mba human resource management subject code- bat …
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UNIVERSITY SCHOOL OF BUSINESS
MBA
HUMAN RESOURCE
MANAGEMENT
SUBJECT CODE-
BAT-656
DR. APOORVA
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Vision and Mission of the Department
Vision of the Department
To create excellence in business management for nurturing value driven business leaders with
analytical and entrepreneurial mindset to foster innovative ideas in order to transform the
world and serve the society.
Mission Statements of the Department
M1 : Design a unique competency directed and industry relevant curriculum with outcome
oriented teaching learning process facilitated by world class infrastructure.
M2 : Enhance students’ cognitive, research, analytical, ethical and behavioral competencies
through programs that equip them to meet global business challenges in the professional
world.
M3 : Facilitate student centric sound academic environment with co-curricular and extra-
curricular activities to groom and develop future ready business professionals.
M4 : Design a transparent evaluation system for objective assessment of the program
learning.
M5 : Align meaningful interactions with the academia, industry and community to facilitate
value driven holistic development of the students.
M6 : Develop ethical and socially responsible entrepreneurial attitude for harnessing the
environmental opportunities through creativity and innovation for a vibrant and
sustainable society.
UNIVERSITY
SCHOOL OF BUSINESS
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Program Educational Objectives (PEOs)
Program Educational Objectives (PEOs) are the broad statements that describe career and
professional accomplishments that graduates will attain within a few years of graduation. After
successful completion of MBA program from Chandigarh University, the graduates will:
PEO1: Make significant impact as successful management professionals with a sound business
and entrepreneurial acumen leading to a promising career in the various management
domains.
PEO 2: Develop the professional competence for astute decision making, organization skills,
planning and its efficient implementation, research, data analysis and interpretation with a
solution finding approach.
PEO 3: Be known for their team player qualities to handle diversity and the leadership skills to
make sound decisions while working with peers in an inter-disciplinary environment with
people of cross-cultural attributes
PEO 4: Be adaptable to new technology, innovations and changes in world economy that
positively impacts and contributes towards industry, academia and the community at large.
PEO 5: Be responsible citizens with high ethical conduct that will empower the business
organizations with high integrity, moral values, social effectiveness and legal business
intelligence.
UNIVERSITY
SCHOOL OF BUSINESS
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Program Outcomes (POs)
Program
Outcome
After completing the program, the students will be able to:
PO1 Apply knowledge of management theories and practices to solve business
problems.
PO2 Foster Analytical and critical thinking abilities for data-based decision making
PO3 Ability to develop Value based Leadership ability
PO4 Ability to understand, analyze and communicate global, economic, legal, and
ethical aspects of business.
PO5 Ability to lead themselves and others in the achievement of organizational
goals, contributing effectively to a team environment.
PO6 Ability to develop innovative and entrepreneurial mindset.
UNIVERSITY
SCHOOL OF BUSINESS
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Unit-1
Introduction to Human Resource Management
Human resource management can be defined as the total knowledge, skills,
competencies, intelligence, values, attitudes and aptitudes of the employees working
in an organization.
With the growing importance of manpower in the organization, its management is
also crucial to retain good skill and talent.
Therefore it is a management function that help managers recruit, select, train and
develops manpower for an organization. Also HRM includes employee remuneration,
motivation and growth.
Scope of HRM
The scope of HRM is very wide. It consists of all the functions that come under the banner
of human resource management. The different functions are as follows −
a. Human Resources Planning
It is the process by which a company identifies how many positions are vacant and
whether the company has excess staff or shortage of staff and subsequently deals with
this need of excess or shortage.
ii. Job Analysis Design
Job analysis can be defined as the process of noticing and regulating in detail the
particular job duties and requirements and the relative importance of these duties for a
given job.
Job analysis design is a process of designing jobs where evaluations are made regarding
the data collected on a job. It gives an elaborate description about each and every job in
the company.
iii. Recruitment and Selection
With respect to the information collected from job analysis, the company prepares
advertisements and publishes them on various social media platforms. This is known
as recruitment.
A number of applications are received after the advertisement is presented, interviews
are conducted and the deserving employees are selected. Thus, recruitment and selection
is yet another essential area of HRM.
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iv. Orientation and Induction
After the employees are selected, an induction or orientation program is organized.
The employees are updated about the background of the company as well as culture,
values, and work ethics of the company and they are also introduced to the other
employees.
v. Training and Development
Employees have to undergo a training program, which assists them to put up a better
performance on the job. Sometimes, training is also conducted for currently working
experienced staff so as to help them improve their skills further. This is known
as refresher training.
vi. Performance Appraisal
After the employees have put in around 1 year of service, performance appraisal is
organized in order to check their performance. On the basis of these appraisals, future
promotions, incentives, and increments in salary are decided.
Vii. Compensation Planning and Remuneration
Under compensation planning and remuneration, various rules and regulations regarding
compensation and related aspects are taken care of. It is the duty of the HR department to
look into remuneration and compensation planning.
Features of HRM
Human Resource Management as a discipline includes the following features −
It is pervasive in nature, as it is present in all industries.
It focuses on outcomes and not on rules.
It helps employees develop and groom their potential completely.
It motivates employees to give their best to the company.
It is all about people at work, as individuals as well as in groups.
It tries to put people on assigned tasks in order to have good production or
results.
It helps a company achieve its goals in the future by facilitating work for
competent and well-motivated employees.
It approaches to build and maintain cordial relationship among people working at
various levels in the company.
Basically, we can say that HRM is a multi-disciplinary activity, utilizing knowledge and
inputs drawn from psychology, economics, etc.
Functions and objectives of HRM
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To provide effective, efficient and talented manpower to the organizations.
To create opportunities for employees to develop and grow.
To maintain employees by encouraging value system and creating
environment of trust by way of rewards and facilities.
To appraise their performance in order to reward them or to take corrective
actions.
