number and kind of people at proper time and at
proper places to accomplish the organizational objectives.
According to Dale. S. Beach human resource planning is, “a process of

determining and assuring that the organization will have an adequate number of
qualified persons, available at proper times, performing jobs which meet the needs of
the enterprise and which provide satisfaction for the individuals involved.”
The human resource planning is a continuous process of searching the right

kind and number of people at right time and at right places, to perform in the
organization bringing benefits to the enterprise and individuals. The human resource
planning should be in tune with the overall planning of the organization.
Concept:
Human resources are the most important assets of any organization. The
success or failure, growth and development of the organization depend on human

resources. The organization must therefore acquire knowledgeable, skillful, trained,

talented and potential human resources to attain and accomplish the organizational
objectives. A great care needs to be taken in their acquisition. The human resource
planning provides necessary direction in this regard to the human resource
management in the light of overall organizational objectives.
The organizational objectives determine the required number, type and kind of human
resources and for their acquisition the process of human resource planning begins. The
human resource planning bridges the gap between the organizational plans and human
resource management. It is a conscious determination of direction and composition of
human resources of the organization. The Human resource planning provides the
necessary groundwork and set the stage ready for manpower procurement to fill up
various positions in the organization.
Factors influencing HR:
This article throws light upon the six main internal factors affecting human
resources of an organization. The factors are;
1. Mission
2. Policies
3. Organizational Culture
4. Organizational Conflicts
5. Organizational Structure
6. HR Systems.
1. Mission:
Mission is the very purpose and justification for the existence of a firm. An
organization’s mission statement tells- what it is, why it exists and the unique
contribution it can make. At various levels, people must carry out assigned tasks
keeping the overall mission of the firm in mind. The HRM functions are also affected by
the mission of the organization.

2. Policies:
Policies are the guide maps in the organization. Policies tell people what
they may or may not do. These direct the manner in which the objectives of the
organization are to be achieved. Objectives show the destination but the route towards
that destination is shown by policies.
3. Organizational Culture:
Organizational culture is the sum total of shared values, beliefs and habits
within an organization. It depicts the personality of the organization. The HR managers
have to adjust positively to the culture of the organization.
4. Organizational Conflicts:
There is often conflict between organizational culture and employee’s
attitudes.
5. Organizational Structure:
Organizational structures are suitable to companies that are labor oriented.
Here the authority is vested at the top and the pyramid shows the hierarchy of
positions. Flat organizations are suitable to technology oriented companies.
6. HR Systems:
The survival, development and performance of an organization depends
heavily upon the quality of its personnel.
External Factors that Affect Human Resource Management:
Government Regulations – With the introduction of new workplace compliance

standards your human resources department is constantly under pressure to stay within
the law. These types of regulations influence every process of the HR department,
including hiring, training, compensation, termination, and much more. Without adhering

to such regulations a company can be fined extensively which if it was bad enough
could cause the company to shut down.
Economic Conditions – One of the biggest external influences is the shape of the
current economy. Not only does it affect the talent pool, but it might affect your ability
to hire anyone at all. One of the biggest ways to prepare against economic conditions is
to not only know what’s happening in the world around you, but also create a plan for
when there is an economic downturn. All companies can make due in a bad economy if
they have a rainy day fund or plan to combat the harsh environment.
Technological Advancements – This is considered an external influence because

when new technologies are introduced the HR department can start looking at how to
downsize and look for ways to save money. A job that used to take 2-4 people could be
cut to one done by a single person. Technology is revolutionizing the way we do
business and not just from a consumer standpoint, but from an internal cost-savings
way.
Workforce Demographics – As an older generation retires and a new generation

enters the workforce the human resources department must look for ways to attract
this new set of candidates. They must hire in a different way and offer packages that
work for this younger generation. At the same time, they must offer a work
environment contusive to how this generation works.
HR Planning Process:
The Human Resource Planning is a process of forecasting the organization’s

demand for and supply of manpower needs in the near future.

1. Determining the Objectives of Human Resource Planning: The foremost

step in every process is the determination of the objectives for which the process is to
be carried on. The objective for which the manpower planning is to be done should be
defined precisely, so as to ensure that a right number of people for the right kind of job
are selected.
The objectives can vary across the several departments in the organization
such as the personnel demand may differ in marketing, finance, production, HR
department, based on their roles or functions.
2. Analyzing Current Manpower Inventory: The next step is to analyze the

current manpower supply in the organization through the stored information about the
employees in terms of their experience, proficiency, skills, etc. required to perform a
particular job.
Also, the future vacancies can be estimated, so as to plan for the manpower
from both the internal (within the current employees) and the external (hiring
candidates from outside) sources. Thus, it is to be ensured that reservoir of talent is
maintained to meet any vacancy arising in the near future.

3. Forecasting Demand and Supply of Human Resources: Once the inventory

of talented manpower is maintained; the next step is to match the demand for the
manpower arising in the future with the supply or available resources with the
organization.
Here, the required skills of personnel for a particular job are matched with
the job description and specification.
4. Analyzing the Manpower Gaps: After forecasting the demand and supply, the
manpower gaps can be easily evaluated. In case the demand is more than the supply of
human resources that means there is a deficit, and thus, new candidates are to be
hired.
Whereas, if the Demand is less than supply, there arises a surplus in the
human resources, and hence, the employees have to be removed either in the form of
termination, retirement, layoff, transfer, etc.
5. Employment Plan Action Plan: Once the manpower gaps are evaluated, the
action plan is to be formulated accordingly. In a case of a deficit, the firm may go either
for recruitment, training, interdepartmental transfer plans whereas in the case of a
surplus, the voluntary retirement schemes, redeployment, transfer, layoff, could be
followed.
6. Training and Development: The training is not only for the new joiners but
also for the existing employees who are required to update their skills from time to
time.
After the employment plan, the training programmers are conducted to equip
the new employees as well as the old ones with the requisite skills to be performed on
a particular job.

7. Appraisal of Manpower Planning: Finally, the effectiveness of the manpower

planning process is to be evaluated. Here the human resource plan is compared with its
actual implementation to ensure the availability of a number of employees for several
jobs.
Job analysis
Job analysis contains a simple term called "analysis", which means detailed study
or examination of something (job) in order to understand more about it (job). therefore
job analysis is to understand more about a specific job in order to optimize it. Job
analysis is a systematic process of collecting complete information pertaining to a job.
Job analysis is done by job analyst who is an officer have been trained for Job
analysis is a procedure through which you determine the duties and responsibilities,
nature of the jobs and finally to decide qualifications, skills and knowledge to be
required for an employee to perform particular job. Job analysis helps to understand
what tasks are important and how they are carried on. Job analysis forms basis for later
HR activities such as developing effective training program, selection of employees,
setting up of performance standards and assessment of employees (performance
appraisal) and employee remuneration system or compensation plan.
Job Analysis plays an important role in recruitment and selection, job

evaluation, job designing, deciding compensation and benefits packages, performance
appraisal, analyzing training and development needs, assessing the worth of a job and
increasing personnel as well as organizational productivity.

