 MODULE 1

INTRODUCTION OF HRM
In general Human Resource Management is a management function concerned with
hiring, training, motivating, developing and maintaining workforce in an organisation.
According to Flippo ―HRM is the planning, organizing, directing and controlling of the
procurement, development, compensation, integration, maintenance and reproduction
of human resources to the end that individual organizational and societal objectives are
accomplished.

Objectives of HRM
The main objective of HRM is to ensure that there are right people for right jobs so that
the organizational goals are achieved effectively. Beside that: -
1. To help the organization to attain its goals effectively and efficiently by providing
competent and motivated employees
2. To utilize the available human resources effectively.

3. To increase to the fullest the employee ‘s job satisfaction and self-actualization.

4. To develop and maintain the quality of work life (QWL) which makes employment
in the organization a desirable personal and social situation.
5. To help maintain ethical policies and behaviour inside and outside the organization.

6. To establish and maintain cordial relations between employees and management.

7. To reconcile individual/group goals with organizational goals.

Scope of HRM
HRM has a very wide application. HRM encompasses all the areas during the service of
an employee starting from the time he enters, until he quits. Scope of
HRM includes the following areas:
1) Procurement: It consists of recruiting prospective employees and then selecting the
most appropriate ones for the desired posts in the organisation. This is followed by their
induction and settlement into their respective positions.
2) Training and Development: It is necessary for the employees to perform well in
realistic situations. The employees are encouraged to participate in committees and
board meetings. which will aid their development.
3) Job Analysis and Job Description: These are prepared to hire qualified employees by
studying the job requirements of the organisation and assigning definite functions to
jobs. They also act as a base for wage determination.
4) Compensation/Rewards: Compensation is provided to the employees for their
work. The amount of compensation which is to be given to the employees is
ascertained by job analysis and job evaluation. It involves determining wage rates,
methods of wage payment, and performance appraisal.
5) Employee Records: Employee records are maintained to collect details of all
employees about their work, e.g. training job performance, payment records,
their achievements, etc.
6) Welfare: In HRM, the welfare aspect is focused on providing good working
conditions to the workers. It includes programmes for health and safety. sanitation
facilities, entertainment facilities, accommodations, education, security, etc.
7) Industrial Relations: HRM helps in maintaining cordial relations in the industry.
It comprises of aspects such as collective bargaining, workers participation in
management, dispute resolution, grievance management etc.

The functions of HRM can be classified into following two categories.

Managerial Functions Operational Functions
Planning Employment
Organising Human Resource Development
Directing Compensation
Coordinating Human Relations
Controlling
Manager' s first and foremost job is to manage people. All the managers regardless of
their departments carry-out managerial functions.

FUNCTIONS OF HR MANAGERS
To facilitate easy understanding, the functions of HR managers may be broadly divided
into two categories: managerial functions and operative functions.
Managerial Functions:

The basic managerial functions comprise planning, organising, directing and controlling.
Planning: This is the process of making decisions about the future. It is the process of
determining enterprise objectives and selecting future courses of actions necessary for
their accomplishment. Planning of personnel today prevents crises tomorrow. The HR
manager is expected to design appropriate policies and procedures regarding
recruitment, selection and training of employees.
Organizing: This function is primarily concerned with proper grouping of personnel
activities, assigning of different groups of activities to different individuals and
delegation of authority. Creation of a proper structural frameWork is the primary task.
Directing: This involves supervising and guiding the personnel. The personnel manager
must be an effective leader who can create winning teams. While achieving results, the
personnel manager must, invariably, take care of the concerns and expectations of
employees at all levels.
Controlling: This function involves measuring the employee's performance, correcting
negative deviations and ensuring the efficient accomplishment of plans. It makes
individuals aware of their performance through review reports, records and personnel
audit programmes. It ensures that the activities are carried out in accordance with
stated plans.

OPERATIONAL FUNCTIONS
Operational functions are the special activities which human resource people must
perform for each and every department of the organisation. These are the regular
functions of the human resource department. It focuses on all activities of the
organisation workforce from their HR Planning till their exit.

These functions are as follows:

1) Employment: It deals with acquiring and hiring the potential candidates for
the attainment of objectives of the organisation. Job analysis, manpower
planning, recruitment, selection, induction, and placement, etc. are the activities
which are included in the employment function.
2) Human Resource Development: HRD is the procedure of building and transforming
the knowledge, skills, creativity, attitude, etc., according to the existing and upcoming
requirements of the job and organisation. It consists of performance evaluation, training
and development, career planning and development, etc.
3) Compensation: Compensation is about motivating employees by providing them
reasonable and satisfactory remuneration so that they can work more effectively.
Employee benefits, bonus, incentives, and social security benefits are the
components of compensation package. Job evaluation and wage and salary
administration are the processes of compensation management.
4) Human Relations: It is the procedure of integrating people through interaction at the
workplace. It helps people to work collectively in a team to gain high productivity and
satisfaction in terms of money, mind, and society. It involves dealing with employee
grievances timely by a well-developed grievance handling procedure, disciplinary action,
and employee counselling to give them relief from stress, frustration, etc.

HR MANAGER: ROLE AND STATUS

The role of the human resource (HR) manager has undergone dramatic changes over
the years. It used to be a boring and monotonous administrative job consisting of
routine activities such as welfare administration, compensation management,
appraising performance etc. Creating records, maintaining files, formulating personnel
policies and procedures seemed to be the prime-time activities of most personnel
people. They had to play the role of a mediator between labour and management-
sorting out contentious issues on a daily basis. It was more or less a glorified clerical job-
a kind of non-strategic work-with very little excitement and challenge.

Modern HR managers, unlike their earlier counterparts, wear many hats. Apart from
talent acquisition, development and retention, they play multifarious roles-such as
change agent, problem solver, integrator, coach, mentor and employee champion. They
are expected to align HR strategies and policies with business policies and Practices. In
fact, they are supposed to lead from the front, invent ways and means to improve
organizational performance leveraging on the strengths of employees. Investment in HR
initiatives and efforts are not treated as expenses but as valuable investments that
definitely help a firm get past competition and succeed in a competitive environment.
1. Change agent-changing the behaviour, attitudes and performance of employees

2. Integrator-striking rapport between labour, unions, management and external

groups such as customers, suppliers, financiers and shareholders.
3. Trainer, educator, developer and motivator-playing the role of a proactive, radical,
transformational change leader
4. Employee champion-putting the house in order in sync with employee expectations

5. Counsellor, mentor and coach-rewarding team efforts

6. Teams, teamwork and team spirit-This is the new HR mantra, which aims to get
results through and with people, focusing on their potential and by treating them with
respect and dignity. HR involves, encourages and puts trust in people to get the best
out of them.
7. Problem Solver-Solving problems in a proactive, novel and innovative manner

8. Strategic partner-playing a key, strategic and outstanding role in striking

rapport between people, goals, resources and results.
9. Designing a winning path-aligning HR policies and practices in sync
with organizational mission, philosophy and strategies
10. Put the talent to best use-Talent acquisition and development is the principal
focus area; making the best use of employee skills, knowledge and experience in the
service of organisational goals.
11. Outstanding value--HR is a valuable investment. It is an investment centre and not a
cost centre.

Administrative Roles

Administrative expert

Policymaker Advisor

HR Manager
Administrative
Role
Housekeeper Counsellor

Welfare officer Legal consultant

1. Policymaker: The human resource Manager helps management in the formulation

of policies governing talent acquisition and retention, wage and salary administration,
welfare activities, personnel records, working conditions, etc. He also helps in
interpreting personnel policies in an appropriate manner.
2. Administrative expert: The administrative role of an HR manager is heavily oriented
towards processing and recordkeeping-such as maintaining employee files, processing
employee benefit claims, updating leave and medical records of employees, preparing
reports in sync with the laws of the land.
3. Advisor: HR professionals are known for their expert advice. They are expected to
assist line managers on matters relating to talent management, grievance redressal,
dispute resolution, reward management etc. They are also expected to formulate and
implement personnel policies and programmes following the laws of the land
scrupulously.
4. Housekeeper: The administrative roles of a personnel manager in managing the
show include recruiting, pre-employment testing, reference checking employee
surveys, timekeeping, wage and salary administration, benefits and pension
administration, wellness programmes and maintenance of records.
5. Counsellor: The personnel manager discusses various problems of the employees
relating to work, career, supervisors, colleagues, health, family, financial, social, etc.
and advises them on minimizing and overcoming problems, if any.
6. Welfare officer: Personnel manager is expected to be the Welfare Officer of the
company. Under the Factories Act, Welfare officers are expected to take care of safety,
health and welfare of employees. The HR managers are often asked to oversee if
everything is in line with the company legislation and stipulation.
7. Legal consultant: The personnel manager handles grievances, settling of disputes,
disciplinary cases, collective bargaining, enabling the process of joint consultation,
interpretation and implementation of various labour laws, contacting lawyers regarding
court cases, filing suits in labour courts, industrial tribunals, civil courts and the like.

Operational Roles:

Recruiter Trainer, Developer & Motivator

HR Manager
Operational
Roles
Coordinator
Employee champion
Mediator

The operational roles of HR managers may be listed thus:

Recruiter: 'Winning the war for talent' has become an important job of HR managers in
recent times in view of the growing competition for people possessing requisite
knowledge, skills and experience. HR managers have to use their experience to good
effect while laying down lucrative career paths to new recruits without increasing the
financial burden to the company.
Trainer, developer and motivator: Apart from talent acquisition, talent retention is also
important. To this end, HR managers have to find skill deficiencies from time to time,
offer meaningful training opportunities and bring out the latent potential of people
through intrinsic and extrinsic rewards which are valued by employees.
Coordinator/linking pin: The HR manager is often deputed to act as a linking pin
between various divisions/departments of an organization. The whole exercise is meant
to develop rapport with divisional heads, using PR and communication skills of HR
executives to the maximum possible extent.
Mediator: The personnel manager acts as a mediator in case of friction between two
employees, groups of employees, superiors and subordinates, and employees and
management with the sole objective of maintaining industrial harmony.
Employee champion: HR managers have traditionally been viewed as company morale
officers' or employee advocates. Important obligations of HR managers as champions of
employee interests include: placing people on a right job, charting a suitable career
path, rewarding creditable performance, resolving differences between warring groups
amicably, adopting family friendly policies, ensuring a fair and equitable treatment to all
people, striking a happy balance between employee expectations and organisational
requirements etc.
Strategic Roles :
To remain cost competitive and to achieve success in a competitive world, HR managers
have to get the best out of employees. To keep employees in good humour they need
to undertake certain proactive steps. They need to bring about radical changes,
sometimes, in sync with market needs.
Change agent: Strategic HR, as it is popularly called, now aims at building the
organization's capacity to embrace and capitalize on change. It makes sure that change
initiatives that are focused on creating high-performing teams, reducing cycle time for
innovation, or implementing new technology are defined, developed and delivered in a
timely manner. The HR manager in his new avatar would help employees translate the
vision statements into a meaningful format. HR's role as a change agent is to replace
resistance with resolve, planning with results and fear of change with excitement about
its possibilities. HR certainly helps in putting everything in place by taking employees
and other stakeholders into confidence.
Strategic partner: HR's role is not just to adapt its activities to the firm's business
strategy, nor to carry out firefighting operations such as handling disputes. Instead, it
must deliver strategic services cost effectively by building a competent, consumer-
oriented workforce. It must assume important roles in strategy formulation, as well as
strategy implementation.