Human resource planning
In today’s knowledge economy an organization’s most valuable asset is its human resources – its
employees. Their skills and knowledge, as well as their relationships with key customers, can
often be irreplaceable and can determine an organization’s success. So much so, human resource
planning is now an integral part of an organization’s strategy.
The human resource planning is a four-step process that analyzes current human resources,
forecasts future requirements, identifies areas where there are gaps, and then implements a plan
to tighten up those gaps. Breaking it down, the objectives of human resource planning are to
make sure you have the right number of people in the right jobs at the right time.
It helps the management to anticipate shortages or surpluses of human resource in
future and correct these imbalances before they become unmanageable and
expensive.
Process of HRP:
Step 1: Assess your current human resource capacity
Start by looking at your current human resources state of play. This will involve
analyzing the HR strength of your organization across factors including employee
numbers, skills, qualifications, experience, age, contracts, performance ratings, titles, and
compensations. During this phase, it’s a good idea to gather insight from your managers
who can provide real-world feedback on the human resource issues they face, as well as
areas in which they think changes are necessary.
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Step 2: Forecast future HR requirements
You will then need to look at the future HR needs of your organization and how human
resources will be applied to meet these organizational goals. HR managers will typically
look at the market or sectoral trends, new technologies that could automate certain
processes, as well as industry analysis in order to gauge future requirements. Of course,
there are a number of factors affecting human resource planning such as natural
employee attrition, layoffs, likely vacancies, retirements, promotions and end of contract
terms. Above all of this, you will need to understand the goals of the organization: are
you entering a new market, launching new products or services, expanding into new
areas. Forecasting HR demand is a complex task based on several dynamics. Being
informed and having a seat, or at least an ear, at boardroom level is essential if you are to
make accurate HR projections.
Step 3: Identify HR gaps
An effective human resource plan walks the fine line between supply and demand. By
assessing the current HR capacity and projecting future requirements you should have a
clear picture of any gaps that exist. Using your HR forecast you can better judge if there
will be a skills gap, for example. Should you upskill existing employees or recruit
employees who are already qualified in specific areas? Are all current employees being
utilized in the right areas or would their skills be better suited to different roles?
Step 4: Integrate the plan with your organization’s overall strategy
After you’ve assessed your current human resources capacity, projected future HR
demands and identified the gaps, the final step is to integrate your human resources plan
with your organizational strategy. On a practical level, you will need a dedicated budget
for human resources recruiting, training or redundancies, and you will also need
management buy-in across the business. You will need cooperation and the necessary
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finances in order to implement the plan and a collaborative approach from all
departments to put it into practice. Learn about the benefits of strategic human resource
management.
Job analysis
It is a formal and detailed examination of jobs in order to understand the tasks that
need to be done and the skills required to do these tasks under this job. Job
analysis provides the analyst with basic data related to specific jobs in terms of
duties , responsibilities, skills and knowledge.
Process of job analysis
Identification of Job Analysis Purpose: Well any process is futile until its purpose is
not identified and defined. Therefore, the first step in the process is to determine its need
and desired output. Spending human efforts, energy as well as money is useless until HR
managers don’t know why data is to be collected and what is to be done with it.
Who Will Conduct Job Analysis: The second most important step in the process of job
analysis is to decide who will conduct it. Some companies prefer getting it done by their
own HR department while some hire job analysis consultants. Job analysis consultants
may prove to be extremely helpful as they offer unbiased advice, guidelines and methods.
They don’t have any personal likes and dislikes when it comes to analyze a job.
How to Conduct the Process: Deciding the way in which job analysis process needs to
be conducted is surely the next step. A planned approach about how to carry the whole
process is required in order to investigate a specific job.
Strategic Decision Making: Now is the time to make strategic decision. It’s about
deciding the extent of employee involvement in the process, the level of details to be
collected and recorded, sources from where data is to be collected, data collection
methods, the processing of information and segregation of collected data.
Training of Job Analyst: Next is to train the job analyst about how to conduct the
process and use the selected methods for collection and recoding of job data.
Preparation of Job Analysis Process: Communicating it within the organization is the
next step. HR managers need to communicate the whole thing properly so that employees
offer their full support to the job analyst. The stage also involves preparation of
documents, questionnaires, interviews and feedback forms.
Data Collection: Next is to collect job-related data including educational qualifications
of employees, skills and abilities required to perform the job, working conditions, job
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activities, reporting hierarchy, required human traits, job activities, duties and
responsibilities involved and employee behaviour.
Documentation, Verification and Review: Proper documentation is done to verify the
authenticity of collected data and then review it. This is the final information that is used
to describe a specific job.
Developing Job Description and Job Specification: Now is the time to segregate the
collected data in to useful information. Job Description describes the roles, activities,
duties and responsibilities of the job while job specification is a statement of educational
qualification, experience, personal traits and skills required to perform the job.
Thus, the process of job analysis helps in identifying the worth of specific job, utilizing the
human talent in the best possible manner, eliminating unneeded jobs and setting realistic
performance measurement standards.
Recruitment
It is the process of searching candidates for employment and stimulating them to apply for
the jobs in the organization. It is the linking activity that brings together employer and
seeking employee. To be effective, the recruitment process should attract qualified
applicants and provide enough information for unqualified persons to screen themselves
out.
Sources of recruitment
The candidates may be available inside or outside the organisation. Basically, there are
two sources of recruitment i.e., internal and external sources.
(A) Internal Sources:
Best employees can be found within the organization. When a vacancy arises in the organisation,
it may be given to an employee who is already on the pay-roll. Internal sources include
promotion, transfer and in certain cases demotion. When a higher post is given to a deserving
employee, it motivates all other employees of the organisation to work hard. The employees can
be informed of such a vacancy by internal advertisement.
