critical review on hr practices of an organization

CRITICAL REVIEW ON HR PRACTICES FOLLOWED IN AN ORGANIZATION…………………………………………………………………………………………………………………………………….

CRITICAL REVIEW ON HUMAN RESOURCE PRACTICES

FOLLOWED IN AN ORGANIZATION

BY :-

NEHA SEHGAL

REGISTRATION NO. :- 200641625

SUBMITTED TO :-

SYMBIOSIS CENTRE FOR DISTANCE LERNING,

SYMBIOSIS BHAVAN, 1065 B, GOKHALE CROSS ROAD,

MODEL COLONY,

PUNE-411 016.

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SYMBIOSIS CENTRE FOR DISTANCE LERNING, PUNE

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JULY, 2006

CONTENTS

TITLE PAGE NO.

ACKNOWLEDGEMENT

ANNEXURE – 1

Chapter 1 – The Concept and Functions of Human Resource Management

Chapter 2 – Human Resource Planning

Chapter 3 – Job Analysis

Chapter 4 – Staffing

Chapter 5 – Orientation

Chapter 6 – Training & Development

Chapter 7 – Performance Appraisal

Chapter 8 – Career Planning

Chapter 9 – Compensation

Chapter10 – Benefits

Chapter 11 – Labour Relations

Chapter 12 – Record Keeping

Chapter 13 – Personnel Research

BIBLIOGRAPHY

Human Resources and Personal Management – by William B. Werter, Jr and

Keith Davis

Search engines employed on internet:

www.google.co.in

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http://www.google.co.in/


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ACKNOWLEDGEMENT

I feel great pleasure in expressing my deepest sense of gratitude to my family members,

friends and colleagues whose precious guidance, encouragement and sympathetic attitude

were immensely helpful and invaluable throughout the present work. I must avow that without

their able guidance, inspiring supervision, this dissertation would not have seen the light of the

day.

Also I would like to thank my parents and they deserve more than I can express in words.

However, I would like to use this opportunity to express my deepest and most sincere feelings

of indebtedness and gratitude to them for their affection, forbearance and inspiration.

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ANNEXURE – 1

NAME NEHA SEHGAL

REGISTRATION

NO.

200641625

PROGRAM NAME POST GRADUATE DIPLOMA IN BUSINESS

ADMINISTRATION WITH SPECILIZATION IN HUMAN

RESOURCE MANAGEMENT

ADDRESS H. NO. 2406, SECTOR – 7A, FARIDABAD – 121006,

HARYANA.

PROJECT TITLE CRITICAL REVIEW ON HUMAN RESOURCE PRACTICES

FOLLOWED IN AN ORGANIZATION

OBJECTIVE THE MAIN OBJECTIVE OF THIS WORK IS TO

UNDERSTAND THE INTRINSIC ASPECTS OF THE HUMAN

RESOURCE FUNCTION/PROCESSES FOLLOWED IN AN

ORGANIZATION LIKE RECRUITMENT, SELECTION,

TRAINING & DEVELOPMENT, AND OTHER WELFARE

PROGRAMMES. IT ALSO THROWS LIGHT ON OTHER

ACTIVITIES THAT HR DEPARTMENT PERFORMS LIKE

PERFORMANCE APPRAISAL, SALARY DISBURSEMENT,

MAINTAINING LEAVE RECORDS/ACCOUNTS,

GRIEVANCE HANDLING, INDUSTRIAL RELATIONS,

CONVEYANCE, CANTEEN ALLOWANCES ETC. THIS

PROJECT GIVES AN INSIGHT VIEW ON VARIOUS ………………………………………………………………………………………………………………………………..


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PROCEDURES FOLLOWED BY HR DEPARTMENT AND

THE PROBLEMS FACE BY THEM.

NEED FOR THE

TOPIC

HUMAN RESOURCES ARE THE MOST IMPORTANT

ASSETS OF THE COMPANY. THEY ARE THE MOST

UNPREDICTABLE AND COMPLEX CREATURES ALSO

AND TO MANAGE THEM IS A HERCULEAN TASK. THE

SUCCESS OR FAILURE OF AN ORGANIZATION DEPENDS

UPON THE KIND OF PEOPLE THE FIRM HIERS AND HOW

WELL THEY MANAGE THEM. HUMAN RESOURCE

MANAGEMENT HAS THEREFORE BEEN EMERGED AS A

REVOLUTION IN THIS REGARD. IT IS AN

INDISPENSABLE PART OF THE ORGANIZATION AND

WITHOUT PROPER FUNCTIONING OF HR DEPARTMENT,

WHOLE ORGANIZATION CANNOT RUN SMOOTHLY AND

EFFICIENTLY.

THIS PROJECT HAS BEEN UNDERTAKEN TO MAKE ONE

UNDERSTAND THE IMPORTANCE OF HUMAN

RESOURCE MANAGEMENT AND ITS FUNTIONS IN AN

ORGANIZATION AND HOW IT HELPS IN SMOOTH

RUNNING OF THE ORGANIZATION.

METHODOLOGY

AND PROCEDURE

OF WORK

THE METHODOLOGY ADOPTED FOR THE PRESENT

WORK IS A MIX OF BOOKS, NEWSPAPERS, JOURNALS

AND REPORTS.

BOOKS ON CULTURE AND HUMAN RESOURCE

DEVELOPMENT ARE THE THEORETICAL INPUTS IN

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THIS WORK AND IT IMMENSELY HELPED IN THE

DESIGN OF THE PROJECT.

NEWSPAPER ARTICLES TOO WERE REFERRED FOR THE

LATEST INFORMATION ABOUT THIS PROJECT. THE

VOLUMINOUS INTERNET SITES TOO WERE

INSTRUMENTAL IN THE RESEARCH FOR THIS WORK.

CHAPTERISATION THIS PROJECT HAS BEEN DIVIDED INTO FOURTEEN

CHAPTERS. EACH CHAPTER IS THE EXPLAINATION OF

DIFFERENT FUNCTIONS OF HUMAN RESOURCE

MANAGEMENT.

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CHAPTER – 1

THE CONCEPT AND FUNTIONS OF HUMAN RESOURCE

MANAGEMENT

1.0 Before we start off with various Human Resource functions that an organization

performs, we must know the meaning of Human Resource Management.

Therefore, the objective of this chapter is to understand the meaning and

concept of Human Resource Management and also to explain the functions of

HR. Responsibilities and new roles of HR practitioners can also be considered as

objectives.

1.1 INTRODUCTION

Human resource management (HRM) is an approach to the management of

people, based on four fundamental principles.

First, human resources are the most important assets an organization has

and their effective management is the key to its success.

Second, this success is most likely to be achieved if the personnel policies

and procedures of the enterprise are closely linked with, and make a major

contribution to, the achievement of corporate objectives and strategic

plans.

Third, the corporate culture and the values, organizational climate and

managerial behavior that emanate from that culture will exert a major

influence on the achievement of excellence.

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This culture must, therefore, be managed which means that organizational values

may need to be changed or reinforced, and that continuous effort, starting from

the top, will be required to get them accepted and acted upon.

And finally, HRM is concerned with integration – getting all the members

of the organization involved and working together with a sense of

common purpose.

1.2 CONCEPT OF HUMAN RESOURCE MANAGEMENT

HRM is a strategic approach to the acquisition, motivation, development and

management of the organization’s human resources. It is a specialized field that

attempts to develop an appropriate corporate culture, and introducing programs,

which reflects and supports the core values of the enterprise and ensure its

success. HRM is proactive rather than reactive, i.e., always looking forward to

what needs to be done and then doing it, rather than waiting to be told what to do

about recruiting, paying or training people, or dealing with employee relations

problems as they arise.

The techniques for the application of HRM will include many familiar functions

of personnel managers, such as manpower planning, selection, performance

appraisal, salary administration, training and management development. These

will be overlaid by special programs designed to improve communication

systems, involvement, commitment, and productivity. Broadly, there are three

meanings attached to the concept of HRM.

In the first place, persons working in an organization are regarded as a

valuable source, implying that there is a need to invest time and effort in

their development.

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Secondly, they are human resources, which mean that they have their own

special characteristics and, therefore, cannot be treated like material

resources. The approach focuses on the need to humanize organizational

life and introduce human values in the organization.

And thirdly, human resources do not merely focus on employees as

individuals, but also on other social realities, units and processes in the

organization.

These include the role or the job a person has in the organization, the dyadic unit,

(consisting of the person and his superior), the various teams in which people

work, inter-team processes, and the entity of the total organization.

In its essence, HRM is the qualitative improvement of human beings who are

considered the most valuable assets of an organization – the sources, resources,

and end-users of all products and services. HRM is, no doubt, an outgrowth of

the older process and approach. But it is much more than its parent disciplines

viz., personnel management, and behavioral science. HRM is also more

comprehensive and deep-rooted than training and development. Its approach is

multi-disciplinary from the beginning to the end. It is a scientific process of

continuously enabling the employees to improve their competency and capability

to play their present as well as future expected roles so that the goals of the

organization are achieved more fully and at the same time the needs of the

employees are also met to an adequate extent.

HRM is a production model approach to personnel management. The HRM

model is characterized as being employee-oriented with an emphasis on the

maximization of individual skills and motivation through consultation with the

workforce so as to produce high levels of commitment to company strategic

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goals. It is a resource to be used to its fullest capacity. It is an asset to be

invested in HRM is concerned with both the structures of work in a firm and with

all the related employment practices that are needed to carry out the work. HRM

is not simply about HR or people practices; it is about the management of

work and people in the firm.

Managing people includes both individual and collective dimensions. The

traditional personnel management is non-strategic, separate from the business,

reactive, short-term, and constrained by a limited definition of its role as dealing

with mostly unionized and low level employees. The major attention of

traditional personal administration or management while the major attention of

HRM is on developing people and their competencies. If personnel

management is curative, HRM is preventive. The key distinguishing feature

of HRM is its evolving strategic role.

HRM essentially emphasizes and incorporates those expectations, which are not

being fulfilled through the traditional personnel management. It integrates in a

meaningful way the various sub-systems like performance appraisal, potentially

appraisal and development, career planning, training and development,

organization development, research and systems development, rewards, employee

welfare and quality of work life, industrial relations, and human resource

information. Under the HRM approach, some basic assumptions about human

resources are also different from the traditional approach. The important

assumptions of HRM are as follows:

The members of an organization are reservoirs of untapped resources.

There is a scope for unlimited development of these resources.

It is more in the nature of self-development than development thrust from

outside.

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The organization also undergoes development with the overall benefits

along with the development of its members.

The organization further develops a culture in which utmost emphasis is

placed on harmonious superior-subordinate relations, teamwork, and

collaboration among different groups of individuals, open communication,

and above all, integration of the goals of the organization with the needs

of the employees.

Top management takes the initiative for HRM, formulates necessary plans

and strategies, and creates an overall climate and support for its

implementation.

The management of human resources is more of an art than a science. In

practice, it is an art full of pitfalls, judgment calls, and learning from past

mistakes.

1.3 OBJECTIVES OF HRM

The primary objective of HRM is to ensure the availability of competent and

willing workforce to an organization. Apart from this, there are other objectives

too. Specifically, HRM objectives are four fold –

1.3.1 Societal Objective

The societal objectives are socially and ethically responsible for the needs and

challenges of society. While doing so, they have to minimize the negative impact

of such demands upon the organization. The failure of organizations to use their

resources for society’s benefit in ethical ways may lead to restrictions. For

example, the society may limit human resource decisions to laws that enforce

reservation in hiring and laws that address discrimination, safety or other such

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areas of societal concern.

1.3.2 Organizational Objective

The organizational objectives recognize the role of human resource management

in bringing about organizational effectiveness. Human resource management is

not an end in itself; it is only a means to assist the organization with its primary

objectives. Simply started the human resource department exists to serve the rest

of the organization.

1.3.3 Functional Objective

Functional objectives try to maintain the department’s contribution at a level

appropriate to the organization’s needs. Human resources are to be adjusted to

suit the organization’s demands. The department’s level of service must be

tailored to fit the organization it serves.

1.3.4 Personal Objectives

Personal objectives assist employees in achieving their personal goals, at least in

so far at these goals enhance the individual’s contribution to the organization.

Personal objectives of employees must be met if they are to be maintained,

retained and motivated. Otherwise, employee performance and satisfaction may

decline giving rise to employee turnover.