 MODULE 2
HR POLICY
Objectives provide the goals to be achieved, whereas policies provide broad guidelines
for all operating managers as to how these may be achieved.
HR policies guide action. They offer the general standards or parameters based on
which decisions are reached. They serve as a road map for managers on a number of
issues such as recruitment (the job, for example, reserved for physically challenged
only), selection (selection based on merit only), promotion (performance leads to
promotion) and compensation (only star performers would get performance bonus, not
everyone). Important features of an effective personnel policy can be broadly outlined
as:
i. It is generally derived from the personnel objectives of an organisation.
ii. It summaries past experience in the form of useful guidelines that help managers to
speed-up the decision making process
ii. As a guide to executive thinking it permits managers to transfer some of the recurring
problems to subordinates.
iv. It helps in achieving coordination of organisational members and predicting more
accurately the actions and decisions of others.
TYPES OF HR POLICIES
These may be classified into several categories depending on (i) their sources
(originated, appealed and imposed) (ii) scope ( general or specific) and (iii) form
(written or implied). These may ne stated thus :
Originated policies.
Appealed policies.
Imposed policies.
General policies
Specific policies
Written or implied policies

Originated policies: These are established by top management deliberately so as to

guide executive thinking at various levels.
Appealed policies: These are formulated to meet the requirements of certain peculiar
situations which have not been covered by the earlier policies. Such requests usually
came from subordinated who fail to handle the cases based on guidance offered by
existing policies.
the employees may make an appeal to the top management to give employment to an
eligible member of an employee's family after the latter's retirement.
Imposed polices: These are formed under pressure from external agencies such
as government, trade associations and unions.
to officially force a rule, tax, punishment, etc. to be obeyed or received: Very high taxes
have recently been imposed on cigarettes. Judges are imposing increasingly heavy fines
for minor driving offenses. The council has imposed a ban on alcohol in the city parks.
General policies: They reflect the basic philosophy and priorities of the management in
formulating the broad plan for mapping out the organisation growth chart.
Specific policies: These policies cover specific issues such as hiring, rewarding and
bargaining. Such policies, however, should be in line with the basic framework offered
by the general policies.
Written or implied policies: implied policies are of members inferred from the
behaviour of the members (such as dress code, gentle tone while talking to getting
customers, not angry while at work etc.). Written policies, on the other hand, spell out
managerial thinking on paper so that there is very little room for loose interpretation.

Some policy examples:

1. Attendance
An attendance policy addresses various issues related to attendance, such as tardiness,
early leave and absence without advanced notice. Attendance policies typically define
these terms and describe or point to disciplinary actions. For example, an organization
might define tardiness as arrival over five minutes after the start of a shift or the end of
lunch and go on to describe a progressive discipline scheme.
2. Code of conduct
A code of conduct policy relates to employee behavior. This kind of policy commonly
addresses issues a broad range of issues, including:
Appropriate and inappropriate manners of dress
Confidentiality about company activities or projects
Interpersonal relationships and behaviors
Intoxication on the job
The use of communications devices or social media during work hours
A code of conduct policy may also include a warning against infractions of the policy,
noting that violations may lead to disciplinary action. These aspects of the policy help
others to understand the seriousness of the issues addressed and encourage adherence
to the policy.
3. Equal opportunity
Equal opportunity refers to an anti-discrimination policy that prevents employers from
mistreating employees or job candidates based on their age, culture, ethnicity, gender,
religion or other personal attributes. This policy is essential because it promotes fair
treatment to all individuals by both managers and colleagues. It also allows an
organization to comply with federal regulations issued by U.S. Equal Employment
Opportunity Commission.
4. Health and safety
The purpose of health and safety policies is to prevent illnesses and injuries in the
workplace. In a food service setting, for example, these policies may require employees
to wash their hands regularly and provide instructions for doing so. They're also likely to
describe protocols for using potentially hazardous equipment, such as deep fryers, meat
slicers, knives and other common kitchen tools.
5. Security
A security policy relates to the physical safety of the people in an organization or the
information found in an area within a facility. Security policies normally outline
procedures for entering and exiting the workplace or a room inside the building. It may
note the use of an ID card or fingerprint scanner and qualify the types of personnel
permitted entry into classified areas.
6. Cybersecurity
Cybersecurity relates to the protection of an organization's networks and digital
property. Cybersecurity policies often address various areas of concern, including but
not limited to:
7. Acceptable use
An acceptable use policy is a set of rules that dictate the appropriate use of an
organization's computer network and devices. This can be seen as an extension of both
cybersecurity and the code of conduct. Such policies often prohibit behaviors such as
downloading certain file types, uploading unauthorized files to the network and certain
forms of communication via email or messaging applications.
8. Bring your own device
Bring your own device, also known as BYOD, refers to the practice of allowing
employees to use their personal computing devices, including mobile devices, for work.
This is an extension of acceptable use, as personal devices could potentially increase
cybersecurity risks. BYOD policies usually include restrictions concerning uploading to
the company network and requirements relating to antivirus software.
9. Social media
A social media policy, which is commonly considered another extension of acceptable
use, dictates how and when employees can access their personal social media accounts
during work hours. Many employers might worry that browsing social media could
cause a decrease in productivity, so social media policies often restrict access to certain
times, such as breaks. These policies may also restrict what kinds of employer-related
information employees share, to prevent the leaking of sensitive information.
10. Privacy
A company's privacy policy defines the extent to which it collects employee data and
monitors employee activity. A typical privacy policy informs employees of the collection
of certain types of personal information—addresses, phone numbers, social security
numbers—that are necessary for documentation. It also may note that company
correspondences are subject to monitoring but ensure employees of their right to
privacy concerning their personal belongings, personal correspondences and
conversations.
11. Paid time off
Paid time off, also known as PTO, refers to vacation days, personal days and holidays,
during which the employee continues to earn their regular rate of compensation. A PTO
policy usually mentions how many vacation and personal days an employee has, how
these days accrue and how many holidays per year the organization acknowledges. The
policy might also address what happens when one of these holidays falls on the
weekend or an employee doesn't use all of their vacation days during a business year.
12. Sick leave
Some employers have a sick leave policy separate from the PTO policy. Sick leave refers
to days spent away from work because of illness or injury. Salaried employees typically
receive paid sick days, while hourly employees usually don't receive compensation for
sick days. Normally, a sick leave policy includes the number of sick days allowed per year
and outlines associated protocol, such as acquiring a doctor's note or finding a colleague
to cover your work.
13. Leave of absence
A leave of absence, also called LOA, is an extended period away from work. This differs
from PTO because of the length of the time off and the various circumstances under
which an employee might request leave. There are two categories of leave—paid and
unpaid—and numerous types, including but not limited to:

Parental: Parental leave is for those who've recently had a child through either birth or
adoption.
Bereavement: Bereavement leave applies to individuals who've recently experienced
the death of a loved one.
Medical: Medical leave is for individuals who have serious ongoing medical conditions
or are responsible for the care of someone who does.
An LOA policy typically notes the types of leave that the organization allows, the length
of time permitted and adjustments to the rate of compensation, if any.
14. Flexible work
Flexible work policies refer to allowances for employees working outside of the
traditional work environment and schedule—9 a.m. to 5 p.m. in a central location such
as an office. Examples of flexible work include:
Work-from-home or remote: The employee may work part of the time or entirely from
a remote location, usually their place of residence.
Flex time: On a given day, the employee may arrive and leave as they wish, with the
understanding that they meet the required number of hours per day or week.
Compressed schedule: The employee works longer hours per day but fewer total days
per week—typically 10 hours per day for four days.
15. Harassment
Harassment is a term that broadly refers to actions that cause others to feel belittled or
threatened. A workplace harassment policy defines harassment and may provide
examples. This kind of policy usually addresses both harassers and the harassed,
pointing to disciplinary action and suggesting avenues for recourse, respectively.
16. Payroll
A payroll policy is an assurance to employees concerning their compensation. In the
policy, the employer guarantees payment of wages or salaries on a specified date or
regular interval. It often also includes mention of deductions such as federal and state
taxes.

BENEFITS OF HR POLICIES
Delegation

Uniformity Better control

Benefits of
HR policies
 Standards of efficiency Confidence

1.Policies, as useful instructional devices, offer many advantages to the personnel

working at various levels. These are:
1. Delegation: They help managers operating at different levels to act with confidence
without the need for consulting
2. Uniformity: They increase the chances of different people at different levels of the
organisation making similar choices, when independently facing similar situations. They
make the actions of organisational members more consistent.
3. Better control: As personnel policies specify the relationship shared between the
organisation, management and its employees, they allow members to work towards
achievement of the objectives of the organisation without friction/ conflict, paving the
way for better control.
4. Standards of efficiency: Policies can also serve as standards in the execution of work.
They enable the management to see if they have been translated into action by various
groups in the organisation or not. In the light of the actual performance, existing policies
may be subjected to amendment/refinement.
5. Confidence: Policies make the employees aware of where they stand in the
organisation and create confidence in them while confronting routine and recurring
problems. They reduce chances of misinterpretation, misrepresentation and friction.
Handling Employee Concerns: Many companies have written procedures for handling
employee complaints, whether they are internal, informal complaints or allegations
made about the employer to enforcement agencies. The benefit of this policy is to
document your company's commitment to non-discriminatory practices and how such
complaints are resolved. These policies also benefit employees because they provide
important information about workplace communication in the event an employee is
unsure of who he/she contacts to discuss any concerns or problems.
Workplace Safety: In a time when more than worker safety in the performance of
his/her job is the primary issue addressed in safety policies, employers distribute
policies that address matters such as workplace violence. These types of policies are
generally discussed in detail with employee groups; an emergency evacuation policy
isn’t effective if you don't discuss it until the emergency happens. Another benefit to
having a human resources safety policy is adherence to federal and state guidelines for
workplace safety.
Organisational Structure: An introduction to the human resources policy manual
explains the organisational structure, what departments fulfil which expectations and
company leadership. In the introductory section, many employers also explain the
company philosophy as it is related to customer service, co-workers, leadership and
business ethics. Ethics statements are extremely popular, especially in a world where
social responsibility is observed by a large number of the population. This section of a
human resources policy manual may also state the company's compliance with federal,
state and local anti-discrimination laws.

Evolution of HRM
The field of HRM as it currently exists represents a crystallization of a variety of
historical and contemporary factors:
The industrial revolution:

Scientific management

Trade unionism
Human relations movement

Human resources approach

1. The industrial revolution: During this period machines were brought in; technology
made rapid progress; jobs were more fragmented where the worker did only a small
portion of the total job; and specialization increased speed and efficiency but left
workers with dull, boring and monotonous jobs. Workers were treated like 'glorified
machine tools. Employers were keen to meet production targets rather than satisfy
workers' demands. Government did very little to protect the interests of workers.
2. Scientific management: To improve efficiency and speed F w Taylor advocated
scientific management. Scientific management is nothing but a systematic analysis and
breakdown of work into its smallest mechanical elements and rearranging them into
their most efficient combination. In addition to the scientific study of the task itself,
Taylor argued that individuals selected to perform the tasks should be as perfectly
matched, physically and mentally to the requirements of the task as possible and that
overqualified individuals should be excluded. Employees should also be trained to
ensure that carefully by supervisors they performed the task exactly as specified by
prior scientific analysis. A differential piece rate system was also advocated by Taylor to
vide an incentive for employees to follow the detailed procedures specified by
supervisors.
3. Trade unionism: Workers joined hands to protect against the tendencies of
employers and the prohibitive, unfair labour practices through unions. Unions tried to
improve the lot of workers through collective bargaining, resolving the grievances of
workers relating to working conditions, pay and benefits, disciplinary actions, etc.
4.Human relations movement: The famous Hawthorne experiments conducted by Elton
Mayo and his Harvard colleagues during 1930s and 194Os demonstrated that employee
productivity was affected not only by the way the job was designed and the manner in
which employees were rewarded economically, but by certain social and psychological
factors as well. The human relations movement led to the wide scale implementation of
behavioural science techniques in industry for the first time which included supervisory
training programmes, emphasising support and concern for workers, programmes to
strengthen the bonds between labour and management and counselling programmes
whereby employees were encouraged to discuss both work and personal problems with
trained counsellors. The movement was also influenced by the growing strength of
unions during the late 1930s and 1940s. The rise of unionism during this period was due
to the passage of the Wagner Act which gave workers the legal right to bargain
collectively with employers over matters concerning, wages, job security, benefits and
many other conditions of work.
5. Human resources approach: The Human Resources Approach recognizes the fact that
each employee is unique and wants to be treated differently. People do not dislike work
basically. People show keen desire to achieve goals if the work is structured
appropriately. People can use discretion; exercise self-direction and self-control if they
are allowed to work freely. A manager's basic job is to exploit untapped human
potential in the service of organisational goals. Even ordinary people can achieve
extraordinary things if the work climate is good and there is recognition for meritorious
performance. Most principles of HRM are based on the human resources approach only.
  MODULE 3
HUMAN RESOURCE PLANNING
Definition: Human resource planning (HRP) is essentially the process of getting the right
number of qualified people into the right job at the right time so that an organization
can meet its objectives. It is a system of matching the supply of people (existing
employees and those to be hired or searched for) with openings the organization
expects over a given time frame.