 Recruitment and Selection: Job Analysis helps in determining what kind of

person is required to perform a particular job. It points out the educational
qualifications, level of experience and technical, physical, emotional and personal
skills required to carry out a job in desired fashion. The objective is to fit a right
person at a right place.
 Performance Analysis: Job analysis is done to check if goals and objectives of
a particular job are met or not. It helps in deciding the performance standards,
evaluation criteria and individual’s output. On this basis, the overall performance
of an employee is measured and he or she is appraised accordingly.
 Training and Development: Job Analysis can be used to assess the training
and development needs of employees. The difference between the expected and
actual output determines the level of training that need to be imparted to
employees. It also helps in deciding the training content, tools and equipments
to be used to conduct training and methods of training.
 Compensation Management: Of course, job analysis plays a vital role in
deciding the pay packages and extra perks and benefits and fixed and variable

incentives of employees. After all, the pay package depends on the position, job
title and duties and responsibilities involved in a job. The process guides HR
managers in deciding the worth of an employee for a particular job opening.
 Job designing and Redesigning: The main purpose of job analysis is to
streamline the human efforts and get the best possible output. It helps in
designing, redesigning, enriching, evaluating and also cutting back and adding
the extra responsibilities in a particular job. This is done to enhance the
employee satisfaction while increasing the human output.
Therefore, job analysis is one of the most important functions of

an HR manager or department. This helps in fitting the right kind of talent at the right
place and at the right time.
Recruitment and selection
The recruitment and selection (also recruitment and staffing) belongs to

value added HR Processes. The recruitment is about the ability of the organization to
source new employees, keep the organizations operating and improving the quality of
the human capital employed in the company. The quality of the recruitment process is
the main driver for the satisfaction of managers with the services provided by Human
Resources.
The main goal of the recruitment and selection is about finding the best
recruitment sources, hiring the best talents from the job market and keeping the
organization competitive on the job market. The recruitment and selection process is
about managing high volumes of job resumes and the ability to choose the right
candidates and pushing them quickly through the organization. The recruitment process
usually needs a strong support by the dedicated recruitment software solution. It can
be provided externally, or the software can be run internally. Many vendors provide
the recruitment software solution, but the organization has to choose carefully the
right solution to meet its needs.

The recruitment process needs a complete process description. It is not possible to

solve the job candidates individually. HR Recruiters have to follow the process, and they
have to keep the candidates flowing to right managers to achieve the consensus, and
decision about the hire quickly. The described process helps to set and achieve the right
limits. The performance of the recruitment process has to be measured, analyzed, and
new, innovative recruitment solutions have to be implemented.
The recruitment is the expensive HR Process, and it eats a large proportion of the HR
budget. The recruitment is about time to hire and the cost of hiring in most
organizations. The HR is responsible for the proper management of the process to
improve the performance of the recruitment process to keep the managers satisfied.
The competitive HR management always starts with the competitive recruitment

process. The organization builds the competitive advantage with its employees. The
recruitment process has to determine the best sources on the job market. The HR
Recruiters have to utilize the recruitment sources and managers have to make the right
and quick hiring decisions. This is the basic set-up of the competitive recruitment
process.

Main Recruitment and Staffing Areas
Recruitment
 Recruitment Process Description

 Internal Recruitment
 External Recruitment
 Recruitment Sources Management
 Recruitment Agencies Management
 Recruitment Outsourcing
 Recruitment Software
Staffing
 General Staffing Rules and Principles

 Job Design and Job Descriptions
 Organizational Design and Organizational Planning
 Headcount Planning and Headcount Management
 Job Vacancies Management
 Talent Gap Analysis
Recruitment and Selection Content
 Recruitment Definition
 Recruitment and Selection Process Description
 Recruitment Strategy
 Recruitment Process Outsourcing
 Recruitment Sources
 Background Check
 Recruitment Process Flowchart
 Recruitment Training

 Recruitment Planning
 Online Recruitment
 Employer Branding
 Executive Recruitment
 Induction Program
 Internal and External Recruitment
 Attracting Job Candidate
 Managing Recruitment Agencies
 Outplacement
 Social Media Recruitment
Tests and interview techniques
For many job seekers, an invitation to interview is a welcome chance to meet with a
prospective employer. Nevertheless, for recruiters and hiring managers, it is often a
difficult decision deciding which candidates to interview. To make the hiring process
productive, the human resources department should prepare a selection procedure that
is fruitful for both the company and candidates.
1. Determine the selection process that works best for your business. Establish
minimum criteria for available positions, and adhere to your guidelines for selecting
qualified applicants. Prepare an interview process that you will use for all candidates.
Human resources interviewing techniques vary from one employer to another.
However, some practices are common among interviewers and hiring managers.
2. Develop specific interview criteria for all positions within the company. You may want
to have administrative level or support candidates interview once with a human
resources recruiter and once with the department hiring manager. For supervisory
positions, the candidate may be required to interview with the recruiter, the department
manager and even meet briefly with employees in the department. Panel interviews

consisting of human resources staff and departmental peers may be a suitable interview
technique for manager or director-level candidates.
3. Assist the candidate in preparing for the interview. Confirm the interview date, time
and location. In addition, provide her with information about the interview process, the
number of interviews necessary for consideration and the names and title of the people
with whom she will be interviewing. This gives the candidate a sketch of what to
anticipate, and may even provide her with enough information to conduct background
research on the interviewers.
4. Provide interviewers with copies of the candidate's resume and test scores, if
applicable. Ensure they receive this information early enough to complete a thorough
review of the candidate's qualifications. If your human resources department permits
interviewers to develop their own questions, sufficient advance notice gives the hiring
manager sufficient time to craft relevant questions for the candidate.
5. Assemble notes from all the interviewers--recruiter questions, as well as questions

and notes from department managers, peers and employees who met with the
candidate. Don't store these notes in the candidate's file because they may contain
statements and assessments that are personal opinions, and are not germane to the
selection process.
6. Confer with the interviewers to get their impressions on whom they believe is best
suited for the vacancy. Since most interviews involve more than one interviewer, a
discussion to reach consensus is the ideal way to make a hiring decision. If you cannot
reach a consensus, consider a follow-up interview with candidates on your short list.

Unit-3 Training and Development-Need, Process, Methods and Techniques,

Evaluation, Management development; Evaluating Employee Performance;
Career development and counseling.
IMP Questions
1. Training and Development-Need, Process
2. Methods and Techniques
3. Evaluating Employee Performance
4. Career development and counseling.
Training and development-Need, Process
TRAINING & DEVELOPMENT. “Training & Development is any attempt

to improve current or future employee performance by increasing an employee's ability
to perform through learning, usually by changing the employee's attitude or increasing
his or her skills and knowledge.”
Today's work environment requires employees to be skilled in performing

complex tasks in an efficient, cost-effective, and safe manner. Training (a performance
improvement tool) is needed when employees are not performing up to a certain
standard or at an expected level of performance. The difference between actual the
actual level of job performance and the expected level of job performance indicates a
need for training. The identification of training needs is the first step in a uniform
method of instructional design.
A successful training needs analysis will identify those who need training and
what kind of training is needed. It is counter-productive to offer training to individuals
who do not need it or to offer the wrong kind of training. A Training Needs Analysis
helps to put the training resources to good use.