HRM objectives and their respective functions are illustrated below. The

source is basically from page no. 15 the book entitled ‘Human Resources and

Personnel Management written by William B. Werter, Jr. and Keith Davis.

HRM Objectives Supporting Functions

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1. Societal Objectives 1. Legal compliance

2. Benefits

3. Union-management relations

2. Organizational Objectives 1. Human resource planning

2. Employee relations

3. Selection

4. Training and development

5. Appraisal

6. Placement

7. Assessment

3. Functional Objectives 1. Appraisal

2. Placement

3. Assessment

4. Personal Objectives 1. Training and development

2. Appraisal

3. Placement

4. Compensation

5. Assessment

1.4 HUMAN RESOURCE FUNCTIONS

The role of human resource management is to plan, develop, and administer

policies and programs designed to make expeditious use of an organization’s

human resources. It is that part of management, which is concerned with the

people at work and with their relationship within an enterprise. Its objectives are:

The effective utilization of human resources;

Desirable working relationships among all members of the organization;

and

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Maximum individual development

The major functional areas in human resource management are – Planning;

Staffing; Employee development; and Employee maintenance. These four

areas and their related functions share the common objective of an adequate

number of competent employees with the skills, abilities, knowledge, and

experience needed for further organizational goals. Although each human

resource function can be assigned to one of the four areas of personnel

responsibility, some functions serve a variety of purposes. For example,

performance appraisal measures serve to stimulate and guide employee

development as well as salary administration purposes. The compensation

function facilitates retention of employees and also serves to attract potential

employees to the organization. A brief description of usual human resource

functions is given below:

1.4.1 Human Resource Planning

In the human resource planning function, the number and type of employees

needed to accomplish organizational goals are determined. Research is an

important part of this function because planning requires the collection and

analysis of information in order to forecast human resources supplies and to

predict future human resources needs. The basic human resource planning

strategy is staffing and employee development.

1.4.2 Job Analysis

Job analysis is the process of describing the nature of a job and specifying

the human requirements, such as skills, and experience needed to perform it.

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The end product of the job analysis process s the job description. A job

description spells out work duties and activities of employees. Job descriptions

are a vital source of information to employees, managers, and personnel people

because job content has a great influence on personnel programs and practices.

1.4.3 Staffing

Staffing emphasizes the recruitment and selection of the human resources for

an organization. Human resources planning and recruiting precede the actual

selection of people for positions in an organization. Recruiting is the personnel

function that attracts qualified applications to fill job vacancies.

In the selection function, the most qualified applicants are selected for hiring from

among those attracted to the organization by the recruiting function. On

selection, human resource functionaries are involved in developing and

administering methods that enable managers to decide which applicants to select

and which to reject for the given jobs.

1.4.4 Orientation

Orientation is the first step towards helping a new employee adjusts himself

to the new job and the employer. It is a method to acquaint new employees

with particular aspects of their new job, including pay and benefit programs,

working hours, and company rules and expectations.

1.4.5 Training and Development

The training and development function gives employees the skills and

knowledge to perform their jobs effectively. In addition to providing training

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for new or inexperienced employees, organizations often provide training

programs for experienced employees whose jobs are undergoing change. Large

organizations often have development programs, which prepare employees for

higher-level responsibilities within the organization. Training and development

programs provide useful means of assuring that employees are capable of

performing their jobs at acceptable levels.

1.4.6 Performance Appraisal

This function monitors employee performance to ensure that it is at

acceptable levels. Human resource professionals are usually responsible for

developing and administering performance appraisal systems, although the actual

appraisal of employee performance is the responsibility of supervisors and

managers. Besides providing a basis for pay, promotion, and disciplinary action,

performance appraisal information is essential for employee development since

knowledge of results / feedback is necessary to motivate and guide performance

improvements.

1.4.7 Career Planning

Career Planning has developed partly as a result of desire of many employees to

grow in their jobs and to advance in their career. Career planning activities

include assessing an individual employee’s potential for growth and advancement

in the organization.

1.4.8 Compensation

Human resource personnel provide a rational method for determining how much

employees should be paid for performing certain jobs. Pay is obviously related to

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the maintenance of human resources. Since compensation is a major cost to many

organizations, it is a major consideration in human resource planning.

Compensation affects staffing in that people are generally attracted to

organizations offering a higher level of pay in exchange for the work performed.

It is related to employee development in that it provides an important incentive in

motivating employees to higher levels of job performance and to higher paying

jobs in the organization.

1.4.9 Benefits

Benefits are another form of compensation to employees other than direct pay for

work performed. As such, the human resource function of administering

employee benefit shares many characteristics of the compensation function.

Benefits include both the legally required items and those offered at employer’s

discretion. The cost of benefits has risen to such a point that they have become a

major consideration in human resource planning. However, benefits are primarily

related to the maintenance area, since they provide for many basic employee

needs.

1.4.10 Labour Relations

The term ‘labor relations’ refers to interaction with employees who are

represented by a trade union. Unions are organization of employees who join

together to obtain more voice in decisions affecting wages, benefits, working

conditions, and other aspects of employment. With regard to labor relations, the

personnel responsibility primarily involves negotiating with the unions regarding

wages, service conditions, and resolving disputes and grievance.

1.4.11 Record Keeping

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The oldest and most basic personnel function is employee record-keeping. This

function involves recording, maintaining, and retrieving employee-related

information for a variety of purposes.

1.4.12 Personnel Research

All personnel people engage in some form of research activities. In a good

research approach, the object is to get facts and information about personnel

specifics in order to develop and maintain a program that works.

1.5 ROLES PLAYED BY HR MANAGER

HR professionals have an all-encompassing role. They are required to have a

thorough knowledge of the organization and its intricacies and complexities. The

ultimate goal of every HR person should be to develop a linkage between the

employee and the organization because the employee’s commitment to the

organization is crucial. The first and foremost role of HR functionary is to impart

continuous education to employees about the changes and challenges facing the

country in general and their organization in particular. The employees should

know about their balance sheet, sales progress, diversification plans, restructuring

plans, sharp price movements, turnover and all such details. The HR

professionals should impart education to all employees through small booklets,

video films, and lectures. The primary responsibilities of a human resource

manager are:

To develop a thorough knowledge of corporate culture, plans and policies.

To act as an internal change agent and consultant.

To initiate change and act as an expert and facilitator.

To actively involve himself in company’s strategy formulation.

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To keep communication lines open between the HRD function and

individuals and groups both within and outside the organization.

To identify and evolve HRD strategies in consonance with overall

business strategy.

To facilitate the development of various organizational teams and their

working relationship with other teams and individuals.

To try and relate people and work so that the organization objectives are

achieved effectively and efficiently.

To diagnose problems and to determine appropriate solution particularly

in the human resources areas.

To provide coordination and support services for the delivery of HRD

programs and services.

To evaluate the impact of an HRD intervention or to conduct research so

as to identify, develop or test how HRD in general has improved

individual or organizational performance.

Pat McLegan has suggested the following new roles of HR practitioner:

To bring the issues and trends concerning an organization’s external and

internal people to the attention of strategic decision-makers, and to

recommend long-term strategies to support organizational excellence and

endurance.

To design and prepare HR systems and actions for implementation so that

they can produce maximum impact on organizational performance and

development.

To facilitate the development and implementation of strategies for

transforming one’s own organization by pursuing values and visions.

To create the smoothest flow of products and services to customers; to

ensure the best and most flexible use of resources and competencies; and

to create commitment among the people who help us to meet customers’ ………………………………………………………………………………………………………………………………..


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needs whether those people work directly for the organization or not.

To identify learning needs and then design and develop structured learning

programs and materials to help accelerate learning for individuals and

groups.

To help individuals and groups work in new situations and to expand and

change their views so that people in power move from authoritarian to

participative models of leadership.

To help people assess their competencies, values, and goals so that they

can identify, plan, and implement development actions.

To assist individuals to add value in the workplace and to focus on the

interventions and interpersonal skills for helping people change and

sustain development.

To assess HRD practices and programs and their impact and to

communicate results so that the organization and its people accelerate

their change and development.

According to Dave Ulrich – there are four roles which HR play as below:

Strategic partner role – turning strategy into results by building

organizations that create value;

A change agent role – making change happen and, in particular, help it

happen fast;

An employee champion role-managing the talent or the intellectual

capital within a firm; and

An administrative role – trying to get things to happen better, faster and

cheaper.

Human resource management has received tremendous attention in recent years.

Its role in organizations has also undergone a substantial change and may

organizations have gradually oriented themselves from the traditional personnel

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management to a human resource management approach, although many see it as

the ‘old wine in a new bottle’. The basic approach of HRM is to perceive the

organization in its totality. Its emphasis is not only on production and

productivity but also on the quality of life. It seeks to achieve the fullest

development of human resources and the fullest possible socio-economic

development.

With business going global and competition becoming intense today, HR has

traveled a long way from its conventional role as a support function to being a

strategic business partner in the present technology leveraged era.

1.5 SUMMARY

The human resources of an organization represent one of its largest investments.

The objectives of HRM include the organization right, providing effective

motivation and leadership, obtaining and developing the right people, paying and

treating them fairly, and getting them involved in working productively. The

attainment of these objectives necessitates the performance of several functions.

The main HRM systems are – Appraisal system; Career system; Training system;

Work system; Cultural system; and Self-renewal system.

All systems and sub-systems of HRM must be incorporated in the organization

while setting the goals and objectives. This will also integrate the purposes and

processes and make HRM more meaningful. Human resources functions are

many and varied and include such things as human resource planning, recruiting,

selecting, training, counseling employees, compensation management, and

employer-employee relations. In small organizations, most human resource

functions are performed by owners or operating managers. Large organizations

usually have a human resource or personnel department that is responsible for

coordinating and directing the human resource functions. Successful human ………………………………………………………………………………………………………………………………..


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resource management is essential to organizational growth and success.

In the light of new challenges, there are indications that human resource people

will play an increasingly important role in an organization’s long-range planning

and policy-making activities.

CHAPTER – 2

HUMAN RESOURCE PLANNING

2.0 Keith Davis has rightly pointed out, “An organization should identify their

short-run and long-run employee needs examining their corporate

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ORGANIZATIONAL OBJECTIVES AND

STRATEGIES

SCAN EXTERNAL ENVIRONMENT FOR

CHANGES AFFECTING LABOUR SUPPLY

ANALYZE INTERNAL INVENTORY OF HR

CAPABILITIES

SURVEY OF PEOPLE AVAILABLE

ORGANIZATIONAL NEED FOR PEOPLE

FORECASTING

HR STRATEGIES AND PLANS


strategies”. This statement helps us understand that one should always adopt a

situational approach to be more effective. Another most important conclusion is

that it is the corporate strategies and objectives that set a planning horizon.

Managers follows a systematic process or a model when planning for HR. The

following figure (Fig. 2.1) drawn on the next page will illustrate the same.

The process of the HR planning begins with considering the organizational

objectives and strategies. Then both external and internal assessments of HR

needs and supply sources must be done and forecasts developed. Key to assessing

internal human resources is having solid information, which is accessible through

a human re-source information system (HRIS).

Once the assessments are complete, forecasts must be developed to identify the

mismatch between HR supply and HR demand. HR strategies and plans to adress

the imbalance, both short and long term, must be developed.

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Figure 2.1 : This figure illustrates the HR Planning Process

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CHAPTER – 3

JOB ANALYSIS

3.0 Job Analysis is a process to identify and determine in detail the particular job

duties and requirements and the relative importance of these duties for a given

job. Job Analysis is a process where judgements are made about data collected on

a job.

3.1 The Job; not the person An important concept of Job Analysis is that the

analysis is conducted of the Job, not the person. While Job Analysis data may be

collected from incumbents through interviews or questionnaires, the product of

the analysis is a description or specifications of the job, not a description of the

person.

3.2 Purpose of Job Analysis

The purpose of Job Analysis is to establish and document the 'job relatedness' of

employment procedures such as training, selection, compensation, and

performance appraisal.

Determining Training Needs

Job Analysis can be used in training/"needs assessment" to identify or develop:

training content

assessment tests to measure effectiveness of training

equipment to be used in delivering the training

methods of training (i.e., small group, computer-based, video,

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classroom...)

