M.B.A IInd Semester Course - 203

Human Resource Management

LESSONS 1 TO 18

INTERNATIONAL CENTRE FOR DISTANCE EDUCATION

AND OPEN LEARNING HIMACHAL PRADESH UNIVERSITY,

GYAN PATH, SUMMERHILL, SHIMLA-171005

CONTENT

SR.NO. TOPIC PAGE NO.

SYLLABUS 1

LESSON-1 HUMAN RESOURCE MANAGEMENT 2

LESSON-2 PERSONNEL MANAGEMENT 16

LESSON-3 ROLE AND RESPONSIBILITIES OF PERSONNEL MANAGER 28

LESSON-4 HUMAN RESOURCE PLANNING 35

LESSON-5 RECRUTIMENT AND SELCTION 46

LESSON-6 PLACEMENT, INDUSTIN AND SOCIALISATION 57

LESSON-7 TRAINING 66

LESSON-8 EVALUATING TRAINING EFFECTIVENESS 76

LESSON-9 WAGES AND SALARY ADMINISTRARTION 84

LESSON-10 DISCIPLINE 94

LESSON-11 EMPLOYEE GRIEVANCES 104

LESSON-12 EMPLOYEE HEALTH AND SAFETY 112

LESSON-13 JOB ANALYSIS 125

LESSON-14 JOB EVALUATION 136

LESSON-15 INTERNATIONAL HUMAN RESOURCE MANAGEMENT 144

LESSON-16 MANAGING INTERNATIONAL HR ACTIVITIES 153

LESSON-17 INTERNATIONAL SELECTION AND ITS APPROACHES 165

LESSON-18 EXPATRIATION AND REPATRIATION IN IHRM 170

ASSIGNMENT 178

PAPER 179

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Master of Business Administration

II Semester

Course 203

HUMAN RESOURCE MANAGEMENT

Unit-I

Human Resource Management :

Introduction to Human Resource Management, Growing importance of Human Resource, Important

Environmental influence on HRM. Functions of personnel Management, Challenges to Personnel Management,

Approaches to Personnel Management, Importance of Human Relations in Modern Organizations, Recent

Changes and Development of Personnel Management, Organizing the Personnel and Human resource

Department, Responsibilities of a Personnel Managers, Personnel Management and Professionalization.

Unit-II

Human Resource Planning:

Importance of Human resource Planning, Contemporary Challenges in Human Resource Planning,

HRP Process, Approaches to HRP, Evaluating Effectiveness of HRP, Methods of HRP, recruitment, Selection

and Placement, Interview and Promotion Socializing the new employees.

Unit-III

Training and Development:

Training, Methods of Training, Evaluating Training Effectiveness, Organization of a Training Programme

Management Development Process. Methods for developing managers, Performance Appraisal Approaches

the Performance Appraisal.

Unit-IV

Wages and Salary Administration:

Economic Background employee compensation. Factors affecting Wages & Salary Policy of the

Organization. Lows and Rules Governing employees wages and Salary Administration in India, Rewards

Methods of Wage determination.

Unit-V

Maintenance and Disciplining the Employees:

Maintenance and Disciplining the employees, Discipline meaning and importance, employees grievance

handing mechanism and procedure, Disciplinary action dismissal and retrenchment, recent Trends in

maintaining health and safety of employees in the organization.

References:

1. Edwin B. Flippo Principles of Personnel Management.

2. Keith Davis Human Relations at work.

3. Robert L. Mathis and John H. Javeson Personnel Human Resource Management (4th ed).

4. S. Schuler Personnel and Human Resource Management (2nd ed).

5. David A. De Cenzo and Stephen P. Robbins Personnel Human Resource Management (3rd ed.)

6. P.P. Arya and B.B. Tandon (edited) Human Resource Development.

7. Le on C. Megginson Personnel and Human Resources Administration.

8. Dale Yoder Personnel Management and Industrial Relations.

9. Douglas Mc. Gregor The Human Side Enterprise.

10. Juclus MJ. Personnel Management.

*****

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LESSON-1

HUMAN RESOURCE MANAGEMENT

STRUCTURE

1.0 INTRODUCTION

1.1 LEARNING OBJECTIVES

1.2 MEANING OF HUMAN RESORUCE MANAGEMENT

1.3 OBJECTIVES OF HUMAN RESORUCE MANAGEMENT

1.4 SCOPE OF HUMAN RESOURCE MANAGEMENT

1.5 SIGNIFICANCE OF HUMAN RESOURCE MANAGEMENT

1.6 ENVIRONMENTAL INFLUENCE OF HUMAN RESOURCE MANAGEMENT

1.7 STATUS OF HRM IN INDIAN INDUSTRY

1.8 RECENT DEVELOPMENTS IN HRM

1.9 SELF CHECK EXERCISE

1.10 SUMMARY

1.11 GLOSSARY

1.12 ANSWERS TO SELF CHECK EXERCISE

1.13 TERMINAL QUESTIONS

1.14 SUGGESTED READINGS

1.0 INTRODUCTION

This goes without saying that human resource is the most important asset of any organisation and

unlike other resources the human resources could be developed and increased to a limitless extent. Human

resources mean the energies, skills, knowledge and physical strength of the people at work. Human resources

comprise the value of the productive capacity of entire work force of any organisation. To be specific and

brief, human resources refer to the aggregate of knowledge, skill, experience and health of employees

working in any organisation. And development of human resource accounts for the development of human

side of the organisation. The word HUMAN has five letters and each letter speak of a distinct characteristic

of human being as under:

H Hears

U Understands

M Moves

A Adjusts

N Negotiates

Management is absolutely essential in the present times in all organizations, irrespective of their

origin, nature and ownership. Every enterprise, established with profit motive or some social, religious or

such like other purpose, requires efficient management for its sustained progress. But, management has

been viewed differently by various scholars, depending upon their belief and comprehensions. Some regard

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it as the force that runs a business and is responsible for its success or failure. Others perceive it as a means

for achievement of desired results through group efforts and by utilizing both human and non-human resources.

Still others deem management to be a process comprising planning, organizing, staffing, directing and

controlling. Also, some look on it as an instrument for designing and maintaining an environment conducive

to the performance of individuals who are working together in a group towards the accomplishment of

some predetermined objectives.

Furthermore, some think that management merely implies certain tasks which the managers are

supposed to perform. Thus, there are numerous, opinions on what ‘management’ actually involves. And,

no description, however, lengthy would be considered satisfactory for fully and finally deducing the universally

acceptable connotation of this term.

While an agreement on the exact definition of management has not been reached, any definition of

management must include three common factors namely goals, limited resources and people.

First, goals are necessary because activities must be directed towards some end. Second, there

are limited resources. Economic resources are scarce, therefore, the manager is responsible for their

allocation. This requires not only that manager be effective in achieving the goals that are established, but

they are efficient in relation to output to input. Managers then are concerned with the attainment of goals,

which makes them effective and with best allocations of scarce resources, which makes them efficient. The

need for two or more people is the third and last requisite for management. It is with arid through people

that managers perform their work.

Now, let us move from the broad topic of management to the more specific topic of human

resource management.