FEATURES
The key features of HRP may be listed as follows:
1. Forward looking: HRP is a forward-looking function. It tries to assess human
resource requirements in advance keeping the production schedules, market
fluctuations, demand forecasts, etc, in the background.
2. In sync with organizational needs: The human resource plan is subject to revision, of
course, and is tuned to the requirements of an organization from time to time.
3. In tune with corporate plan: It is an integral part of the overall corporate plan
and reflects the broad thinking of management about manpower needs within the
organization.
4. Proactive: Internal as well as external changes impacting the organization are
assessed proactively from time to time so that HR plan would fit in with strategic
business objectives. The whole exercise is meant to see that the organization does
not suffer due to non-availability of qualified people even when it tries to expand its
operations through mergers, acquisitions etc.
5. Get qualified people at a right time: The focus of the plan is always on getting right
number of qualified people into the organization at the right time. To this end, human
resource plans are prepared for varying time periods, i.e. short term plans covering a
time frame of two years and long term plans encompassing a period of five or more
years.

OBJECTIVES
HRP is required to meet the following objectives:
personnel requirements: HR planning is essential to determine the future manpower
needs in an organization. in the absence of such a plan, it would be difficult to have the
service of right kind of people at the right time.
Cope with changes: HR planning is required to cope with changes in market conditions,
technology, products and governments regulations in an effective way. These changes
may often require the services of people with the requisite technical knowledge and
training. In the absence of an HR plan, We may not be in a position to enlist their
services in time.
Use existing manpower productively: By keeping an inventory of existing personnel in
an enterprise by skill, level, training, educational qualification, work experience, it will
be possible to utilize the existing resources more usefully in relation to the job
requirement. This also help in decreasing wage and salary costs in the long run.
Promote employees in a systematic manner: HR planning provides useful information
on the basis of which management decides on the promotion of eligible personnel in
the organization. In the absence of an HR plan, it may be difficult to ensure regular
promotions to competent people on a justifiable basis.
IMPORTANCE
HRP is an important and useful activity. If used properly, it offers a number of benefits:
Reservoir of talent: The organization can have a reservoir of talent at any point of time.
People with requisite skills are readily available to carry out the assigned tasks.
Prepare people for future: People can be trained, motivated and developed in advance
and this helps in meeting future needs for high-quality employees quite easily. Likewise,
human resource shortages can also be met comfortably (when people quit the
organisation for various reasons) through proper human resource planning
Expand or contract: If the organization wants to expand its scale of operations, it can go
ahead easily. Advance planning ensures a continuous supply of people with requisite
skills who can handle challenging jobs easily.
Cut costs: Planning facilitates the preparation of an appropriate HR budget for each
department or division. This, in turn, helps in controlling manpower costs by avoiding
shortages/excesses in manpower supply. The physical facilities such as canteen,
quarters, school, medical help, etc, can also be planned in advance.
Succession planning: HRP, prepares people for future challenges. The ‘stars can be
picked up and kept ready for further promotions whenever they arise. All multinational
companies for example, have this policy of having a 'hot list of promising candidates
prepared in advance, e.g., HLL, Proctor & Gamble, Godrej consumer products etc. Such
candidates are rolled over various jobs and assessed and assisted continuously. When
the time comes, such people 'switch hats' quickly and step into the roles of their
respective bosses without any problem.

PROCESS OF HUMAN RESOURCES

Forecasting the Demand for Human Resources
The demand for talent, that is, people possessing relevant qualifications, requisite skills,
essential training and required experience, is basically influenced by three factors:
External factors
Economic, political, legal, social and technical factors play a major role in forecasting
demand for talent. Liberalization, opening up of banking sector, capital market reforms,
the online trading systems have created a huge demand for finance professionals during
1990-95 in India. Political changes within a country, for example, might bring in are form
oriented Government, leading to greater demand for certain type of skills such as
software, construction, telecommunication professionals.
likewise, technological advances may see a sudden spurt for customer service
executive, qualified sales staff, knowledgeable service engineers etc. in emerging
product categories such as smart phones, tablets, high-end refrigerators, sophisticated
laptops, or even qualified nurses in super-speciality hospitals.
Organizational factors
The organization's strategic plan, sales and production forecasts and new ventures must
all be taken into account in employment planning Britannia Industries ltd. expects
higher demand for biscuits and bread, the long-term HR plan must take this into
consideration Such as milk-based products or confectionary items, the demand for
people positioning requisite skills in those areas in the next couple of years should be
looked into carefully.
Workforce factors
The demand for talent is going to be impacted by several other workforce-related
factors such as retirement, termination, resignation, death and unauthorized absence.
Of course, these changes can be predicted with a lot of accuracy if HR professionals
critically look into computer profiles of employees. These factors will, however, tell us
as to how many people we may require at a point of time-if a certain level of business
activity is maintained.
DEMAND FORECASTING TECHNIQUES
A number of manpower forecasting techniques are employed by modern organizations,
as discussed below.
Judgmental methods
The services of experts are pressed into service in order to forecast the demand for
labour. Three forecasting methods by experts deserve mention here.
1. The simplest way - known as the bottom-up forecasting method-to arrive at the
magical figure is to seek the opinion and guidance from the unit, branch or
division to prepare an estimate. The sum of all such estimates prepared at
various levels in different divisions or branches is the demand forecast for whole
organization.
2. In the top-down forecasting method, the exercise would commence with top
managers. They often meet to discuss how trends, business plans, the economy
and other factors would impact the organization in question. The best and the
worst possible scenarios are looked into--in addition to o environmental factors-
before an estimate is made. Most organizations prefer to use the Delphi
technique for this purpose.
 3. The Delphi technique is a forecasting aid based on a consensus of a panel of
experts-who do not meet face to face but exchange notes through anonymous
questionnaires. The experts refine their opinions, phase by phase, until they reach
a consensus.

useful guide in this regard. Statistical and econometric models may also be pressed into
service, sometimes, depending on the requirement(s).
Job analysis: Job analysis helps in finding out the abilities or skills required to do the
jobs efficiently. A detailed study of jobs is usually made to identify the qualifications and
experience required for them.
FORECASTING THE SUPPLY OF HUMAN RESOURCES
Once an organization is able to forecast its future requirements for employees, it should
begin to look both internally as well as externally to fill the possible vacancies.
Internal labour supply analysis: Internal sources need to be tapped first so as to keep
the interest of members who have acquired considerable amount of experience in a
position. Those skills, knowledge and experience could be put to good use if the
vacancies are filled up with existing experienced staff.
A computer profile of employee in terms of age, sex, education, training, years of
experience in a particular position and eligibility for next promotion should be readily
available in order to facilitate smooth progression of existing staff into superior
positions. While doing so, the HR manager should keep an eye on factors such as
attrition levels, absenteeism, retirement, death, accident rates etc.
External Labour Supply Analysis: When the organization grows rapidly, diversifies into
newer areas of operations (such as merchant banking, capital market operations and
mutual funds in the case of a bank) or when it is not able to find the people internally to
fill the vacancies, it has to look into outside sources.

Formulating HR Plans
The human resource requirements identified along with the procedure outlined above
need to be translated into a concrete manpower plan, backed up by detail policies,
programme and strategies (for recruitment, selection, training, promotion, retirement,
replacement etc.)
Recruitment plan: Will indicate the number and type of people required and when they
are needed; special plans to recruit right people and how they are to be dealt with via
the recruitment programme.
Redeployment plan: Will indicate the programmes for transferring or retaining
the existing employees for new jobs.
Redundancy plan: Will indicate who is redundant, when and where; the plans for
retraining, where this is possible; and plans for golden, handshake,
retrenchment, layoff, etc.
Training plan: Will indicate the number of trainees or apprentices required and the
programme for recruiting or training them; existing staff requiring training or retraining;
new courses to be developed or changes to be affected in existing courses.
Productivity plan: Will indicate reasons for employee productivity or reducing
employee costs through work simplification studies, mechanization, productivity
bargaining: incentives and profit-sharing schemes, job redesign, etc.
Retention plan: Will indicate reasons for employee turnover and show strategies to
avoid wastage through compensation policies; requirements change in work and
improvement in working conditions.
The entire manpower plan will be subjected to close monitoring from time to time.
Control points be set up to find out deficiencies, periodic updating of manpower
inventory, in the light of changing circumstances, be undertaken to remove deficiencies
and develop future plans.

Job Analysis:
According to the Edwin B. Flippo. “ Job analysis is the process of studying and collecting
information related to the operations and responsibilities of specific job.”
BENEFITS OF JOB ANALYSIS :
The important benefits of job analysis may be listed thus:
Human resource planning: Job analysis helps in forecasting human resource
requirements in terms of knowledge and skills. It helps in determining quality of human
resources needed in an organization.
Recruitment: Job analysis is used to find out how and when to hire people for future job
openings. An understanding of the skills needed and the positions that are vacant in
future helps managers to plan and hire people in a systematic way
Selection: It is not possible to select the right person without a proper understanding
of what is to be done on a job. If a Super Bazaar manager has not clearly identified what
a clerk is to do, it is difficult to ascertain if the person selected is to position store items,
run a cash register or keep the account books.
Placement and orientation: After selecting people, we have to place them on jobs best
suited to their interests, activities and aptitude. If we are not sure about what needs to
be done on a job, it is not possible to identify the right person suited for the job.
Similarly, effective job orientation cannot be achieved without a proper understanding
of the needs of each job. To teach a new employee how to handle a job, we must clearly
define the job.
Training: If there is any confusion about what the job is and what is supposed to be
done, proper training efforts cannot be initiated. Whether or not a current or potential
job holder requires additional training can be determined only after the specific needs
of the jobs have been identified through a job analysis.
Counselling: Managers can properly counsel employees about their careers when they
understand the different jobs in the organization. Likewise, employees can better
appreciate their career options when they understand the specific needs of various
other jobs. Job analysis can point out areas that an employee might need to develop to
further a career.
Employee safety: A thorough job analysis reveals unsafe conditions associated with a
job. By studying how the various operations are taken up in a job, managers can find
unsafe practices. This helps in rectifying things easily.
Performance appraisal: By comparing what an employee is supposed to be doing
(based on job analysIs) to what the individual has actually done, the worth of that
person can be assessed. Ultimately, every organization must pay a fair remuneration to
people based on their performance. To achieve this, it is necessary to compare what
individuals should do (as per performance standards) with what they have actually
done (as per job analysis).
Job design and redesign: Once the jobs are understood properly, it is easy to locate
weak spots and undertake remedial steps. We can eliminate unnecessary movements,
simplify certain steps and improve the existing ones through continuous monitoring. In
short, we can redesign jobs to match the mental make-up of employees.
Job evaluation: Job analysis helps in finding the relative worth of a job, based on
criteria such as degree of difficulty, type of work done, skills and knowledge needed,
etc. This, in turn, assists in designing proper wage policies, with internal pay equity
between jobs.

THE PROCESS OF JOB ANALYSIS

The major steps involved in job analysis are as follows
Organizational analysis: First of all, an overall picture of various jobs in the organization
has to be obtained. This is required to find the linkages between jobs and organizational
objectives, interrelationships between jobs and contribution of various jobs to the
efficiency and effectiveness of the organization.
Selection of representative positions to be analysed: It is not possible to analyse all the
jobs. A representative sample of jobs to be analysed is decided keeping the cost and
time constraints in mind. Collection of job analysis data: This step involves the
collection of data on the characteristics of the job, the required behaviour and personal
qualifications to carry out the job effectively.
Preparation of job description: This step involves describing the contents of the job in
terms of functions, duties, responsibilities, operations, and so on. The job holder is
required to discharge the duties and responsibilities and perform the operations listed
in job description.
Preparation of job specification: This step involves conversion of the job description
statements into a job specification. Job specifications is a written statement of personal
attributes in terms of traits, skills, training, experiences needed to carry out the job.