Compensation

Job Analysis can be used in compensation to identify or determine:

skill levels

compensable job factors

work environment (e.g., hazards; attention; physical effort)

responsibilities (e.g., fiscal; supervisory)

required level of education (indirectly related to salary level)

Selection Procedures

Job Analysis can be used in selection procedures to identify or develop:

job duties that should be included in advertisements of vacant positions;

appropriate salary level for the position to help determine what salary

should be offered to a candidate;

minimum requirements (education and/or experience) for screening

applicants;

interview questions;

selection tests/instruments (e.g., written tests; oral tests; job simulations);

applicant appraisal/evaluation forms;

orientation materials for applicants/new hires

Performance Review

Job Analysis can be used in performance review to identify or develop:

goals and objectives

performance standards

evaluation criteria

length of probationary periods

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http://www.hr-guide.com/selection.htm

http://www.hr-guide.com/compensation.htm


duties to be evaluated

3.3 Methods of Job Analysis

Several methods exist that may be used individually or in combination. These

include:

review of job classification systems

incumbent interviews

supervisor interviews

expert panels

structured questionnaires

task inventories

check lists

open-ended questionnaires

observation

incumbent work logs

A typical method of Job Analysis would be to give the incumbent a simple

questionnaire to identify job duties, responsibilities, equipment used, work

relationships, and work environment. The completed questionnaire would then be

used to assist the Job Analyst who would then conduct an interview of the

incumbent(s). A draft of the identified job duties, responsibilities, equipment,

relationships, and work environment would be reviewed with the supervisor for

accuracy. The Job Analyst would then prepare a job description and/or job

specifications.

The method that you may use in Job Analysis will depend on practical concerns

such as type of job, number of jobs, number of incumbents, and location of jobs.

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http://www.hr-guide.com/data/G013.htm





3.4 What Aspects of a Job Are Analyzed

Job Analysis should collect information on the following areas:

Duties and Tasks

The basic unit of a job is the performance of specific tasks and duties.

Information to be collected about these items may include: frequency, duration,

effort, skill, complexity, equipment, standards, etc.

Environment

This may have a significant impact on the physical requirements to be able to

perform a job. The work environment may include unpleasant conditions such as

offensive odors and temperature extremes. There may also be definite risks to the

incumbent such as noxious fumes, radioactive substances, hostile and aggressive

people, and dangerous explosives.

Tools and Equipment

Some duties and tasks are performed using specific equipment and tools.

Equipment may include protective clothing. These items need to be specified in a

Job Analysis.

Relationships

Supervision given and received. Relationships with internal or external people.

Requirements

The knowledge, skills, and abilities (KSA's) required to perform the job. While

an incumbent may have higher KSA's than those required for the job, a Job

Analysis typically only states the minimum requirements to perform the job.

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CHAPTER – 4

STAFFING

4.0 An organization requires the services of human beings. They are the dynamic

elements of it. Without the right kind of persons, an organization structure is only

an unproductive empty shell. Thus, any person occupying a position should have

enough talent to meet its requirements. Staffing basically involves matching jobs

and individuals. It involves a number of functions such as planning, selection,

training and appraisal of the individuals in the organization.

4.1 Meaning of Staffing

The term staffing stands for manning various positions in the organization. It is

defined as “the process involved in identifying, assessing, placing, evaluating and

developing individuals at work.” According to Theo Haiman, “Staffing function

is concerned with the placement, growth and development of all those members

of the organization whose function is to get things done through the efforts of

other individuals.” In the words of Koontz and O’Donnell, “The staffing function

pertains to the recruitment, selection, development, training and compensation of

subordinate managers.”

The staffing function of management pertains to the determination of manpower

requirements of the organization and providing it with adequate number of

competent people at all its levels. Thus manpower planning, recruitment, training

and development, appraisal and remuneration of workers are included in staffing.

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4.2 Need and Importance of Staffing

Since efficient managers are an asset in every enterprise, the need for them is

increasing day-by-day. Several reasons which have increased the importance of

the staffing function of management are as follows:

4.2.1 Better performance. Since performance of an organization depends on the

quality of the persons employed, the function of staffing is very significant.

4.2.2 Use of technology. With technological changes taking place everyday, the right

type of persons are required to make use of the technology.

4.2.3 Development of manpower. In order to avoid a sudden disruption in the

enterprise activities, the manpower requirement should be decided beforehand.

4.2.4 Optimum use of manpower. Although every concern spends some money on its

personnel by way of recruitment, selection, training, wages, and salaries, it can

enjoy optimum results only through efficient staffing.

4.2.5 Recognition of human relations. Human factor determines the success of a

business enterprise to a great extent. Thus, the morale of the employees should be

kept high through various financial and non-financial incentives and the right kind

of working conditions

4.3 Steps in the Staffing Process

The various steps in the staffing process are as follows:

4.3.1 Manpower planning. It is the determination of the future requirement of

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personnel.

4.3.2 Recruitment and selection. It involves selecting the best candidates from among

the applicants to fill various jobs in the organization.

4.3.3 Placement. It is assigning the right job to the right person in the organization.

4.3.4 Training and development. Every organization has some special jobs that need

certain specialized skills. Thus, the staff appointed has to be trained and their

abilities have to be developed commensurate with the organizational objectives.

4.3.5 Compensation or remuneration. It is concerned with developing a system of

adequate and equitable remuneration of personnel commensurate with their

contribution to the objectives of the organization.

4.3.6 Performance appraisal. It deals with the appraisal of the workers’ performance.

4.4 Principles of Staffing

4.4.1 Principle of the Objective of Staffing

The objective of staffing is to ensure that organization roles are filled by those

qualified employees who are able and willing to occupy them.

4.4.2 Principle of Staffing

The clearer the definition of organization roles and their human requirement and

the better the technique of manager appraisal and training employed, the higher

the managerial quality.

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4.4.3 Principle of Job Definition

The more precisely the results expected from managers are identified, the more

clearly their position can be defined.

4.4.4 Principle of Managerial Appraisal

The more clearly, verifiable objectives and required managerial activities are

identified the more precise can be the appraisal of mangers against these criteria.

4.4.5 Principle of Training Objective

The more precisely the training objectives are stated; the more likely are the

chances of achieving them.

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CHAPTER – 5

ORIENTATION

5.0 New employee orientation effectively integrates the new employee into your

organization and assists with retention, motivation, job satisfaction, and quickly

enabling each individual to become contributing members of the work team.

Orienting employees to their workplaces and their jobs is one of the most

neglected functions in many organizations. An employee handbook and piles of

paperwork is not sufficient anymore when it comes to welcoming a new

employee to your organization. The most frequent complaints about new

employee orientation are that it is overwhelming, boring, or that the new

employee is left to sink or swim. The result is often a confused new employee

who is not productive and is more likely to leave the organization within a year.

With an ongoing labor crunch, developing an effective employee orientation

experience continues to be crucial. It is critical that new hire programs are

carefully planned to educate the employee to the values, history and who is who

in the organization. A well thought out orientation program, whether it lasts one

day or six months, will help not only in retention of employees, but also in

productivity. Organizations that have good orientation programs get their people

up to speed faster, have better alignment between what the employees do and

what the organization needs them to do, and have lower turnover rates.

5.1 Purposes of Orientation

It is used for the following purposes:

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5.1.1 To Reduce Startup-Costs

Proper orientation can help the employee get "up to speed" much more quickly,

thereby reducing the costs associated with learning the job.

5.1.2 To Reduce Anxiety

Any employee, when put into a new, strange situation, will experience anxiety

that can impede his or her ability to learn to do the job. Proper orientation helps

to reduce anxiety that results from entering into an unknown situation, and helps

provide guidelines for behavior and conduct, so the employee doesn't have to

experience the stress of guessing.

5.1.3 To Reduce Employee Turnover

Employee turnover increases as employees feel they are not valued, or are put in

positions where they can't possibly do their jobs. Orientation shows that the

organization values the employee, and helps provide tools necessary for

succeeding in the job.

5.1.4 To Save Time For Supervisor & Co-Workers

Simply put, the better the initial orientation, the less likely supervisors and co-

workers will have to spend time teaching the employee.

5.1.5 To Develop Realistic Job Expectations, Positive Attitudes and Job

Satisfaction

It is important that employees learn early on what is expected of them, and what

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to expect from others, in addition to learning about the values and attitudes of the

organization. While people can learn from experience, they will make many

mistakes that are unnecessary and potentially damaging.

5.2 Two Kinds of Orientation

There are two related kinds of orientation. The first we will call

Overview Orientation, and deals with the basic information an employee will

need to understand the broader system he or she works in. Overview Orientation

includes helping employees understand:

government in general, the department and the branch

important policies and general procedures (non-job specific)

information about compensation and benefits

safety and accident prevention issues

employee and union issues (rights, responsibilities)

physical facilities

Often, Overview Orientation can be conducted by the personnel department with

a little help from the branch manager or immediate supervisor, since much of the

content is generic in nature.

The second kind of orientation is called Job-Specific Orientation, and is the

process that is used to help employees understand:

function of the organization, and how the employee fits in

job responsibilities, expectations, and duties

policies, procedures, rules and regulations

layout of workplace

introduction to co-workers and other people in the broader organization.

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Job specific orientation is best conducted by the immediate supervisor, and/or

manager, since much of the content will be specific to the individual. Often the

orientation process will be ongoing, with supervisors and co-workers supplying

coaching.

5.3 The main reasons orientation programs fail

The program was not planned.

The employee was unaware of the job requirements.

The employee does not feel welcome.

All new employees should complete a new employment orientation program that

is designed to assist them in adjusting to their jobs and work environment and to

instill a positive work attitude and motivation at the onset.

A thoughtful new employee orientation program can reduce turnover and save an

organization thousands of dollars. One reason people change jobs is because they

never feel welcome or part of the organization they join. The most important

principle to convey during an orientation is commitment to continuous

improvement and continual learning. That way, new employees become

comfortable with asking questions to obtain the information they need to learn,

problem solve and make decisions.

A well thought out orientation process takes energy, time and commitment;

however it usually pays off for the individual employee, the department, and the

organization.

5.4 Guidelines for orientation

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Orientation should begin with the most important information (basic job

survival).

Orientation should emphasize people as well as procedures and things.

Employees should have a chance to get to know people and their

approaches and styles in both social and work settings.

Buddy an employee to a more experienced person, but make sure the more

experienced person wants to buddy up, and has the interpersonal skills.

This provides ongoing support.

Introduce employees to both information and people in a controlled way.

A new employee can't absorb everything at once, so don't waste your

time. Space out introductions.

5.5 Conclusion

Orientation (or lack of it) will make a significant difference in how quickly an

employee can become more productive, and also has long term effects for the

organization.

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CHAPTER – 6

TRAINING & DEVELOPMENT

6.0 The challenges associated with the changing nature of work and the workplace

environment is as real for the campus as elsewhere. Rapid change requires a

skilled, knowledgeable workforce with employees who are adaptive, flexible, and

focused on the future.

The quality of employees and their development through training and education

are major factors in determining long-term profitability of a small business. If you

hire and keep good employees, it is good policy to invest in the development of

their skills, so they can increase their productivity.

Training often is considered for new employees only. This is a mistake because

ongoing training for current employees helps them adjust to rapidly changing job

requirements.

6.1 Purpose of Training and Development

Reasons for emphasizing the growth and development of personnel include

Creating a pool of readily available and adequate replacements for

personnel who may leave or move up in the organization.

Enhancing the company's ability to adopt and use advances in technology

because of a sufficiently knowledgeable staff.

Building a more efficient, effective and highly motivated team, which

enhances the company's competitive position and improves employee

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morale.

Ensuring adequate human resources for expansion into new programs.

Research has shown specific benefits that a small business receives from training

and developing its workers, including:

Increased productivity.

Reduced employee turnover.

Increased efficiency resulting in financial gains.

Decreased need for supervision

Employees frequently develop a greater sense of self-worth, dignity and well-

being as they become more valuable to the firm and to society. Generally they

will receive a greater share of the material gains that result from their increased

productivity. These factors give them a sense of satisfaction through the

achievement of personal and company goals.

6.2 The Training Process

The model below traces the steps necessary in the training process:

Organizational Objectives

Needs Assessment

Is There a Gap?