1.1 LEARNING OBJECTIVES

After reading this lesson, you should be able to

(a) Define human resource management, and outline the objectives and scope of human resource

management.

(b) Discuss the significance of human resource management.

(c) Examine the environmental influence on HRM.

(d) Trace the recent developments in HRM.

1.2 Meaning of Human Resource Management

Human Resource Management (HRM) is concerned with the “people” dimension in management.

Since every organisation is made up of people, acquiring their services, developing their skills, motivating

them to high level of performance and ensuring that they continue to maintain their commitment to the

organisation are essential to achieving organizational objectives. This is true regardless of type of organisation

may it be Government, business, education, health, recreation or social action. Those organizations that

are able to acquire, develop, stimulate and keep outstanding workers will be both effective, able to achieve

their goals, and efficient (expanding the least amount of resources necessary). Those organisations that are

inefficient and ineffective risk the hazards of stagnating or going out of business.

According to Thomas G. Spates, “Human resource management is a code of the ways of organizing

and treating individuals at work so that they will get the greatest possible realization of their intrinsic abilities,

thus attaining maximum efficiency for themselves and their group and thereby giving to the enterprise of

which they are a part its determining competitive advantage and its optimum results.”

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George Terry has succinctly stated that human resource management is concerned with the obtaining

and maintaining of a satisfied work force. He further clarified that HRM is concerned with maximizing the

effectiveness of the work force through application of sound and proved personnel policies and practices.

According to Dale Yoder, “Human resource management is the function or activity aiding and

directing working men and women in maximizing their contributions and satisfactions in employment”. It

helps ‘workers’ including all those who work, from unskilled common labourers to corporation presidents

or public administrators, to combine their efforts with those of others in providing the services and products

we all want.

In the words of Flippo, “Human resource management is the planning, organizing, directing, and

controlling of the procurement, developments, compensation, integration and maintenance and separation

of human resources to the end that individual, organizational and societal objective are accomplished.”

According to process system view, human resources management is the systematic planning,

development, and control of a network of interrelated process affecting and involving all members of

organisation. These processes include:

• Human resources planning

• Job and work design

• Staffing

• Training and development

• Performance appraisal and review

• Compensation and reward

• Employee protection and representation

• Organisation improvement

According to another view, human resource management refers to the practices and policies you

need to carry out the people aspects of your management job. These include:

• Conducting job analysis

• Planning labour needs and recruiting candidates

• Selecting job candidates

• Orienting and training new employees

• Managing wage and salaries

• Providing incentive and benefits

• Appraising performance

• Communicating

• Training and development

• Building employees’ commitment

To effectively manage these processes, human resources systems are planned, developed and

implemented through the combined efforts of all managers and human resources specialists - and frequently

all employees - in an organisation. Overall, the systems are intended to achieve organisation-wide goals

and contribute to organizational effectiveness and productivity. From the foregoing definitions it may be

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concluded that there is no standard definition of the term ‘HRM’, some authorities have defined it in terms

of its functions, some others in terms of its objects and some in terms of human relationships. However,

there are certain elements which are common to most of these definitions:

(i) HRM aims at getting the best results out of the employees. In other words, it has the overall goal of

securing the optimum contribution from the human factor in business.

(ii) It does not, however, follow from above that this modem branch of business management is geared

to the exploitation of the employees. Good HRM helps the employees develop their capacities to

the full and derive the greatest satisfaction from their work. It, thus, looks to their needs, comforts

and grievances, As Scott, Clothier and Sprieged put it, four different angles or elements of the

employee-in his-work unit must be given due consideration. There are:

(a) Capacities - referring to those abilities, to those attainments, inherited or acquired, that a

worker has, are capable of exercising, and must, to a certain degree at least, exercise in his

work.

(b) Interest - not only an individual’s desires, and ambitions, but also his instinctive, impulsive

tendencies, vague, bearing, and ill-defined carvings that mayor may not stir him to his

fullest action in performing his duties.

(c) Opportunities - not only opportunities for advancement, although, that is included, but

opportunities to exercise his capacities and satisfy his interests also.

(d) Personality - the sum total of a worker’s reaction to his experiences and environment.

Personality in manifest by an individual’s reception by others. Management has only a

minor role in influencing personality, but the worker’s personality has a great influence

upon his opportunities.

(iii) Good HRM aims at promoting group satisfaction, building up what is known as team spirit, because

it is the joint effort that is more important.

(iv) The work related to human resources is of a continuous nature. In the words of George Terry, it

cannot be turned on and off like water from a faucet; it cannot be practiced only one hour each day

or one day a week. It required a constant alertness and awareness of human relations and their

importance in everyday operations. It is, thus, a way of approach, a technique of thinking, a philosophy

of management which has to be kept in view at all times and at different levels of the organisation.

Thus, human resource management refers to set of programmes, functions and activities designed

and carried out in order to maximize both employees as well as organizational effectiveness.

1.3 Objectives of HRM

Since HRM is an integral part of management, its main objective is identical with that of latter,

survival and growth to help the organisation to achieve its objectives, HRM contributes by assuring a rich

and continuous supply of human resources. Further, to make organisation effective and efficient, HRM

aims at coordinated efforts of the competent managers and workers towards the ultimate goal. The general

objective of HRM is to contribute towards realization of firms goals. The specific objectives of HRM

include the following:

(a) Efficient utilization of people’s skills and abilities

HRM aims at utilizing the people’s skill and abilities, in order to achieve organizational as well as

individual goals. Efficient utilization of manpower is beneficial not only to the organisation but also to the

employees and consumers. Human resource manager should ensure that necessary action is taken to make

the fullest utilization of manpower.

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(b) Provision of trained and motivated employees

The human resource manager provides to the organisation well trained and motivated employees,

which is the most valuable asset of an organisation. The human resource manager, for achieving this objective,

creates an environment which is conducive to the growth of well-trained and well motivated employees.

The effectiveness of human resource manager is judged on the basis of right type of person, at right place,

at right time for an organisation.

(c) Increased employees job satisfaction

HRM aims at providing facilities for employees thereby ensure job satisfaction of the individuals.

This objective focuses on employees’ needs rather than organizational needs.

(d) Communicating HRM policies to all concerned

HRM aims at communicating its policies to all concerned in their own language. Effective

communication helps in building organisation image among its employees, Government and public in general.

Through effective communication, policies, goals of organisation can be achieved.

(e) Development and maintenance of quality of work life

HRM develops and maintain qualify of work life that makes work environment more meaningful to

the employees life. It is a programme of building an ideal work environment to promote maximum employees

satisfaction consistent with maximum organisation growth. The premise of quality of work life is having a

work environment where an employee’s activities become more important. This means implementing

procedures that make work less routine and more rewarding for the employee. These policies include

autonomy, recognition, belongingness progress and development and external rewards. Autonomy deals

with the amount of freedom that employees can exercise in their job. Recognition involves being value by

others in the company. An individual contribution to the organisation is noticed and appreciated.