METHODS OF COLLECTING JOB ANALYSIS DATA

The principal methods to collect job analysis data may be listed thus:
Job performance: In this method, the job analyst actually performs the job in question.
The analyst thus receives first-hand experience of contextual factors on the job,
including physical hazards, social demands, emotional pressures and mental
requirements. This method is useful for jobs that can be easily learned. It is not suitable
for jobs that are hazardous (e.g, fire fighters) or for iobs that require extensive training
(e.g, doctors, pharmacists).
Personal observation: The analyst observes the worker(s) doing the job. The tasks
performed, the pace at which activities are done, the working conditions, etc., are
observed during a complete work cycle. This method allows for a deep understanding of
job duties. It is appropriate for manual, short period job activities. On the negative side,
this method fails to take note of the mental aspects of the job.
Critical incidents: The critical incident technique (CIT) is a qualitative approach to job
analysis used to obtain specific, behaviourally focused descriptions of work or other
activities. Here, the job holders are asked to describe several incidents based on their
past experience. The incidents so collected are analysed and classified according to the
job areas they describe. The job requirements will become clear once the analyst draws
the line between effective and ineffective behaviours of workers on the job. For
example, if a shoe salesman comments on the size of a customer's feet and the
customer leaves the store in a huff, the behaviour of the salesman may be judged as
ineffective in terms of the result it produced. The critical incidents are recorded after
the events have already taken place - both routine and non-routine. The analysts
overseeing the work must have analytical skills and ability to translate the content of
descriptions into meaningful statements.
Interview: The interview method consists of asking questions to both incumbents and
supervisors in either an individual or a group setting. The reason behind the use of this
method is that job holders are most familiar with the job and can supplement the
information obtained through observation. Workers know the specific duties of the job
and supervisors are aware of the job's relationship to the rest of the organisation.
Panel of experts: This method utilizes senior job incumbents and superiors with
extensive knowledge of the job. To get the job analysis information, the analyst
conducts an interview with the group. The interaction of the members during the
interview can add insight and detail that the analyst might not get from individual
interviews.
Diary method: Several job incumbents are asked to keep diaries or logs of their daily job
activities - according to this method-and record the amount of time spent on each
activity. By analysing these activities over a specified period of time, a job analyst is able
to record the job's essential characteristics.
Questionnaire method: The questionnaire is a widely used method of analysing jobs
and work. Here the job holders are given a properly designed questionnaire aimed at
eliciting relevant job-related information. After completion, the questionnaires are
handed over to supervisors. The supervisors can seek further clarifications on various
items by talking to the job holders directly. After everything is finalized, the data is given
to the job analyst.

Job Description: A job description is "an organised, factual statement of the duties
and responsibilities of a specific job. "l In brief, it should tell what is to be done, how it is
done and why? It is a standard of function; in that it defines the appropriate and
authorised content of a job. Statement of duties and responsibilities

Job Specification: A job specification is "a statement of the minimum acceptable

human qualities necessary to perform a job properly." In contrast to the job description,
it is a standard of personnel and designates the qualities required for acceptable
performance. Minimum acceptable human qualities.

job Description
Contains Information and facts about.
  Job ldentification: Job title, location, job code, short name, department and unit.
 Job Summary: Brief job contents, its authority, responsibility, hazards, etc.
 Relation to other jobs (Relation with superiors, peers, subordinates).
 Supervision generally taken, location in the hierarchy.
 Machine tools, and equipment used.
 Conditions of work, location of work, working hours, posture-standing, sitting,
walking speed, accuracy, health hazards, occupational disease

Job Specification
Contains information and facts about:
 Education
 Experience
 Training
 Initiative
 Physical effort
 Physical skills
 Responsibilities
 Communication skills
 Emotional characteristics
 Unusual sensory demands such as vision, smell,

Specimen of Job Description of compensation manager is given below:

Title : Compensation Manager
Code : HR/2310
Department: Human Resource Department
Summary : Responsible for the design and administration of employee compensation
and programmes
Duties: .1) To conduct job analysis, prepare job description for current and projected
positions
2) evaluate job descriptions, act as a Chairperson of Job Evaluation Committee
3) Ensure that the company” compensation rates are in tune with the company
philosophy
4)Relate salary to the performance od each employee. Conduct periodic salary survey.
5) Develop and administer performance appraisal programme
6) Develop an integrated HR information system
Working condition: Normal. Eight hours per day. Five days a week
Report to: Director, Human Resource Department.
RECRUITMENT:
According to Edwin B. Flippo. “Recruitment is the process of searching for prospective
employees and stimulating them to apply for job in the organisation”.
Features: The key features of recruitment may be listed as follows:
Locating and attracting talent: Recruiting is the process of locating and attracting
qualified people to fill job vacancies.
Linking process: It links job seekers with employers wanting to fill vacancies in their
organizations.
Positive process of building a talent pool: Recruiting aims at building a pool of well
qualified applicants. It seeks a fairly large pool of applicants so that the recruiter has a
choice.
Vital function: Every organization, small or big, undertakes recruitment, a vital function
without which no organization can get qualified people to accomplish its objectives. In a
knowledge-based, technology-driven economy, every recruiter is compelled to go that
extra mile in order to get people possessing requisite qualifications.
OBJECTIVES
The objectives of recruitment include:
 Attract job seekers possessing relevant qualifications.
 Project a positive and favourable image of the company.
 Encourage a large number of potential candidates to apply for possible vacancies.
 Create a wide choice for the company so that it can pick up right candidates.
 Determine present and future needs of the organization in sync with its overall
strategy and personnel planning.
 Give ample information to candidates so that they themselves can decide
whether to apply or not (for example, an advertisement might say, only
candidates with a first class degree need apply).

PROCESS OF RECRUITMENT
The process of recruitment consists of a number of sequential steps:
 Identify the required numbers and the sources of supply: Initially the HR
department will identify the number of vacancies to be filled up. Afterwards
decision regarding the number and type of employees required, and the
possible sources of supply (say for example, Bangalore for hiring talented
software professionals) will be identified.
 Publicize job details: The company needs to give detailed information about the
job opportunity, growth prospects, compensation details and other conditions of
service. If the attempt is to hire people from a rival company, the whole exercise
can be carried out through professional recruiting agencies that volunteer to get
the right person for the job quickly.
 Encouraging prospective job seekers to apply in large numbers: In order to
save time and resources in screening and shortlisting the candidate, the
recruiter company must encourage only qualified people to apply for the
vacancies.
 Evaluating recruiting effort : It is better to evaluate the recruiting effort after
filling up vacancies with a view to finding out whether the company is able to
meet the recruiting criteria (such as hiring without any gender bias, hiring
without any caste, religion consideration etc.) The evaluation process would
certainly help companies to learn from past mistakes and suitably modify their
methods.
:

SELECTION

What is the Selection Process?

The selection process in organizations is directed towards finding the right talent for
vacancies within the organization. Typically, it is akin to filtering through a series of
funnels to find the solution via elimination.
2. What Are the Key Steps In Selection Process?
Let’s take a look at the step-by-step guide to the employee selection process.
1. Preliminary Interview
2. Receiving Applications
3. Screening Applications
4. Preliminary Tests
5. Employment Interview
6. Checking References
7. Medical Examination
8. Final Selection
1. Preliminary Interview
Once a requirement is posted, a company may receive hundreds of thousands of
applications. In a granular pre-process, the preliminary interview is conducted to weed
out all candidates who do not meet the essential eligibility criteria – educational
qualifications, required skill sets, proven certifications, and experience. Candidates may
also be assessed based on their background and level of interest.
Some companies employ innovative techniques to bring the right candidates to the
table right from the get-go. For example, Uber deployed “Code on the road,” an in-app
coding game that took candidates straight to the next stage of the selection process if
they passed the challenge! Gamifying recruitment selection is among the latest trends
in HRM.
2. Receiving Applications
Once candidates pass the preliminary interview, organizations must aim to standardize
the application process. Here, candidates must fill out a standard application form that
collects bio-data, qualification, experience, background, and educational information.
The application could gather a broader understanding of the candidate, such as hobbies
and interests. A comprehensive application form will come in handy during the final
selection process when decisions are to be made between similar candidates.
3. Screening Applications
This stage includes shortlisting potential candidates from the pool of applicants who
applied. The screening committee constitutes various team leads, department
members, inter-department associates, and coordinators who would be working closely
with the selected candidates. Screening can include multiple criteria, including
educational , relevancy in terms of experience, etc. The interview details and
requirements are shared with potential candidates via a call or email.
4. Preliminary Tests
Preliminary tests are an essential part of the job selection process. They assess the
aptitude, IQ, emotional intelligence, proficiency, and personality of candidates. While
some organizations hold these tests remotely, many prefer to arrange a test venue
generally within organizational premises. Should they be held at the premises, the
candidates are informed of the itinerary.
5. Employment Interview
The selection interview is the crux of the entire process. It could be defined as an in-
person conversation that puts candidates on their feet. This step signals how well
he/she fits into the company ethos. During this stage, companies provide a detailed
brief of the job profile, including the roles and responsibilities that the candidate is
expected to shoulder. Likewise, the candidate is encouraged to share his/her concerns
or queries with the employer.
The employment interview itself may be divided into several rounds, including group
discussions and other activities. In-person interviews allow employers to judge the
candidate’s calibre, personality, teamwork, and leadership skills.
6. Checking References
Although in-person interviews provide a fair idea about the candidate, contacting
references allows employers to verify their understanding. Through discussions with
references who vouch for the candidates’ professionalism and work ethics, they may
discover other qualities about him/her. For this stage of the recruitment process in
HRM, organizations may reach out to previous employers or the concerned educational
institutions.
7. Medical Examination
Although not strictly followed, medical examinations are slowly becoming
commonplace among organizations today. Modern companies are viewing medical
fitness (both mental and physical) as a cost function. A healthy employee would require
fewer sick leaves and handle stress relatively quickly, allowing greater productivity in
dynamic, fast-paced environments. Some employers view this matter seriously and
consider this a preliminary phase during the screening stage.

8. Final Selection
The last phase of the selection process is to cross the t’s and dot the i’s; candidates who
have successfully qualified through all rounds of the recruitment and selection in HRM
receive an offer/appointment letter from the organization. More often than not,
candidates receive a temporary position with an assurance of permanency on
completion of the probation period. The appointment letter typically includes all such
details, including salary and company policies. Candidates may also be asked to sign an
NDA (Non-Disclosure Agreement) that ensures the protection of company data.

TYPES OF INTERVIEWS:
types of interviews are commonly used depending on the nature and importance of the
position to be filled within an organization.
Non-directive interview: In a non-directive interview, the recruiter asks questions as
they come to mind. There is no specific format to be followed. The questions can take
any direction. The interviewer asks broad, open-ended questions such as 'tell me more
about what you did on your last job' and allows the applicant to talk freely with a
minimum of interruption. Difficulties with a non-directive interview include keeping it
job related and obtaining comparable data on various applicants.
The directive or structured interview: In the directive interview, the recruiter uses a
predetermined set of questions that are clearly job related. Since every applicant is
asked the same basic questions, comparison among applicants is easier. Structured
questions improve the reliability of the interview process, eliminate biases and errors
and may even enhance the ability of a company to withstand legal challenges. On the
negative side, the whole process is somewhat mechanical, restricts the freedom of
interviewers and may even convey disinterest to applicants who are used to more
flexible interviews. Also, designing a structured interview may take a good amount of
time and energy.
The situational interview: One variation of the structured interview is known as the
situational interview. In this approach, the applicant is confronted with a hypothetical
incident and asked how he or she would respond to it. The applicant's response is then
evaluated relative to pre-established benchmark standards.
The behavioural interview: The behavioural interview focuses on actual work incidents
(as against hypothetical situations in the situational interview) in the applicant's past.
The applicant is supposed to reveal what he or she did in a given situation, for example,
how he disciplined an employee who was smoking inside the factory premises.
Stress interview: In stress interview, the interviewer attempts to find how applicants
would respond to aggressive, embarrassing, rude and insulting questions. The whole
exercise is meant to see whether the applicant can cope with highly stress-producing,
anxious and demanding situations while at work, in a calm and composed manner. Such
an approach may backfire also0, because the typical applicant is already somewhat
anxious in any interview. So, the applicant that the firm wants to hire might even turn
down the job offer under such trying conditions.
Group discussion interview: In this type of interview, groups rather than individuals are
interviewed. The interviewees are given certain problems and are asked to reach a
specific decision within a particular time limit The applicants enter into group
discussions, knowing that the interview l a test, but do not know which qualities are
being measured or tested. A observers watch the activities few of the interviewees-
those who take the discussion, lea those who try influencing others, those who
summarize a clarify issues and those who speak effectively. The assumption underlying
this type of interview is that 'the behaviour displayed in the solution of the problem is
related to potential success in the job. The object is to see how well individuals perform
on a particular task or in a particular situation.
Panel or Board interview: In a typical panel interview, the applicant meets with three
to five interviewers who take turns asking questions. After the interview, the
interviewers pool their observations to arrive at a consensus about the suitability of the
applicant. The panel members can ask new and incisive questions based on their
expertise and experience and elicit deep and meaningful responses from candidates.
Such an interview could also limit the impact of personal biases of any individual
interviewer. On the negative side, impact as an applicant, a panel interview may make
the candidate feel more stressed than usual.