Types of Needs Analyses
Many needs assessments are available for use in different employment

contexts. Sources that can help you determine which needs analysis is appropriate for
your situation are described below.
 Organizational Analysis. An analysis of the business needs or other reasons

the training is desired. An analysis of the organization's strategies, goals, and
objectives. What is the organization overall trying to accomplish? The important
questions being answered by this analysis are who decided that training should
be conducted, why a training program is seen as the recommended solution to a
business problem, what the history of the organization has been with regard to
employee training and other management interventions.
 Person Analysis. Analysis dealing with potential participants and instructors
involved in the process. The important questions being answered by this analysis
are who will receive the training and their level of existing knowledge on the
subject, what is their learning style, and who will conduct the training. Do the
employees have required skills? Are there changes to policies, procedures,
software, or equipment that require or necessitate training?
 Work analysis / Task Analysis. Analysis of the tasks being performed. This is
an analysis of the job and the requirements for performing the work. Also known
as a task analysis or job analysis, this analysis seeks to specify the main duties
and skill level required. This helps ensure that the training which is developed
will include relevant links to the content of the job.
 Performance Analysis. Are the employees performing up to the established
standard? If performance is below expectations, can training help to improve this
performance? Is there a Performance Gap?
 Content Analysis. Analysis of documents, laws, procedures used on the job.
This analysis answers questions about what knowledge or information is used on
this job. This information comes from manuals, documents, or regulations. It is

important that the content of the training does not conflict or contradict job
requirements. An experienced worker can assist (as a subject matter expert) in
determining the appropriate content.
 Training Suitability Analysis. Analysis of whether training is the desired
solution. Training is one of several solutions to employment problems. However,
it may not always be the best solution. It is important to determine if training will
be effective in its usage.
 Cost-Benefit Analysis. Analysis of the return on investment (ROI) of training.
Effective training results in a return of value to the organization that is greater
than the initial investment to produce or administer the training.
Process
In the present day knowledge based environment, things are changing at a very
fast pace. Even to maintain its position, an organization has to do a lot as well as act
very fast. Organization achieves strategic advantages only due to its core competencies
and core competence is developed only by the employees of the organization. Hence
for achieving a level of excellence, organizations are to invest in updating the skills of
its employees. This is done through training and development process. The process of
training and development is shown in Fig 1.
Fig 1 Process of training and development

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

performance of the individuals and groups of employees in the organizational settings.
It is an organized activity for increasing the knowledge and skills of the employees. It
involves systematic procedures for transferring technical and management skills to the
employees. Training process is an important activity both for the organization as well as
for the employees. Skills acquired by the employees through training are assets for the
organization. The enhancement of the skills also provides the employees job security as
well as opportunities for career advancement.
In the modern industrial environment, where technological development is
outpacing all other things, there is a continuous need for systematic training and
development of the employees. Through ‘training’ employees are taught specific skills
while through ‘development’ employee’s personality and management skills are
enhanced. The training in an organization is necessary since there are:
 Advancement in technologies
 Demanding customers
 Thrusts for boosting productivity
 Requirements for improving the motivation levels
 Needs for improving the quality of output
 Necessities for effectiveness in management.
Training is a continuous process and it should not stop at any stage. The management
should ensure that a training programme should attempt to bring about positive
changes in the knowledge, skills, and attitudes of the employees. The objectives of a
training programme are as follows.
 To prevent obsolescence in the organization
 To improve employees knowledge for doing specific job
 To impart skills to the employees systematically so that they learn the same
quickly

 To impart multi skills in the employees so that they become capable of handling
different jobs
 To bring about the change in attitude of the employees towards organization and
the fellow employees
 To improve the overall performance of the organization by inculcating
technological discipline in the employees
 To train the employees in efficient handling of materials, plant and equipment
 To educate employees towards conservation of resources, pollution prevention
and avoidance of wastages
 To provide safety as well as occupational health training to the employees for
man and equipment health and safety
 To develop management skills in the employees so that they are prepared to
take up higher responsibilities and position
Benefits of training
Training of employees is costly but the ultimate cost is much more if an organization
ignores to train its employees. Hence investment in training is necessary since the
training brings a number of benefits to the organization as well as to the employees.
The benefits to the organizations are listed below.
 Faster learning of new skills
 Increased productivity
 Standardization of procedures
 Reduced need of supervision
 Increased motivation and morale of the employees
 Economy of operations
 Managerial development
The benefits to the employees are as follows.
 Increase of the confidence level
 Learning of new skills
 Helps in career advancement and higher earnings.

 Developing resilience to change

 Improving safety at the workplace
Training Methods/ Techniques
Some of the useful methods and techniques you can use for training
employees are:
1. Vestibule Training
2. Role Playing
3. Lecture Method
4. Conference or Group Discussions
5. Programmed Instruction (PI)
6. Audio-Visuals
7. On-the-Job Training
8. Simulation.
These different methods can be broadly classified as:

(i) On-The-Job Training:
The training methods that are applied in the work place can be referred to as
on-the- job training.
(ii) Off-The-Job Training:
The training methods that are used away from the work place can be termed as off-
the-job training.

Some of the training methods are new whereas others are improvement over the
traditional methods. These training techniques represent the medium of imparting skills
and knowledge to employees.
The different methods of training are as follows:

1. Vestibule Training:
Here training takes place away from the work place but uses all the
equipment’s, materials and methods that resembles the actually ones used in job
performance. In this method the actual work conditions are simulated in classroom. A
special space is set aside from the actual production area and is equipped with
furnishings similar to the actual work place.
2. Role Playing:
It is defined as a method of human interaction that involves realistic
behaviour in imaginary situation. This method involves creation of realistic situation in
which the participants assumes and plays the role of a specific personality in the
situation.
3. Lecture Method:
It is a direct method of instruction that involves a verbal presentation of
information by an instructor to a large audience. The instructor organizes the material
and gives it to a group of trainees in the form of talk. By motivating and creating
interest among the trainees this method can be made effective.
4. Conference or Group Discussions:

In this method of training, a group of people freely discuss and pose ideas,
share and examine the information or idea, test and evaluate them and finally draws
conclusions on various aspects that contributes towards the improvement of job
performance.

5. Programmed Instruction (PI):

In this method of training there is no intervention of a trainer. The subject-
matter to be learned is presented in a series of planned sequential units. After reading
each part, the learner must answer a question about it for which feed back in the form
of right answers is provided.
6. Audio-Visuals:
Audio-visual training methods are used widely in these days. This method
makes use of slides, overhead projectors, television, video-tapes, audio-tapes and films.
The main advantage of this method is that the quality of the presentation will remain
equal for all training groups.
8. Simulation:
In this method of training the equipment or techniques of the actual job is
duplicated to create a realistic decision-making environment for the trainees. The best
example of this is the aircraft simulation. The pilots undergo this training. The aircraft
contacts are simulated so that the pilots under training feel as though they are actually
flying the aircraft.
Training Evaluation
Evaluation involves the assessment of the effectiveness of the training

programs. This assessment is done by collecting data on whether the participants were
satisfied with the deliverables of the training program, whether they learned something
from the training and are able to apply those skills at their workplace. There are
different tools for assessment of a training program depending upon the kind of training
conducted.
Since organizations spend a large amount of money, it is therefore

important for them to understand the usefulness of the same. For example, if a certain
technical training was conducted, the organization would be interested in knowing

whether the new skills are being put to use at the workplace or in other words whether
the effectiveness of the worker is enhanced. Similarly in case of behaviour training, the
same would be evaluated on whether there is change in the behaviour, attitude and
learning ability of the participants.
Benefits of Training Evaluation
Evaluation acts as a check to ensure that the training is able to fill the
competency gaps within the organization in a cost effective way. This is specially very
important in wake of the fact the organizations are trying to cut costs and increase
globally. Some of the benefits of the training evaluation are as under:
 Evaluation ensures accountability - Training evaluation ensures that training

programs comply with the competency gaps and that the deliverables are not
compromised upon.
 Check the Cost - Evaluation ensures that the training programs are effective in
improving the work quality, employee behaviour, attitude and development of
new skills within the employee within a certain budget. Since globally companies
are trying to cut their costs without compromising upon the quality, evaluation
just aims at achieving the same with training.
 Feedback to the Trainer / Training - Evaluation also acts as a feedback to
the trainer or the facilitator and the entire training process. Since evaluation
accesses individuals at the level of their work, it gets easier to understand the
loopholes of the training and the changes required in the training methodology.
Not many organizations believe in the process of evaluation or at least

do not have an evaluation system in place. Many organizations conduct training
programs year after year only as a matter of faith and not many have a firm evaluation
mechanism in place. Organizations like IBM, Motorola only, it was found out, have a
firm evaluation mechanism in place.