Belongingness refers to being part of organisation. Progress and developments refers to internal rewards

available from organisation; challenge and accomplishment. Finally external rewards which are usually in

the form of salary and benefits, also includes promotion, rank and status. Taken together, these components

provides for quality of work life for the individuals. If the quality of work life is lacking, then workers

productivity may suffer.

1.4 Scope of Human Resource Management

Following is the scope of human resource management explained by experts in this area:

(a) Human Resources Planning

Human Resources Planning is the process of assessing the organization’s human resources needs

in light of organizational goals and making plans to ensure that a competent, stable work force is employed.

The planning process includes an analysis of skill levels among employees and in the external labour

market, of current and expected job openings, of plans for expanding or reducing staff throughout the

organisation, and of the external legal environment. The planning process, then, is, closely related to the

staffing process and depends also on the overall strategic plans of the organisation.

The systems designed to control and direct the human resources planning process include such

devices and computerized records of employees’ skills and qualification, forecasts of the number of

employees with certain skills who are likely to leave over the next year, analysis of the extent to which

affirmative action goals have been met; and confidential organization charts showing possible candidates

for promotion to various executive positions.

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(b) Job and Work Design

Job and work design specifies the tasks to be performed by individuals and groups within the

organisation, and establishes the rules, schedules and working conditions under which people perform

those tasks. Through careful design, or circumstance, or both, events converge to create jobs to which

people are assigned and the conditions surrounding these jobs. Some of the systems­ used to help manage

the process of job design include techniques such as time and motion study and work simplification, which

aims at making jobs easy to learn and workers more efficient. Other job design systems, such as job

enrichment involve techniques to restructure jobs to make them more interesting and challenging. Periodic

discussions within a work team about the allocation of tasks can be considered a job design system.

(c) Job Analysis

Job analysis, an outgrowth of job design, is the process of investigating the tasks and behaviour

associated with a particular job. Various systems used in job analysis include observations of workers as

they perform their jobs, interviews and questionnaires. Typically the information obtained from job analysis

is used to write job descriptions and to establish what is required of the person who will perform each job.

In turn, job descriptions are useful in the staffing process, especially in recruiting, hiring, and training new

employees.

(d) Recruitment

An organisation needs people for its present and future vacancies. Recruitment is the process of

exploring the sources of suitable people and taking effective measure for obtaining them. It is designed to

attract as many candidates as possible from inside and outside the organisation so than an objective

selection of the most talented persons can be done.

(e) Selections and placement

Having identified the candidates eligible for the posts, the management should proceed with the

selection of right candidates and their placement. Selection is the process of testing the ability, skill and

aptitude of the candidates. It is done to find out those candidates who are best suited to the specific jobs.

Placement is the process of assigning a job to an accepted individual for which he is best suited. Selection

and placement may or may not occur simultaneously. When candidate are chosen for specific jobs, selection

and placement go together, but when a large number of candidates are selected for avoid of jobs, placement

is generally done only by importing training.

(f) Socialisation

After an employee has been selected and placed at a specific job, the next logical step is to

introduce him to the culture of the organisation, through socialization. It is a process of transmitting the key

values, norms, policies and objectives of the company to the employees with a view to shaping their

attitudes, thought and behaviour and assimilating them into the dominant culture of the company. It enables

a new employee to understand the organisation better and makes him or her feel at home at his work

environment. This is extremely important to his motivation and performance in the organisation.

(g) Training and Development Process

Although the two terms are generally put together, they are not identical in meaning. Training is a

learning process that seeks to bring about a permanent improvement in the ability and behaviour of employees

by enabling them to learn new skill, knowledge, attitude and behaviour so that they can become better

performers. It is mostly intended for operating employees. Development is a much broaden concept than

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training. It is basically an educational process which is directed to increase the conceptual ability of employees

to understand and apply knowledge in terms of cause and effect relationship, in the organizational situation.

It is generally intended for managerial people training and development programmes which essential for

enhancing the quality and potential of human resources for improving the standards of performance and

productivity of an Organisation.

(h) Performance appraisal and review

It is a process of ascertaining how effectively an employee is performing his job. The object of the

appraisal is to determine the present state of efficiency of an employee in order to establish the actual need

for training and motivation. It also serves to indicate the areas of weakness in employee performance so

that measures for skill improvement and prayer motivation may be taken to remedy the situation.

Although performance appraisal is central to training and development programmes, it provides

valuable information to the entire spectrum of HRM. It can offer important feedback information on the

effectiveness of recruitment, selection, motivation and compensation systems. Hence, appraisal methods

should be most carefully chosen and designed to meet the multiple requirements of HRM.

(i) Accommodation

The accommodation process refers to the extent to which management listens and responds to or

accommodates the needs, wants, and complaints (or grievances) of organization members. People working

in organizations expect to be treated fairly; moreover, they feel they have the right to be heard and to be

respected as individuals. Morale is severely affected when there is a sense of unfair treatment or when

workers perceive that management does not care about their feelings, complaints, and suggestions. Systems

for managing the accommodation process include questionnaires, suggestion boxes, an “open-door”

philosophy and formal grievance procedures. The effectiveness with which the accommodation process is

managed varies within organizations and depends on a number of factors such as prevailing leadership

style and management philosophy.

(j) Fair Compensation System

A fair compensation system for rewarding the employees is the most important prerequisite to

attracting and maintaining the employees. Compensation in a narrow sense refers to the wages and salaries

which are paid to the employees in return for their services. But its meaning is often extended to include all

kinds of payments and benefits offered to the employees in lieu of their services. However, the amount of

money paid to an employee is the most important form of compensation as it enables the receiver to satisfy

most of his or her needs. The crucial point about monetary compensation is that it should be fair from the

point of view of both the employer and the employee. Although a fair compensation is difficult to define, it

should be taken to mean the amount that is adequate for the demands and requirements of the job.

(k) Employee Benefits and Services

In addition to fair monetary compensation, employees should be provided with a number of non-

monetary benefits and services which are no less important. The benefits are provided mostly in the form

of paid holidays and vacations, pensions and retirement benefits, accident and life insurance benefits, etc.

Services that are generally offered to the employees include social and recreational activities, medical and

transport facilities, housing, credit cooperatives, discounts in purchases and cafeteria. These benefits are

provided to all the members of an organization regardless of their performance. As such they are intended

mainly for the maintenance of employees, research studies indicate that although employees prefer money

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to anything else, they strongly desire to take a part of their compensation in the form of benefits and

services. In most of the cases an employee’s decision to stay with or leave the organization will be influenced

by the number of benefits and services provided. Therefore, an organization should be to offer as many

advantages as possible to its employees.

(l) Safety and Health Care Programmes

Safety and health care programmes are essential to the maintenance of employees. Industrial

safety implies that the working conditions in or around the factory or mines should be free from the danger

of accidents and health hazards. An accident is a tragic incident which has human, social and economic

dimensions. It results in tremendous mental and physical sufferings for the injured apart from the loss of

earnings. The organizations suffer enormous financial loss in terms of compensation payable to the injured,

damaged equipment and loss of production.

Hence, every precaution should be taken to protect the employees from the damage of accidents.

In addition to adequate safety measures, training and education programme should be organized to create

safety consciousness among the people. The setting up of a separate safety department can go a long way

in eliminating or reducing the hazards of accidents.

