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HUMAN RESOURCEMANAGEMENT
(Text and Cases)
Dr. S.S. KHANKA M.Com., Ph.D.
Professor (HRM)National Institute of Financial Management(Ministry of Finance, Government of India)Sector 48, Pali Road, Faridabad–121 001
HARYANA (INDIA)
S. CHAND & COMPANY LTD.(An ISO 9001 : 2008 Company)
RAM NAGAR, NEW DELHI - 110 055
S. CHAND & COMPANY LTD.(An ISO 9001 : 2008 Company)Head Office: 7361, RAM NAGAR, NEW DELHI - 110 055Phone: 23672080-81-82, 9899107446, 9911310888Fax: 91-11-23677446Shop at: schandgroup.com; e-mail: [email protected]
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Pune - 411 011, Ph: 64017298, [email protected] (Marketing Office)RAIPUR : Kailash Residency, Plot No. 4B, Bottle House Road, Shankar Nagar, Raipur - 492 007,
Ph: 09981200834, [email protected] (Marketing Office)RANCHI : Flat No. 104, Sri Draupadi Smriti Apartments, East of Jaipal Singh Stadium, Neel Ratan Street,
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SILIGURI : 122, Raja Ram Mohan Roy Road, East Vivekanandapally, P.O., Siliguri-734001,Dist., Jalpaiguri, (W.B.) Ph. 0353-2520750 (Marketing Office)
VISAKHAPATNAM : Plot No. 7, 1st Floor, Allipuram Extension, Opp. Radhakrishna Towers, SeethammadharaNorth Extn., Visakhapatnam - 530 013, (M) 09347580841,[email protected] (Marketing Office)
© 2003, Dr. S.S. KhankaAll rights reserved. No part of this publication may be reproduced or copied in any material form (includ-ing photo copying or storing it in any medium in form of graphics, electronic or mechanical means andwhether or not transient or incidental to some other use of this publication) without written permission ofthe copyright owner. Any breach of this will entail legal action and prosecution without further notice.Jurisdiction : All disputes with respect to this publication shall be subject to the jurisdiction of the Courts,tribunals and forums of New Delhi, India only.First Edition 2003Reprints 2005, 2007 (Thrice), 2008, 2009 (Thrice), 2010, 2011, (Twice), 2012Reprint 2013
ISBN : 81-219-2300-X Code : 07 381PRINTED IN INDIA
By Rajendra Ravindra Printers Pvt. Ltd., 7361, Ram Nagar, New Delhi-110 055and published by S. Chand & Company Ltd., 7361, Ram Nagar, New Delhi -110 055.
ToToToToToMy Loving Students (1994–2002My Loving Students (1994–2002My Loving Students (1994–2002My Loving Students (1994–2002My Loving Students (1994–2002 )))))
ofofofofofAssam UniversityAssam UniversityAssam UniversityAssam UniversityAssam University
SilcharSilcharSilcharSilcharSilchar
By the Same Author■■■■■ ENTREPRENEURIAL DEVELOPMENT■■■■■ ORGANISATIONAL BEHAVIOUR
PREFACE
The times are changing and so is business environment. The ongoing LPG process (Liberaliza-tion, Privatization and Globalisation) has made business environment highly competitive and com-plex. These changes have led to changes in human resource environment which, in turn, has changedhuman behaviour in organisations. As such, the changing environment has necessitated a perspica-cious and thorough study of its impact on human resource management practices. The present book isa modest attempt to fulfil this need.
The book makes a presumptious attempt to knead all aspects of HRM logically dividing theminto seven sections to enable the readers comprehend the key and vital issues of HRM in a dynamicenvironment. The seven sections are: (1) Human Resource Management—Environment and Strate-gies, (2) Acquisition and Absorption, (3) Development, (4) Maintenance and Retention, (5) Control,(6) Miscellaneous, and (7) Cases from Indian Organisations. Thus, the book gives a well-knitted andbalanced coverage of theory, contemporary issues, and practical examples and anectodes drawn fromthe Indian business world. Employee empowerment, potential appraisal, succession planning, strate-gic human resource management, human resource management in a changing environment, HR invirtual organisations, international human resource management and leadership in the new millen-nium are some of the emerging and contemporary issues discussed in the book. These topics have notbeen dealt with in most of the books on HRM available in the market. The book covers the wholesyllabus of HRM prescribed by the UGC Course Development Committee on Management.