Training Objectives

Select the Trainees

Select the Training Methods and Mode

Choose a Means of Evaluating

Administer Training

Evaluate the Training

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Your business should have a clearly defined strategy and set of objectives that

direct and drive all the decisions made especially for training decisions. Firms that

plan their training process are more successful than those that do not. Most

business owners want to succeed, but do not engage in training designs that

promise to improve their chances of success. Why? The five reasons most often

identified are:

Time

Small businesses managers find that time demands do not allow them to train

employees.

Getting started

Most small business managers have not practiced training employees. The

training process is unfamiliar.

Broad expertise

Managers tend to have broad expertise rather than the specialized skills needed

for training and development activities.

Lack of trust and openness

Many managers prefer to keep information to themselves. By doing so they keep

information from subordinates and others who could be useful in the training and

development process.

Skepticism as to the value of the training

Some small business owners believe the future cannot be predicted or controlled

and their efforts, therefore, are best centered on current activities i.e., making

money today.

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A well-conceived training program can help your firm succeed. A program

structured with the company's strategy and objectives in mind has a high

probability of improving productivity and other goals that are set in the training

mission.

For any business, formulating a training strategy requires addressing a series of

questions.

Who are your customers? Why do they buy from you?

Who are your competitors? How do they serve the market? What

competitive advantages do they enjoy? What parts of the market have they

ignored?

What strengths does the company have? What weaknesses?

What social trends are emerging that will affect the firm?

The purpose of formulating a training strategy is to answer two relatively simple

but vitally important questions: (1) What is our business? and (2) What should our

business be? Armed with the answers to these questions and a clear vision of its

mission, strategy and objectives, a company can identify its training needs.

6.3 Identifying Training Needs

Training needs can be assessed by analyzing three major human resource areas:

the organization as a whole, the job characteristics and the needs of the

individuals. This analysis will provide answers to the following questions:

Where is training needed?

What specifically must an employee learn in order to be more productive?

Who needs to be trained?

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Begin by assessing the current status of the company how it does what it does best

and the abilities of your employees to do these tasks. This analysis will provide

some benchmarks against which the effectiveness of a training program can be

evaluated. Your firm should know where it wants to be in five years from its

long-range strategic plan. What you need is a training program to take your firm

from here to there.

Second, consider whether the organization is financially committed to supporting

the training efforts. If not, any attempt to develop a solid training program will

fail.

Next, determine exactly where training is needed. It is foolish to implement a

companywide training effort without concentrating resources where they are

needed most. An internal audit will help point out areas that may benefit from

training. Also, a skills inventory can help determine the skills possessed by the

employees in general. This inventory will help the organization determine what

skills are available now and what skills are needed for future development.

Also, in today's market-driven economy, you would be remiss not to ask your

customers what they like about your business and what areas they think should be

improved. In summary, the analysis should focus on the total organization and

should tell you (1) where training is needed and (2) where it will work within the

organization.

Once you have determined where training is needed, concentrate on the content of

the program. Analyze the characteristics of the job based on its description, the

written narrative of what the employee actually does. Training based on job

descriptions should go into detail about how the job is performed on a task-by-

task basis. Actually doing the job will enable you to get a better feel for what is

done.

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Individual employees can be evaluated by comparing their current skill levels or

performance to the organization's performance standards or anticipated needs.

Any discrepancies between actual and anticipated skill levels identify a training

need.

6.4 Selection of Trainees

Once you have decided what training is necessary and where it is needed, the next

decision is who should be trained? For a small business, this question is crucial.

Training an employee is expensive, especially when he or she leaves your firm for

a better job. Therefore, it is important to carefully select who will be trained.

Training programs should be designed to consider the ability of the employee to

learn the material and to use it effectively, and to make the most efficient use of

resources possible. It is also important that employees be motivated by the

training experience. Employee failure in the program is not only damaging to the

employee but a waste of money as well. Selecting the right trainees is important

to the success of the program.

6.5 Training Goals

The goals of the training program should relate directly to the needs determined

by the assessment process outlined above. Course objectives should clearly state

what behavior or skill will be changed as a result of the training and should relate

to the mission and strategic plan of the company. Goals should include milestones

to help take the employee from where he or she is today to where the firm wants

him or her in the future. Setting goals helps to evaluate the training program and

also to motivate employees. Allowing employees to participate in setting goals

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increases the probability of success.

6.6 Training Methods

There are two broad types of training available to small businesses: on-the-job

and off-the-job techniques. Individual circumstances and the "who," "what" and

"why" of your training program determine which method to use.

On-the-job training is delivered to employees while they perform their regular

jobs. In this way, they do not lose time while they are learning. After a plan is

developed for what should be taught, employees should be informed of the

details. A timetable should be established with periodic evaluations to inform

employees about their progress. On-the-job techniques include orientations, job

instruction training, apprenticeships, internships and assistantships, job rotation

and coaching.

Off-the-job techniques include lectures, special study, films, television

conferences or discussions, case studies, role playing, simulation, programmed

instruction and laboratory training. Most of these techniques can be used by small

businesses although, some may be too costly.

Orientations are for new employees. The first several days on the job are crucial

in the success of new employees. This point is illustrated by the fact that 60

percent of all employees who quit do so in the first ten days. Orientation training

should emphasize the following topics:

The company's history and mission.

The key members in the organization.

The key members in the department, and how the department helps fulfill

the mission of the company.

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Personnel rules and regulations.

Some companies use verbal presentations while others have written presentations.

Many small businesses convey these topics in one-on-one orientations. No matter

what method is used, it is important that the newcomer understand his or her new

place of employment.

Lectures present training material verbally and are used when the goal is to

present a great deal of material to many people. It is more cost effective to lecture

to a group than to train people individually. Lecturing is one-way communication

and as such may not be the most effective way to train. Also, it is hard to ensure

that the entire audience understands a topic on the same level; by targeting the

average attendee you may undertrain some and lose others. Despite these

drawbacks, lecturing is the most cost-effective way of reaching large audiences.

Role playing and simulation are training techniques that attempt to bring

realistic decision making situations to the trainee. Likely problems and alternative

solutions are presented for discussion. The adage there is no better trainer than

experience is exemplified with this type of training. Experienced employees can

describe real world experiences, and can help in and learn from developing the

solutions to these simulations. This method is cost effective and is used in

marketing and management training.

Audiovisual methods such as television, videotapes and films are the most

effective means of providing real world conditions and situations in a short time.

One advantage is that the presentation is the same no matter how many times it's

played. This is not true with lectures, which can change as the speaker is changed

or can be influenced by outside constraints. The major flaw with the audiovisual

method is that it does not allow for questions and interactions with the speaker,

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nor does it allow for changes in the presentation for different audiences.

Job rotation involves moving an employee through a series of jobs so he or she

can get a good feel for the tasks that are associated with different jobs. It is

usually used in training for supervisory positions. The employee learns a little

about everything. This is a good strategy for small businesses because of the

many jobs an employee may be asked to do.

Apprenticeships develop employees who can do many different tasks. They

usually involve several related groups of skills that allow the apprentice to

practice a particular trade, and they take place over a long period of time in which

the apprentice works for, and with, the senior skilled worker. Apprenticeships are

especially appropriate for jobs requiring production skills.

Internships and assistantships are usually a combination of classroom and on-

the-job training. They are often used to train prospective managers or marketing

personnel.

Programmed learning, computer-aided instruction and interactive video all

have one thing in common: they allow the trainee to learn at his or her own pace.

Also, they allow material already learned to be bypassed in favor of material with

which a trainee is having difficulty. After the introductory period, the instructor

need not be present, and the trainee can learn as his or her time allows. These

methods sound good, but may be beyond the resources of some small businesses.

Laboratory training is conducted for groups by skilled trainers. It usually is

conducted at a neutral site and is used by upper- and middle management trainees

to develop a spirit of teamwork and an increased ability to deal with management

and peers. It can be costly and usually is offered by larger small businesses.

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6.7 Trainers

Who actually conducts the training depends on the type of training needed and

who will be receiving it. On-the-job training is conducted mostly by supervisors;

off-the-job training, by either in-house personnel or outside instructors.

In-house training is the daily responsibility of supervisors and employees.

Supervisors are ultimately responsible for the productivity and, therefore, the

training of their subordinates. These supervisors should be taught the techniques

of good training. They must be aware of the knowledge and skills necessary to

make a productive employee. Trainers should be taught to establish goals and

objectives for their training and to determine how these objectives can be used to

influence the productivity of their departments. They also must be aware of how

adults learn and how best to communicate with adults. Small businesses need to

develop their supervisors' training capabilities by sending them to courses on

training methods. The investment will pay off in increased productivity.

There are several ways to select training personnel for off-the-job training

programs. Many small businesses use in-house personnel to develop formal

training programs to be delivered to employees off line from their normal work

activities, during company meetings or individually at prearranged training

sessions.

There are many outside training sources, including consultants, technical and

vocational schools, continuing education programs, chambers of commerce and

economic development groups. Selecting an outside source for training has

advantages and disadvantages. The biggest advantage is that these organizations

are well versed in training techniques, which is often not the case with in-house

personnel.

The disadvantage of using outside training specialists is their limited knowledge ………………………………………………………………………………………………………………………………..


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of the company's product or service and customer needs. These trainers have a

more general knowledge of customer satisfaction and needs. In many cases, the

outside trainer can develop this knowledge quickly by immersing himself or

herself in the company prior to training the employees. Another disadvantage of

using outside trainers is the relatively high cost compared to in-house training,

although the higher cost may be offset by the increased effectiveness of the

training.

Whoever is selected to conduct the training, either outside or in-house trainers, it

is important that the company's goals and values be carefully explained.

Training Administration

Having planned the training program properly, you must now administer the

training to the selected employees. It is important to follow through to make sure

the goals are being met. Questions to consider before training begins include:

Location.

Facilities.

Accessibility.

Comfort.

Equipment.

Timing.

Careful attention to these operational details will contribute to the success of the

training program.

An effective training program administrator should follow these steps:

Define the organizational objectives.

Determine the needs of the training program.

Define training goals.

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Develop training methods.

Decide whom to train.

Decide who should do the training.

Administer the training.

Evaluate the training program.

Following these steps will help an administrator develop an effective training

program to ensure that the firm keeps qualified employees who are productive,

happy workers. This will contribute positively to the bottom line.

6.8 Evaluation of Training

Training should be evaluated several times during the process. Determine these

milestones when you develop the training. Employees should be evaluated by

comparing their newly acquired skills with the skills defined by the goals of the

training program. Any discrepancies should be noted and adjustments made to the

training program to enable it to meet specified goals. Many training programs fall

short of their expectations simply because the administrator failed to evaluate its

progress until it was too late. Timely evaluation will prevent the training from

straying from its goals.

6.9 General Benefits from Employee Training and Development

There are numerous reasons for supervisors to conduct training among

employees. These reasons include:

Increased job satisfaction and morale among employees

Increased employee motivation

Increased efficiencies in processes, resulting in financial gain

Increased capacity to adopt new technologies and methods

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Increased innovation in strategies and products

Reduced employee turnover

Enhanced company image, e.g., conducting ethics training (not a good

reason for ethics training!)

Risk management, e.g., training about sexual harassment, diversity

training

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CHAPTER – 7

PERFORMANCE APPRAISAL

7.0 There is, says Dulewicz (1989), "... a basic human tendency to make judgements

about those one is working with, as well as about oneself." Appraisal, it seems, is

both inevitable and universal. In the absence of a carefully structured system of

appraisal, people will tend to judge the work performance of others, including

subordinates, naturally, informally and arbitrarily.

Performance appraisal may be defined as a structured formal interaction between

a subordinate and supervisor, that usually takes the form of a periodic interview

(annual or semi-annual), in which the work performance of the subordinate is

examined and discussed, with a view to identifying weaknesses and strengths as

well as opportunities for improvement and skills development.

In many organizations - but not all - appraisal results are used, either directly or

indirectly, to help determine reward outcomes. That is, the appraisal results are

used to identify the better performing employees who should get the majority of

available merit pay increases, bonuses, and promotions.

By the same token, appraisal results are used to identify the poorer performers

who may require some form of counseling, or in extreme cases, demotion,

dismissal or decreases in pay. (Organizations need to be aware of laws in their

country that might restrict their capacity to dismiss employees or decrease pay.)

Whether this is an appropriate use of performance appraisal - the assignment and

justification of rewards and penalties - is a very uncertain and contentious matter.