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Methods of Internal Sources:
The Internal Sources Are Given Below:
1. Transfers:
Transfer involves shifting of persons from present jobs to other similar jobs. These do not
involve any change in rank, responsibility or prestige. The numbers of persons do not increase
with transfers.
2. Promotions:
Promotions refer to shifting of persons to positions carrying better prestige, higher
responsibilities and more pay. The higher positions falling vacant may be filled up from within
the organisation. A promotion does not increase the number of persons in the organisation.
A person going to get a higher position will vacate his present position. Promotion will motivate
employees to improve their performance so that they can also get promotion.
3. Present Employees:
The present employees of a concern are informed about likely vacant positions. The employees
recommend their relations or persons intimately known to them. Management is relieved of
looking out prospective candidates.
The persons recommended by the employees may be generally suitable for the jobs because they
know the requirements of various positions. The existing employees take full responsibility of
those recommended by them and also ensure of their proper behaviour and performance.
Advantages of Internal Sources:
The Following are The Advantages of Internal Sources:
1. Improves morale:
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When an employee from inside the organisation is given the higher post, it helps in increasing
the morale of all employees. Generally every employee expects promotion to a higher post
carrying more status and pay (if he fulfills the other requirements).
2. No Error in Selection:
When an employee is selected from inside, there is a least possibility of errors in selection since
every company maintains complete record of its employees and can judge them in a better
manner.
3. Promotes Loyalty:
It promotes loyalty among the employees as they feel secured on account of chances of
advancement.
4. No Hasty Decision:
The chances of hasty decisions are completely eliminated as the existing employees are well
tried and can be relied upon.
5. Economy in Training Costs:
The existing employees are fully aware of the operating procedures and policies of the
organisation. The existing employees require little training and it brings economy in training
costs.
6. Self-Development:
It encourages self-development among the employees as they can look forward to occupy higher
posts.
Disadvantages of Internal Sources:
(i) It discourages capable persons from outside to join the concern.
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(ii) It is possible that the requisite number of persons possessing qualifications for the vacant
posts may not be available in the organisation.
(iii) For posts requiring innovations and creative thinking, this method of recruitment cannot be
followed.
(iv) If only seniority is the criterion for promotion, then the person filling the vacant post may
not be really capable.
Inspite of the disadvantages, it is frequently used as a source of recruitment for lower positions.
It may lead to nepotism and favouritism. The employees may be employed on the basis of their
recommendation and not suitability.
(B) External Sources:
All organisations have to use external sources for recruitment to higher positions when existing
employees are not suitable. More persons are needed when expansions are undertaken.
The external sources are discussed below:
Methods of External Sources:
1. Advertisement:
It is a method of recruitment frequently used for skilled workers, clerical and higher staff.
Advertisement can be given in newspapers and professional journals. These advertisements
attract applicants in large number of highly variable quality.
Preparing good advertisement is a specialised task. If a company wants to conceal its name, a
‘blind advertisement’ may be given asking the applicants to apply to Post Bag or Box Number or
to some advertising agency.
2. Employment Exchanges:
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Employment exchanges in India are run by the Government. For unskilled, semi-skilled, skilled,
clerical posts etc., it is often used as a source of recruitment. In certain cases it has been made
obligatory for the business concerns to notify their vacancies to the employment exchange. In the
past, employers used to turn to these agencies only as a last resort. The job-seekers and job-
givers are brought into contact by the employment exchanges.
3. Schools, Colleges and Universities:
Direct recruitment from educational institutions for certain jobs (i.e. placement) which require
technical or professional qualification has become a common practice. A close liaison between
the company and educational institutions helps in getting suitable candidates. The students are
spotted during the course of their studies. Junior level executives or managerial trainees may be
recruited in this way.
4. Recommendation of Existing Employees:
The present employees know both the company and the candidate being recommended. Hence
some companies encourage their existing employees to assist them in getting applications from
persons who are known to them.
In certain cases rewards may also be given if candidates recommended by them are actually
selected by the company. If recommendation leads to favouritism, it will impair the morale of
employees.
5. Factory Gates:
Certain workers present themselves at the factory gate every day for employment. This method
of recruitment is very popular in India for unskilled or semi-skilled labour. The desirable
candidates are selected by the first line supervisors. The major disadvantage of this system is that
the person selected may not be suitable for the vacancy.
6. Casual Callers:
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Those personnel who casually come to the company for employment may also be considered for
the vacant post. It is most economical method of recruitment. In the advanced countries, this
method of recruitment is very popular.
7. Central Application File:
A file of past applicants who were not selected earlier may be maintained. In order to keep the
file alive, applications in the files must be checked at periodical intervals.
8. Labour Unions:
In certain occupations like construction, hotels, maritime industry etc., (i.e., industries where
there is instability of employment) all recruits usually come from unions. It is advantageous from
the management point of view because it saves expenses of recruitment. However, in other
industries, unions may be asked to recommend candidates either as a goodwill gesture or as a
courtesy towards the union.
9. Labour Contractors:
This method of recruitment is still prevalent in India for hiring unskilled and semi-skilled
workers in brick klin industry. The contractors keep themselves in touch with the labour and
bring the workers at the places where they are required. They get commission for the number of
persons supplied by them.
10. Former Employees:
In case employees have been laid off or have left the factory at their own, they may be taken
back if they are interested in joining the concern (provided their record is good).
11. Other Sources:
Apart from these major sources of external recruitment, there are certain other sources which are
exploited by companies from time to time. These include special lectures delivered by recruiter
in different institutions, though apparently these lectures do not pertain to recruitment directly.
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Then there are video films which are sent to various concerns and institutions so as to show the
history and development of the company. These films present the story of company to various
audiences, thus creating interest in them.
Various firms organise trade shows which attract many prospective employees. Many a time
advertisements may be made for a special class of work force (say married ladies) who worked
prior to their marriage.