Interviewing mistakes
There are certain common types of interviewing mistakes/errors which need To be
avoided.
1. The halo effect: Under this type of error, one marked candidate (either
favourable or characteristic of the unfavourable) maybe allowed to dominate the
appraisal of his entire personality. Physical appearance, his brilliant scholastic
record, his fluency or lack of it in language, experience of experience living
abroad, or as a sportsman may create a halo effect. The interviewers should
assess the whole of the candidate's personality and should not be led away by
any one trait or achievement. He should remember that good candidates come
in all shape, size, ages, education, religion, caste,
2. Leniency: When regionality. a candidate is rated by two people, their different.
One may show ratings may be consistent leniency by giving him other may high
scores; the consistently rate him by giving low scores. Leniency is associated
with lack of usually confidence and interest in the result of rating. Toughness
may be exaggerated expectation, lack of contact with people, and rigidity of
personality. general
3. Candidate order error: Sometimes the interviewer might have rated an applicant
poorly, following the interview of a very favourable or unfavourable candidates
(an anomaly known as candidate-order error; the order in which you interview
applicants can also affect how you rate them).
4. Projection: Error of projection arises when an interviewer expects his own
qualities, skills, values in an applicant. And therefore, he may select the
candidates who very much resemble him in age, appearance, manners,
opinion, voice and background. When supervisors or managers interview the
candidate, there is very possibility of this error being done. .
5. Stereotyping: This type of error occurs when the interviewer allows himself to
be unduly influenced by associating a particular personality trait with a person’s
origin or cultural background and that kind of stereotyping/ generalizing
ultimately determining the scores of a candidates. For example, he may feel that
candidates from Bihar may find it difficult to read, write and speak English
language and hence not select them at all!
Comparison Chart

BASIS FOR
RECRUITMENT SELECTION
COMPARISON
1.Meaning Recruitment is an activity of Selection refers to the process of
searching candidates and selecting the best candidates
encouraging them apply for it. and offering them job.
2. Approach Positive Negative
Objective Inviting more and more candidates Picking up the most suitable
to apply for the vacant post. candidate and rejecting the rest.
3.Key Factor Advertising the job Appointment of the candidate
Sequence First Second
Process Vacancies are notified by the firm The firm makes applicant pass
through various sources and through various levels like
application form is made available submitting form, written test,
to the candidate. interview, medical test and so
on.

4.Contractual As recruitment only implies the Selection involves the creation of

Relation communication of vacancies, no contractual relation between the
contractual relation is established. employer and employee.
5.Method Economical Expensive
 MODULE 4
 MOTIVATING EMPLOYEE
What is Motivation?
Motivation is a psychological process through which a person acts or behaves towards a
particular task or activity from start to completion. Motivation drives or pushes a person
to behave in a particular way at that point in time. When the motivation is positive, a
person is happy, energetic, enthusiastic & self-driven to perform the work and when it is
negative motivation, the person is demoralized, sad, lethargic & pessimistic leading to a
drop in productivity and performance.
importance of Motivation
It is an important psychological factor for any individual as it defines the work, ambition
and drive of that person to do any work. A person with high levels of motivation is
motivated to do good quality work, help others, spread their energy and focus on
achieving goals. On the contrary, a person with low levels of motivation demotivates
others, works shabbily and creates a negative atmosphere.
It is an important human factor in an individual’s personal as well as professional life.
Positive motivation for people is required in every field like business, sports, politics,
entrepreneurship etc. It is the desire of an individual to work towards a motive, which is
a certain task. In business, good motivation helps employees learn important
managerial skills like leadership, team management, time management, decision-
making, communication etc.
4 Types of Motivation

It is driven by several factors which influences the behavior and attitude of an

individual. Based on the different factors and the kind of impact it has on a person,
there are different types of motivation. The different types of motivation in people are:
1. Intrinsic Motivation
This type comes from within a person to do a task or achieve a particular goal. It is a
feeling of being self-driven and achieving objectives for oneself. Intrinsic motivation is
driven by motives like social acceptance, eating food, desires to achieve goals, biological
needs etc.
2. Extrinsic Motivation
This type drives an individual due to external forces or parameters. Some other person
or organization motivates the individual to work hard to achieve certain goals or tasks.
Extrinsic motivation is driven by motives like financial bonus, rewards, appreciation,
promotion, punishment, demotion etc.
3. Positive Motivation
This type drives an individual by offering positive accolades and rewards for performing
a task. In this type of motivation, the individual is rewarded by monetary benefits,
promotions etc. which drives an individual to work hard.
4. Negative Motivation
This is where fear and threat are used as a parameter to get the work done. In this type
of motivation, individuals are threatened with things like demotion, reducing benefits,
withdrawing merits etc.
For every individual, all the types are interlinked based on which he or she takes an
action. The resultant behavior of any person is basis the motivation types he or she has
been influenced by.

THEORIES OF MOTIVATION
1. Maslow’s Theory of Hierarchical Needs
Abraham Maslow postulated that a person will be motivated when all his needs are
fulfilled. People do not work for security or money, but they work to contribute and
to use their skills. He demonstrated this by creating a pyramid to show how people
are motivated and mentioned that ONE CANNOT ASCEND TO THE NEXT LEVEL UNLESS
LOWER-LEVEL NEEDS ARE FULFILLED. The lowest level needs in the pyramid are basic
needs and unless these lower-level needs are satisfied people do not look at working
toward satisfying the upper-level needs.

Below is the hierarchy of needs:

  Physiological needs: are basic needs for survival such as air, sleep, food,
water, clothing, sex, and shelter.
 Safety needs: Protection from threats, deprivation, and other dangers
(e.g., health, secure employment, and property)
 Social (belongingness and love) needs: The need for association, affiliation,
friendship, and so on.
 Self-esteem needs: The need for respect and recognition.
 Self-actualization needs: The opportunity for personal development, learning,
and fun/creative/challenging work. Self-actualization is the highest-level need to
which a human being can aspire.

The leader will have to understand at what level the team members are currently, and
seek out to help them to satisfy those specific needs and accordingly work to help fulfil
those needs. This will help the team members perform better and move ahead with the
project. Also, as their needs get fulfilled, the team members will start performing, till
the time they start thinking of fulfilling the next upper level of need as mentioned in the
pyramid.

2. What is Vroom’s Expectancy Theory?

It works on the assumption that people will choose to maximise pleasure and
minimise pain. This means that people will behave in a way that results in the best
outcome or reward.

The theory is dependent on the idea that the more an employee values the outcome, the
more motivated they will be to achieve it. The more effort they put in to succeed, the
more certain they are of getting that satisfying reward.

To make the connection between motivation, effort and performance,

Expectancy Theory has three
variables: Expectancy, Instrumentality and Valence.
What are Expectancy, Instrumentality and Valence?
These are all links in the chain of motivation – if one of these links is weak, then your
employee will not be motivated, so you would need to find the problem and resolve it
to achieve the outcome.

Expectancy (E)

If an employee puts in the effort, they expect a certain result. If they do not get that
result, they will not be motivated to make the effort again and so will not be satisfied
with the outcome.
How can managers help employees get the results they expect?
Make sure the employee has the tools and time
Assign an employee that already has or will gain useful skills
Be available to provide support and encouragement
Instrumentality (I)

Your employee might make the effort and get the expected result but if they do not
believe that the result is instrumental in getting the reward, they will not be motivated.
And so the outcome is not achieved and your employee is not satisfied.
It is important to note though, that the reward might not always be what the employee
expected at first.

For example, if they learn new skills in an effort to earn a promotion but that employee
is not rewarded with the position they want, they will still have those skills which
might result in them getting promoted in the future or recruited for a more senior role
in another company.

How can managers help employees understand that the result is instrumental in get

Be clear about what the reward is and how to achieve it

Give staff an outcome they value so they can trust that their effort is important
Be open about how rewards are allocated
Valence (V)

Valence is how much the outcome is valued, if at all. The more an employee values
a certain reward, the more satisfied they will be with their efforts.

A reward doesn’t have to be a grand gesture, it just has to be meaningful to the

employee – whether that’s a bonus, extra time off or simply a bit of recognition.

The Valence can be categorised by:

 -1 Avoiding the outcome/reward

 0 Apathetic about the outcome/reward
 +1 Desiring the outcome/reward
The Valance can only be motivating if the employee would prefer having the
outcome, to not having it.

Say an employee makes the effort, gets the expected result and believes that the result is
instrumental in achieving the outcome. But if the value of the reward doesn’t appeal to
them – if they aren’t satisfied with the outcome – the employee will not be motivated.
It’s important to make it clear to your employee that their effort will have a satisfying
outcome or reward that they value. This establishes trust and paves the way for the
rest of the chain of motivation to succeed.

So, the chain (or equation) of Vroom’s Expectancy Theory is as follows:

If either E, I or V are
Motivational zero,(MF)
Force then the equation fails,
= Expectancy (E) and this indicates that
x Instrumentality (I) x Valence (V)
motivation is low or non-existent.

How to use Vroom’s

For example, Expectancy
it could be Theory
that an employee to not
does increase
believemotivation and time
they have enough
performance
to perform a task well, which means their effort will not result in a satisfactory
outcome.can
Managers After all, who
assess would
whether beemployees
their motivatedunderstand
to work hard
whaton something
they that
need to do to is
get the
doomed to fail?
desired outcome. Clarifying their role can be a way to make sure staff are aligned and
understand what they need to do.
Solving the problem behind the lack of motivation will restore employees’
expectations, prove their instrumentality and/or help managers better
understand the value their staff place on the organisation’s rewards.
For example, say a manager tasked their employee with producing an advertising
campaign, which would get them the bonus they wanted as a reward (Valence).

According to Vroom’s Expectancy Theory, the employee must believe the task is
achievable, in order for them to put the effort into it. If the task is doable, the
employee will be keen to perform well in anticipation of the bonus (Expectancy).

The employee must also believe that the effort they put in will get them the desired
outcome (Instrumentality), so the organisation must deliver on the outcomes it
promises.

Luckily, our example organisation bestows rewards often, so due to the employee’s
trust and hard work, the advertising campaign is engaging and performs well, and
so the employee earns that satisfying bonus – and rightly so!