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http://www.performance-appraisal.com/dulewicz.htm


7.1 People differ in their abilities and their aptitudes. There is always some difference

between the quality and quantity of the same work on the same job being done by

two different people. Performance appraisals of Employees are necessary to

understand each employee’s abilities, competencies and relative merit and worth

for the organization. Performance appraisal rates the employees in terms of their

performance.

It is a powerful tool to calibrate, refine and reward the performance of the

employee. It helps to analyze his achievements and evaluate his contribution

towards the achievements of the overall organizational goals.

By focusing the attention on performance, performance appraisal goes to the heart

of personnel management and reflects the management's interest in the progress

of the employees.

7.2 Objectives of Performance appraisal:

To review the performance of the employees over a given period of time.

To judge the gap between the actual and the desired performance.

To help the management in exercising organizational control.

Helps to strengthen the relationship and communication between superior

– subordinates and management – employees.

To diagnose the strengths and weaknesses of the individuals so as to

identify the training and development needs of the future.

To provide feedback to the employees regarding their past performance.

Provide information to assist in the other personal decisions in the

organization.

Provide clarity of the expectations and responsibilities of the functions to

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be performed by the employees.

To judge the effectiveness of the other human resource functions of the

organization such as recruitment, selection, training and development.

To reduce the grievances of the employees.

Almost all organizations practice performance appraisal in one form or another to

achieve certain objectives. These objectives may vary from organization to

organization or even within the same organization from time to time. It has been

found that there are two primary objectives behind the use of this methodology.

One is to use it as an evaluation system and second, to use it as a feedback

system.

The aim of the evaluation system is to identify the performance gap. This means

that it helps determine the gap between the actual performance of the employee

and that required or desired by the organization.

The aim of the feedback system is to inform the employee about the quality of his

work or performance. This is an interactive process by which the employee can

also speak about his problems to his superior.

An effective performance appraisal system should emphasis individual objectives,

organizational objectives and also mutual objectives. From the viewpoint of

individual objective the performance appraisal should talk about

What task the individual is expected to do?

How well the individual has done the task?

How can his performance be further improved?

His reward for doing well.

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From the organizational view point a performance appraisal should generate

manpower information, improve efficiency and effectiveness serve as a

mechanism of control and provide a rational compensation structure. In short the

appraisal system establishes and upholds the principle of accountability in the

absence of which organization failure is the only possible outcome.

Finally, talking about mutual goals, the emphasis is on growth and development,

harmony, effectiveness and profitability.

7.3 Methods of Performance Appraisal

In order to achieve the objectives, a variety of performance appraisal methods

have been developed. The choice of method depends on organizational ethos, its

objectives, size, product and technology.

The most traditional method is the Confidential Report method where the

supervisor makes an evaluation of his subordinate on the basis of certain

characteristics like loyalty, intelligence, conduct, character etc. In some other

methods like Graphic Rating scale and the Ranking Methods though the

process is simple it is plagued with subjectivity. In the Critical Incidents method

a balance sheet of on-job-behavior for each employee is generated which can then

be used at the end of the year to see how well the employee has performed.

In 1961 Peter Drucker popularized the Management by Objectives (MBO)

method. In this method the subordinate in consultation with the supervisor chalks

out short term objectives followed by specific actions that he has to carry out. The

goals are finally set and are action oriented. The goals set should be specific,

measurable, achievable, review able and time bound and most importantly it

should be aligned with the goal of the organization. At the end of a specified time

period, the activities are jointly reviewed by both the subordinate and his

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supervisor. Depending on the performance of the subordinate, the goals are

modified or redesigned for the next period of time.

The MBO is thus a performance oriented system. A well thought out MBO

system provides multiple benefits. It establishes a link between the performance

of the individual and the organization. It is easy to implement because those who

carry out the plan also participates in setting it up. Each employee becomes aware

of the task he has to perform. This leads to better utilization of capacity and talent.

It promotes better communication and information sharing. It provides guidelines

for self evaluation as well as evaluation by the superior against set tasks and

goals. It facilitates guidance and counseling.

But most organizations engage in a retrospective performance appraisal. In this

process some objectives that were agreed upon in the beginning of the year are

dragged out and the appraisee and the manager discuss and debate about how well

each of these objectives was achieved.

This procedure has many flaws. It does not address the basic human needs in the

motivation process. Feedback should be as immediate as possible, it should focus

on actual things and the individual involved should be given the opportunity to

correct his behavior. But the traditional procedure is too late. It is difficult to

remember events a month old let alone events that had occurred over ten months

ago.

7.4 Performance Management and Performance Appraisal

Many people mistake performance appraisal for performance management.

Actually, performance management is a much bigger system, and is much more

valuable to managers and companies (and employees) than performance

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appraisal. The essential components or parts of an effective performance

management system include:

Performance Planning (includes employee goal setting / objective setting)

Ongoing Performance Communication

Data Gathering, Observation and Documentation

Performance Appraisal Meetings

Performance Diagnosis and Coaching

Performance Management is an ongoing process of measuring and adjusting

performance continually focusing on behaviors throughout the year. It is a

continuous process not an event. It is not the same as performance appraisal,

which is an assessment of the employee’s performance by both the employee and

his superior jointly, with the purpose of allocating a score that may be used for

both development and salary or promotion purposes.

Performance Management includes Performance Appraisal as one of its elements.

Performance Management should became part of day to day workplace behavior.

Some organizations have adopted an online Performance Management system.

Going online with performance management puts ownership of the process in the

hands of the individual as opposed to the traditional manager driven system. It

allows direct communication between the individual and the manager via online

journals at times convenient to both. It links performance with the individual’s

learning and development plans and also to the organizational goals, values and

competencies.

In fact performance appraisal is the least important component of a performance

management system. To quote Robert Bacal ‘If all you do is appraisal -- if you

don't do planning and have ongoing communication, collect data, and diagnose

problems, you are wasting your time.’ In fact it's even worse than that. If all you

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do is performance appraisal, you will almost be guaranteed that morale will

suffer, performance problems will increase, and the manager's job will become

much harder.

7.5 Modern Trends

A growing number of front running organizations like Ford, Microsoft and Sun

Microsystems, have adopted a performance appraisal model in which best-to-

worst ranking methods are used to identify poor performers. The identified poor

performers are then given a time period during which they have to show an

improvement in their performance. In cases where the employee fails to improve

his performance he is asked to leave the organization gracefully and a severance

package is offered to him. If the employee refuses to leave then his service is

terminated and no compensation is offered. This system is called “rank and yank

strategy”. Advocates of this system feel that it continually motivates employees to

better their performance since nobody would like to be included in the poor

performance band. But the flip side of this strategy is that employees become too

competitive and team spirit is not nurtured.

Effective organizations are not build merely on investment and returns but more

on the quality of the workforce, its commitment to the organizational goals and

investments made to attract train and retain superior human capital. An integrated

Performance Management system is essential to get the best out of its people.

Employee performance is linked to company performance. This helps in

achieving the organizational goal and creates a performance culture in the

company. Invention, creativity, diversity of perspectives is fostered. Employees

act as one company one brand.

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CHAPTER – 8

CAREER PLANNING

8.0 Attracting and keeping good staff is a challenge within today's labour market.

One strategy that will help you with this is to encourage all staff to engage in

career planning. If your staff have clear direction and goals they are more likely to

be satisfied in their job and this could mean less staff turn over for your business.

Career planning is essential to retain the good staff you already have.

8.1 Purpose of career planning

When you organise or support career planning, you give staff a clear message that

you support their employment advancement within your organisation. By helping

people to plan career choices that are realistic and suitable, you are offering them

the opportunity for future satisfaction within your business and you

significantly lower the risk of them leaving.

In the process of developing a career plan, employees will gain a better idea of:

what type of work they are best suited to within your organisation

what training and education they will need to pursue the work they would

most like within your organisation

the strategy that will help them get where they want to be.

8.2 The process of career planning

Career planning is the key process in career management. It uses all the

information provided by the organization's assessments of requirements, the

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assessments of performance and potential and the management succession plans,

and translates it in the form of individual career development programs and

general arrangements for management development, career counseling, mentoring

and management training.

8.3 Career planning the competency band approach

It is possible to define career progression in terms of the competencies required

by individuals to carry out work at progressive levels of responsibility or

contribution. These levels can be described as competency bands.

Competencies would be defined as the attributes and behavioral characteristics

needed to perform effectively at each discrete level in a job or career family. The

number of levels would vary according to the range of competencies required in a

particular job family. For each band, the experience and training needed to

achieve the competency level would be defined.

These definitions would provide a career map incorporating 'aiming points' for

individuals, who would be made aware of the competency levels they must reach

in order to achieve progress in their careers. This would help them to plan their

own development, although support and guidance should be provided by their

managers, and HR specialists. The provision of additional experience and training

could be arranged as appropriate, but it would be important to clarify what

individual employees need to do for themselves if they want to progress within

the organization.

The advantage of this approach is that people are provided with aiming points and

an understanding of what they need to do to reach them. One of the major causes

of frustration and job dissatisfaction is the absence of this information.

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8.4

Career planning is for core people as well as high flyers

The philosophy upon which career plans are based refers not only to advancing

careers to meet organizational and individual requirements, but also the need to

maximize the potential of the people in the organization in terms of productivity

and satisfaction under conditions of change, when development does not

necessarily mean promotion.

Career planning is for individuals as well as the organization

Career planning procedures are always based on what the organization needs. But

they have to recognize that organizational needs will not be satisfied if individual

needs are neglected. Career planning has to be concerned with the management of

diversity.

Career plans must therefore recognize that:

members of the organization should receive recognition as individuals with

unique needs, wants, and abilities;

individuals are more motivated by an organization that responds to their

aspirations and needs;

individuals can grow, change and seek new directions if they are given the right

opportunities, encouragement and guidance.

Career planning techniques

Career planning uses all the information generated by the succession plans,

performance, and potential assessments and self assessments to develop programs

and procedures which are designed to implement career management policies,

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8.5

8.6

achieve succession planning objectives and generally improve motivation,

commitment and performance. The procedures used are those concerned with:

personal development planning .

training and management development.

mentoring

career counseling

In addition, career planning procedures may cater for the rising stars by 'fast

tracking' them, that is, deliberately accelerating promotion and giving them

opportunities to display and enlarge their talents. But these procedures should pay

just as much, if not more, attention to those managers who are following the

middle route of steady, albeit unspectacular, progression.

Career counseling

Performance management processes, should provide for counseling sessions

between individuals and their managers. These sessions should give the former

the opportunity to discuss their aspirations and the latter the chance to comment

on them helpfully and, at a later stage, to put forward specific

Career development proposals to be fed into the overall career management

programs.

Personal development planning

Personal development planning is carried out by individuals with guidance,

encouragement and help from their managers/HRM as required. A personal

development plan sets out the actions people propose to take to learn and to

develop themselves. They take responsibility for formulating and implementing

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8.7

the plan, but they receive support from the organization and their managers in

doing so. The purpose is to provide a 'self organized learning framework'.

Personal development planning consists of the following stages:

Analyze current situation and development needs. This can be done as part of a

performance management process.

Set goals. These could include improving performance in the current job,

improving or acquiring skills, extending relevant knowledge, developing

specified areas of competence, moving across or upwards in the organization, or

preparing for changes in the current role.

Prepare action plan. The action plan sets out what needs to be done and how it

will be done under headings such as outcomes expected (learning objectives), the

development activities, the responsibility for development (what individuals are

expected to do and the support they will get from their manager, the HR

department or other people), and timing. A variety of activities tuned to individual

needs should be included in the plan, for example observing what others do,

project work, planned use of e learning programs and internal learning resource

centres, working with a mentor, coaching by the line manager or team leader,

experience in new tasks, guided reading, special assignments and action

Management Development

Formal approaches to management development

The formal approaches to management development include:

development on the job through coaching, counseling, monitoring and feedback

by managers on a continuous basis associated with the use of performance

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8.8

8.9

management processes to identify and satisfy development needs, and with

mentoring;

development through work experience, which includes job rotation, job

enlargement, taking part in project teams or task groups, 'action learning', and

secondment outside the organization;

formal training by means of internal or external courses;

structured self development by following self managed learning programs agreed

as a personal development plan or learning contract with the manager or a

management development adviser these may include guidance reading or the

deliberate extension of knowledge or acquisition of new skills on the job.