These ladies can also prove to be very good source of work force. Similarly there is the labour
market consisting of physically handicapped. Visits to other companies also help in finding new
sources of recruitment.
Merits of External Sources:
1. Availability of Suitable Persons:
Internal sources, sometimes, may not be able to supply suitable persons from within. External
sources do give a wide choice to the management. A large number of applicants may be willing
to join the organisation. They will also be suitable as per the requirements of skill, training and
education.
2. Brings New Ideas:
The selection of persons from outside sources will have the benefit of new ideas. The persons
having experience in other concerns will be able to suggest new things and methods. This will
keep the organisation in a competitive position.
3. Economical:
This method of recruitment can prove to be economical because new employees are already
trained and experienced and do not require much training for the jobs.
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Demerits of External Sources:
1. Demoralisation:
When new persons from outside join the organisation then present employees feel demoralised
because these positions should have gone to them. There can be a heart burning among old
employees. Some employees may even leave the enterprise and go for better avenues in other
concerns.
2. Lack of Co-Operation:
The old staff may not co-operate with the new employees because they feel that their right has
been snatched away by them. This problem will be acute especially when persons for higher
positions are recruited from outside.
3. Expensive:
The process of recruiting from outside is very expensive. It starts with inserting costly
advertisements in the media and then arranging written tests and conducting interviews. In spite
of all this if suitable persons are not available, then the whole process will have to be repeated.
4. Problem of Maladjustment:
There may be a possibility that the new entrants have not been able to adjust in the new
environment. They may not temperamentally adjust with the new persons. In such cases either
the persons may leave themselves or management may have to replace them. These things have
adverse effect on the working of the organisation.
Suitability of External Sources of Recruitment:
External Sources of Recruitment are Suitable for The Following Reasons:
(i) The required qualities such as will, skill, talent, knowledge etc., are available from external
sources.
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(ii) It can help in bringing new ideas, better techniques and improved methods to the
organisation.
(iii) The selection of candidates will be without preconceived notions or reservations.
(iv) The cost of employees will be minimum because candidates selected in this method will be
placed in the minimum pay scale.
(v) The entry of new persons with varied experience and talent will help in human resource mix.
(vi) The existing employees will also broaden their personality.
(vii) The entry of qualitative persons from outside will be in the long-run interest of the
organisation.
Selection
The Selection is a process of picking the right candidate with prerequisite qualifications and
capabilities to fill the jobs in the organization.
The selection process is quite lengthy and complex as it involves a series of steps before making
the final selection. The procedure of selection may vary from industry to industry, company to
company and even from department to department. Every organization designs its selection
process, keeping in mind the urgency of hiring people and the prerequisites for the job vacancy.
It is the process of picking individuals who have relevant qualifications and experience to
fill jobs in an organization.
Selection process
1. Preliminary Interview: The preliminary interview is also called as a screening interview
wherein those candidates are eliminated from the further selection process who do not meet the
minimum eligibility criteria as required by the organization.
Here, the individuals are checked for their academic qualifications, skill sets, family
backgrounds and their interest in working with the firm. The preliminary interview is less formal
and is basically done to weed out the unsuitable candidates very much before proceeding with a
full-fledged selection process.
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2. Receiving Applications: Once the individual qualifies the preliminary interview he is
required to fill in the application form in the prescribed format. This application contains the
candidate data such as age, qualification, experience, etc. This information helps the interviewer
to get the fair idea about the candidate and formulate questions to get more information about
him.
3. Screening Applications: Once the applications are received, these are screened by the
screening committee, who then prepare a list of those applicants whom they find suitable for the
interviews. The shortlisting criteria could be the age, sex, qualification, experience of an
individual. Once the list is prepared, the qualified candidates are called for the interview either
through a registered mail or e-mails.
4. Employment Tests: In order to check the mental ability and skill set of an individual,
several tests are conducted. Such as intelligence tests, aptitude tests, interest tests, psychological
tests, personality tests, etc. These tests are conducted to judge the suitability of the candidate for
the job.
5. Employment Interview: The one on one session with the candidate is conducted to gain
more insights about him. Here, the interviewer asks questions from the applicant to discover
more about him and to give him the accurate picture of the kind of a job he is required to
perform.
Also, the briefing of certain organizational policies is done, which is crucial in the performance
of the job. Through an interview, it is easier for the employer to understand the candidate’s
expectations from the job and also his communication skills along with the confidence level can
be checked at this stage.
6. Checking References: The firms usually ask for the references from the candidate to
cross check the authenticity of the information provided by him. These references could be from
the education institute from where the candidate has completed his studies or from his previous
employment where he was formerly engaged. These references are checked to know the conduct
and behavior of an individual and also his potential of learning new jobs.
7. Medical Examination: Here the physical and mental fitness of the candidate are checked
to ensure that he is capable of performing the job. In some organizations, the medical
examination is done at the very beginning of the selection process while in some cases it is done
after the final selection.
Thus, this stage is not rigid and can take place anywhere in the process. The medical examination
is an important step in the selection process as it helps in ascertaining the applicant’s physical
ability to fulfill the job requirements.
8. Final Selection: Finally, the candidate who qualifies all the rounds of a selection process
is given the appointment letter to join the firm.
Thus, the selection is complex and a lengthy process as it involves several stages than an
individual has to qualify before getting finally selected for the job.
Training and development
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In the present day knowledge based environment, things are changing at a very fast pace. Even to
maintain its position, an organization has to do a lot as well as act very fast. Organization
achieves strategic advantages only due to its core competencies and core competence is
developed only by the employees of the organization. Hence for achieving a level of excellence,
organizations are to invest in updating the skills of its employees. This is done through training
and development process
Training and development process is an organizational activity aimed at improving the
performance of the individuals and groups of employees in the organizational settings. It is an
organized activity for increasing the knowledge and skills of the employees. It involves
systematic procedures for transferring technical and management skills to the employees.