Apart from accidents, workers in an industrial organization is often exposed to certain health

hazards and occupational diseases. Proper steps like provision for cleanliness, safe disposal of waste and

effluents, proper ventilation and lighting should be taken to protect the health of the employees. Moreover,

efficient medical service and recreational activities can greatly contribute to the physical and mental well-

being of the employees.

(m) Collective Bargaining

The collective bargaining process refers to those events that establish a formal agreement between

workers and management regarding such matters such as wages and employee benefits, hours of work,

working conditions and. grievance procedures. The process includes both the negotiation and administration

of the labour-management contract.

(n) Organizational Development

The integrated approach which is followed for the simultaneous development of people and

organization is called organization development (OD). It may be defined as a comprehensive programme

of building a climate of improved decision-making adaptability and higher performance in an organization.

It is, in fact, a long-term process of deliberately changing the organization by training and developing

managerial people so as to make it more dynamic and effective in meeting the challenge of competition,

adaptation and growth. OD programmes are mainly characterized by planned approach to change, emphasis

on group rather than individual, participation in external change agents, use of intervention strategy and

action research. It includes such complex process as grid training, survey feed back, team building and

transactional analysis.

1.5 Significance of Human Resource Management

Human Resource Management is of utmost important from atleast three standpoints, social,

professional and individual enterprises.

(i) Social Significance

The effective management of human resources is likely to serve the goals of our society. It can

serve the following goals:

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* It can help to maintain an even balance of jobs and job holders to raise living standards of individuals

in society.

* It can help people to avail the best most productive and most gainful jobs where they can be most

satisfy and effective.

* It can help to ensure the best protection and conservation of human resources to prevent its

wasteful or careless use.

* It can help people to take decisions with minimum direction and control.

(ii) Professional Significance

From professional standpoint, the management of human resources is also of great significance. It

can provide motivation for effective teamwork by providing desirable working conditions and policies.

Specifically, it can serve following professional goals.

* It can help in maintaining the dignity of individual members.

* It can help in providing maximum opportunities for personality development of each participant in

the organization.

* It can help in improving employees working skills and capacity thereby increasing productivity and

standard of living.

* It can provide healthy relationship between different work groups so that work is effectively

performed.

* It can ensure conservation of human resources by correcting errors of wrong placement and

proper reallocation of work.

(iii) Individual Enterprise Significance

The management of human resource management has also significance from stand points of the objectives

of the individual enterprise. It can help the individual enterprise to achieve its goal by:

* obtaining capable people through scientific recruitment and selection techniques. Enterprise can

identify proper sources of manpower supply and select the suitable candidates among available

personnel.

* using proper training and development techniques, the existing manpower can be effectively and

efficiently utilized. The proper training and development programmes help the employees to learn

new techniques of production, thereby increasing productivity and quality of product. Training

programmes also prevent industrial accidents and manpower obsolescence. Thus, ultimately helps

in improving organizational climate.

* maintaining the willingness of people to work through equal provisions of opportunities for satisfaction

of human needs not only physiological and security but also need of love, esteem and self actualization.

1.6 Environmental Influence on HRM

A number of environmental factors influence the work of a HR manager. He cannot perform his

job in a vacuum. These factors influence the organization through human resources. The term ‘environment’

here refers to the totality of all factors which influence both the organization and personnel sub-system.

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Table 1.1: External and Internal Factors influencing the Personnel Function

External Factors Internal Factors

• Technological factors • Mission

• Economic challenges • Policies

• Political factors • Organisational culture

• Social Factors • Organisation structure

• Local and Government issues • HR systems

• Unions

• Employer’s demands

• Workforce diversity

The external environment consists of those factors (Table 1.1) which affect an organisation’s human

resources from outside the organization. Each of these external factors separately or in combination can

influence the HR function of any organization. The job of a HR manager is to balance the demands and

expectations of the external groups with the internal requirements and achieve the assigned goals in an

efficient and effective manger. Likewise, the internal environment also affects the job of a HR manager. The

functional areas, structural changes, specific cultural issues peculiar to a unit, HR systems, corporate policies

and a lot of other factors influence the way the HR function is carried out. The HR manager has to work

closely with these constituent parts, understand the internal dynamics properly and devise ways and means

to survive and progress. In addition to these, the personnel manages has to grapple with the problem of

workforce diversity.

1.7 Status of HRM in Indian Industry

The studies in this area have given the status of HRM in India as follows:

(a) Most of the companies recognized the significance of the personnel function and paid substantial

attention to personnel in their corporate structures.

(b) The private sector companies placed greater emphasis on the personnel department than those in

the public sector.

(c) The average remuneration of employees in the personnel area was at par with that of their

counterparts in other functional areas.

(d) The status of personnel in the corporate structure of multinationals appeared to be relatively higher

as compared to other private sector companies. The proportion of the gross remuneration of

employees in the personnel area to that of the gross remuneration of non personnel employees was

found to be double in the case of the former as compared to the latter. The ratio of employees in

the personnel area to non-personnel employees was found to be more in the former than in the

latter.

(e) The personnel executives at the corporate level were highly qualified, most of them were double

graduates and several of them possessed post graduate qualifications.

(f) In conjunction with the personnel executives performing general personnel functions, there existed

several personnel specialists and personnel advisors at the corporate level to facilitate the growth

of different aspects of human resource management functions.

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(g) There existed personnel function in the organization even if it did not have a personnel functionary

at the corporate level. Although the initial salary at the enterprise level may not have been as high as

at the corporate level, by mere seniority, a labour welfare officer or an establishment officer who

performed housekeeping or record keeping functions could reach the salary level, equivalent to

the corporate structure. Thus, earning a high salary did not mean that the personnel function with a

variety of sub-systems was playing a multifunctional innovative role in an enterprise.

(h) Several designations of managers manning the personnel department in companies were found.

Perhaps designations reflected the policy and tradition of an individual company. The use of several

designations appeared to be linked with the development of different sub-systems of personnel,

management and thus, reflected the scope and status of personnel at corporate level.

(i) The employees in the personnel department had more than 40 different designations. Personnel

Manager, Personnel Officer, Chief Personnel Manager, Chief Personnel Officer, and Industrial

Relations Manager were some of the most common designations used in the companies.

(j) The personnel director had specialist officers reporting to him. Alternatively, in some cases only

one specialist existed as a manpower specialist. The higher the level of the personnel employee in

the organization (personnel director), there would be a department built around him embracing

both specialists and generalists working in IR and personnel functions. Multifunctional innovative

department had an integration of the two streams and was concerned with the formulation and

implementation of personnel policy to facilitate the attainment of corporate objectives.

The foregoing analysis of status of HRM in India depends upon a lot of factors such as philosophy

of top management of the organization towards the human resources, volume of business and government

policies towards human resources.