The formal approaches to management development are based on the

identification of development needs through performance management or a

development centre. The approach may be structured around a list of generic or

core competences which have been defined as being appropriate for managers in

the organization.

Informal approaches to management development

Informal approaches to management development make use of the learning

experiences that managers meet during the course of their everyday work.

Managers are learning every time they are confronted with an unusual problem,

an unfamiliar task or a move to a different job. They then have to evolve new

ways of dealing with the situation. They will learn if they analyse what they did to

determine how and why it contributed to its success or failure.

Competency based management development

Competency based management development uses competency frameworks as a

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8.10

means of identifying and expressing development needs and pointing the way to

self managed learning programs or the provision of learning opportunities by the

organization.

Competency based management development may concentrate on a limited

number of core or generic competences which the organization has decided will

be an essential part of the equipment of their managers if they are going to take

the organization forward in line with its strategic plans. For example:

strategic capability to understand the changing business environment,

opportunities for product market development, competitive challenges and the

strengths and weaknesses of their own organization in order to identify optimum

strategic responses;

change management capability to identify change needs, plan change programs

and persuade others to participate willingly in the implementation of change

team management capability to get diverse groups of people from different

disciplines to work well together.

relationship management to network effectively with others to share information

and pool resources to achieve common objectives;

international management to be capable of managing across international frontiers

working well with people of other nationalities.

Mentoring

Mentoring is the process of using specially selected and trained individuals to

provide guidance and advice which will help to develop the careers of the

'prot6g6s' Allocated to them.

Mentoring is aimed at complementing learning on the job, which must always be

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the best way of acquiring the particular skills and knowledge the job holder needs.

Mentoring also complements formal training by providing those who benefit from

it with individual guidance from experienced managers who are 'wise in the ways

of the organization'.

Mentors provide for the person or persons allocated to them :

advice in drawing up self development programs or learning contracts; general

help with learning programs; guidance on how to acquire the necessary

knowledge and skills to do a new job; advice on dealing with any administrative,

technical or people problems individuals meet, especially in the early stages of

their careers; information on 'the way things are done around here' the corporate

culture and

its manifestations in the shape of core values and organizational behaviour ;

coaching in specific skills;

help in tackling projects not by doing it for the trainees but by pointing them in

the right direction, that is helping people to help themselves;

a parental figure with whom the trainee can discuss their aspirations and concerns

and who will lend a sympathetic ear to their problems.

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CHAPTER – 9

COMPENSATION

9.0 Compensation is a systematic approach to providing monetary value to employees

in exchange for work performed. Compensation may achieve several purposes

assisting in recruitment, job performance, and job satisfaction.

Compensation is a tool used by management for a variety of purposes to further

the existance of the company. Compensation may be adjusted according the the

business needs, goals, and available resources.

9.1 Compensation may be used to:

recruit and retain qualified employees.

increase or maintain morale/satisfaction.

reward and encourage peak performance.

achieve internal and external equity.

reduce turnover and encourage company loyalty.

modify (through negotiations) practices of unions.

Recruitment and retention of qualified employees is a common goal shared by

many employers. To some extent, the availability and cost of qualified applicants

for open positions is determined by market factors beyond the control of the

employer. While an employer may set compensation levels for new hires and

advertize those salary ranges, it does so in the context of other employers seeking

to hire from the same applicant pool.

Morale and job satisfaction are affected by compensation. Often there is a balance

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(equity) that must be reached between the monetary value the employer is willing

to pay and the sentiments of worth felt be the employee. In an attempt to save

money, employers may opt to freeze salaries or salary levels at the expense of

satisfaction and morale. Conversely, an employer wishing to reduce employee

turnover may seek to increase salaries and salary levels.

Compensation may also be used as a reward for exceptional job performance.

Examples of such plans include: bonuses, commissions, stock, profit sharing, gain

sharing.

9.2 Components of a compensation system

Compensation will be perceived by employees as fair if based on systematic

components. Various compensation systems have developed to determine the

value of positions. These systems utilize many similar components including job

descriptions, salary ranges/structures, and written procedures.

The components of a compensation system include:

Job Descriptions

A critical component of both compensation and selection systems, job

descriptions define in writing the responsibilities, requirements, functions, duties,

location, environment, conditions, and other aspects of jobs. Descriptions may be

developed for jobs individually or for entire job families.

Job Analysis

The process of analyzing jobs from which job descriptions are developed. Job

analysis techniques include the use of interviews, questionnaires, and

observation.

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http://www.hr-guide.com/jobanalysis.htm


Job Evaluation

A system for comparing jobs for the purpose of determining appropriate

compensation levels for individual jobs or job elements. There are four main

techniques: Ranking, Classification, Factor Comparison, and Point Method.

Pay Structures

Useful for standardizing compensation practices. Most pay structures include

several grades with each grade containing a minimum salary/wage and either

step increments or grade range. Step increments are common with union

positions where the pay for each job is pre-determined through collective

bargaining.

Salary Surveys

Collections of salary and market data. May include average salaries, inflation

indicators, cost of living indicators, salary budget averages. Companies may

purchase results of surveys conducted by survey vendors or may conduct their

own salary surveys. When purchasing the results of salary surveys conducted by

other vendors, note that surveys may be conducted within a specific industry or

across industries as well as within one geographical region or across different

geographical regions. Know which industry or geographic location the salary

results pertain to before comparing the results to your company.

9.3 Different types of compensation

Different types of compensation include:

Base Pay

Commissions

Overtime Pay

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http://www.hr-guide.com/jobevaluation.htm


Bonuses, Profit Sharing, Merit Pay

Stock Options

Travel/Meal/Housing Allowance

Benefits including: dental, insurance, medical, vacation, leaves,

retirement, taxes...

9.4 Compensation Plans

Develop a program outline.

Set an objective for the program.

Establish target dates for implementation and completion.

Determine a budget.

Designate an individual to oversee designing the compensation program.

Determine whether this position will be permanent or temporary.

Determine who will oversee the program once it is established.

Determine the cost of going outside versus looking inside.

Determine the cost of a consultant's review.

Develop a compensation philosophy.

Form a compensation committee (presumably consisting of officers or

at least including one officer of the company).

Decide what, if any, differences should exist in pay structures for

executives, professional employees, sales employees, and so on (e.g.,

hourly versus salaried rates, incentive-based versus noncontingent pay).

Determine whether the company should set salaries at, above, or below

market.

Decide the extent to which employee benefits should replace or

supplement cash compensation.

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Conduct a job analysis of all positions.

Conduct a general task analysis by major departments. What tasks must

be accomplished by whom?

Get input from senior vice presidents of marketing, finance, sales,

administration, production, and other appropriate departments to

determine the organizational structure and primary functions of each.

Interview department managers and key employees, as necessary, to

determine their specific job functions.

Decide which job classifications should be exempt and which should be

nonexempt.

Develop model job descriptions for exempt and nonexempt positions

and distribute the models to incumbents for review and comment;

adjust job descriptions if necessary.

Develop a final draft of job descriptions.

Meet with department managers, as necessary, to review job

descriptions.

Finalize and document all job descriptions.

Evaluate jobs.

Rank the jobs within each senior vice president's and manager's

department, and then rank jobs between and among departments.

Verify ranking by comparing it to industry market data concerning the

ranking, and adjust if necessary.

Prepare a matrix organizational review.

On the basis of required tasks and forecasted business plans, develop a

matrix of jobs crossing lines and departments.

Compare the matrix with data from both the company structure and the

industrywide market.

Prepare flow charts of all ranks for each department for ease of

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interpretation and assessment.

Present data and charts to the compensation committee for review and

adjustment.

Determine grades.

Establish the number of levels - senior, junior, intermediate, and

beginner - for each job family and assign a grade to each level.

Determine the number of pay grades, or monetary range of a position at

a particular level, within each department.

Establish grade pricing and salary range.

Establish benchmark (key) jobs.

Review the market price of benchmark jobs within the industry.

Establish a trend line in accordance with company philosophy (i.e.,

where the company wants to be in relation to salary ranges in the

industry).

Determine an appropriate salary structure.

Determine the difference between each salary step.

Determine a minimum and a maximum percent spread.

Slot the remaining jobs.

Review job descriptions.

Verify the purpose, necessity, or other reasons for maintaining a

position.

Meet with the compensation committee for review, adjustments, and

approval.

Develop a salary administration policy.

Develop and document the general company policy.

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Develop and document specific policies for selected groups.

Develop and document a strategy for merit raises and other pay

increases, such as cost-of-living adjustments, bonuses, annual reviews,

and promotions.

Develop and document procedures to justify the policy (e.g.,

performance appraisal forms, a merit raise schedule).

Meet with the compensation committee for review, adjustments, and

approval.

Obtain top executives' approval of the basic salary program.

Develop and present cost impact studies that project the expense of

bringing the present staff up to the proposed levels.

Present data to the compensation committee for review, adjustment, and

approval.

Present data to the executive operating committee (senior managers and

officers) for review and approval.

Communicate the final program to employees and managers.

Present the plan to the compensation committee for feedback,

adjustments, review, and approval.

Make a presentation to executive staff managers for approval or change,

and incorporate necessary changes.

Develop a plan for communicating the new program to employees,

using slide shows or movies, literature, handouts, etc.

Make presentations to managers and employees. Implement the

program.

Design and develop detailed systems, procedures, and forms.

Work with HR information systems staff to establish effective

implementation procedures, to develop appropriate data input forms,

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and to create effective monitoring reports for senior managers.

Have the necessary forms printed.

Develop and determine format specifications for all reports.

Execute test runs on the human resources information system.

Execute the program.

Monitor the program.

Monitor feedback from managers.

Make changes where necessary.

Find flaws or problems in the program and adjust or modify where

necessary.

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CHAPTER – 10

BENEFITS

10.0 Fringe benefits are one of the means to ensure, maintain and increase the material

welfare of employees. Employees who get fringe benefits are stimulated to give

out their best so as to increase their productivity and to develop a sense of

belongingness to the organization.

10.1 MEDICLAIM

Some of the large organization provides medical benefits to their employees and

their family members. This benefit creates a feeling of attachment with the

organization. It is given to the employees up to the limit of Rs. 50,000/-. The

details required for this purpose are:

Name of the Employee

Name of the Department

Date of Birth

Name of the Nominee

Relationship with the Nominee

Address with Contact Numbers

10..2 PERSONAL ACCIDENT INSURANCE

In personal accident insurance claim up to Rs. 20,000/- is given to the employee

or Rs. 1,000/- per week till the rejoining of the employee. The details required for

this purpose are discussed below:

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Name of the Employee

Name of the Department

Date of Birth

Name of the Nominee

Relationship with the Nominee

Address and Contact Numbers

10.3 BIRTHDAY CELEBRATION

A separate database is maintained related to the birthdays of the employees. At

the month end, a common birthday party is being celebrated for all the employees

whose birthdays are on that particular month. This gives a sense of association,

openness and freedom among the employees.

10.4 REWARDS AND RECOGNITION

In order to encourage the employees for the better performance; schemes of

reward and recognition are being applied. Under this, those employees who have

performed in an excellent way are being given rewards that would encourage the

zeal of better performance among the employees.

10.5 CANTEEN

Perhaps no employees benefits have received as much attention these years as that

of canteens. Some organization has statutory obligation to provide such facilities

as Section 46 of the Factories Act, 1948, impose a statutory obligation to

employers to provide canteens in factories employing more than 250 workers.

Others have provided such facilities voluntarily. Foodstuffs are provided at

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subsidized price in these canteens. Some companies provide lunchroom when

canteen facilities are not available. The cost incurred, are then deducted from the

salary of the employee.

10.6 CONCLUSION

According to HR policy, some benefits in way of facilities are to be provided to

the employees working in the organization by the authorities to encourage the

individuals. It enhances both speed and accuracy of the employee and helps the

organization to run in a smooth way.

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CHAPTER – 11

LABOUR RELATIONS

11.0 India is a country having diverse religions and cultures. It becomes necessary to

harmonize industrial relations in the country with respect to such diversity.

India’s trade performance during 2003–04 was influenced by a number of factors

which include productivity changes in the manufacturing sector, recovery of

global economy and world trade, continued trade promotion and trade facilitation

efforts of the government, and an appreciating Indian Rupee against the US

dollar. Hence India has a wide variety of labour laws which are essential for the

smooth functioning of industrial relations in the country.