Advantages and disadvantages of using Expectancy Theory

Advantages:
 There is a connection between motivation and satisfaction
 The expectation of a reward increases motivation, even if the outcome
differs slightly from the original reward
 The theory focuses on rewards and achieving goals
 It promotes the idea that more effort should lead to
increased performance, meaning the desired outcomes are
met
Disadvantages:
 It assumes that effort and performance will result in the desired reward
 The theory does not account for factors like an employee’s learning and
workload capacity
 If either the task is unachievable, the reward is not delivered or the
outcome isn’t valuable, that is enough for employees to lose motivation
While Vroom’s Expectancy Theory allows both the business and staff to meet their
objectives by focusing on a meaningful reward or outcome.
 3. Herzberg's Theory: A Guide for Boosting Employee Motivation

Motivating employees can help create a pleasant and productive workplace and
increase job satisfaction. Herzberg's two-factor motivation theory identifies factors that
inspire professionals to complete high-quality work. Understanding and implementing
the two-factor theory can help you deliver supportive management to members of your
team.
In this article, we define Herzberg's motivation theory, list the steps for using it in a
work environment and provide an example of the theory in action.
What is the Herzberg theory?
Also known as Herzberg's motivation-hygiene theory, the two-factor theory or the dual-
factor theory, the Herzberg theory states that certain elements within a workplace lead
to job satisfaction, while others lead to dissatisfaction. Herzberg developed the theory
to understand an employee's attitude better and drive toward the job.
He interviewed employees about what pleased and displeased them at work,
studying both their good and bad experiences. He theorized that an individual's job
satisfaction depends on two types of factors: motivators and hygiene factors.
Motivating factors
Here's a list of factors that can cause satisfaction:
 Achievement: Individuals who have a strong drive to set and accomplish
goals, enjoy working alone, are willing to take calculated risks and want to
receive
 regular feedback on their accomplishments and progress have a desire for
achievement. This motivates them to succeed in the workplace.
 Recognition: Offering recognition not only makes employees feel accomplished
and appreciated, but it also reinforces good performance and encourages
employees to continue repeating the actions that led to the high performance.
The more a workplace positively recognizes an employee's behavior, the more
likely they are to repeat these behaviors and remain motivated.
 The work itself: Employees who believe that their work is important and
that their tasks are meaningful are more likely to be motivated to do well.
 Job advancement opportunities: Ensuring employees understand a clear plan
of progression within their position in the workplace can instill motivation to
work toward a promotion, which can ultimately increase employee productivity.
 Growth opportunities: Employees often feel more motivated at work when there
are ample opportunities for growth and professional development. Giving
employees opportunities to increase their skills and become more efficient in
their positions instills a sense of accomplishment and pride that acts as a strong
motivator for employees.
Hygiene factors
Here's a list of factors that can cause dissatisfaction:
 Relationship with peers: Encouraging camaraderie among team members
can contribute to greater job satisfaction.
 Company policies: This can cover initiatives to promote a healthy workplace, such
as mask wearing and social distancing.
 Physical workspace: Some aspects of a physical working environment include
its size and facilities, such as an on-site gym and updated furniture.
 Working conditions: This element includes the formal terms that the company
hires its staff members, such as the rate of pay, contract of employment and
length of the workday.
 Salary: Companies can offer competitive salaries and benefits to maintain high
employee satisfaction.
 Status: As an employee, performing meaningful work can provide a sense
of status.
 Job security: Employees may also feel more satisfied with their jobs when they
feel secure in their positions.
  Supervision: Autonomy enables employees to perform their tasks as they
deem fit.

How to use the Herzberg theory

Follow these steps to implement the two-factor Herzberg theory:
1. Evaluate the workplace
Evaluate morale in your work environment to help you identify motivating and hygiene
factors. Observe how employees interact with one another and find a correlation
between their attitudes and the quality of work they produce.
For example, if you noticed the option to telecommute increased productivity, then you
can conclude that company policy is a hygiene factor. Pinpointing what influences your
team's motivation can help you customize an improvement plan to best benefit the
company you represent.
2. Address hygiene factors
Create a plan to address hygiene factors that impact the workplace. For example, you
can revisit company policies and contemplate how you can change them to meet
employees' needs.
Consider implementing training programs for managers to learn how to supervise team
members effectively and support them during projects. You can also assess the
organizational budget to see if increasing salaries are possible. Review
your communication patterns with the workforce to better assure them about the
security of their jobs.
3. Reinforce motivators
Make the motivating factors more prevalent in the workplace to boost satisfaction
among employees. For example, you can promote training and
development opportunities to show employees the company is committed to their
professional growth.
Consider offering internal employees the chance to seek higher-level positions before
expanding the job search externally. You can also design a protocol for acknowledging
an individual's achievements publicly.

Example of the Herzberg theory

Consider this example situation using the Herzberg theory:
You're a senior executive at a graphic design firm. Your goal is to decrease
dissatisfaction, so you address hygiene factors, including work conditions, autonomy
and
job security. You make physical improvements to the office so employees have access to
the latest design software and dual-monitors to showcase their work. The PTO policy
allows employees to take unlimited vacation time, and you allow employees to
telecommute or come to the office depending on their preferences.
Now that you've acknowledged dissatisfaction, your aim is to increase every employee's
job satisfaction. You credit employees when the company receives positive feedback
from clients. You also openly discuss how their designs have boosted clients' brand
awareness and product sales, which shows employees that their work is meaningful.

4. What Is Theory X and Theory Y?

In the 1960s, social psychologist Douglas McGregor developed two contrasting theories
that explained how managers' beliefs about what motivates their people can affect their
management style. He labeled these Theory X and Theory Y. These theories continue to
be important even today.
What Motivates Your People?
If you believe that your team members dislike their work and have little motivation,
then, according to McGregor, you'll likely use an authoritarian style of management.
This approach is very "hands-on" and usually involves micromanaging people's work to
ensure that it gets done properly. McGregor called this Theory X.
On the other hand, if you believe that your people take pride in their work and see it as
a challenge, then you'll more likely adopt a participative management style. Managers
who use this approach trust their people to take ownership of their work and do it
effectively by themselves. McGregor called this Theory Y.
The approach that you take will have a significant impact on your ability to motivate
your team members. So, it's important to understand how your perceptions of
what motivates them can shape your management style.
We'll now take a more in-depth look at the two different theories and discover how and
when they can be useful in the workplace.
Theory X
Theory X managers tend to take a pessimistic view of their people, and assume that
they are naturally unmotivated and dislike work.
Work in organizations that are managed like this can be repetitive, and people are often
motivated with a "carrot and stick" approach.
Performance appraisals and remuneration are usually based on tangible results, such as
sales figures or product output, and are used to control and "keep tabs" on staff.
This style of management assumes that workers:
 Dislike their work.
 Avoid responsibility and need constant direction.
 Have to be controlled, forced and threatened to deliver work.
 Need to be supervised at every step.
 Have no incentive to work or ambition, and therefore need to be enticed
by rewards to achieve goals.
According to McGregor, organizations with a Theory X approach tend to have several
tiers of managers and supervisors to oversee and direct workers. Authority is rarely
delegated, and control remains firmly centralized.
Although Theory X management has largely fallen out of fashion in recent times, big
organizations may find that adopting it is unavoidable due to the sheer number of
people that they employ and the tight deadlines that they have to meet.
Theory Y
Theory Y managers have an optimistic opinion of their people, and they use a
decentralized, participative management style. This encourages a
more collaborative, trust-based relationship between managers and their team
members.
People have greater responsibility, and managers encourage them to develop their
skills and suggest improvements. Appraisals are regular but, unlike in Theory X
organizations, they are used to encourage open communication rather than to control
staff.
Theory Y organizations also give employees frequent opportunities for promotion.
This style of management assumes that workers are:
 Happy to work on their own initiative.
 More involved in decision making.
 Self-motivated to complete their tasks.
 Enjoy taking ownership of their work.
 Seek and accept responsibility and need little direction.
 View work as fulfilling and challenging.
 Solve problems creatively and imaginatively.
Theory Y has become more popular among organizations. This reflects workers'
increasing desire for more meaningful careers that provide them with more than just
money.

5. Alderfer’s ERG theory

Clayton P. Alderfer’s ERG theory from 1969 condenses Maslow’s five human needs into
three categories: Existence, Relatedness and Growth.
 1. Existence Needs
Include all material and physiological desires (e.g., food, water, air, clothing,
safety, physical love and affection). Maslow’s first two levels.
2. Relatedness Needs
Encompass social and external esteem; relationships with significant others like
family, friends, co-workers and employers . This also means to be recognized and
feel secure as part of a group or family. Maslow’s third and fourth levels.
3. Growth Needs
Internal esteem and self actualization; these impel a person to make creative or
productive effects on himself and the environment (e.g., to progress toward one’s
ideal self). Maslow’s fourth and fifth levels. This includes desires to be creative
and productive, and to complete meaningful tasks.
Even though the priority of these needs differ from person to person, Alberger’s
ERG theory prioritises in terms of the categories’ concreteness. Existence
needs are the most concrete, and easiest to verify. Relatedness needs are less
concrete than existence needs, which depend on a relationship between two or
more people. Finally, growth needs are the least concrete in that their specific
objectives depend on the uniqueness of each person.

5. What Is Adams' Equity Theory?

Adams' Equity Theory of Employee Motivation (also known as the Equity Theory of
Motivation) posits that employees are motivated when they believe they are receiving a
fair reward for their work. This theory was developed by J. Stacey Adams in 1963 and
has since been used to explain employee behavior and motivation.
Adams' Equity Theory suggests that employees compare their own inputs and outputs
(e.g., effort and rewards) to those of others, and when there is a perceived imbalance,
they will act to restore equity. It states that employees are motivated to keep their own
perceived fairness levels in balance with those around them. This means that if they feel
they are being treated unfairly, they will be less motivated to work hard.
What are the three components of Adams' Equity Theory?
The three components of Adams' Equity Theory are inputs, outputs, and comparisons.
Inputs refer to the resources that employees bring to the job, such as their education,
experience, and skills.
Outputs refer to the resources that employees receive from the job, such as salary,
benefits, and recognition.
Comparisons refer to the process of comparing one's own inputs and outputs to
those of others.
Adams' Equity Theory is based on the premise that employees seek to maintain
equity between their inputs and outputs. When there is a perceived inequity,
employees will take action to restore equity.
Input equity examples Output equity examples
 Time Income
 Effort Job security
 Loyalty Benefits
 Enthusiasm Reward
 Trust Responsibility
 Training Recognition

Internal and External equity

While internal equity is focused on pay equality within and across the organization,
external equity is also an important factor when considering your employee
compensation. This means taking into account what the wider external market is paying
for similar jobs within your industry.

What’s the Difference?

Internal equity refers to fairness of pay among current employees working for the same
company and performing the same or similar jobs. An analysis of internal equity
ensures that fairness is maintained throughout the organization based on similar
responsibilities, performance, knowledge, skills, and experience. A good review is
contingent on accurate job analyses and descriptions, not just job titles (which may be
inflated), to provide the appropriate comparators. Pay grades are an example of a
process that is designed to ensure internal equity. These structures ensure that
individuals in an organization are compensated in a consistent manner relative to their
peers, supervisors, and reports.
External equity refers to fairness of pay against the external market. External equity
compares what the company is willing to pay for talent versus what outside
organizations competing for the same talent are willing to pay. It provides a basis for
competitive job offers, salary adjustments, and salary structures. Equity exists when
employees are rewarded fairly in relation to those who perform similar jobs in other
organizations.
Both internal and external equity factors are important tools used to define and
implement a solid compensation strategy, resulting in effective management of
employee total rewards. With the majority of expenses attributable to labor costs,
consideration of both is vital to providing fair, equitable compensation and the ability to
attract and retain the best talent.

Fringe: health insurance, workers' compensation, retirement plans, and family and
medical leave.
What is the difference between fringe benefits and incentives? Firstly, incentives are
awarded after the work has been done, as long as the employee has hit specific targets.
Benefits, on the other hand, are delivered from the moment they join the company's
workforce.

 MODULE 5
PERFORMANCE APPRAISAL SYSTEM
Performance Appraisal in HRM –

MEANING
After placed and trained as an employee on the job, the next important and essential
step in the management of human resources of an organisation is to evaluate the
performance of an employee on the job. The management must be able to recognize
the level of an employee’s job performance and then they can be rewarded on the
basis of their contributions to organizational goals. It is the process of deciding how
employees do their jobs and if any problems are identified, then immediately steps are
taken to remedy them.

As per the views of C. Heyel (1973), “performance appraisal is the process of evaluating
the performance and qualifications of the employees in terms of the requirements of
the job for which he is employed, for the purposes of administration including
placement, selection for promotions, providing financial rewards and other actions
which require differential treatment among the members of a group as distinguished
from actions affecting all members equally”. It is organized on the principle of goals and
management by objectives.
However, the term performance appraisal or evaluation is most widely used.
Performance appraisal is a systematic evaluation of the employee’s present job
capabilities and also his potential for growth and development by his superiors. It can
be either informal or formal. The informal appraisals are unplanned while formal
appraisal system is set up by the organisation to regularly and systematically evaluate
employee performance. It reduces the chance of bias and snap judgment but bound to
yield better results.
A. Monappa and M.S. Saiyadain Douglas Mc Gregor (1957) says – Formal performance
appraisal plans are designed to meet three needs, one of the organisation and other
two of the individual, namely –
(i) They provide systematic judgments to back up salary increase, transfers, demotions
or terminations.
(ii) They are means of telling a subordinate how he is doing, and suggesting needed
changes in his behaviour, attitudes, skills or job knowledge. They let him know ‘where
he stands’ with the boss
(iii) They are used as a base for coaching and counselling the individual by the superior.
Performance appraisal is the systematic evaluation of employee’s behaviour in the work
place which includes employee’s job performance and his potential for growth and
development.
1. Appraise – The person whose performance is going to be appraised by other person.
2. Appraiser – The person who is going to evaluate the performance of appraise.
The appraiser may be a superior, subordinate, peers, self-appraisal, and group.