In all, the book provides a refreshing insight into all that a reader wants to know about humanresource management.
The book is written in a jargon-free and accessible style. It is hoped that the book would serve asa useful text for the students of M.B.A., M.Com. and other diploma courses in management. It wouldalso be useful to the practitioners in the field of human resource management.
Finally, a request to the discernible readers to do a great favour to me by sending their valuablesuggestions and critical comments on the book for its improvement in subsequent editions.
Tezpur14-4-2003(Baisakhi)
S.S. KHANKA
ACKNOWLEDGEMENTS
Every author owes a great deal to others who extend assistance of one type or other. I am noexception. The list to acknowledge them individually will be too long. I wish to express my sincerethanks to all of them. Nonetheless, I must mention some of them whose help was of considerableimportance.
I express my sincere gratitude to my revered and erudite teacher Prof. T.S. Papola for hisguidance and encouragement in my academic endeavours. I also wish to express my profound re-gards and gratitude to Prof. P. Bhattacharyya, Hon’ble Vice Chancellor, Tezpur University, Tezpurfor his recognization and reward to my academic career. My sincere thanks are also due to my ex-colleagues in Assam University, Silchar and my colleagues in Tezpur University, Tezpur for their co-operation and encouragement extended to me during the course of the present study.
I imbibed interest in HRM while teaching it in Assam University for about a decade. The stu-dents, in and outside the classroom, always acted as a sounding board to deepen my interest and, inturn, improve my knowledge in HRM. I take this opportunity to exonerate my debt to them by dedi-cating this book as a token of my love and affection to my loving students (1994-2002), in AssamUniversity, Silchar.
As always, I am deeply appreciative to my wife ‘Geetu’ and sons ‘Abhineet’ and ‘Abhinav’ whohave provided me with a loving and supportive atmosphere needed to complete this and other aca-demic projects over the years.
Finally, my sincere thanks to my publishers, S. Chand & Company Private Limited, for theiruntiring effort and support in bringing out this book.
Tezpur S.S. KHANKA14-4-2003(Baisakhi)
(viii)
CONTENTSPrefaceAcknowledgements
SECTION - IHUMAN RESOURCE MANAGEMENT: ENVIRONMENT AND STRATEGIES
1. Nature and Scope of Human Resource Management (HRM) 1– 81.1 Meaning and Definition 11.2 Difference between Personnel Management and Human Resource Management 21.3 Objectives 41.4 Scope 41.5 Functions 51.6 Summary 7
2. Evolution and Development 9—172.1 Evolution and Development of HRM 92.2 Environment of HRM 142.3 Summary 16
3. Strategic Human Resource Management 18–243.1 Meaning of Strategic HRM 183.2 Benefits of Strategic Management 193.3 Role of HRM in Stratgic Management 203.4 Strategic HRM in Essar Steel Limited 213.5 Summary 23
SECTION- IIACQUISITION AND ABSORPTION
4. Human Resource Planning 27–384.1 Human Resource Planning (HRP) Defined 274.2 Objectives of HRP 294.3 Need for and Importance of HRP 294.4 Human Resource Planning Process 314.5 Problems / Barriers to HRP 364.6 How to Make HRP Effective ? 374.7 Summary 37
5. Job Analysis and Design 39–525.1 Concepts 395.2 Why Job Analysis ? 415.3 Process of Job Analysis 425.4 Methods of Data Collection 435.5 Concept of Job Design 455.6 Factors Affecting Job Design 465.7 Methods / Techniques of Design 475.8 How to Enrich Job ? 505.9 Summary 51
6. Recruitment 53–676.1 Meaning and Definition 536.2 Factors Affecting Recruitment 546.3 Sources of Recruitment 556.4 Recruitment Process 606.5 Recruitment Practices in India 62
(ix)
6.6 Methods of Recruitment 646.7 Effectiveness of Recruitment Programme 656.8 Summary 65
7. Selection 68–867.1 Meaning and Definition 687.2 Need for Scientific Selection 697.3 Selection Method / Process 707.4 Summary 84
8. Placement, Induction and Socialisation 87–948.1 What is Placement ? 878.2 Induction : 888.3 Socialisation 928.4 Summary 93