1.8 Recent Developments in HRM

The HR environment is changing and so is the role of HRM, to adapt the changing trends. The

human resource managers of today may find themselves obsolete tomorrow in the changed business

environment if they do not adapt HR practices suiting to the environment. As such, new role or practices

have emerged to successfully respond to the changes. Some of the important HR practices are discussed

here:

(a) Flatter Organisation: Physical organization was the norm of yesterday. The pyramidal shape

of organizations is converted into flat organizations reducing the ten-twelve levels to five-seven levels. The

increasing number of flat organization abounds in the country. One main feature of flat organization, among

other things, is that there are more people to report to the managers, they will be less able to meddle in the

work of their subordinates.

(b) Employee Empowerment: Gone are days when managers were exercising formal power

over employees to get work done from them. The changes occurred in attitude and awareness of employees

over the period has rendered this mode of managing employees as obsolete. Under the changed conditions

when employee has become, what is popularly termed as a ‘knowledge worker’, the employees need to

be provided with greater autonomy through information sharing and provision of control over factors that

affect performance. This is, experts say, turning the typical organization upside down. Granting sanction to

the employees to make decisions in their work matters is called ‘employee empowerment’.

13

(c) Team work: The concept of division of labour i.e., specialized function introduced by Adam

Smith remained in practice for a long period till the twentieth century. But, given the process-oriented work

nature of modern organizations, single-function concept has ceased to its relevance. Modern organsiation,

or say, MNCs rely more on multi-function of workers so that workers do not remain confined to a single

function but can do more than one function. This is particularly so in case of increasing concern for downsizing

by the organizations. As such, a worker’s contribution to organization becomes more as a member of the

team. The managerial implications are that these workers need to be managed accordingly as a team, not

an individual in isolation. In other words, managers need to follow a holistic approach of management for

managing such workers. 360 degree appraisal may be such as example.

(d) Ethical Management: As the issues faced by the HR managers have increased in number

and complexity, so have the pressures and challenges of working ethically. Ethical issues pose fundamental

questions about fairness, justice, truthfulness, and social responsibility. Concerns have been raised about

the ethical standards used by managers and employees, particularly those in business organisations. The

most common unethical incidents exhibited by employees have been cheating on expense account, paying

or accepting bribes and kickbacks, forging signature, lying to supervisors, employees’ alcohol or drug

abuse, and falsification of records.

Ethics means doing just or right. In this sense, ethics deals with what “ought” to be done. For the

HR manager, there are ethical ways in which the manager ought to act relative to a given human resource

issue. However, determining specific (ethical) actions is not always easy. Ethical issues in HRM often have

dimensions such as extended consequences, multiple alternatives, mixed outcomes, uncertain consequences,

and personnel effects. Then, the real problem of HR manages is how to deal with these ethical dimensions?

Researchers have suggested some guidelines that can help HR managers respond to the ethical elements:

• Does the behaviour or result achieved comply with all applicable laws, regulations, and government

codes?

• Does the behaviour or result achieved comply with all organizational standards of ethical behaviour?

• Does the behaviour or result achieved comply with professional standards of ethical behaviour?

It is clear from the above points that just complying with the laws and regulations cannot guarantee

ethical behaviour. Instead, organizational members need to be guided by values and codes of behaviour.

One way to include ethical behaviour in organizations is to conduct training of employees and HR managers.

Training of employees and HR managers in ethics compliance has been found to reduce the incidence of

ethical problems.

1.9 SELF CHECK EXERCISE

1. What do you understand by HRM? Discuss in brief.

2. Discuss brief explanation of objectives of HRM.

3. Write a short-note on Scope of HRM.

4. Discuss in brief importance of HRM.

5. What is the status of HRM in Indian Industry? Discuss in brief.

6. Write a short-note on ethical management.

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1.10 SUMMARY

Human resource management is a process of procuring, developing and maintaining competent

human resources in the organization so that the goals of an organization are achieved in an effective and

efficient manner. To make organisation effective and efficient, HRM aims at coordinated efforts to the

competent managers and workers towards the ultimate goal. The general objective of HRM is to contribute

towards realization of firm’s goal. HRM is significant from the social professional and individual enterprise

point of view. A number of environmental factors influence the work of HR manager. HR managers of

today may find themselves obsolete tomorrow in the changed business environment if they do not adopt

HR practices suiting to the environment.

1.11 GLOSSARY

• Flat organization (also known as horizontal organization) has an organizational structure with few

or no levels of middle management between staff and executives. Transforming a highly hierarchical

organization into a flat organization is known as delayering.

• Human resource management (HRM or HR) is the strategic approach to the effective management

of people in a company or organization such that they help their business gain a competitive

advantage. It is designed to maximize employee performance in service of an employer's strategic

objectives.

• Job consists of duties, responsibilities, and tasks (performance elements) that are defined and

specific, and can be accomplished, quantified, measured, and rated.

• Management consists of the interlocking functions of creating corporate policy and organizing,

planning, controlling, and directing an organization's resources in order to achieve the objectives

of that policy.

• Personnel mean the people who work for a particular company or organization or in a department

within a company or organization that deals with the people who work for it.

1.12 ANSWERS TO SELF CHECK EXERCISE

1. For answer refer to section 1.2.

2. For answer refer to section 1.3.

3. For answer refer to section 1.4.

4. For answer refer to section 1.5.

5. For answer refer to section 1.7.

6. For answer refer to section 1.8.

1.13 TERMINAL QUESTIONS

1. Define human resource management. Explain the objectives and significance of human resource

management.

2. Outline the scope of human resource management in the light of ongoing changes scenario in the

economy.

3. Discuss the factors influencing HRM in detail.

4. Explain the status of HR Manager in Indian Industry.

5. What are the recent developments in HRM?

15

1.14 SUGGESTED READINGS

1. Yoder D, Heneman H.G. and Turnbull J.G. and Stove C.H., Handbook of Personnel Management

and Labour Relations, McGraw Hill, New York.

2. Ahmad, S., Human Resource Management and Technical changes, Kalpaz Publications, New

Delhi.

3. Formburn C.J. et al. Strategic Human Resource Management, Wiley, New York.

4. Bemardin, H.J. and Russel J, Human Resource Management, McGraw Hill, New York.

5. Gramin H.T. and Bennett R., Human Resource Management, Pitman Publishing, Delhi.

6. Decenzo, D.A. and Robbins, S.P., Personnel/Human Resource Management, PHI, New Delhi

7. Dessler, Gary, Human Resource Management, PHI, New Delhi.

*****

16

LESSON-2

PERSONNEL MANAGEMENT

STRUCTURE

2.0 INTRODUCTION

2.1 LEARNING OBJECTIVES

2.2 CONCEPT OF PERSONNEL MANAGEMENT

2.3 NATURE OF PERSONNEL MANAGEMENT

2.4 APPROACHES TO [ERSONNEL MANAGEMENT

2.5 FUNCTIONS OF PERSONNEL MANAGEMENT

2.6 CHALLENGES TO PERSONNEL MANAGEMENT

2.7 SELF CHECK EXERCISE

2.8 SUMMARY

2.9 GLOSSARY

2.10 ANSWERS TO SELF CHECK EXERCISE

2.11 TERMINAL QUESTIONS

2.12 SUGGESTED READINGS

2.0 INTRODUCTION

For the different use of all material and economic resources efficient use of human resources employed

in a firm is essential. Otherwise raw materials will remain stocked, machines will remain idle and money will

get tied up. The development, allocation, utilization and conservation of human resources through their

employment is a continuing, inevitable process in modern societies. Social objectives of business can be

achieved only through the efficient utilization of human efforts. Therefore, management of manpower assumes

greater importance. The efficient utilization of human resources and their conservation and prevention of

their waste is the major responsibility of personnel management.