Performance Appraisal in HRM –

CHARACTERISTICS
A system which may have the following qualities or characteristics may become sound
appraisal system:
(1) It should be simple and understandable by the employees. Any complications need
to be avoidable.
(2) It should be suitable to be adopted for appraisal at regular intervals because
periodic appraisal enables the employees to improve.
(3) It should create the atmosphere of mutual understanding and confidence.
(4) The system should be capable of giving equitable justice to all employees.
Therefore it should be objective and free from personal bias.
(5) The employees should be taken in confidence while preparing
performance appraisal.
(6) The system should be suitable to the organisation from the points of its
structure, needs and more essentially based on latest development in the area.
(7) It should be able to fulfil the desired purpose by locating potential for promotion,
increments, placements, transfers etc.
(8) Special training is given to evaluated” for making him more impartial and free from
bias.
(9) Negative appraisal of any employee should be immediately communicated to him
so that he can adopt measures for improvement.
(10) The employee should be allowed to go in appeal in case his performance
appraisal is negative if he is not satisfied. By this the management will win the
confidence of the employees.
(11) The performance appraisal system should not be aimed at harassing the
employees who are vital human resources and play very important role in achieving
organisational goals. On the other hand the top bosses should be made aware that
performance appraisal is aimed at improving performance, organisational effectiveness
and to accomplish organisational goals.

Performance Appraisal in HRM –

8 MAIN OBJECTIVES
Performance appraisal plans are designed to meet the needs of the organisation and
the individual. It is viewed as core to good human resource management. According to
Cummings, “the overall objective of performance appraisal is to improve the efficiency
of an enterprise by attempting to mobilize the best possible efforts from individuals
employed in it. Such appraisals achieve four objectives including the salary reviews, the
development and training of individuals, planning job rotation and assistance
promotions.”
The following main objectives of employee performance appraisal are:
i. To identify employee weaknesses and strengths;
ii. To identify and meet training needs and aspirations;
iii. To generate significant, relevant and valid information about employee;
iv. To provide inputs to increments of rewards, transfers, promotion and salary
administration.
v. To help in improving employee’s performance if he is not found to be suitable during
the review period;
vi. To create a desirable culture and tradition in the organisation;
vii. To help in planning career development and human resources planning based
on potentialities.
viii. To provide ‘deadlock’ and research data for improving overall human
resources information system.

Performance Appraisal in HRM –

PROCESS
Performance appraisal is planned, developed and implemented in the following
manner:
1. Establish Performance Standards:
The performance standards for each and every job should be developed and
discussed with the superiors after thorough analysis of the job. These standards
should be clear. They must be measurable after certain period.
2. Communicate the Standards:
After setting the performance standards of job, the next activity is to communicate
these standards to all concerned; at least two parties – (a) appraiser (b) appraisee. It is
necessary, these standards must be modified. The appraiser must ensure that the
information communicated by him has been received by appraisee and understood
clearly.
3. Measure Actual Performance:
Now the next activity is to measure actual performance of appraisee on the job after
certain period. Generally, four common sources are used by appraiser to measure
actual performance, personal observation, statistical reports, oral reports and written
reports.
4. Compare Actual Performance with Standards:
The fourth activity is the comparison of actual performance with standards.
Sometimes actual performance may be better than standards and sometimes it may
go off the
track. Any deviations between actual performance and standard performance may be
noted carefully for next activity.
5. Feedback to the Employee:
In this activity the results of stage forth are discussed with employee. The information
which is received by appraisee about his assessment has a great impact on his
performance. Communicating poor performance is difficult task of appraiser.
6. Taking Corrective Action, if Necessary:
This is the final or last activity of the performance appraisal process. In this stage two
types of corrective action may be recommended by the appraiser. One is positive means
salary increase or promotion if actual performance of appraisee is up to the mark and
second is negative means coaching and counselling may be done if the performance is
poor. If necessary appraisee may be deputed for formal training courses.

Performance Appraisal in HRM –

Top 8 Methods:
Ranking Methods, Graphic Rating Scale Method, Critical Incidents Method, Checklist
Method and a Few Others
There are various methods for conducting performance appraisal to identify areas of
performance that should be modified or improved and to provide information to
management for specific actions such as promotion, transfers and compensation
adjustment.
Various methods of conducting performance appraisal are explained below:
1. Ranking Method:
This method requires the evaluator to list all salespeople in order of their performance,
beginning with the top performer. A number of ranking methods are used for
conducting the performance appraisal of employees.
Some of the important ones are listed as under:
(I) Simple Ranking Method:
In this method all the employees are rated on the same set of factors and ranks as
given to them on the basis of their performance in relation to others in the group. They
are all rated from the first to the last in order of their performance.
(II) Paired Comparison Method:
In this method all the employees’ performances are compared with other employees
but comparison is made with only one member at a time. The number of times each
member is preferred over the other is recorded. These numbers determine the ranks of
members and obviously the top performers will be those with highest ranks for more
number of times.
(III) Forced Distribution Method:
It is a method to evaluate employee performance according to a predetermined
distribution scale. Generally the organisations use five grade scales where one end of
the scale represents the best job performance and the other represents the poorest job
performance. All the employees are rated somewhere on the scale according to their
level of performance in comparison to other employees.
The biggest advantage of using ranking method is its low cost, little time and effort, and
simplicity. But the ranking method is not considered a very scientific and objective
method because there is lots of ambiguity and vagueness involved in ranking the
various employees. Chances of personal biasness and favouritism are many in this case
as ranks are being assigned by supervisors as per their own opinion and judgment.
2. Graphic Rating Scale Method:
Graphic rating scale method identifies specific desired traits, behaviour factors or
performance criteria, such as, quality and quantity of work, cooperativeness, analytical
ability, decisiveness, initiative, emotional stability, etc. Employees are rated on a scale
based on the extent to which they exhibit the desired behaviour or the extent to
which they meet the desired performance criteria.
The rating for each factor will be done on the basis of numbers (1, 2, 3, 4, and 5) or
descriptions (excellent, very good, average, poor, etc.) The central idea behind using
rating scales is to provide the appraiser with a continuous representation of various
degrees of particular qualities or characteristics being present in employees.
The total of the points obtained by an employee on all the rating factors constitutes the
overall ratings score of that employee in comparison to other employees in the
organisation.
Many organisations use graphic rating scales because they are practical and cost little to
develop. As traits are defined in advance, there is less ambiguity in this technique of
evaluation. While, unfortunately, rating scales suffer from a major weakness, that is, the
uneven interpretation of performance criteria and rating.
Unless each evaluator clearly understands what each criterion means and what the
rating means, confusion and dissatisfaction can result.
3. Critical Incidents Method:
Under this method the immediate supervisor tries to make a continuous record of all
the good or bad incidents of a person’s work-related behaviour. Whenever employees
are found doing something good or positive which contribute towards increasing the
overall productivity of the organisation or creating a healthy work atmosphere it is
recorded as their positive contribution.
At the same time whenever they commit a mistake, a blunder or an error because of
which damage has been incurred to machinery or the overall productivity of the
organisation gets adversely affected it adds to their negative contributions. At the end
of the rating period, these recorded critical incidents whether positive or negative are
used in the evaluation of the employee’s performance.
The biggest positive feature of this technique is that it measures behaviours which are
critical to the effective performance of the job. Using this method facilitates a feedback
by providing the employees with concrete examples of actual behaviours committed by
them. If proper records are maintained of these critical incidents it provides the most
realistic measurement of an employee’s performance on the job.
Although this method is an improvement and it tries to minimise the subjectivity
problems associated with other appraisal systems, it also suffers from certain
limitations. As employees are aware of the fact that they are being noticed by their
supervisors, it might add to their level of anxiety and hostility.
Others tend to hide those behaviours which they feel will adversely affect their
performance reviews. In either case, the end results are distorted performance reviews.
4. Checklist Method:
In this method the employer starts with a list of factors in their checklist, such as, does
the employee cooperate with other co-workers, do they keep their work place neat and
clean, do they follow their supervisors instructions closely, do they reach on their
workplace in time, and are they able to achieve the work targets assigned to them
properly.
Each factor or item receives a numerical value based on its perceived importance to
successful job performance. Those items that are deemed more important are assigned
higher values. The actual performance of all the employees on the job is measured and
is compared against the checklist. Their scores on the appraisal are determined by sum-
ming the scores of the factors checked by the rater.
One of the biggest advantages of using the checklist method is the convenience to the
supervisors as they simply have to say yes or no in front of the statements or the factors
provided to them. It saves their time and the same checklist can be discussed with the
employees and a feedback can be given to them.
However developing an effective checklist, measuring the performance against the
checklist and finally interpreting the results might not be very simple for the
supervisors.
5. Essay Method:
Brief narratives by the manager describe the performance of an employee. A manager
may write a detailed write-up on the job knowledge and potential of the employee;
employees understanding of the company’s programs, policies, and objectives;
employees promotability; overall appraisal of the employees performance;
and employees relation with their co-workers and superiors; and so forth.
Essay method provides detailed information about the employee’s performance by the
managers who have seen them closely on the job.
The essay method provides a great deal of information about the employee, which
provides a useful feedback to the employee for further improvement in the job
performance. Although this method allows more flexibility and appears to be simple, it
is not consistent and tends to be subjective as each supervisor has a different writing
style and emphasis.
They might evaluate the employee’s performance from altogether a different
perspective. Sometimes even the problem of halo effect can enter into their subjective
evaluation, where the evaluators may be biased by a generalized overall impression or
image of the person they are evaluating. If the manager does not like the way an
employee dresses, for instance, that attitude may bias all aspects of the manager’s
evaluation.
6. Management by Objectives Method:
Management by objectives (MBO) is a comprehensive management approach which is
used for conducting performance appraisal. It is considered as one of the most scientific
and objective method as a set procedure is followed. The primary focus in this method
is on developing a set of objectives which are to be realised by the employees.
These objectives are later used as criteria for measuring the performance of the
employees, or in other words the extent to which these objectives have been achieved
by the employees. So in this method at the first stage detailed objectives for the
employees are clearly set. In the light of these objectives the individual employees’
responsibilities and tasks are clearly laid down.
At the time of performance appraisal, a supervisor will measure the actual performance
of the employee on the job and the realisation of objectives by them. In case the
employees have been able to successfully realise the objectives they are rewarded
accordingly and in case they are not able to achieve the objectives, reasons for their
shortcomings are identified. Later in the light of these findings the objectives might be
redefined for future.
MBO is considered a very objective approach because goals and objectives are clearly
determined before the appraisal begins. This gives employees clear-cut directions as to
what is expected of them and the standards against which their actual performance will
be measured and compared at a later date.
If the objectives are unattainable they are redefined and reset for future. However this
method also suffers from the limitation of involving lots of time and effort on the part of
the supervisor and the subordinate.
7. 360° Feedback Appraisal:
The term 360° feedback appraisal is also known as multi-rater feedback, multisource
feedback, full circle appraisal and group performance review. This concept was
developed in the US in the year 1998. This concept involves a process of collecting
information about a person’s behaviour from the people around him – his boss (es),
colleagues, fellow members in the team, suppliers, as well as customers.
The basic assumption underlying this approach is that a person who works closely with
an employee sees his or her behaviour in various settings and circumstances that a
supervisor might not be able to see. Thus, the term 360° implies that everyone around is
involved in evaluating the performance.
Unlike traditional methods, only supervisors do not evaluate the subordinate rather
literally everyone around gives the feedback. It tries to eliminate the subjectivity in
evaluation, as many people rate an employee on a fairly extensive list of attributes.
Companies prefer this method as they receive a broader and more accurate perception
on their employees from multiple sources.
This performance appraisal method is a very effective method as it provides an
individual an opportunity to learn about others perception of him. It provides a more
open culture and an opportunity to resort to self-development for employees. It
increases the overall communication networks in the organisation.
The 360° feedback is widely accepted as an effective performance tool, but if it is not
managed properly then it does more harm than benefit. As so many people are going to
appraise an employee’s performance, all of them might not be closely familiar with him
and might not be able to give an accurate judgement or opinion about him.
So in order to use this method effectively every organisation must develop an effective
system and an appropriate procedure for generating enthusiasm amongst key decision
makers and participants, ensuring that all of them have the skills to support the
process. This might call for providing an orientation benefiting participants in one-to-
one meeting and providing organisational summary data.
8. Potential Appraisal:
This is done to predict whether an employee is capable of taking on more demanding
work, and the speed at which he or she is capable of advancing. This appraisal method
tries to judge the potential of employees for being promoted to higher positions. In this
method it is necessary to inform employees of their future prospects and give them an
opportunity to perform to the best of their capacity.
The organisation also might have to modify and update training and development pro-
grams and advice employees of what they must do to enhance their career prospects. In
the potential appraisal process, attempt is made to match the employee’s abilities and
aspirations with the organisation’s forecast of requirements for higher-level managerial
staff.
This aspect of employee appraisal is considered as a highly positive and motivating
because this tries to give an employee an incentive to work hard as they can look
forward to growing up in their career path. The potential appraisal is concerned with
forecasting the direction in which subordinates career can and should go and the rate at
which he or she is expected to develop.
The assessment of potential requires an analysis of the existing skills, qualities, and how
they can be developed to the mutual advantage of the company and the employee.
There is also an important counseling aspect to the review of potential which consists of
discussions with the individual about his or her aspirations and how these can best be
matched to the future foreseen for him or her. They can also provide employees with
additional motivation and encouragement which they need to remain with the
company.
Finally, once the employee’s performance has been evaluated with the help of any of
the methods listed above, the results should be reviewed in a meeting with the
manager. This discussion should be viewed as a counselling session, in which the
manager explains the person’s achievements on each evaluation factors and points out
how the results compared with the standards.
Then the manager and the employee together may try to determine the reasons for the
performance variations above or below the standards. Based on their review of all
evaluation factors, the manager and the employee can then establish goals and an
operating plan for the coming period.