Management Development
Management development is the overall concept that describes the many

ways in which organizations help employees develop their personal and organizational
skills, either as managers in a management job or with an eventual management job in
mind.
After reading this article you will learn about Management Development:-
1. Meaning of Management Development 2. Importance of Management Development
3. Nature 4. Aims 5. Contents 6. Facilities.
1. Meaning of Management Development:

Since 1950, Management or Executive Development has been the most
prominent area of personnel or human resources management. It is also called
management revolution.
Management development is a systematic process of management training

and growth by which individuals (aspiring to rise on the ladder of management) gain
and apply knowledge, skills, insights, and attitudes to manage managers, workers and
work organizations effectively.
2. Importance of Management Development:

Executive talent is the most important asset of an organization. It is not
shown on the corporate balance sheet, but it influences appreciably the growth,
progress, profits and the share values, than any other corporate assets.
3. Nature of Management Development:

Management or executive development is an organized and planned process and
programme of training and growth by which individual manager or executive at each
level of management hierarchy gains and applies knowledge, skills, insights and
attitudes to manage workers and the work organizations effectively.

4 Aims of Planned Management Development:

To ensure that the company is staffed both now and in the future with a
sufficient number of managers with necessary skills, experience and ability to secure
continued” growth and profitability the right man/woman at the right time in the right
place. Thus, we will have a steady source of competent people at all levels to meet
organizational needs at all lines.
5. Contents of Management Development:

There are three areas in which we can have management development training:
1. Knowledge,
2. Skills and
3. Attitudes, to become competent managers.
6. Facilities of Management Development:

We can have the following methods of management or executives development:
1. External:
(a) Management education at University and other institutions of higher learning
offering specialized courses for interested executives, e.g., marketing management,
export management, financial management, personnel management and so on.
2. Internal:
(a) Art of delegation,
(b) Job rotation,
(c) Promotions and transfers,
(d) Understudy method,

EVALUATING EMPLOYEE PERFORMANCE (PERFORMANCE APPRAISAL) :

Performance Appraisal is the systematic evaluation of the performance of employees
and to understand the abilities of a person for further growth and development.
Performance appraisal is generally done in systematic ways which are as follows:
1. The supervisors measure the pay of employees and compare it with targets and
plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance.
Objectives of Performance Appraisal
Performance Appraisal can be done with following objectives in mind:
1. To maintain records in order to determine compensation packages, wage

structure, salaries raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on
right job.
3. To maintain and assess the potential present in a person for further growth and
development.
4. To provide a feedback to employees regarding their performance and related
status.
5. To provide a feedback to employees regarding their performance and related
status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programmes.

Advantages of Performance Appraisal
It is said that performance appraisal is an investment for the company which can be
justified by following advantages:
1. Promotion: Performance Appraisal helps the supervisors to chalk out the

promotion programmers for efficient employees. In this regards, inefficient
workers can be dismissed or demoted in case.
2. Compensation: Performance Appraisal helps in chalking out compensation
packages for employees. Merit rating is possible through performance appraisal.
Performance Appraisal tries to give worth to a performance. Compensation
packages which include bonus, high salary rates, extra benefits, allowances and
pre-requisites are dependent on performance appraisal. The criteria should be
merit rather than seniority.
3. Employees Development: The systematic procedure of performance appraisal
helps the supervisors to frame training policies and programmers. It helps to
analyze strengths and weaknesses of employees so that new jobs can be
designed for efficient employees. It also helps in framing future development
programmers.
4. Selection Validation: Performance Appraisal helps the supervisors to
understand the validity and importance of the selection procedure. The
supervisors come to know the validity and thereby the strengths and weaknesses
of selection procedure. Future changes in selection methods can be made in this
regard.
5. Communication: For an organization, effective communication between
employees and employers is very important. Through performance appraisal,
communication can be sought for in the following ways:
a. Through performance appraisal, the employers can understand and accept
skills of subordinates.

b. The subordinates can also understand and create a trust and confidence
in superiors.
c. It also helps in maintaining cordial and congenial labour management
relationship.
d. It develops the spirit of work and boosts the morale of employees.
All the above factors ensure effective communication.
6. Motivation: Performance appraisal serves as a motivation tool. Through

evaluating performance of employees, a person’s efficiency can be determined if
the targets are achieved. This very well motivates a person for better job and
helps him to improve his performance in the future.
Career Development and Counseling :
Career Development is defined as the efforts that are made by the

organization to equip its employees with the skills, knowledge & experience that help
them to perform the duties of their current as well as future jobs effectively. The
organization develops and implements certain policies including counseling the
employees, promotion & opportunities to attain excellence that facilitate the employee
to prepare their career. Development of career actually promotes the knowledge, skills,
and experiences along with the behavior modification & techniques of refinement that
promotes the addition of value for the employees by improving their work.
In career development, Human Resource Management has the vital

importance that centers the entire efforts of the organization. It is relatively different
from the training in such a way that it has wide scope, longer frame of time & broader
focus. Moreover the purpose of training is limited to the performance improvements but
the goal of development is to make employees more capable and enriched.

In modern days the careers development not only fulfills the needs of the
organization but also the needs of the employees. The career development is looked as
essential by the organizations due to the following reasons.
 It is a method of prevention from job burnout

 The career information is provided to the employees
 The quality of work life is improved
 The affirmative action goals are met
In short the careers development becomes essential for the organizations

to be sustained in the competitive global environment.
Career Development Methods :
There are many methods that are used extensively for the purpose of careers
development. But mostly these are used in combination of more than one method.
Following are the commonly used methods of career development.
1. Discussion with Knowledgeable Individuals
In this method the subordinate is combined with his superior to agree on

the best career development activities. In certain cases guidance counselors &
psychologists provide this service. In case of academic institutions like colleges &
universities, specialized career planning & development guidance is provided to the
students. Professors are usually responsible for such guidance.
2. Company Material
There are certain organizations that have developed certain specific

material for the development of its employees. The developed material is in accordance
with the needs of the organizations. Moreover the job descriptions can be considered as

good material that show the employees to decide either their strengths & weakness
match with the requirement of any offering job within their own organization.
3. Performance Appraisal System
The performance appraisal system in the organizations can also be

regarded as good source of career development. When the strengths & weaknesses of
employees are discussed with their relative supervisors than the needs for the
development of employees emerged clearly. If there is not possibility to overcome the
weakness of certain employee, then there can be a solution of alternative career path
for that employee.
4. Workshops
Certain organizations offer the workshops for their employees that last for
two or more days so that the employees can be able to develop their career within the
organization. The career objectives are described & match by the employees with the
needs of the organizations. In other situations, the workshops are presented at the
community level so that the employees may be sent or they may start the visit
themselves.
5. Personal Development Plans (PDP)
Personal development. Such plan consists of summary of needs of personal

development of employees along with the specified action list for the achievement. So
the management encourages the employees to analyze their weakness & strengths.
Counseling:
Emotions are part of the nature of human beings and emotional upsets are part of their
life. It is sometimes more disastrous to suppress emotions. The emotional problems
affect the interest of the employees himself and the organization in which he is working

for. The problems may reduce their productivity, morale and increase absenteeism.
Hence the managers should take steps to maintain a reasonable emotional balance of
their employees and channelize their emotions on the constructive lines. The instrument
with which the managers can achieve such balance is called counseling.
Counseling is a method of understanding and helping people who have technical,

personal and emotional or adjustment problems that usually has emotional contents
that an employee with the objective of reducing it so that performance is maintained at
adequate level or even improved upon.
Features of counseling:
1.Counseling is interviewing the person being counselled and helping to solve his
problems through human approach of sharing and guidance.
2. Counseling is sitting down in private setting for an open discussion with an

employee. Sometimes it is to pay a sincere compliment, sometimes it is to solve a
problem that is hurting productivity/effectiveness, sometimes it is because an employee
violated your discipline line and you need to talk about improvement in his behavior.
3. It is communicating one to one, in private. It is interviewing- it's a two way dialogue

and not one way sermonizing or advising.
4. It is encouraging the other person to to talk about himself so that the problem and
it's reasons emerge clearly and solutions can be worked out.
5.In an organization, counseling can be done by the team leader, supervisor or

manager or one can seek the expertise and assistance of an in-house or external
professional counselor.