2.1 LEARNING OBJECTIVES

After reading this lesson, you should be able to

(a) Define personal management and explain approaches to personnel management.

(b) Discuss the various functions of personnel management.

(c) Pinpoint the challenges to personnel management.

2.2 Concept of Personnel Management

Personnel management is the management of people at work. It involves employment, training,

appraisal and compensation of the people. Some of the important definitions of personnel management are as

follows:

According to Edwin B. Flippo, “Personnel management is the planning, organizing, compensation,

integration and maintenance of people for the purpose of contributing to organizational, individual and societal

goals.”

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According to E.F.L. Brech, “Personnel management is that part of the management process which

is primarily concerned with the human constituents of an organisation.”

According to Institute of Personnel Management (U.K.), “Personnel management is integral but

distinctive part of management, concerned with people at work and their relationship within the enterprise,

seeking to bring together into an effective organisation the men and women who staff the enterprise, enabling

each to make his/her best contribution to its success, both as a member of a working group and as individual.

It seeks to provide relationships within the enterprise that are conducive both to effective work and human

satisfaction.”

Personnel management is that part of the management process which is concerned with the

management of human resources in an organisation. It tries to secure the best from people by winning their

wholehearted cooperation. In short, personnel management can be defined as the art of procuring, developing

and maintaining competent workforce to achieve the goals of the organisation in an effective and efficient

way.

2.3 Nature of Personnel Management

The personnel function is performed by all the managers at all levels in organisation. It is a pervasive

function of management. It may be noted that personnel department is created to help the managers various

levels to perform their personnel functions. The personnel manager performs certain operative functions of

the personnel department like selection, placement, training and development, performance appraisal, wages

and salaries administration, etc. All the line managers have to make their contribution in the performance of

these functions. The nature of personnel management can be further elaborated as follows:

(a) It includes the functions of employment, training, development and compensation. These functions

are usually performed by the personnel department in consultation with the other departments.

(b) It is an extension of general management that of promoting and simulating every employee to

make his fullest contribution to the purpose of the business. Personnel management is the management of the

personnel.

(c) It exists to assist and advise the line or operating managers to do their personnel work more

effectively. Personnel manager is specialist advisor. Thus, personnel department is a staff department.

(d) It focuses attention on action, rather than on record keeping, written procedures or rules. The

problems of employees at work are solved through rational policies.

(e) It has human orientation. It tries to help employees develop their potential fully. It encourages

them to give out their best to the organisation. It motivates employees through a systematic process of

recruitment, selection, training and development coupled with fair wage policies.

(f) It is concerned with employees both as individuals and also as groups. It includes both blue-collar

employees (craftsmen, workers, etc.) and white-collar employees (managers, supervisors and clerks).

2.4 Approaches to Personnel Management

Philosophy is dynamic and changes with shifting values over a time. There are many forces, both

internal and external, which influence its development. The personnel philosophy and the field of personnel

management as we know today have evolved as a result of shifting values over a long period of time

stretching to many centuries under the influence of many forces such as religious, economic, cultural, political,

legal forces. For example, reformation, a religious revolution, was responsible for philosophy of competitiveness,

commercial revolution gave rise to the concept of master-servant relationship between the employer and the

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employee, industrial revolution gave rise to modern factory system, expansion and diversion and emphasized

division of labour and specialization and facilitated rise of unions, rise of democracy led to assertion of

individual values and rights, change in cultural and work values led to demographic changes in the workforce.

Sometimes customs and folkways became values. All these forces have contributed to the evolution of the

personnel management in its present form. A study a few important developments that have occurred in this

field from the time round about industrial revolution are as follows:

(a) Pre-Industrial Revolution Scene

Though there always has been some philosophy relating to the management of employees and utilization

of human resources but prior to industrial revolution, personnel management did not appear as a field of

formal study or knowledge. The personnel philosophy of the times grew out of the custom, standards and the

practices of ancient and medieval times. The pre-industrial revolution time was marked by small size of work,

whether on farm, in shops, on the cottage or home. For example, labour was treated and paid according to

custom or tradition in kind or cash or in both. In India, even the occupation of people was determined by their

caste. There was utter lack of mobility of labour. Due to small scale of work or production and near absence

of mechanization as we understand today, and on account of causes given above, no need was felt of

evolving a particular philosophy related to personnel management. It was the industrial revolution, in 18th

century which drastically changed the nature of work and set in motion such forces that necessitated the

solution of problems of large number of workers engaged in factories, mills and companies in later years.

Before industrial revolution, only the church or the governments employed large number of people to run their

affairs. In short, modern personnel philosophy has largely been an outgrowth of the forces originating from

the industrial revolution.

(b) Early Years of Industrial Revolution – A Period of Laissez faire

Industrial revolution changed the nature of work and gave rise to factory system. In early years of

industrial revolution, the factories were small, generally owned by a single individual who also used to plan

and organize production. In the early decades of industrial revolution, i.e. during the transition from domestic

to factory system, there was very little concern for the welfare of the labour or his rights. The Government

on its own part followed the policy of “Laissez-faire” in its relationship with business or factory owners. The

period was characterized by low wages, long hours of work, child labour, arbitrary lay-offs, and miserable

working conditions. The dominant consideration was that it is the management rights and interests that should

be served. The owner was self-centred and self-interested with the result that relations between employer

and employees were distant and impersonal and he had no concern for the lot of labour. It was a condition of

“take it or leave it!” Richard P. Calhoon has termed this stage as “Caveat Operarius” meaning “Let the

employee beware!”

(c) Mechanical or Commodity Approach towards Personnel

With the inventions of new machines and introduction of innovative practices, goods began to be

produced on large scale. Big mills, foundries, and mines were established. Mechanisation i.e. use of mechanical

power and large scale production required large number of workers. Mechanisation brought with it many

problems such as unemployment, safety hazards, unpleasant and execrable working conditions. There was

little interest in the lot of labour. Workers had a low status in the society and were considered inferiors.

Ruthlessness and cruelty towards employees was part of natural law. Labour like other inert and inanimate

things was regarded as a commodity or factor of production.

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Mechanical approach toward personnel implied that labour was to be treated as another factor of

production. Thus labour was categorized with land and capital as a factor of production. It was to be procured

as cheaply as possible and was to be utilized to the fullest. The commodity concept of labour meant that

employees services should be purchased like other factors of production, in accordance with the forces of

supply and demand. Wages were high when labour was scarce in relation to their demand and were low

when supply was more than their demand. In 19th century, industrial firms and employers were solely concerned

with production, and workers were manipulated and exploited like any other inert factor of production. The

fact, that employees and workers are human beings, have their own feelings, sensibilities and attitudes, and

needed to be treated more humanely, was not recognized. Hence the importance of human element or

workers welfare did not exist. It was assumed that workers were controllable, predictable, and interchangeable

and there was no scope for improving their contribution. They could be hired and fired at will and they had no

say in the matter. The wages and salaries were still awfully low and working conditions in factories were

abominable and unbearable. The employees interests and rights remained ignored.