Training process is an important activity both for the organization as well as for the employees.
Skills acquired by the employees through training are assets for the organization. The
enhancement of the skills also provides the employees job security as well as opportunities for
career advancement.
In the modern industrial environment, where technological development is outpacing all other
things, there is a continuous need for systematic training and development of the employees.
Through ‘training’ employees are taught specific skills while through ‘development’ employee’s
personality and management skills are enhanced. The training in an organization is necessary
since there are:
Advancement in technologies
Demanding customers
Thrusts for boosting productivity
Requirements for improving the motivation levels
Needs for improving the quality of output
Necessities for effectiveness in management.
Training is a continuous process and it should not stop at any stage. The management should
ensure that a training programme should attempt to bring about positive changes in the
knowledge, skills, and attitudes of the employees. The objectives of a training programme are as
follows.
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To prevent obsolescence in the organization
To improve employees knowledge for doing specific job
To impart skills to the employees systematically so that they learn the same quickly
To impart multi skills in the employees so that they become capable of handling different
jobs
To bring about the change in attitude of the employees towards organization and the
fellow employees
To improve the overall performance of the organization by inculcating technological
discipline in the employees
To train the employees in efficient handling of materials, plant and equipment
To educate employees towards conservation of resources, pollution prevention and
avoidance of wastages
To provide safety as well as occupational health training to the employees for man and
equipment health and safety
To develop management skills in the employees so that they are prepared to take up
higher responsibilities and position
Benefits of training
Training of employees is costly but the ultimate cost is much more if an organization
ignores to train its employees. Hence investment in training is necessary since the
training brings a number of benefits to the organization as well as to the employees. The
benefits to the organizations are listed below.
Faster learning of new skills
Increased productivity
Standardization of procedures
Reduced need of supervision
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Increased motivation and morale of the employees
Economy of operations
Managerial development
The benefits to the employees are as follows.
Increase of the confidence level
Learning of new skills
Helps in career advancement and higher earnings.
Developing resilience to change
Improving safety at the workplace
Helping in teamwork and hence improving interpersonal relationship
Training needs of an organization are identified by any of the following analysis:
Organizational analysis – It is basically a systematic study of the organization’s
objectives, resources, resource allocation and utilization, growth potential and its
environment. Its purpose is to determine where the emphasis for training is to be placed
in the organization so that effectiveness of the organization increases.
Task analysis – In task analysis the main focus is on the job. It requires the study of
various types of skills and training required to perform the job effectively. It is systematic
analysis of jobs to identify job contents, knowledge, skills and aptitudes needed to
perform the job. The important aspects are the tasks to be performed, the methods to be
used, the way the employees learn these methods as well as the performance standards
required from the employees.
Manpower analysis – Both the internal and external environments influence the quality of
manpower needed by an organization. The quality of manpower also depends upon the
social, economical, political and technological environments in which the organization
operates. The manpower analysis is done taking into considerations these factors to
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determine the quality of manpower needed. Specific training needs for the manpower are
determined for meeting the quality standards needed as per the manpower analysis. These
needs include (i) specific areas where employees need training, (ii) the capability of
present employees to learn new skills and behaviour, (iii) the time frame for imparting
training, and (iv) designing and redesigning of jobs with introduction of new work
methods and technologies.
Unit-2
Career Planning
Effective HRM encompasses career planning, career development and succession planning. An
organization without career planning and career development initiatives is likely to encounter the
highest rate of attrition, causing much harm to their plans and programmes. Similarly without
succession planning managing of vacancies, particularly at higher levels, become difficult. There
are examples of many organizations that had to suffer for not being able to find a right successor
for their key positions. With the increase scope for job mobility and corporate race for global
headhunting of good performers, it is now a well established fact that normal employment span
for key performers remains awfully short.
The term career planning and career developments are used interchangeably in most of the
organizations. It is also correct that but for their subtle difference in the definitional context, their
process remains the same.
Career is a sequence of attitudes and behaviours associated with the series of job and work
related activities over a person’s lifetime.
Yet in another way, it may be defined as a succession of related jobs, arranged in hierarchical
order, through which a person moves in an organization. As the literal definition of career
focuses on an individually perceived sequence, to be more accurate, career may be either
individual-centred or organizational-centred. Therefore, career is often defined separately as
external career and internal career. External career refers to the objective categories used by
society and organizations to describe the progression of steps through a given occupation,
while internal career refers to the set of steps or stages which make up the individual’s own
concept of career progression within an occupation. For such two different approaches, in
organizational context, career can be identified as an integrated pace of vertical lateral movement
in an occupation of an individual over his employment span.
Objectives of career planning
Career planning seeks to meet the following objectives:
i. Attract and retain talent by offering careers, not jobs.
ii. Use human resources effectively and achieve greater productivity.
iii. Reduce employee turnover.
iv. Improve employee morale and motivation.
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v. Meet the immediate and future human resource needs of the organization on a timely basis
Performance Appraisal
Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development. Performance appraisal is generally done in systematic ways which are as follows:
1. The supervisors measure the pay of employees and compare it with targets and plans. 2. The supervisor analyses the factors behind work performances of employees. 3. The employers are in position to guide the employees for a better performance.
Objectives of Performance Appraisal
Performance Appraisal can be done with following objectives in mind:
1. To maintain records in order to determine compensation packages, wage structure,
salaries raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on right job.
3. To maintain and assess the potential present in a person for further growth and
development.
4. To provide a feedback to employees regarding their performance and related status.
5. To provide a feedback to employees regarding their performance and related status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programmes.
Advantages of Performance Appraisal
It is said that performance appraisal is an investment for the company which can be justified by
following advantages:
1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion
programmes for efficient employees. In this regards, inefficient workers can be dismissed
or demoted in case.