In the year 2003–04, the Indian economy appeared to be in a resilient mode in

terms of growth, inflation and balance of payment. Real gross domestic product is

estimated to have grown by 8.1%. As per the Monthly Economic Report, of the

Ministry of Finance, Government of India, dated October 2004, the overall

industrial growth during the period April–August 2004 stood at 7.9% as

compared to 5.9% during the period April–August 2003; the growth in mining,

manufacturing and electricity during the period April–August 2004 was 5.2%,

8.2% and 7.7% as compared to 4.1%, 6.5% and 2.5% respectively during the

corresponding period in the previous year. The data available from the 945

employment exchanges in the country indicates that in February 2004, the number

of job seekers registered with the employment exchanges was 4.11 crore, out of

which 70% were educated (10th standard and above). The number of women job

seekers registered was 1.07 crore (26% of the total number of job seekers).

Women constitute a significant proportion of the labour force. Female

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participation in the workforce, however, varies across rural-urban areas.

According to the 58th round survey of National Sample Survey Organization

(NSSO), (carried out from July to December 2004) , the female workforce

participation rate in rural areas declined to 281 per 1000 compared to 299 during

the period July to December 1999-2000.

Therefore it could be seen that there exists a huge workforce in India, large

amount of which is in the unorganized sector and therefore needs to be integrated

alongwith the organized sector.

11.1 Compliance with labour laws and standing orders

While conforming to the essentials of the laws of contracts, a contract of

employment must adhere also to the provisions of labour laws and the rules

contained under the Standing Orders of the establishment.

The Minimum Wages Act 1948 has classified workers as:

unskilled;

semi-skilled;

skilled; and

highly skilled.

11.1.1 The Industrial Employment (Standing Orders) Act 1946

Classification should be made as per the Standing Orders. Where there are no

Standing Orders or service rules applicable to employees, then classification can

be made either based on trade tests or any other test which is reasonable and in

accordance with the Model Standing Orders. Generally, the workers are classified

as

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apprentice/trainee;

casual;

temporary;

badli/substitute;

probationer;

permanent; and

fixed period employees

11.1.2 Factories Act of 1948

The main objectives of the Factories Act are

to regulate working conditions in factories;

to ensure that basic minimum requirements for the safety, health and

welfare of the factory workers are provided; and

to regulate of working hours, leave, holidays, overtime and employment of

children, women and young persons.

This act applies to all factories including Government factories. A “factory” as

defined in the Act means any premises including the precincts:

where ten or more workers are employed on any day of the preceding 12

months and a manufacturing process is carried on with the aid of electric

power; and

where 20 or more workers are employed on any day of the preceding 12

months and a manufacturing process is carried on without the aid of

electric power.

The obligations of the employers are, practically speaking, the rights of the

employees to claim the minimum health and safety measures and welfare

amenities as provided for in the Act, observance of working hours, holidays,

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overtime, annual leave and special protection against hazardous processes and

dangerous substances, to obtain information relating to workers’ health and safety

at work from the occupier, to get trained by or through the occupier, in respect of

workers’ health and safety, to represent to the Inspector directly or though a

representative in the matter of inadequate provision for protection of health or

safety in the factory, not to pay any fee or charge for the facilities or appliances

provided by the employer and to claim wages for or in lieu of allowable leave

under the provisions of the Payment of Wages Act.

11.1.3 Payment of Wages Act 1936

Under the Payment of Wages Act 1936 the following are the common obligations

of the employer:

every employer is primarily responsible for payment of wages to

employees. The employer should fix the wage period (which may be per

day, per week or per month) but in no case it should exceed one month;

every employer should make timely payment of wages. If the employment

of any person is being terminated, those wages should be paid within two

days of the date of termination; and

the employer should pay the wages in cash, ie in current coins or currency

notes. However wages may also be paid either by cheque or by crediting

in employee’s bank account after obtaining written consent.

11.1.4 Minimum Wages Act 1948

The employer is bound to pay to every employee engaged by him wages at a rate

not less than the minimum rates of wages fixed for that class of employees

without making any deduction (except as permitted under the Payment of Wages

Act). The employees are entitled to the minimum wages at all times and under all

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circumstances.

11.1.5 Workmen’s Compensation Act 1923

The empoyer must pay compensation for an accident suffered by an employee

during the course of employment and in accordance with the Act. The employer

must submit a statement to the Commissioner (within 30 days of receiving the

notice) giving the circumstances attending the death of a worker as result of an

accident and indicating whether the employer is liable to deposit any

compensation for the same. It should also submit an accident report to the

Commissioner within seven days of the accident.

11.1.6 Employees Provident Funds and Miscellaneous Provisions Act 1952

The employer must pay its and the employees’ contributions and administrative

charges as required under the Act and schemes. Financial difficulty is no excuse

for non-payment. The contribution has to be made irrespective of the fact whether

wages are paid to the employee due to lockout, strike, or other related reason.

Employer must furnish the necessary returns to the Provident Funds

Commissioner.

11.2 Other Related Issues

11.2.1 Punishment

In industrial law, punishments other than dismissal which an employer can

impose (depending upon the gravity of misconduct) are recommended as a

measure of disciplinary action on a worker. These alternatives can be in the form

of:

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warning;

fine;

withholding of increment;

demotion;

suspension; and

discharge.

11.2.2 Courts and Tribunals

Some important points to note regarding the courts and tribunals:

The first stage of review of the employer’s disciplinary action against a

worker is by the Labour Court or Industrial Tribunal appointed under the

Act.

Unlike ordinary civil courts, the Industrial Tribunal’s jurisdiction does not

commence on the basis of any party approaching it directly but

commences on the basis of reference made by the appropriate Government

under the Act.

Labour Tribunals are expected to hold proceedings expeditiously and to

submit the award to the appropriate Government within the specified time,

if any.

The award requires publication within a 30 day period from the date of its

receipt by the appropriate Government.

An award of the Industrial Tribunal ordinarily becomes enforceable on the

expiry of 30 days from the date of its publication.

11.3 Duties Of Employers To Third Parties

11.3.1 Liability to government and revenue authorities

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The State is an integral component of industrial relations. The four main tenets of

the Government’s labour policy can be summed up as:

to exercise political control over the industrial movement without

jeopardizing the legal rights of entrepreneurs or employees;

to maintain industrial peace;

to encourage and recognise trade unions and employers’ federations for

collective bargaining; and

to ensure that individual rights should not be infringed.

(This is done through administrative and executive agencies. The employers are

under obligation to Government for the peaceful observance of the above

functions).

Employers are liable to pay taxes, contributions and assistance to various revenue

authorities created by statute, such as income tax, central excise and sales tax

under the central sales tax and state government sales tax laws. Employers must

make timely deposits of contributions to the Provident Fund and the ESI

authorities (under the law in force) and must file timely returns to respective

authorities. Employers are automatically governed by the intention of the various

legislation.

11.4 Obligations Of The Parties

Under various labour legislation, both the employer and employee have various

statutory obligations to each other. Apart from the statutory obligations, there are

certain principles peculiar to the contract of employment: cooperation, care and

fidelity which are at the root of the employment relationship.

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85


Employer and employee must cooperate to facilitate the performance of their

mutual obligations under the contract of employment. The important general

obligations of the employers and employees are discussed in the following

paragraphs.

11.4.1 Employers’ obligations to the employee

The employer’s obligations to the employees are:

to provide each employee a copy of the service rules and a copy of

Standing Orders, (if any).

to provide each employee a copy of the appointment letter or employment

contract.

to pay the wages/salary on time.

to communicate any change in terms of service in writing to the employee.

to pay bonuses to eligible employees, under the provisions of the Bonus

Act of 1965.

to deposit its contribution to the provident fund and the ESI along with the

contributions of the employee.

to ensure security of staff and tools while on duty.

to provide tools that are functional.

to comply with the provisions of the employment contract and Standing

Orders if the employer wishes to terminate the services of the employee.

to indemnify employees against expenses and liabilities incurred in the

course of employment.

11.4.2 Employees’ obligations to the employer

The employee’s obligations to the employer are:

to perform the job peacefully and carefully.

to obey the orders of superiors.

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86


to safeguard the assets of the Company, which are in possession.

to account for all monies and property received in the course of

employment.

to inform and take permission for his future leave, so that the employer

can make alternate arrangements.

to observe the employment contract or service rules applicable.

to give notice to the employer of an intention to leave the organisation as

per the employment contract or service rules.

Terms implied by legislation and the courts.

11.5 Breach Of Contract

Avenues Available To Employer

When a worker/employee either individually or collectively is found guilty of any

violation of the employment contract, the employer can take the following

actions:

disciplinary action;

forced leave;

transfer of job;

demotion;

termination;

dismissal;

suspension; and

the right to claim compensation.

Disciplinary action

The employer may initiate disciplinary action against the worker by serving a

show cause notice. The worker is required to reply to the notice within stipulated

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87


time with relevant facts and proof, failing which rigorous action can be taken.

Forced leave

The employer can insist and can grant leave to the worker as a matter of warning.

The intention of this strategy is a worker will not be allowed to join with other

workers for the time being.

Transfer of job

As a matter of punishment for violation of employment contract, the employer

can transfer a worker to another department, unit, or place of work, where it will

be inconvenient for the worker to work, so that after some time the worker leaves

the organisation on his/her own.

Demotion

If a worker is found guilty of a violation of the employment contract and the

employer does not want to take hard action, the employer may demote the worker,

or may start to keep records of performance in a confidential report for the future

purpose of deciding further promotions, increments and other benefits.

Termination

The biggest avenue available to an employer is termination of the services of an

employee. Termination can be done in accordance with the provisions of

Industrial Disputes Act. Where the Standing Orders are in operation in the

concerned establishment, termination shall be in accordance with such Standing

Orders. If an appointment letter/contract of employment contains provisions

relating to termination, it must be observed strictly.

Dismissal

Dismissal occurs when the employer strikes the name of the employee from the

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88


rolls for the commission of a ‘serious misconduct’ in violation of the contract.

The employer has to observe the conditions precedent to dismissal.

Suspension

The employer can suspend any worker during domestic enquiry conducted against

such an employee for an alleged violation. However, the employee has to be

given subsistence allowance during such suspension until the domestic enquiry

ends. If the enquiry finds the worker guilty, employment can be terminated

according to the seriousness of the ‘misconduct’.

Right to claim compensation

Under the Indian Contract Act of 1872, when a contract has been broken, the

party who suffers by such breach is entitled to receive, from the party who has

broken the contract, compensation for any loss or damage caused (which naturally

arose in the usual course of things). For example, when a worker has agreed not to

divulge trade secrets or information relating to employer’s business to third party

and then subsequently breaches this secrecy clause, the employer is entitled to

seek damages from the employee.

Rights available under the Industrial Disputes Act of 1947

The employer can raise a dispute and can approach the appropriate authorities

established under the Act for the settlement of the dispute. It can take actions in

accordance with the directions given by such authorities. In dealing with illegal

strikes by the employees, the employer will be liable as a principal offender under

the Penal Code, if “he assists, abets, aids, enables another in the commission of

the offence or procures that other to commit the offence”.

11.6 Termination Provisions & Notice

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89


Termination means the end of the employment service. It can be initiated by

either party. After termination, the employer/employee relationship comes to an

end. Certain provisions must be followed in respect of termination. Generally

termination provisions are mentioned in the contract of employment or in the

Standing Orders applicable to the industry.

Reasons For Termination

Employer-initiated termination

Employer-initiated termination can occur for the reasons:

fixed term/contract coming to an end;

unsatisfactory probation;

termination by notice;

medical reasons;

breach of contract;

dismissal;

retirement; and

retrenchment.

Employee-initiated termination

Employee-initiated termination can occur in the following instances:

resignation during probation;

resignation with notice;

breach of contract; and

medical reasons.

Termination provisions

Notice should be in writing. If an employee intends to leave the service, the

employee should give notice of this intention in writing to the employer. If the

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90


employee wishes, the employer has the right to accept the resignation with

immediate effect (subject to payment in lieu of time worked).

The notice provisions for termination

As provided specifically in the contract of service, the employer may terminate

the services of an employee after giving notice in writing or on payment of wages

in lieu. The employer reserves the right to require an employee to work and not to

relieve the employee during the notice period.