Greater mechanization and the innovative practices employed by employers to effect economies of

scale resulted in unemployment of labour and insecurity. Edwin Flippo called it technological unemployment.

According to him, loss of jobs through the development of new machines or new techniques is termed as

technological unemployment. Labour is replaced either by machines or by management innovations that

result in more work being done by fewer persons. For almost over a century this mechanical approach was

applied to labour without any interference from outside. This was a free-enterprise system in which employees

looked after themselves and bore the adverse effects of technological changes.

(d) Welfarism or Paternalism

In the latter part of 19th century, workers started organizing themselves into unions and their

memberships started increasing. The period witnesses the emergence of social consciousness which helped

in initiating factory legislation. A few employers also reacted to the human problem caused by industrialization

and took some measures to help the workers in solving some of these problems. For this purpose, a few

employers in America and England appointed social or welfare secretaries to look after personal needs of

employees. They began to undertake voluntarily a number of humanistic activities to improve working conditions.

The principle characteristic of welfarism was recognition of responsibility for the welfare of employees. The

approach of welfarism was in fact an attempt on the part of employers to prevent workers from joining

unions which were raising their head and growing stronger at that time. They felt that employees joined

unions because they neglected employees welfare. Thus their brand of welfarism grew out of the fear of

union’s power. But the approach was adopted only by a small percentage of employers and a large number

of organisations remained indifferent to their welfare. It would be interesting to note the characteristics of

welfarism as it was practiced.

Welfarism of the time originated out of social consciousness as well as out of the fear of rise of

unionism. Some employers adopted this approach voluntarily and undertook some welfare activities they felt

the employees needed. It was the employer who decided what welfare measures were to be undertaken and

the employees had no say in the matter. Thus approach of welfarism was characterized by a belief that “only

management was qualified to determine what was best for employees.” Of course, employers took more

interest in helping employees who were sick or unable to work and helped employees in meeting their

personal problems such as education, housing and medical needs. Owners or managers decided who was

worthy of loans and for what purposes loans were legitimate. Through these measures, employers bought

20

employees loyalty and gratitude and maintained control over their private lives. For example, in some American

industrial establishments, it was obligatory for workers to go to church. Employers undertook those welfare

programmes that they thought were good for employees just as a parent decides what is good for the child.

Welfarism took the form of what is called paternalism.

(e) Scientific Management (Taylorism) – Business Philosophy

In the early years of 20th century, F.W. Taylor propounded the philosophy of scientific management

which implied that problems in management of a business should be tackled scientifically i.e. they should be

subjected to critical analysis, inventive experiment and objective evaluation rather than to rely on tradition and

intuition. Taylor asserted that the first object of management should be to secure the maximum prosperity for

the employer, coupled with the maximum prosperity for each employee. And the prosperity and material

welfare can be ensured only if there is an overall improvement in productive efficiency or productivity of the

enterprise. This could be done by applying scientific methods and principles. He asserted that improved

productive efficiency will result in higher wages for the labour. According to him, each individual was a

unique resource which should be conserved and utilized properly. It was also emphasized that proper training

could improve the efficiency of workers and hence efficiency of the enterprise. This, in nutshell, was the

philosophy of scientific management.

Scientific management was primarily concerned with the improvement in productivity through greater

efficiency in production and increased pay for workers through the application of the scientific method.

These principles emphasized using science, creating group harmony and cooperation, achieving maximum

output, and developing workers. It was followed by technique approach, towards personnel management.

The basic assumption was that if employees were properly selected, trained, compensated and supervised,

productivity would automatically result. The emphasis on specialization and improved training of personnel

strengthened the need of a personnel department.

Another noteworthy development that occurred in early decades of 20th century was emergence of

philosophy of business-relationships which emphasized on increasing productivity and reducing costs. The

unions started acquiring strength and demanded higher wages. The employers on their part tended to increase

pay packets instead of spending additional money on welfare and recreational measures, benefits and other

frills.

(f) Personnel Management from 1900 onward until the Great Depression

In the first two decades of 20th century, unions were the only force that led organisations to pay more

attention to the management of the personnel. This period saw the establishment of labour or personnel

departments in some large industrial organisations but their role was of advisory nature. They kept records

and provided specialized assistance only. Problems of operation were given prominence over problems of

personnel management. In the First World War, army authorities developed selection tests for recruits to the

army. The advanced versions of these tests are being applied for selection of personnel for business and

industrial organisations even today. Thanks to the efforts of early unions, organizations started giving more

attention to human and social aspects of management.

(g) Humanism and Human Behaviour Approach

The main purpose of most of the employers behind establishing personnel departments in 1900-1930

period was to prevent their employees from organizing i.e. to discourage unionisation. In some cases, they

planted their own men as office bearers of the unions. They used threats, bribes, or other unfair practices in

21

their attempts to capture or control unions. The great depression of the 1930s resulted in mass unemployment

and caused great misery to the labour in particular and other sections of the society in general. Wide spread

strikes disrupted commerce. It was felt that business organisations were averse to their needs and interests.

In words of Werther & Davis, “The depression of the 1930s led citizens to lose faith in the ability of business

to meet society needs”. They called for Government intervention. During the depression of 1930s, some

governments enacted laws about unemployment compensation, social security, minimum wages, and rights of

employees operating system form unions and bargain collectively. For example, American Government enacted

Wagner Act, also known as the National Labour Relations Act, in 1935 and allowed employees to form labour

organisations and to bargain with management about wages, hours of work, and working conditions. Under

the Act, management was prohibited to interfere, restrain or cerece employees who desire to act collectively

or refrain from such activities, to dominate or interfere with the formation or administration of any labour

organisation by contributing money or other support to it, to refuse to bargain in good faith with employee

representatives etc. The great depression not only led to Government intervention and hence labours legislation,

it also caused soul searching in employee relations during 1930s. According to this philosophy, it was felt that

management had definite responsibilities to employees over and above wages and decent working conditions.

This approach was counter to dehumanization characteristic of scientific management.

A humanistic philosophy focuses upon the individual employee, his needs, rights, and obligations, and

recognizes the need of teamwork. Human needs got more importance as a result of famous ‘Hawthorne

Studies’. These studies showed that efficiency goals of scientific management had to be balanced by

considerations of human needs. The results of Hamthrone studies had a profound impact on personnel

philosophy and management.

(h) The Hawthrone Experiments and their results

Elton Mayo, Professor of Industrial Research at Harvard University and his colleagues carried

extensive experiments at the Hawthorne Works of the Western Electric Company in Chicago (USA) between

1927 and 1932. These have become famous as Hawthorne Studies. Their purpose was to study the effects

of work environment, fatigue, rest pauses, hours of work, hours in working week, monotony, money incentives,

employee attitudes, employee organisation, leadership etc. on productivity. In fact, Mayo and his assistants

set out to measure the effect of changes in working conditions and other physical factors on the productivity

of workers. The results of these experiments were rather indifferent. What turned out to be starling and of

significance instead was that the factors responsible for improved output were social relationships among the

workers and the willingness of the workers to cooperate with the management.