Performance Appraisal in HRM –

Effective Performance Appraisal Programs:
Elements, Steps and Guidelines for Evaluation
Most of the controversies surrounding performance appraisals are due to lack of
certain guidelines in using this system. Some of the common problems in setting up a
performance appraisal system are the establishment of the verifiable standards of
performance, the clarity and the communication of those standards to the
subordinates, the factors to be measured, the frequency of measurement, the tools of
measurement, the scope of the program, the establishment of responsibilities, and so
on.
Some of these problems can be overcome if an organization follows certain guidelines
pertaining to performance appraisal programs.
A sound constructive program should include the following elements:
1. An effective performance appraisal program must have the support of top manage-
ment.
2. Objectives and standards of performance appraisal must be carefully planned and
keyed to the company needs. These objectives and standards of performance appraisal
must be visible and understood by the employee and his supervisor. Subordinates
should participate in the development of their job objectives.
3. The approach of appraisals and reviews should be different for people of differing
occupations. A uniform system may be desirable where applicable.
4. Objectivity of the program is very essential. Acceptance of the program depends on
objectivity. The key to objectivity in goal performance is verifiability, that is, the quality
that makes it possible to ascertain whether a given goal has been accomplished.
5. The appraisal program should not be permitted to become routine, rather, it should
be a flexible management tool.
6. At the time of performance appraisal, estimates of potential can logically be made,
and training and development needs should be identified.
7. The post-appraisal interview is an important factor in an effective evaluation system.
During this interview, the superior sits down with each subordinate and discusses the
review. This interview should stimulate the subordinate to improve his performance.
Criticism of poor performance should be timely and it should be accompanied by a
discussion of how to improve, not merely what to avoid.
8. The success of the performance appraisal program depends on an effective follow-up
procedure.
9. Appraisal records must be kept confidential to ensure an honest and objective
evaluation.
10. Individuals making the appraisals must be given training in conducting constructive
reviews.
Steps in Performance Appraisal Programme:
Pigors and Myers suggest several steps to develop and administer the programme
effectively:
1. The HR department may attempt to obtain as much as possible the agreement of line
management in respect of the needs and objective of the programme. A choice has to
be made among different kinds of appraisal methods judiciously.
2. The HR department has to examine the plans of other organisations as well as
the relevant literature in the field to formulate the most suitable plan for the
appraisal programme.
3. Attempts should be made to obtain the co-operation of supervisors in division of the
appraisal form and discuss with them the different factors to be incorporated, weights
and points to be given to each factors, and description or instructions to be indicated on
the form.
4. The HR or industrial relations manager tends to explain the purpose and nature of
the programme to all the supervisors and subordinates to be involved and effected by
it. Care should be taken to take into confidence for the representation of the union, if it
exists in the company.
5. Attempt is to be made to provide intensive training to all the supervisors with a view
to obtaining unbiased and uniform appraisal of their subordinates.
6. Care should be taken to acquire line and staff co-ordination and mutual checking of
appraisals with a view to achieving intra and inter departmental consistency and
uniformity.
7. There should be an arrangement for periodic discussion of the appraisal by the
superior with each of the subordinates where attempts may be made to stress good
points, indicate difficulties and encourage improved performance. Explicitly, in this
context, the discussion should be in the form of a progress review and every
opportunity should be given to the subordinate to express himself, if he feels that
the appraisal has been biased and that it should be otherwise.
8. As soon as the appraisal has been duly discussed, attempts may be made to
recommend for salary increase or promotion, if there decision seen possible in the light
of appraisals.
9. There should be provision for challenge and review of appraisals, if the employees
or their union representatives are dissatisfied with the personnel decisions which the
management has taken on the basis of these appraisals.
These steps, if followed carefully, are likely to help the superiors to evaluate their
subordinates effectively.
Davis suggests these guidelines for better evaluation:
1. Use a system of mutual goal setting
2. Discuss performance, not personality during evaluation discussion
3. Relationship in everyday work situation is crucial and employee development is a
full- time consideration
4. Praise, if used properly, can be-an effective tool
5. Your role is one of a counsellor in the appraisal process
6. Compensation should not be dealt with in evaluation interviews

Performance Appraisal –
Uses of Performance Appraisal Data
The performance appraisal data are useful in the following ways:
(i) It can serve as a useful basis for promotion and job rotation. On the basis of this, the
future requirements can be projected or curtailed.
(ii) It helps in determining appropriate salary increase and bonus for workers based
on performance measure.
(iii) It can provide suitable information for formulating training and development
programmes. If an employee is not performing up to expectations, a training
programme may enable him to correct any skill or knowledge deficiencies.
(iv) It can motivate employees by showing them where they stand and establishing a
data bank on appraised for rendering assistance in personal decisions.
(v) The data are useful tool for differentiating between good and poor employees
performance. “For example, in 1992, IBM set new guidelines to its performance
appraisal system with the objective of more strictly enforcing its existing method of
ranking employees on a numerical scale of 1 to 4.
Where 1 being the highest. Over the years, it had become established practice to rate
employees between 1 to 3 with very few exceptions. Under the new guidelines,
managers were forced to rank people as 4 whenever necessary. Industry executive
expect about 10% of IBM’s U.S. workforce, or about 20,000 people to get this low rating
and face pressure to resign.
In the nut shell, the uses of performance appraisal can be categorized into two broad
categories. One category concerns for administrative uses such as pay increases,
promotions, transfers, and discharges. The other use is for employee development
including performance improvement training, coaching and counselling.

Performance Appraisal in HRM –

8 Common Errors:
First Impression, Halo Effect, Leniency, Central Tendency, Horn Effect, Contract Error,
Recency Effect & Personal Bias Error
Due to difference in values and perception techniques the possibility of common errors
in performance appraisal is unavoidable phenomenon. The appraiser being bias can
compromise the credibility of an appraisal.
Some of the common errors in performance appraisal are:
Common Error # 1. First Impression:
The general saying is “First impression is the last impression”. The appraiser’s opinion
about rate is based on first impression and the evaluation is not appropriate
although the performance of candidate is up to mark.
Common Error # 2. Halo Effect:
When appraiser draw a general impression about an appraisee on the basis of a single
trait such as sociability, intelligence and attitude etc. then the halo effect is operating.
As per Blum, L. Milton, and C. Naylor the halo effect is a tendency to let the assessment
of an individual one trait influence the evaluation of that person on other specific traits.
The problem arises when rates the same rating to all other traits regardless of an
appraisee’s actual performance on these traits. For example, when appraiser rates high
performance only on the basis of punctuality of his appraisee ignoring all other traits of
the employee.
The elimination of this error is very difficult; only the possibility of minimization is
possible if the evaluator appraises all his subordinates on one trait before proceeding to
the next traits and providing one hour training to the evaluators.
Common Error # 3. Leniency or Severity Errors:
In this type of errors the evaluator develops his own value system which acts as a
standard against which he makes his appraisals. Some appraisers consistently assign
high values to all subordinates and other times they may assign consistently low values
without considering the actual performance of his subordinates. The former is known
as positive leniency error while the later as negative leniency error.
In the positive leniency error the distribution curve shifts to the right and in case of
negative leniency error the distribution curve of performance ratings shift to the left,
this is also called severity error. These errors can be partially overcome by conducting
meetings or training programmes for appraisers.
Common Error # 4. Central Tendency:
This is most common error that, occurs when the evaluator assign average ratings to all
his subordinates and avoids using high or low ratings. This kind of play it safe rating is
almost useless because it fails to distinguish between good and poor performance.
Common Error # 5. Horn Effect:
In this type of error the appraiser’s bias is in negative direction. The tendency is to allow
one negative trait of subordinate to colour the entire appraisal.
Common Error # 6. Contract Error:
The evaluation of a subordinate’s characteristics are affected by comparisons with other
subordinate recently encountered who rank higher or lower on the same
characteristics. For example, if the performance of two workers are actually
unsatisfactory and a third is average, then the third worker may well be rated
outstanding because in contrast of other two, the relating performance of third worker
becomes better.
Common Error # 7. Recency Effect:
In this case, the appraiser assign ratings only on the basis of recent behaviour or
performance. This is possible when appraisals are done over longer periods such as –
one year or more. The appraiser is human being and forgot about past behaviour of
subordinate for example, an outstanding performance of six to eight months old is
forgotten by appraiser during poor rating to an appraisee, which is not good in recent
months. The appraiser must be trained to remember whole year performance of
appraisee during evaluation of performance to minimize this errors.
Common Error # 8. Personal Bias Error:
The personal biasness of supervisor also effect when he evaluate his subordinates.
These biasness against subordinates may be on ground of sex, race, religion positions,
and age. The removal of this type of error is very difficult.

SUCCESSION PLANNING
Succession planning is the process of identifying the critical positions within your
organization and developing action plans for individuals to assume those positions.
Taking a holistic view of current and future goals, this type of preparation ensures that
you have the right people in the right jobs today and in the years to come.
In the long term, succession planning strengthens the overall capability of the
organization by:
 Identifying critical positions and highlighting potential vacancies;
 Selecting key competencies and skills necessary for business continuity;
  Focusing development of individuals to meet future business needs.
A succession plan identifies future staffing needs and the people with the skills and
potential to perform in these future roles. Professional & Organizational Development’s
Succession Planning Toolkit will help guide you, though we strongly suggest you involve
your assigned HR consultant and/or HR administrator in this process as well.
Toolkit
We’ve broken succession planning down into three phases with clear steps, and
the Succession Planning Toolkit (PDF) comprises a series of worksheets that move you
through the succession planning process. Within this document, you’ll find templates
and tips for:
 Ensuring succession planning is closely tied to business strategy and goals;
 Understanding the importance of engaging executive and senior leaders in the
process;
 Clearly defining the development of key talent; and
 Ensuring staff understand their role in the process and know what is expected of
them.
Assessment phase
Step 1: Identify significant business challenges in the next 1–5 years.
Step 2: Identify critical positions that will be needed to support business continuity.
Step 3: Identify competencies, skills, and institutional knowledge that are critical
success factors.
Evaluation phase
Step 4: Consider high potential employees.
Step 5: Select the competencies individuals will need to be successful in positions and to
meet identified business challenges.
Development phase
Step 6: Capture the knowledge that individuals possess before departing the
organization.
Step 7: Develop a pool of talent to step into critical positions through targeted career
development strategies.