Unit-4 Compensation –Concepts and Principles; Influencing Factors; Current

Trends in Compensation – Methods of payment –Incentives and Rewards.
IMP Questions
1. Concepts and Principles; Influencing Factors
2. Methods of payment
3. Incentives and Rewards.
Compensation –Concepts and Principles
Compensation Concept in HRM. The literal meaning of compensation is to

counter–balance. In the case of human resource management, compensation is
referred to as money and other benefits received by an employee for providing services
to his employer.
The term compensation is used to indicate the employee’s gross earnings in the
form of financial rewards and benefits.
Compensation can also be defined as follows:

1. A system of rewards that can motivate the employees to perform.
2. A tool that is used to foster values and culture.
3. An instrument that enables an organization to achieve its objectives.
The management should ensure that compensation structure is designed after

taking into account certain factors such as qualification, experience, attitude and
prevailing rates in the markets. Compensation means the reward that is received by an
employee for the work performed in an organization. It is an important function of

human resource management. Employees may receive financial and non-financial

compensations for the work performed by them.
Principles :
Some Basic principles:
1. There general level of wages and salaries should be reasonably in line with that
prevailing in the market. The labor market criterion is most commonly used.
2. There should be definite plan to ensure that differences in pay for jobs are based
upon variations in job requirements, such as skill effort, responsibility or job or working
conditions, and mental and physical requirements.
3. The plan should carefully distinguish between jobs and employees. A job carries a
certain wage rate, and a person is assigned to fill it at that rate. Exceptions sometimes
occur in very high-level jobs in which job-holder may make the job large or small,
depending upon his ability and contributions.
4. Equal pay for equal work, i.e., if two jobs have equal difficulty requirements, the pay
should be the same, regardless of who fills them.
5. An equitable practice should be adopted for the recognition of individual differences

in ability and contribution.
6. There should be a clearly established procedure for hearing and adjusting wage
complains.
7. The wage should be sufficient to ensure for the worker and his family reasonable
standard of living.
8. Prompt and correct payments of the dues of the employees must be ensured and
arrears of payment should not accumulate.

Influencing factors :
1) Productivity of workers: to get the best results from the employees and to
increase the productivity compensation has to be productivity based.
2) Ability to pay: it depends upon the employer’s ability to pay wages to the workers.
This depends upon the profitability of the firm. If the firm is marginal and can’t afford to
pay higher than the competitors, then the employees will go to other firms while if the
company is successful then they can easily pay their employees as they wish.
3) Government: government has also fixed the rules for protecting the interest of the
employees. The organizations are liable to pay as per the government instructions.
Wages cannot be fixed below the level prescribed by the government.
4) Labor union: labor union also helps in paying better wages to the workers. Higher
wages have to be paid by the firm to its workers under the pressure of the trade
unions.
5) Cost of living: wages depend upon the cost of living if it is high wages will also
hike.
6) Demand and supply of labor: it is one of the important factors affecting wages. If
the demand of labor is more they will be paid high wages otherwise vice versa. If the
supply of the employees is more than they will be paid less and vice versa.
7) Prevailing wage rate: wages also depend upon the prevailing wage rate as the
organizations have to pay accordingly to keep the employees with them.

Current trends in Compensation
In the current context, different organizations are using different methods

and techniques in the determination of compensation. At one hand, compensation is
being strong factors of employee mobility and at the other hand, financial position of
the organization is being weak because of increasing competition and raising
compensation. To balance these issues, organizations are adopting different tests which
form the trends in compensation management. Globalization, diversity, increased level
of awareness and creation of unlimited opportunities has forced organization to
determine appropriate compensation. New trends are also emerging in compensation
management. Some of the important trends in compensation are as under:
1. Skill based payments
The trend of compensation determination based on skill rather than job

performance is increasing in these days. Skills required for the job performance are
given more importance by organization and is considered as a basis for compensation.
This is a most fair and justified compensation. Employees are motivated to acquire and
increase their skill because they are compensated as per their skills. This method
emphasizes on the range, depth and skill or capability application.
2. Broad banding:
In this method, employees are categorized into different group based

upon the nature of skill, qualification and responsibility while determine the
compensation. Minimum to maximum compensation is ascertained to each group and
accordingly employees are compensated. Generally, all employees are broadly
categorized into three groups professional, management and leadership. After
categorizing, minimum and maximum level of compensation will be assigned.

3. Comparable worth:
Under this method, jobs are evaluated and the relative worth of jobs is
compared to determine the compensation. Less contributing jobs receive lower
compensation and high contribution jobs receive higher level of compensation. For
example, women who perform jobs comparable to men get the same level of
compensation. Women nurse and male electrician who perform jobs of equal value get
identical compensation.
4. Variable pay plans:
The use of variable pay system is increasing. It is based on improving

production and sharing of prosperity. Different employees even being on the same level
get different level of compensation on the basis of their performance or productivity.
This means greater the profitability, greater will be the compensation to the
employees.
Methods of Wage Payments
Some of the systems of wage payments commonly used are:
1. Time Rate System
2. Piece Rate System
3. Combination of Time a Piece rate system
1. Time Rate System:

Time rate system is the simplest and oldest method of wage payment.
According to this system, the workers are paid in accordance with the time spent on the
job. The time may be on hourly, daily, weekly, fortnightly or monthly basis. The work or
production done by an employee is not taken into consideration.

For example,
If the worker is paid at the rate of Rs.20 per hour and he spends 50 hours during a
week, the weekly payment is:
Weekly wages = (Number of hours worked during the week) x (Rate per hours) = 50 x
20 = Rs.1000 per week.
Advantages:
a. This method of wage payment is very simple. The workers will not find any difficulty
in calculating the wages.
b. This method is acceptable to trade unions because it does not distinguish between
workers on the basis of their performance.
c. The quality of goods will be better as workers are assured of wages on time basis.
d. This system is good for the beginners because they may not be able to reach a
particular level of production in the beginning.
e. There will be less wastage, as workers will not be in a hurry to push through
production.
Disadvantages:
a. This method does not distinguish between efficient and inefficient workers. The
payment of wages is related to time and not output. Thus, the method gives no
incentive for producing more.
b. There will be wastage of time, as the workers are not following a target of
production.
c. Because wages are not related to output, employees find it difficult in determining
labour cost per unit.

d. Work needs supervision. Thus, cost of supervision increases.