2. Compensation: Performance Appraisal helps in chalking out compensation packages for
employees. Merit rating is possible through performance appraisal. Performance
Appraisal tries to give worth to a performance. Compensation packages which includes
bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on
performance appraisal. The criteria should be merit rather than seniority.
3. Employees Development: The systematic procedure of performance appraisal helps the
supervisors to frame training policies and programmes. It helps to analyse strengths and
weaknesses of employees so that new jobs can be designed for efficient employees. It
also helps in framing future development programmes.
4. Selection Validation: Performance Appraisal helps the supervisors to understand the
validity and importance of the selection procedure. The supervisors come to know the
validity and thereby the strengths and weaknesses of selection procedure. Future changes
in selection methods can be made in this regard.
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5. Communication: For an organization, effective communication between employees and
employers is very important. Through performance appraisal, communication can be
sought for in the following ways:
a. Through performance appraisal, the employers can understand and accept skills of
subordinates.
b. The subordinates can also understand and create a trust and confidence in
superiors.
c. It also helps in maintaining cordial and congenial labour management
relationship.
d. It develops the spirit of work and boosts the morale of employees.
All the above factors ensure effective communication.
6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating
performance of employees, a person’s efficiency can be determined if the targets are
achieved. This very well motivates a person for better job and helps him to improve his
performance in the future.
Performance Appraisal Tools and Techniques
Following are the tools used by the organizations for Performance Appraisals of their employees.
1. Ranking
2. Paired Comparison
3. Forced Distribution
4. Confidential Report
5. Essay Evaluation
6. Critical Incident
7. Checklists
8. Graphic Rating Scale
9. BARS
10. Forced Choice Method
11. MBO
12. Field Review Technique
13. Performance Test
We will be discussing the important performance appraisal tools and techniques in detail.
1. Ranking Method
The ranking system requires the rater to rank his subordinates on overall performance. This
consists in simply putting a man in a rank order. Under this method, the ranking of an employee
in a work group is done against that of another employee. The relative position of each employee
is tested in terms of his numerical rank. It may also be done by ranking a person on his job
performance against another member of the competitive group.
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Advantages of Ranking Method
i. Employees are ranked according to their performance levels.
ii. It is easier to rank the best and the worst employee.
Limitations of Ranking Method
1. The “whole man” is compared with another “whole man” in this method. In practice, it is
very difficult to compare individuals possessing various individual traits.
2. This method speaks only of the position where an employee stands in his group. It does not
test anything about how much better or how much worse an employee is when compared to
another employee.
3. When a large number of employees are working, ranking of individuals become a difficult
issue.
4. There is no systematic procedure for ranking individuals in the organization. The ranking
system does not eliminate the possibility of snap judgements.
2. Forced Distribution method
This is a ranking technique where raters are required to allocate a certain percentage of rates to
certain categories (eg: superior, above average, average) or percentiles (eg: top 10 percent,
bottom 20 percent etc). Both the number of categories and percentage of employees to be allotted
to each category are a function of performance appraisal design and format. The workers of
outstanding merit may be placed at top 10 percent of the scale, the rest may be placed as 20 %
good, 40 % outstanding, 20 % fair and 10 % fair.
Advantages of Forced Distribution
i. This method tends to eliminate raters bias
ii. By forcing the distribution according to pre-determined percentages, the problem of
making use of different raters with different scales is avoided.
Limitations of Forced Distribution
The limitation of using this method in salary administration, however, is that it may lead low
morale, low productivity and high absenteeism.
Employees who feel that they are productive, but find themselves in lower grade(than expected)
feel frustrated and exhibit over a period of time reluctance to work.
3. Critical Incident techniques
Under this method, the manager prepares lists of statements of very effective and ineffective
behaviour of an employee. These critical incidents or events represent the outstanding or poor
behaviour of employees or the job. The manager maintains logs of each employee, whereby he
periodically records critical incidents of the workers behaviour. At the end of the rating period,
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these recorded critical incidents are used in the evaluation of the worker’s performance. Example
of a good critical incident of a Customer Relations Officer is : March 12 - The Officer patiently
attended to a customers complaint. He was very polite and prompt in attending the customers
problem.
Advantages of Critical Incident techniques
1. This method provides an objective basis for conducting a thorough discussion of
an employees performance.
2. This method avoids recency bias (most recent incidents are too much emphasized)
Limitations of Critical Incident techniques
Negative incidents may be more noticeable than positive incidents.
The supervisors have a tendency to unload a series of complaints about the
incidents during an annual performance review sessions.
It results in very close supervision which may not be liked by an employee.
The recording of incidents may be a chore for the manager concerned, who may
be too busy or may forget to do it.
4. Checklists and Weighted Checklists
In this system, a large number of statements that describe a specific job are given. Each
statement has a weight or scale value attached to it. While rating an employee the supervisor
checks all those statements that most closely describe the behaviour of the individual under
assessment. The rating sheet is then scored by averaging the weights of all the statements
checked by the rater. A checklist is constructed for each job by having persons who are quite
familiar with the jobs. These statements are then categorized by the judges and weights are
assigned to the statements in accordance with the value attached by the judges.
Advantages of Checklists and Weighted Checklists
Most frequently used method in evaluation of the employees performance.
Limitations of Checklists and Weighted Checklists
This method is very expensive and time consuming
Rater may be biased in distinguishing the positive and negative questions.
It becomes difficult for the manager to assemble, analyze and weigh a number of
statements about the employees characteristics, contributions and behaviours.
Performance Appraisal Biases
Managers commit mistakes while evaluating employees and their performance. Biases and
judgment errors of various kinds may spoil the performance appraisal process. Bias here refers to
inaccurate distortion of a measurement. These are:
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1. First Impression (primacy effect): Raters form an overall impression about the ratee on
the basis of some particluar characteristics of the ratee identified by them. The identified
qualities and features may not provide adequate base for appraisal.