SECTION - IIIDEVELOPMENT
9. Career Planning and Development 97–1069.1 Concepts of Career, Career Planning and Succession Planning 979.2 Career Stages 1009.3 Career Planning Process 1019.4 Career Development 1039.5 Career Management 1049.6 Summary 104
10. Employee Training 107–12210.1 Concept of Training 10710.2 Need for Training 10910.3 Importance of Training 11010.4 Steps in Training Programme 11010.5 Summary 121
11. Executive Development 123–13011.1 Concepts and Objectives 12311.2 Importance of Executive Development 12511.3 Process 12511.4 Methods 12711.5 Evaluation 12711.6 Summary 129
12. Organisation Development (OD) 131–14012.1 Meaning of OD 13212.2 Models of OD 13312.3 Action Research Model of OD 13412.4 OD Interventions 13512.5 Summary 138
13. Internal Mobility and Separations 141–14813.1 Promotion 14113.2 Transfer 14313.3 Demotion13.4 Separations 14513.5 Summary 147
(x)
SECTION - IVMAINTENANCE AND RETENTION
14. Job Evaluation 151–16114.1 Concept of Job Evaluation 15114.2 Objectives of Job Evaluation 15214.3 Procedure of Job Evaluation 15214.4 Advantages of Job Evaluation 15414.5 Drawbacks of Job Evaluation 15414.6 Methods of Job Evaluation 15514.7 Essentials of Successful Job Evaluation Programme 15914.8 Summary 160
15. Wage and Salary Administration 162–17515.1 Objectives of Wage and Salary Administration 16215.2 Principles of Wage and Salary Administration 16315.3 Components of Wage and Salary Administration 16415.4 Methods of Wage Payments 16715.5 Theory of Wages 17015.6 Wage Legislation in India 17115.7 Wage Differentials 17215.8 Executive / Managerial Remuneration 17315.9 Summary 174
16. Incentives and Benefits 176–18516.1 Incentives 17616.2 Benefits 18016.3 Making Incentives and Benefits More Effective 18316.4 Summary 184
17. Motivation : Concepts And Application 186–20717.1 Meaning of Motivation 18617.2 Importance of Motivation 18717.3 Theories of Motivation 18717.4 Motivation Tools / Application 19517.5 Motivation and Morale 20417.6 Summary 205
18. Employee Empowerment 208–21818.1 What is Empowerment? 20818.2 Conditions Necessary for Empowerment 21018.3 Forms of Empowerment 21118.4 Empowerment in India : An Overview 21518.5 Barriers to Empowerment 21618.6 Summary 216
19. Worker’s Participation in Management (WPM) 219–23019.1 Rationale for WPM 21919.2 Definition and Objectives 22019.3 Forms of WPM 22219.4 WPM in India : A Review 22319.5 Evaluation of WPM Scheme 22619.6 MakingWPM Effective 22719.7 Summary 229
20. Employee Health and Safety 231–24320.1 Meaning of Health 23120.2 Importance of Health 232
(xi)
20.3 Occupational Hazards and Diseases 23220.4 Protection against Hazards 23420.5 Statutory Provisions concerning Health 23520.6 Accidents : Their Types and Causes 23520.7 Significance of Industrial Safety 23920.8 Safety Measures / Programmes 23920.9 Statutory Provisions for Industrial Health 24020.10 Summary 242
21. Social Security 244–25121.1 Concept and Scope 24421.2 Types of Social Security 24621.3 Social Securtiy Measures in India 24721.4 Social Security Legislation in India 24821.5 Summary 250
22. Employee Discipline 252–26422.1 Meaning and Features of Discipline 25222.2 Objectives of Discipline 25322.3 Types of Disipline 25322.4 Causes of Indiscipline or Misconduct 25422.5 Guidelines of a Disciplinary Action 25722.6 Procedure of Disciplinary Action 25822.7 Disciplinary Actions : Penalties and Punishments 26022.8 Statutory Provisions Concerning Discipline 26122.9 Code of Discipline 26222.10 Summary 263
23. Employee Grievances 265–27423.1 Meaning of Grievances 26523.2 Causes or Sources of Grievances 26623.3 Grievance Procedure 26823.4 Model Grievance Procedure 27123.5 Legislative Aspects of the Grievance Procedure in India 27123.6 Essentials of Sound Grievance Procedure 27323.7 Summary 273