2. Piece Rate System:
Piece rate system is a system in which wages are paid in accordance with the
number of units of work produced. This is independent of time spent on the job. A fixed
rate of wage is paid for each piece of unit produced.
For example,
If a worker produces 100 pieces per day and he is paid at the rate of Rs.1.2 per piece,
the daily wage is 100 x 1.2 = Rs.120.
Advantages:
a. This system is simple in working and the workers can easily calculate their wages.
b. This system helps in distinguishing efficient and inefficient workers.
c. Strict supervision is not required in this system.
d. This system is fair to employee and employer both.
e. There will be no dispute for wages, as workers will be rewarded satisfactory for their
work.
Disadvantages:
a. This system does not guarantee a fixed minimum wage to a worker.
b. The quality of goods will be poor as workers try to speed up their work in order to
produce more.
c. There will be increase in wastage of materials.
d. Workers intentionally ignore safety rules, inviting accidents.
e. Workers neglect their health in order to put their maximum efforts.

f. The wages of beginners will be less, as their output cannot be equal to the
experienced workers.
3. Combination of Time and Piece Rate System:

In this system, both time and product are taken into consideration. The
minimum weekly wages are fixed for every worker, which are to be paid irrespective of
his output during the week, provided he has worked for full working hours required in a
week. The wages for the period of his absence are deducted from the total amount of
his wages.
The piece rate system is also combined with time rate system as follows:
A job card of each worker is maintained which clearly shows the number of
jobs completed by the worker during a week. Payment for each job is fixed in advance.
If the piece rate wages earned by the worker are more than time rate wages, the
balance is paid to the worker. On the other hand, if piece rate wages are less than time
rate wages, then the worker will have to compensate the same by making more pieces
during next week.
Advantages:
a. This system provides incentives to workers to produce more,
b. It is simple in its working and the workers can easily calculate their wages.
Disadvantages:
a. It needs check on quality.
b. It needs careful piece rate fixing.
c. The entire benefit of extra payment goes to worker.

Incentives and Rewards
Anything that can attract an employee’s attention and motivate them to work
can be called as incentive. An incentive aims at improving the overall performance of an
organization. Incentives can be classified as direct and indirect compensation. They can
be prepared as individual plans, group plans and organizational plans.
Definition:
1. According to Milton L. Rock, incentives are defined as ‘variable rewards granted
according to variations in the achievement of specific results’.
2. According to K. N. Subramaniam, ‘incentive is system of payment emphasizing the

point of motivation, that is, the imparting of incentives to workers for higher production
and productivity’.
Types of incentives:
Incentives can be classified into three categories:
1. Financial incentives:
Some extra cash is offered for extra efficiency. For example, profit sharing
plan and group incentive plans.
2. Non-financial incentives:
When rewards or prizes are provided by the organization to motivate the
employees it is known as non-financial incentives.
3. Monetary and non-monetary incentives:

Many times, employees are rewarded with monetary and non-monetary
incentives that include promotion, seniority, recognition for merits, or even designation
as permanent employee.

Advantages of incentive Plan:

1. Incentive plans motivate workers for higher efficiency and productivity.
2. It can improve the work-flow and work methods.
3. Incentive plans make employees hardworking and innovative.
4. When employees are dedicated, supervision costs can be reduced.
5. The National Commission on Labor says that under our conditions, wage incentives
are the cheapest, quickest, and sure means of increasing productivity.
6. Incentive plans help establish positive response in an organization.
7. It helps workers improve their standard of living.
8. The other benefits offered by incentive plans are reduced turnover, reduced
absenteeism, and reduced lost time.
Disadvantages of Incentive Plan:

1. Incentive plans can lead to disputes among workers, since some earn more than
others.
2. Hunger for money among the workers forces them to overwork, which may affect
their heath.
3. Some workers may involve in malpractices in order to earn more money.
4. For enhanced incentives, they may sacrifice quality.
5. It also leads to corruption by falsifying the production records.
6. Incentive plans can create tensions among different personnel.

Rewards
Reward management is concerned with the formulation and implementation of

strategies and policies that aim to reward people fairly, equitably and consistently in
accordance with their value to the organization.
There are a number of ways to classify rewards. Three of the more typical dichotomies
are: Intrinsic versus extrinsic rewards, financial versus non financial rewards, and
performance-based versus membership based rewards. These categories are far from
being mutually exclusive.
1. Intrinsic versus extrinsic rewards: The satisfactions one gets from the job itself
are its intrinsic rewards. These satisfactions are self initiated rewards, such as having
pride in one’s work, having a feeling of accomplishment, or being part of a team. The
techniques of flex time, job enrichment, shorter work weeks, and job rotation, can offer
intrinsic rewards by providing interesting and challenging jobs and allowing the
employee greater freedom.
2. Financial versus Non financial rewards: Rewards may or may not enhance the
employees financial well being. If they do they can do this directly through wages,
bonuses, profit sharing, and the like, or indirectly through supportive benefits such as
pension plans, paid vacations, paid sick leaves and purchase discounts.
3. Performance based versus membership based rewards: The rewards that the
organization allocates can be said to be based on either performance criteria or
membership criteria. While the managers in most organizations will vigorously argue
that their reward system pays off for performance, you should recognize that this is
almost invariably not the case. Few organizations actually rewards employees based on
performance. However, without question, the dominant basis for reward allocations in
organization is membership.

Unit-5 Managing Industrial Relations – Trade Unions- Employee Participation

Schemes –Collective Bargaining – Marketing Knowledge Workers
IMP Questions
1. Managing Industrial Relations.
2. Trade Unions
3. Employee Participation Schemes
4. Collective Bargaining
Managing Industrial Relations
Industrial relations has become one of the most delicate and complex
problems of modern industrial society. Industrial progress is impossible without
cooperation of labors and harmonious relationships. Therefore, it is in the interest of all
to create and maintain good relations between employees (labor) and employers
(management).
Concept of Industrial Relations:
The term ‘Industrial Relations’ comprises of two terms: ‘Industry’ and

‘Relations’. “Industry “refers to “any productive activity in which an individual (or a
group of individuals) is (are) engaged”. By “relations” we mean “the relationships that
exist within the industry between the employer
The term industrial relations explains the relationship between employees and
management which stem directly or indirectly from union-employer relationship.
Definitions:
The term ‘industrial relations’ has been variously defined. J.T. Dunlop defines
industrial relations as “the complex interrelations among managers, workers and
agencies of the governments”.

According to Dale Yoder “industrial relations is the process of management

dealing with one or more unions with a view to negotiate and subsequently
administer collective bargaining agreement or labor contract”.
Importance of Industrial Relations:
The healthy industrial relations are key to the progress and success. Their significance
may be discussed as under –
 Uninterrupted production – The most important benefit of industrial relations

is that this ensures continuity of production. This means, continuous employment
for all from manager to workers. The resources are fully utilized, resulting in the
maximum possible production. There is uninterrupted flow of income for all.
Smooth running of an industry is of vital importance for several other industries;
to other industries if the products are intermediaries or inputs; to exporters if
these are export goods; to consumers and workers, if these are goods of mass
consumption.
 Reduction in Industrial Disputes – Good industrial relations reduce the

industrial disputes. Disputes are reflections of the failure of basic human urges or
motivations to secure adequate satisfaction or expression which are fully cured
by good industrial relations. Strikes, lockouts, go-slow tactics, gherao and
grievances are some of the reflections of industrial unrest which do not spring up
in an atmosphere of industrial peace. It helps promoting co-operation and
increasing production.
 High morale – Good industrial relations improve the morale of the employees.
Employees work with great zeal with the feeling in mind that the interest of
employer and employees is one and the same, i.e. to increase production. Every
worker feels that he is a co-owner of the gains of industry. The employer in his
turn must realize that the gains of industry are not for him along but they should

be shared equally and generously with his workers. In other words, complete
unity of thought and action is the main achievement of industrial peace. It
increases the place of workers in the society and their ego is satisfied. It
naturally affects production because mighty co-operative efforts alone can
produce great results.
 Mental Revolution – The main object of industrial relation is a complete

mental revolution of workers and employees. The industrial peace lies ultimately
in a transformed outlook on the part of both. It is the business of leadership in
the ranks of workers, employees and Government to work out a new relationship
in consonance with a spirit of true democracy. Both should think themselves as
partners of the industry and the role of workers in such a partnership should be
recognized. On the other hand, workers must recognize employer’s authority. It
will naturally have impact on production because they recognize the interest of
each other.
 Reduced Wastage – Good industrial relations are maintained on the basis of

cooperation and recognition of each other. It will help increase production.
Wastage of man, material and machines are reduced to the minimum and thus
national interest is protected
Trade Unions
Meaning:
Trade unions are associations of workers formed to represent their interests
and improve their pay and working conditions.
“A trade union is a combination of persons. Whether temporary or permanent,

primarily for the purpose of regulating the relations between workers and employers or
between workers for imposing restrictive conditions on the conduct of any trade or

business and includes the federations of two or more trade unions as per Sec. 2 (6)
Trade Unions Act, 1926.
“A Trade Union is an organization of workers, acting collectively, who seek to

protect and promote their mutual interests through collective bargaining”.
Types:
There are four main types of trade unions. These are:
i. Craft unions:
These represent workers with particular skills e.g. plumbers and weavers. These
workers may be employed in a number of industries.
ii. General unions:

These unions include workers with a range of skills and from a range of industries.
iii. Industrial unions:

These seek to represent all the workers in a particular industry, for instance,
those in the rail industry.
iv. White collar unions:

These unions represent particular professions, including pilots and teachers.
Unions in a country, often belong to a national union organization. For example, in
India, a number of unions belong to the All India Trade Union Congress (AITUC).
This is the oldest and one of the largest trade union federations in the country. A
number of them also belong to international trade union organizations such as the
International Confederation of Free Trade Unions, which has more than 230 affiliated
organizations in 150 countries.

Objectives:
1. Ensure Security of Workers:
This involves continued employment of workers, prevent retrenchment, lay off
or lock-outs. Restrict application of “fire” or dismissal or discharge and VRS.
2. Obtain Better Economic Returns:

This involves wages hike at periodic intervals, bonus at higher rate, other
admissible allowances, subsidized canteen and transport facilities.
3. Secure Power To Influence Management:

This involves workers’ participation in management, decision making, role of
union in policy decisions affecting workers, and staff members.
4. Secure Power To Influence Government:

This involves influence on government to pass labor legislation which improves
working conditions, safety, welfare, security and retirement benefits of workers and
their dependents, seek redressal of grievances as and when needed.
Functions of a Trade Union:

The important basic functions of unions listed by National Commission on labour are:
i) To secure fair wages to workers.
(ii) To safeguard security of tenure and improve conditions of service.
(iii) To enlarge opportunities for promotion and training.
(iv) To improve working and living conditions.
(v) To provide for educational, cultural and recreational facilities.
(vi) To co-operate in and facilitate technological advance by broadening the

understanding of workers on its underlying issues.

(vii) To promote identity of interests of workers with their industry.
(viii) To offer responsive co-operation in improving levels of production and

productivity, discipline and high standards of quality and
(ix) To promote individual and collective welfare.
Employee Participation Schemes
Employee participation is the process whereby employees are involved in

decision making processes, rather than simply acting on orders. Employee participation
is part of a process of empowerment in the workplace.
Employee participation is also referred to as employee involvement (EI)

Examples of employee participation include:
i. Project teams or quality circles in which employees work on projects or tasks with
considerable responsibility being delegated to the team.
ii. Suggestion schemes - where employees are given channels whereby they can
suggest new ideas to managers within the organization. Often they will receive rewards
for making appropriate suggestions.
iii. Consultation exercises and meetings whereby employees are encouraged to share
ideas.
iv. Delegation of responsibility within the organization. In modern organizations ground
level employees have to be given considerable responsibility because they are dealing
with customers on a day-to-day basis often in novel situations. Such employees need to
be trusted to make decisions for themselves.
v. Multi-channel decision making processes. In such situations decisions are not only
made in a downward direction, they also result from communications upwards,
sideways, and in many other directions within the organization.
Participation of workers in decision-making process has resulted in
successful value creation in many organizations. Though the extent to which employees

should participate in organizational decision making is still a matter of debate. Some say
that workers’ union should participate with management as equal partners while some
believe in restricted or bounded participation, that is, participation of employees or
workers to a limited extent. However, there are a number of ways through which
employees can participate in decision-making process of any organization.
 Participation at the Board Level: Representation of employees at the board

level is known as industrial democracy. This can play an important role in
protecting the interests of employees. The representative can put all the
problems and issues of the employees in front of management and guide the
board members to invest in employee benefit schemes.
 Participation through Ownership: The other way of ensuring workers’
participation in organizational decision making is making them shareholders of
the company. Inducing them to buy equity shares, advancing loans, giving
financial assistance to enable them to buy equity shares are some of the ways to
keep them involved in decision-making.
 Participation through Collective Bargaining: This refers to the participation
of workers through collective agreements and by deciding and following certain
rules and regulations. This is considered as an ideal way to ensure employee
participation in managerial processes. It should be well controlled otherwise each
party tries to take an advantage of the other.
 Participation through Suggestion Schemes: Encouraging your employees to
come up with unique ideas can work wonders especially on matters such as cost
cutting, waste management, safety measures, reward system, etc. Developing a
full-fledged procedure can add value to the organizational functions and create a
healthy environment and work culture. For instance, Satyam is known to have
introduced an amazing country-wide suggestion scheme, the Idea Junction. It
receives over 5,000 ideas per year from its employees and company accepts
almost one-fifth of them.

 Participation through Complete Control: This is called the system of self

management where workers union acts as management. Through elected
boards, they acquire full control of the management. In this style, workers
directly deal with all aspects of management or industrial issues through their
representatives.
 Participation through Job Enrichment: Expanding the job content and
adding additional motivators and rewards to the existing job profile is a fine way
to keep workers involved in managerial decision-making. Job enrichment offers
freedom to employees to exploit their wisdom and use their judgment while
handling day-to-day business problems.
 Participation through Quality Circles: A quality circle is a group of five to
ten people who are experts in a particular work area. They meet regularly to
identify, analyze and solve the problems arising in their area of operation.
Anyone, from the organization, who is an expert of that particular field, can
become its member. It is an ideal way to identify the problem areas and work
upon them to improve working conditions of the organization.
Collective Bargaining
Collective bargaining is a process of negotiating between management and

workers represented by their representatives for determining mutually agreed terms
and conditions of work which protect the interest of both workers and the
management. According to Dale Yoder’, “Collective bargaining is essentially a process in
which employees act as a group in seeking to shape conditions and relationships in
their employment”.
Michael J. Jucious has defined collective bargaining as “a process by which

employers, on the one hand, and representatives of employees, on the other, attempt
to arrive at agreements covering the conditions under which employees will contribute
and be compensated for their services”.

Objectives:
The basic objective of collective bargaining is to arrive at an agreement between the
management and the employees determining mutually beneficial terms and conditions
of employment.
1. To foster and maintain cordial and harmonious relations between the

employer/management and the employees.
2. To protect the interests of both the employer and the employees.
3. To keep the outside, i.e., the government interventions at bay.
4. To promote industrial democracy
Importance:
The need for and importance of collective bargaining is felt due to the
advantages it offers to an organization.
1. Collective bargaining develops better understanding between the

employer and the employees:
It provides a platform to the management and the employees to be at
par on negotiation table. As such, while the management gains a better and deep
insight into the problems and the aspirations of die employees, on the one hand, die
employees do also become better informed about the organizational problems and
limitations, on the other. This, in turn, develops better understanding between the two
parties.
2. It promotes industrial democracy:

Both the employer and the employees who best know their problems,
participate in the negotiation process. Such participation breeds the democratic process
in the organization.
3. It benefits the both-employer and employees:

The negotiation arrived at is acceptable to both parties—the employer and the
employees.
4. It is adjustable to the changing conditions:

A dynamic environment leads to changes in employment conditions. This
requires changes in organizational processes to match with the changed conditions.
Among other alternatives available, collective bargaining is found as a better approach
to bring changes more amicably.
5. It facilitates the speedy implementation of decisions arrived at collective

negotiation:
The direct participation of both parties—the employer and the employees—
in collective decision making process provides an in-built mechanism for speedy
implementation of decisions arrived at collective bargaining.
Types of Collective Bargaining
1. Conjunctive or Distributive Bargaining: In this form of collective bargaining,

both the parties viz. The employee and the employer try to maximize their respective

gains. It is based on the principle, “my gain is your loss, and your gain is my loss” i.e.
one party wins over the other.
The economic issues such as wages, bonus, other benefits are discussed,
where the employee wishes to have an increased wage or bonus for his work done,
whereas the employer wishes to increase the workload and reduce the wages.
2. Co-operative or Integrative Bargaining: Both the employee and the

employer sit together and try to resolve the problems of their common interest and
reach to an amicable solution. In the case of economic crisis, such as recession, which
is beyond the control of either party, may enter into a mutual agreement with respect
to the working terms.
For example, the workers may agree for the low wages or the management
may agree to adopt the modernized methods, so as to have an increased production.
3. Productivity Bargaining: This type of bargaining is done by the management,

where the workers are given the incentives or the bonus for the increased productivity.
The workers get encouraged and work very hard to reach beyond the standard level of
productivity to gain the additional benefits.
Through this form of collective bargaining, both the employer and the employee
enjoy the benefits in the form of increased production and the increased pay
respectively.
4. Composite Bargaining: In this type of collective bargaining, along with the

demand for increased wages the workers also express their concern over the working
conditions, recruitment and training policies, environmental issues, mergers and
amalgamations with other firms, pricing policies, etc. with the intention to safeguard
their interest and protect the dilution of their powers.

Thus, the purpose of the Collective Bargaining is to reach a mutual agreement

between the employee and the employer with respect to the employment terms and
enjoy a long term relationship with each other.
Marketing Knowledge Workers :
1. Introduction
In knowledge based economy it is extremely important to properly manage

employees, who have a major impact on the future of the organization, namely
knowledge workers. Managing these people in such a manner as to win their full
engagement in work, is a true challenge for the organization they work in and their
superiors.
2. Knowledge workers characteristics
Knowledge originates and is applied in the minds of people. It is embedded

in an individual’s personal mental space and is strongly related to an individual’s
psychological features, volition, motivation and emotional intelligence
3.Types and roles of knowledge workers
 Knowledge producers: scientists, engineers, lawyers, architects, accountants,

computer programmers etc.;
 Knowledge distributors: teachers, librarians, archivists, editors, journalists, etc.;
 Market search and coordination specialists: enumerators and interviewers,
estimators, investigators, surveyors, buyers, shippers, brokers, auctioneers,
advertising agents, salesmen, administrators, managers, process control
workers, etc.
 Information processors: proofreaders, secretaries, file clerks, telegraph
messengers, statistical clerks, bank tellers, bookkeepers, cashiers, typists, sales
clerks, etc.;

 Information machine workers: stenographers, printing apprentices, data

processing machine repair computer/telegraph/telephone/radio operators,
telephone installers, etc.
5. The concept of employee engagement :
Employee engagement is a growing area of focus for both scientists and

business practitioners. Many books and articles are published on this subject, as
well as many conferences, seminars, trainings and workshops are organized.
Furthermore, the range of services of consulting firms focused on projects in the
field of employee engagement is growing steadily. The issue of creating
employee engagement is of special importance with reference to knowledge
workers, who when engaged can contribute to the success of the organization,
but when disengaged – can contribute to its defeat in the market
5. Effects of high level of employees’ engagement:

High level of knowledge workers’ engagement brings benefits to themselves, the
organization in which they work, as well as the organization’s stakeholders.
6. Drivers of employee engagement
Assuming that it is possible to influence a level of employees engagement, it is

necessary to identify determinants of engagement, that is factors that may increase or
decrease knowledge workers engagement. Knowledge of these determinants gives
superiors the ability to take appropriate decisions and action resulting in the increase of
subordinate’s engagement.
7. Employee engagement in the light of the research
Employee engagement is typically measured using an employee engagement

survey developed specifically for this purpose. Such survey should be focused on
collecting data that are relevant and possible to act on, because employees asked for
their opinions, expect action to follow.

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MBA 2ND SEMESTER - HUMAN RESOURCES MANAGEMENT

PALVIELA PG COLLEGE, PALIVELA, KOTHAPETA -533229, PHONE NO:08855-244771/774

HUMAN RESOURCES MANAGEMENT

Unit-1: Introduction: Definition and Function of HRM; Principles of HRM; Changing

Unit-2: HR Planning; Concepts; Factors influencing; HR Planning; HR Planning Process;

Unit-3 Training and development-Need, Process, Methods and Techniques, Evaluation,

Unit-5 Managing Industrial Relations – Trade Unions- Employee Participation Schemes –

1|Page : PALIVELA PG COLLEGE (ICET CODE : SSSK)

Unit-1: Introduction: Definition and Function of HRM; Principles of HRM; Changing

1. Definition and Functions of HRM.

HRM is concerned with the human beings in an organization. “The

HRM is the process of managing people of an organization with a human

HRM is the planning, organizing, directing and controlling of the procurement,

2|Page : PALIVELA PG COLLEGE (ICET CODE : SSSK)

Human Resource Management is a management function concerned

According to Armstrong (1997), Human Resource Management can be

Functions of Human Resource Management

3|Page : PALIVELA PG COLLEGE (ICET CODE : SSSK)

2. Organizing - In an organization tasks are allocated among its members,

3. Directing - Activating employees at different level and making them contribute

4. Controlling - After planning, organizing, and directing, the actual performance of

The Operative Functions of Human Resource Management are as follows:

1. Recruitment and Selection - Recruitment of candidates is the function preceding

3. Performance Appraisal - Human resource professionals are required to perform

4. Training and Development - This function of human resource management helps

4|Page : PALIVELA PG COLLEGE (ICET CODE : SSSK)

5. Wage and Salary Administration - Human resource management determines

7. Maintenance - Human resource is considered as asset for the organization.

8. Labor Relations - This function refers to the interaction of human resource

9. Personnel Research - Personnel researches are done by human resource

10. Personnel Record - This function involves recording, maintaining, and retrieving

5|Page : PALIVELA PG COLLEGE (ICET CODE : SSSK)

The Advisory Functions of Human Resource Management are as follows:

6|Page : PALIVELA PG COLLEGE (ICET CODE : SSSK)

4. Principle of free flow of commutation:

7|Page : PALIVELA PG COLLEGE (ICET CODE : SSSK)

Changing environment of HRM:

1. Work force Diversity

2. Economic and Technological Change

5. Changing Nature of Work.

Business environment is changing environment and so is HR environment. The

1. Work force Diversity:

2. Economic and Technological Change:

8|Page : PALIVELA PG COLLEGE (ICET CODE : SSSK)

5. Changing Nature of Work:

9|Page : PALIVELA PG COLLEGE (ICET CODE : SSSK)

Here are 10 of today’s most common human resource challenges along

1 Compliance with Laws and Regulation:

Keeping up with changing employment laws is a struggle for business

As a business grows, its strategies, structure, and internal processes grow

4 Workforce Training and Development

Investing in the training and development of lower-level employees is

10 | P a g e : PALIVELA PG COLLEGE (ICET CODE : SSSK)

Technology is constantly changing. Businesses must be quick to adapt, or

Many companies are struggling with how best to structure employee

7 Understanding Benefits Packages

8 Recruiting Talented Employees

9 Retaining Talented Employees

Competition for talented employees is fierce. Startups and small companies