2. Halo Effect: The individual’s performance is completely appraised on the basis of a
perceived positive quality, feature or trait. In other words this is the tendency to rate a
man uniformly high or low in other traits if he is extra-ordinarily high or low in one
particular trait. If a worker has few absences, his supervisor might give him a high rating
in all other areas of work.
3. Horn Effect: The individual’s performance is completely appraised on the basis of a
negative quality or feature perceived. This results in an overall lower rating than may be
warranted. “He is not formally dressed up in the office. He may be casual at work too!”.
4. Excessive Stiffness or Lenience: Depending upon the raters own standards, values and
physical and mental makeup at the time of appraisal, ratees may be rated very strictly or
leniently. Some of the managers are likely to take the line of least resistance and rate
people high, whereas others, by nature, believe in the tyranny of exact assessment,
considering more particularly the drawbacks of the individual and thus making the
assessment excessively severe. The leniency error can render a system ineffective. If
everyone is to be rated high, the system has not done anything to differentiate among the
employees.
5. Central Tendency: Appraisers rate all employees as average performers. That is, it is an
attitude to rate people as neither high nor low and follow the middle path. For example, a
professor, with a view to play it safe, might give a class grade near the equal to B,
regardless of the differences in individual performances.
6. Personal Biases: The way a supervisor feels about each of the individuals working under
him - whether he likes or dislikes them - as a tremendous effect on the rating of their
performances. Personal Bias can stem from various sources as a result of information
obtained from colleagues, considerations of faith and thinking, social and family
background and so on.
7. Spillover Effect: The present performance is evaluated much on the basis of past
performance. “The person who was a good performer in distant past is assured to be okay
at present also”.
8. Recency Effect: Rating is influenced by the most recent behaviour ignoring the
commonly demonstrated behaviours during the entire appraisal period.
Therefore while appraising performances, all the above biases should be avoided.
Compensation Management
Compensation is the results or rewards that the employees receive in return for their work.
Compensation includes payments like bonuses, profit sharing, overtime pay, recognition
rewards and sales commission, etc.
Compensation can also include non-monetary perks like a company-paid car, company-paid
housing and stock opportunities. Compensation is a vital part of human resource management,
which helps in encouraging the employees and improving organizational effectiveness.
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From a manager's point of view, the compensation package offered to a company's employees is
essential not only because it costs money, but because it is likely to be the primary reason the
employees work for the firm.
Compensation packages with good pay and advantages can help attract and retain the best
employees. A quick survey of employees about compensation is likely to expose an expectation
that wages are fair and cover basic living expenses, keep up with inflation, leave some money
for savings (perhaps for retirement) and leisure, increment over time.
A company's compensation scheme also informs a great deal about the firm's values and
cultures. Employees often look at what a company pays rather than what it says. In many
aspects, people behave as they are rewarded.
A compensation scheme projects what the company expects of its employees. For example, if
quality is an essential value, then it should be implemented through some element of the total
compensation system.
Objectives of Compensation Policy
The objectives of compensation policy are as follows −
Allure suitable staff.
Keep qualified personnel.
Develop reward structures that are equitable with logical and fair pay relationships
between differently valued jobs.
Manage pay structures to mirror inflationary effects.
Assure that rewards and salary costs handle changes in market rates or organizational
change.
Appraise performance, duty, and loyalty, and provide for progression.
Abide with legal requirements.
Maintain compensation levels and differentials under review and control salary or wage
costs.
Types of Compensations
When it comes to an organization, be it private or public, compensations are further divided into
the following −
Direct Compensation
It is naturally made up of salary payments and health benefits. The creation of salary ranges and
pay scales for different positions within an organization are the central responsibility of
compensation management staff.
Direct compensation that is in line with the industry standards facilitates employees with the
assurance that they are getting paid fairly. This helps the employer not to worry about the costly
loss of trained staff to a competitor.
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Indirect Compensation
It focuses on the personal encouragements of each individual to work. Although salary is
essential, people are most productive in jobs where they share the company's values and
priorities.
These benefits can include things like free staff development courses, subsidized day care, the
chances for promotion or transfer within the company, public recognition, the ability to effect
change or bring some changes in the workplace, and service to others.
These are the two types of compensation that need to be managed and have its own contribution
in the development of the organization. Moving forward, we will see the different components
of compensation.
Components of Compensation
Compensation as a whole is made up of different components that work as an aid for an
employee after retirement or in case of some accident or injury. Now we shall see the key
elements or components that make compensation.
Wages and Salary
Wages mark hourly rates of pay, and salary marks the monthly rate of pay of an employee. It is
irrelevant of the number of hours put in by an employee working in the firm. These are subject
to annual increase.
Allowances
Allowances can be defined as the amount of something that is allowed, especially within a set
of rules and regulations or for a specified purpose. Various allowances are paid in addition to
basic pay.
Some of these allowances are as follows −
Dearness Allowance − This allowance is given to protect real income of an employee
against price rise. Dearness allowance (DA) is paid as a percentage of basic pay.
House Rent Allowance − Companies who do not provide living accommodation to their
employees pay house rent allowance (HRA) to employees. This allowance is calculated
as a percentage of salary.
City Compensatory Allowance − This allowance is paid basically to employees in
metros and other big cities where cost of living is comparatively more. City
compensatory allowance (CCA) is normally a fixed amount per month, like 30 per cent
of basic pay in case of government employees.
Transport Allowance/Conveyance Allowance − Some companies pay transport
allowance (TA) that accommodates travel from the employee’s house to the office. A
fixed amount is paid every month to cover a part of traveling expenses.
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Incentives and Performance Based Pay
Incentive compensation is performance-related remuneration paid with a view to encourage
employees to work hard and do better.
Both individual incentives and group incentives are applicable in most cases. Bonus, gain-
sharing, commissions on sales are some examples of incentive compensation.