24. Industrial Relations (IR) 275–29424.1 Concept of IR 27524.2 Scope of IR 27624.3 Objectives of IR 27624.4 Importance of IR 27724.5 Approches to IR 27824.6 Parties to IR 27924.7 Causes for Poor IR 28124.8 Developing Sound IR 28224.9 Industrial Relations in India 28324.10 New Economic Policy (NEP) and IR 28424.11 International Labour Organisation (ILO) and IR in India 28524.12 Labour Legislation 28924.13 Summary 292
25. Industrial Disputes (ID) 295–31325.1 Concept of Industrial Disputes 29525.2 Causes of Industrial Disputes 29825.3 Industrial Disputes in India 30025.4 Consequences of Industrial Disputes 30425.5 Prevention of Industrial Disputes 305
(xii)
25.6 Settlement of Industrial Disputes 30725.7 Summary 311
26. Trade Unionism 314–33126.1 Meaning of Trade Union 31426.2 Why do Workers Join a Trade Union? 31526.3 Types of Trade Unions 31626.4 Registration of Trade Union 31726.5 Recognition of Trade Union 31826.6 Trade Union Legislation 32026.7 Theories of Trade Unions 32126.8 Trade Union Movement in India 32126.9 Problems of Trade Unions 32526.10 Measures to Strengthen the Trade Union Movement in India 32626.11 Recommendations of National Commision on Labour 32726.12 Summary 329
27. Collective Bargaining 332–34227.1 Meaning 33227.2 Objectives 33327.3 Importance 33327.4 Bargaining Strategies 33327.5 Bargaining Process 33427.6 Bargaining Impasse, Mediation and Strikes 33627.7 Conditions of Effective Collective Bargaining 33827.8 Collective Bargaining in India 33927.9 Summary 340
28. Performance and Potential Appraisal 343–36528.1 What is Performance Appraisal? 34328.2 Purpose of Performance Appraisal 34528.3 Approches to Performance Appraisal 34628.4 Process of Performance Appraisal 34728.5 Methods of Performance Appraisal 34828.6 Problems of Performance Appraisal 35928.7 Making Performance Appraisal More Effective 36028.8 Potential Appraisal 36128.9 Summary 363
SECTION - VCONTROL
29. Personnel Research and Audit 369–37629.1 Personnel Research 36929.2 Personnel Audit 37329.3 Summary 375
30. Human Resource Accounting (HRA) 377–38330.1 Meaning and Objectives 37730.2 Advantages 37830.3 Limitations 37930.4 Methods of Valuations of Human Resources 37930.5 Controlling Costs of Human Resource 38130.6 Summary 383
31. Human Resource Information System (HRIS) 384–39031.1 Need for HRIS 38431.2 Advantages of HRIS 385
(xiii)
31.3 Uses of HRIS 38631.4 Designing of HRIS 38731.5 Computerised HRIS 38831.6 Personnel Inventory 38831.7 Limitations of HRIS 38931.8 Summary 390
SECTION - VIMISCELLANEOUS
32. Human Resource Management in a Changing Environment 393–39832.1 Changing Environment of HRM 39332.2 Changing Role of HRM 396
Summary 39733. International Human Resource Management (IHRM) 399–407
33.1 Types of International Business 39933.2 Perspective of International HRM 40033.3 Practices in International HRM 40233.4 Summary 405
34. Managing Human Resources (HR) in VirtualOrganisations (VO) 408–41434.1 What is Virtual Organisation? 40834.2 Types of Virtual Organisations? 40934.3 Difference between Traditional/ Face-to-Face and Virtual Organisation 41034.4 Advantages and Disadvantages 41134.5 Features of Virtual Organisation 41134.6 Human Resource Management in Virtual Organisation 41234.7 Summary 413
SECTION - VIICASES FROM INDIAN ORGANISATIONS
1. Biggest Buy-Out Deal 4172. Recruitment and Promotion Policies 4183. Engineering Industry 4194. Hindustan Chemicals Ltd. 4215. Workmen’s Compensation 4226. Major Mohanty of Sunrise Limited 4237. Empowering People in the HLL 4248. XYZ Corporation 4259. Pioneer Industries Limited 427
10. Grievance Procedure Vs Collective Bargaining 43011. The Bulb Manufacturing Company 43112. High Salary Vs High Turnover 43213. Dilemma of HR Manager 43314. Amgen’s Global Workforce 435
Glossary 436Abbreviations 447
SECTION – 1
HUMAN RESOURCE MANAGEMENT :ENVIRONMENT AND STRATEGIES
1. Nature and Scope of Human Resource Management (HRM)2. Evolution and Environment3. Strategic Human Resource Management
Human Resource Management
Publisher : SChand Publications ISBN : 9788121923002 Author : SS Khanka
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