For temporaries, casuals and probationers, no notice is required if the service is

terminated before the expiry of the period, subject to the provisions of the

statutes.

There is no provision in law specifying the number of days of notice to be given

to an employee while terminating services. Normal practice is that one-month

notice is given for junior-level employees, with up to three months for senior

level employees.

11.7 The Shops & Establishment Act

The Shops and Establishment Act is a state legislation act and each state has

framed its own rules for the Act. The object of this Act is to provide statutory

obligation and rights to employees and employers in the unauthorized sector of

employment, i.e., shops and establishments. This Act is applicable to all persons

employed in an establishment with or without wages, except the members of the

employers’ family.

This Act lays down the following rules:

working hours per day and week.

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Guidelines for spread-over, rest interval, opening and closing hours,

closed days, national and religious holidays, overtime work.

Employment of children, young persons and women.

Rules for annual leave, maternity leave, sickness and casual leave, etc.

Rules for employment and termination of service.

Under this Act, registration of shop/establishment is necessary within thirty days

of commencement of work. Fifteen days of notice is required to be served before

the closing of the establishment State government can exempt, either permanently

or for specified period, any establishments from all or any provisions of this Act.

11.7 Future Trends

Whistleblower protection

Effective from April 1, 2005, the Securities and Exchange Board of India (SEBI)

directed Indian stock exchanges to implement a new set of reporting

requirements, commonly known as Clause 49, for listed companies. Included in

Clause 49 is a non mandatory direction for companies to establish an internal

whistleblower policy. Corporate whistleblower policies would establish a

mechanism for employees to report to management concerns about unethical

behaviour, actual or suspected fraud, or violations of the company’s code of

conduct or ethics policy. The whistleblower mechanism also could provide for

direct access to the chairperson of the company audit committee in exceptional

cases, as well as safeguards for employees who availed themselves of the

whistleblower procedures.

National Rural Employment Guarantee Act 2005

The aforementioned Act was notified on September 7, 2005 and the scheme

launched on February 2, 2006. The objective of the Act is to enhance the

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livelihood security of the people in rural areas by generating wage employment

through works that develop the infrastructure base of that area. The choice of

work suggested addresses the causes of chronic poverty like drought,

deforestation, and soil erosion. The objective behind suggesting certain key

activities/works is to rejuvenate the natural resources of the area to stimulate the

local economy enabling those who work for wage employment in creating an

asset to take advantage of it to engage in productive ways of self employment,

and augment their income. Section 4 of the Act provides that within six months

from the date of commencement of the Act, every state government shall, by

notification, make a scheme for providing not less than 100 days of guaranteed

employment in a financial year to every household in the rural areas covered

under the scheme and whose adult members volunteer to do unskilled manual

work subject to the conditions laid down in the Act.

Labour Participation in Management

But there is a silver lining as well for the workers in the country which could be

seen from the inclusion in the Board of Kanan Devan Hill Plantations Company

of Ms. A Chandra, a worker in the largest participatory management tea company

in the world. Seventeen years of dedicated service has got her into the Board of

the Rs.105 crore company. The lady still earns Rs.82.65 for a day’s work and still

lives in the worker’s lane with the rest of the workers.

Employee Stock Option Scheme

Employee Stock Option Schemes (ESOPs) are a method of employee

compensation. They can be useful if the firm is growing rapidly and seriously

wishes to retain a good and efficient work force.

List of various Central Labour Acts

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Laws related to Industrial Relations

1 The Trade Unions Act, 1926

The Trade Unions (Amendments) Act, 2001

2 The Industrial Employment (Standing Orders) Act, 1946

The Industrial Employment (Standing Orders) Rules, 1946

3 The Industrial Disputes Act, 1947

Laws related to Wages

1 The Payment of Wages Act, 1936

The Payment of Wages Rules, 1937

The Payment of Wages (AMENDMENT) Act, 2005

2 The Minimum Wages Act, 1948

The Minimum Wages (Central) Rules, 1950

3 The Working Journalist (Fixation of Rates of Wages) Act, 1958

Working Journalist (Conditions of service) and Miscellaneous Provisions

Rules, 1957

4 The Payment of Bonus Act, 1965

The Payment of Bonus Rules, 1975

Laws related to Working Hours, Conditions of Services and Employment

1 The Factories Act, 1948

2 The Dock Workers (Regulation of Employment) Act, 1948

3 The Plantation Labour Act, 1951

4 The Mines Act, 1952

5 The Working Journalists and other Newspaper Employees’ (Conditions of

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http://labour.nic.in/act/acts/wja.doc

http://indiacode.nic.in/fullact1.asp?tfnm=195235




http://labour.nic.in/act/acts/pbr.doc

http://labour.nic.in/act/acts/pba.doc

http://labour.nic.in/act/acts/wjr.doc



http://labour.nic.in/act/acts/mw.doc



http://labour.nic.in/act/acts/pw.doc



http://labour.nic.in/act/acts/IndustrialEmployment(StandingOrders)Rules.doc

http://labour.nic.in/act/acts/IndustrialEmploymentAct.doc




Service and Misc. Provisions) Act, 1955

The Working Journalists and other Newspaper Employees’ (Conditions of

Service and Misc. Provisions) Rules, 1957

6 The Merchant Shipping Act, 1958

7 The Motor Transport Workers Act, 1961

8 The Beedi & Cigar Workers (Conditions of Employment) Act, 1966

9 The Contract Labour (Regulation & Abolition) Act, 1970

The Contract Labour Regulation Rules

10 The Sales Promotion Employees (Conditions of Service) Act, 1976

The Sales Promotion Employees (Conditions of Service) Rules, 1976

11 The Inter-State Migrant Workmen (Regulation of Employment and

Conditions of Service) Act, 1979

12 The Shops and Establishments Act

13 The Cinema Workers and Cinema Theatre Workers (Regulation of

Employment) Act, 1981

The Cinema Workers and Cinema Theatre Workers (Regulation of

Employment) Rules, 1984

The Cine Workers’ Welfare Fund Act, 1981.

14 The Dock Workers (Safety, Health & Welfare) Act, 1986

15 The Building & Other Construction Workers (Regulation of Employment

& Conditions of Service) Act, 1996

16 The Dock Workers (Regulation of Employment) (inapplicability to Major

Ports) Act, 1997

Laws related to Equality and Empowerment of Women

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http://labour.nic.in/act/acts/CineWorkersAndCinemaTheatreWorkers(Rules)1984.doc

http://labour.nic.in/act/acts/CineWorkersAndCinemaTheatreWorkers(Rules)1984.doc



http://labour.nic.in/act/acts/TheSalesPromotionEmployees(ConditionsOfService)Rules,1976.doc

http://labour.nic.in/act/acts/SalesPromotionAct.doc

http://labour.nic.in/acts/RulesCLRAAct.doc

http://labour.nic.in/act/acts/contactlabour.doc


http://labour.nic.in/act/acts/TheMotorTransportWorkersAct,1961.doc




http://labour.nic.in/act/acts/wja.doc


1 The Maternity Benefit Act, 1961

2 The Equal Remuneration Act, 1976

Laws related to Deprived and Disadvantaged Sections of the Society

1 The Bonded Labour System (Abolition) Act, 1976

2 The Child Labour (Prohibition & Regulation) Act, 1986

3 The Children (Pledging of Labour) Act, 1933

Laws related to Social Security

1 The Workmen’s Compensation Act, 1923

The Workmen's Compensation (Amendments) Act, 2000

2 The Employees’ State Insurance Act, 1948

3 The Employees’ Provident Fund & Miscellaneous Provisions Act, 1952

The Employees’ Provident Fund & Miscellaneous Provisions

(Amendment) Act, 1996

4 The Payment of Gratuity Act, 1972

The Payment of Gratuity Rules

5 The Unorganised Woekers' Social Security Act 2008

The Unorganised Workers' Social Security Rules 2008

Laws related to Labour Welfare

1 The Mica Mines Labour Welfare Fund Act, 1946

2 The Limestone & Dolomite Mines Labour Welfare Fund Act, 1972

3 The Beedi Workers Welfare Fund Act, 1976

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http://labour.nic.in/act/acts/Unorganised-workers-social-security-Rules%202009.pdf

http://labour.nic.in/act/acts/Unorganised-workers-social-security-act-2008.pdf

http://labour.nic.in/act/acts/RulesofPaymentOfGratuity.doc








http://www.indiacode.nic.in/fullact1.asp?tfnm=193302






4 The Beedi Workers Welfare Cess Act, 1976

The Beedi Worker's Welfare Cess Act Rules, 1977

5 The Iron Ore Mines, Manganese Ore Mines & Chrome Ore Mines Labour

Welfare Fund Act, 1976

6 The Iron Ore Mines, Manganese Ore Mines & Chrome Ore Mines Labour

Welfare Cess Act, 1976

7 The Cine Workers Welfare Fund Act, 1981

8 The Cine Workers Welfare Cess Act, 1981

9 The Employment of Manual Scavengers and Construction of Dry latrines

Prohibition Act, 1993

Laws related to Employment & Training

1 The Employment Exchanges (Compulsory Notification of Vacancies) Act,

1959

The Employment Exchanges (Compulsory Notification of Vacancies)

Rules, 1959

2 The Apprentices Act, 1961

Others

1 The Fatal Accidents Act, 1855

2 The War Injuries Ordinance Act, 1943

3 The Weekly Holiday Act, 1942

4 The National and Festival Holidays Act

5 The War Injuries (Compensation Insurance) Act, 1943

6 The Personal Injuries (Emergency) Provisions Act, 1962

7 The Personal Injuries (Compensation Insurance) Act, 1963

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http://dget.nic.in/acts/welcome.html













http://labour.nic.in/act/acts/beediWorkerCessRules77.pdf



8 The Coal Mines (Conservation and Development) Act, 1974

10 The Labour Laws (Exemption from Furnishing Returns and Maintaining

Register by Certain Establishments) Act, 1988

11 The Public Liability Insurance Act, 1991

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http://labour.nic.in/act/acts/TheLabourLaws(ExemptionfromFurnishingReturnsandMaintainingRegistersbyCertainEstablishments)Act,1988.doc

http://labour.nic.in/act/acts/TheLabourLaws(ExemptionfromFurnishingReturnsandMaintainingRegistersbyCertainEstablishments)Act,1988.doc



CHAPTER – 12

RECORD KEEPING

12.0 The oldest and most basic personnel function is employee record-keeping. This

function involves recording, maintaining, and retrieving employee-related

information for a variety of purposes. Records, which must be maintained,

include application forms, health and medical records, employment history (jobs

held, promotions, transfers, lay-offs), seniority lists, earnings and hours of work,

absences, turnover, tardiness, and other employee data. Complete and up-to-date

employee records are essential for most personnel functions. More than ever

employees today have a great interest in their personnel records. They want to

know what is in them, why certain statements have been made, and why records

may or may not have been updated. Personnel records provide the following:

A store of up-to-date and accurate information about the company’s

employees.

A guide to the action to be taken regarding an employee, particularly by

comparing him with other employees.

A guide when recruiting a new employee, e.g. by showing the rates of pay

received by comparable employees.

A historical record of previous action taken regarding employees.

The raw material for statistics, which check and guide personnel policies.

The means to comply with certain statutory requirements.

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CHAPTER – 13

PERSONNEL RESEARCH

13.0 All personnel people engage in some form of research activities. In a good

research approach, the object is to get facts and information about personnel

specifics in order to develop and maintain a program that works. It is impossible

to run a personnel program without some pre-planning and post-reviewing. For

that matter, any survey is, in a sense, research. There is a wide scope for research

in the areas of recruitment, employee turnover, terminations, training, and so on.

Through a well-designed attitude survey, employee opinions can be gathered on

wages, promotions, welfare services, working conditions, job security, leadership,

industrial relations, and the like. In spite of its importance, however, in most

companies, research is the most neglected area because personnel people are too

busy putting out fires. Research is not done to put out fires but to prevent them.

13.1 Research is not the sole responsibility of any one particular group or department

in an organization. The initial responsibility is that of the human resource

department, which however should be assisted by line supervisors and executives

at all levels of management. The assistance than can be rendered by trade unions

and other organizations should be ignored, but should be properly made use of.

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critical review on hr practices of an organization

Documents

human resource practices

human resource development

hr practices

organization objective

organization programmes

staffing chapter

orientation chapter

symbiosis centre