Fringe Benefits/Perquisites
Fringe benefits include employee benefits like medical care, hospitalization, accident relief,
health and group insurance, canteen, uniform, recreation and the likes.
In recent years, a great deal of attention has been directed to the development of compensation
systems that go beyond just money. We can say that all the components of compensation
management play a very important role in the life of an employee.
In particular, there has been a marked increase in the use of pay-for-performance (PrP) for
management and professional employees, especially for executive management and senior
managers. Compensation is a primary motivation for most employees.
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Unit-3
Industrial Disputes
• According to Sec. 2 of the Industrial Dispute Act, 1947, “Industrial dispute means any
dispute or difference between employers and employers or between employers and
workmen or between workmen and workmen, which is connected with the employment
or non-employment or the terms of employment or with the conditions of labour of any
person”
Causes of Industrial Disputes
We can classify the causes of industrial disputes into two broad groups:
(i) Economic causes, and
(ii) Non-economic causes.
Economic causes include:
(i) Wages,
(ii) Bonus,
(iii) Dearness allowance,
(iv) Conditions of work and employment,
(v) Working hours,
(vi) Leave and holidays with pay, and
(vii) Unjust dismissals or retrenchments.
Non-economic causes include:
(i) Recognition of trade unions,
(ii) Victimisation of workers,
(iii) Ill-treatment by supervisory staff,
(iv) Sympathetic strikes,
(v) Political causes, etc.
Types of Industrial Disputes
• Interest disputes- These refer to the disputes relating to the economic interest of the
employees.
• Rights disputes- These involve disputes over the understanding, interpretation, and
application of the rules and regulations which protect the rights of the employees.
The outcomes of disputes are:
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• Strike: A cessation of work by a body of persons employed in any industry acting in
combination or a concerted refusal, or a refusal under a common understanding, of any
number of persons who are or have been so employed to continue to work or to accept
employment. -Industrial disputes act, 1947
• Picketing: It is a form of protest by employees in which the primary intention is to
prevent or dissuade the non-striking employees from attending to their work during the
strike period.
Picketing may be held at the workplace or even at some other prominent places to attract
the attention of the public and the government.
• Gherao : It is a form of protest in which employees encircle their employers or top
managers at the workplace with a view to restricting their movements. The purpose of a
gherao is to force the employer or managers to concede the demands of the workers. The
wrongful confinement of any person is not legally tenable.
• Lock-out: A lock-out is the employer’s response to the employees’ continued protest in
the form of strike. In a lock-out, the employer closes the workplace with the aim of
preventing the employees from entering the factory premises and performing their job.
The temporary closing of a place of employment or the suspension of work, or the refusal
by an employer to continue to employ any number of persons employed by him.
Trade Union
Labour unions or trade unions are organizations formed by workers from related fields that work
for the common interest of its members. They help workers in issues like fairness of pay, good
working environment, hours of work and benefits. They represent a cluster of workers and
provide a link between the management and workers.
The purpose of these unions is to look into the grievances of wagers and present a collective
voice in front of the management. Hence, it acts as the medium of communication between the
workersandmanagement.
Regulation of relations, settlement of grievances, raising new demands on behalf of workers,
collective bargaining and negotiations are the other key principle functions that these trade
unionsperform.
The Indian Trade Union Act, 1926, is the principle act which controls and regulates the
mechanism of trade unions.
Objectives of trade unions:
Following are the objectives of trade unions:
1. Ensure Security of Workers:
This involves continued employment of workers, prevent retrenchment, lay off or lock-outs.
Restrict application of “fire” or dismissal or discharge and VRS.
2. Obtain Better Economic Returns:
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This involves wages hike at periodic intervals, bonus at higher rate, other admissible allowances,
subsidized canteen and transport facilities.
3. Secure Power To Influence Management:
This involves workers’ participation in management, decision making, role of union in policy
decisions affecting workers, and staff members.
4. Secure Power To Influence Government:
This involves influence on government to pass labour legislation which improves working
conditions, safety, welfare, security and retirement benefits of workers and their dependents,
seek redressal of grievances as and when needed.
Functions of a Trade Union:
The important basic functions of unions listed by National Commission on labour are:
(i) To secure fair wages to workers.
(ii) To safeguard security of tenure and improve conditions of service.
(iii) To enlarge opportunities for promotion and training.
(iv) To improve working and living conditions.
(v) To provide for educational, cultural and recreational facilities.
(vi) To co-operate in and facilitate technological advance by broadening the understanding of
workers on its underlying issues.
(vii) To promote identity of interests of workers with their industry.
(viii) To offer responsive co-operation in improving levels of production and productivity,
discipline and high standards of quality and
(ix) To promote individual and collective welfare.
(e) Restrict management actions which are against the interest of workers.
Employee Grievance
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Employee grievance refers to the dissatisfaction of an employee with what he expects from the
company and its management. A company or employer is expected to provide an employee with
a safe working environment, realistic job preview, adequate compensation, respect etc. However,
employee grievance is caused when there is a gap between what the employee expects and what
he receives from the employer.
Employee grievances may or may not be justified. However, they need to be tackled adequately
by the leadership team because they not only lower the motivation and performance of the
employee but also affects the work environment. Employee grievances if left unchecked can lead
to large disputes within the company. It can also drop the motivation levels of other employees.
Any company must have a proper channel for employee grievance redressal.
Employee Grievance should be handled in a proper and well defined manner. If an employee
voice is raised or a person reports a matter related to a policy or something he or she is not happy
with or wants to complaint against, a framework defined in policy should be used.
Typical Steps in Employee Grievance Handling:
1. Employee grievance should be submitted in a proper channel.
2. The supervisor of the employee should be informed and spoken to.
3. A review committee should examine the grievance for its validity and against the company's
policy.
4. Resolution should be provided if the grievance is valid.
5. If the employee grievance is not resolved there should be a further body where it can be
appealed.