Mayo and his researchers concluded that social factors, not physical, had the greatest influence on

willingness to work. Employees have not only economic needs but also psychological and social needs which

need to be served to motivate them and elicit their cooperation. An organisation was a social system rather

than an economic system. Another important conclusion of Hawthorne Studies was that management should

deal with workers not as individuals but as members of a group which influences their behaviour and attitude

towards work. Under favourable conditions a group of people may produce more creative ideas when working

together than when working individually.

The importance of Mayo’s work lies in the fact that he was the foremost pioneer who contributed to

the development of Human Relations Approach. His studies brought a behavioural science revolution. He

was the first to articulate and stress the importance of human and social factors in industrial relations. He also

stressed the promotion of informal social contacts at work. Hawthorne studies showed that the improvement

22

in productivity was due to such social factors as morale, satisfactory inter-relationships between members of

a work group and effective management. The management must understand human behaviour, especially

group behaviour, and serve it through such inter-personal skills as motivating, counseling, leading and

communicating. To summarize, humanistic philosophy or behavioural approach to personnel management

focuses on inter-personal behaviour, human relations, leadership, communication and motivation. It also lays

due stress on behaviour of people in groups. The approach is based on psychology (individual and social) and

sociology. It calls for a strong moral and ethical code with character and integrity as major requirements of

management. It recognized the importance of sound personnel management practices with concern for

individual needs and for human relations. In short, this approach stressed the importance of human and social

factors in industrial relationships. It questioned unnecessary emphasis on technical skills at the expense of

social skills.

2.5 Functions of Personal Management

There are two broad categories of functions of personnel management, which are: (a) Management

Function (b) Operative Functions. These are explained as follows:

(a) Management Functions

They are as follows:-

(i) Planning: Planning is the basic function of personnel management. It can be described as the

beginning of other functions. Planning can be described as a well-defined course of future action. Personnel

department is required to determine the personnel requirements, personnel programmes, policies, procedures

and methods, etc. Business operations are to be planned with reference to the overall objectives of the

enterprise.

(ii) Organisation: The function of organizing refers to the creation of a structure of duties and

function to achieve the objectives of the enterprise. According to Urwick “Organisation is determining what

activities are necessary for any purpose (or plan) and arranging them in groups which may be assigned to

individuals.” Organisation thus is concerned with activity-authority relationship. Under organisation, the

personnel manager creates a structure of duties and functions to achieve the objectives of the enterprise.

(iii) Directing: Direction can be described as the process of guiding and supervising the subordinates.

In the enterprise, the work of different subordinates is to be guided and supervised. Personnel manager is

required to give a specific direction to various activities in the office with a view to its proper functioning. He

is required to guide and to supervise the work of different departments.

(iv) Controlling: It is the last stage in management. Here, actual performance is compared with

plans and taking corrective action when results deviate from plans. Under controlling, personnel manager

evaluates and controls the performance of various employees working under him.

(b) Operative Functions

Operative functions are discussed in the following manner:

(i) Procurement: This first operative function is concerned with the obtaining of the proper kind and

number of personnel necessary to achieve the objectives. It includes operating system manpower requirements

and their recruitment, selection and placement cover various activities designed to screen and hire personnel,

such as application forms, psychological tests and interviews.

23

(ii) Development: After the personnel have been taken, it becomes necessary to develop them.

Development implies the enhancement of skill – through training, that is necessary for proper job performance.

Development function will be influenced by various factors, like induction of new machines, promotions and

transfers.

(iii) Compensation: This function can be defined as the adequate and equitable remuneration of

personnel for their contribution in achieving the objectives of organisation. Compensating remains one of the

basic functions of personnel management.

(iv) Integration: The function of integration relates to problems of communication, informal

organisation and trade unions. Integration can be defined as an attempt to effect a reasonable reconciliation

of individual and organsiational interests. Integration must follow the above functions of procurement,

development and compensation.

(v) Maintenance: It refers to sustaining and improving the working conditions that have been

established. However, it must be pointed out that it would be necessary to take care of physical well-being

and mental well-being of the employees. In other words, it includes establishment of health, sanitation, safety

standards and welfare facilities such as canteen, recreation rooms, group insurance, and education of the

employee children and so on.

2.6 Challenges to Personnel Management

Challenges to personnel management both arise from managerial practices i.e. from within the

organisation and from the changing external environment. Requirements and need of professionalism also

need tackling. Generally, these challenges are intertwined. The challenges to personnel management are as

follows:

(a) Organisational Challenges

Although there have been rapid improvements in managerial practices, improvements will still be

needed to meet these challenges. Most of them stem from within, due to demands for an expanded contribution,

modern information data and professionalism. The organizational challenges to personnel management are as

under:

(i) Organisational Objectives: The traditional concerns of a manager have been cost control,

improvement of efficiency, performance and profitability, compliance with legal requirements, growth of

business and fair return on capital. With human relation approaches in management and change in value-

system as reflected in ideas like concern for people, employee satisfaction, job security, social responsibility,

the objectives of management and organisation have undergone a sea change. More and more emphasis on

respect for dignity of individual and emerging hopes and aspirations of working class will put added pressures

on the organisation and management. Managers are required to work so as to achieve maximizing of both

dimensions viz. concern for production and concern for people and the management will have to adjust their

objectives in the light of the changes. It may necessitate change in current personnel practices.

(ii) Personnel Management Information System: For effective contribution, managers need a

modern management information system which is the total of all data concerning all aspects of production,

personnel and plans. This may need computerization of information base. The information requirements

pertain to duties, objectives, working conditions and other aspects of a specified job (job descriptions), required

qualifications, experience and skills to perform these jobs, human resource needs, compensation trends in the

market, biodata and other personnel records. Personnel department must see that privacy of personnel

24

records is safeguarded. A modern information system can help improve contribution of personnel managers

towards accomplishment of organizational goals and to meeting future challenges. The effectiveness of

personnel department depends on the quality of information it possesses and provides to others in the

organisation. Computerisation of information base, of course, involves substantial cost.

(b) External Challenges

Changes in society also affect management. Many of these changes will challenge personnel

management during this decade and beyond. These challenges are likely to stimulate many innovations in

personnel management in future. Some of these challenges are discussed below:

(i) Socio-Cultural Challenges: These challenges include population trends and demographic changes

like population growth rate, birth rate, percentage of the population comprising work force, education levels,

percentage of women in the workforce, changes in value system, social security costs, retirement programmes

etc. Decline in birth rate, increase in population, higher proportion rates of women participation and migration

of skilled workers to other countries result in change in the size and composition of workforce and pose new

challenges.

Cultural and work values also change over a time. These affect the attitudes of people toward work,

loyalty, attendance, work effort, retirement. Introduction of new values leads to changes in work ethics. Not

long ago, punctuality, honesty, loyalty to the organisation, hardwork, pride in one’s work, and frugality were

regarded as behavioural norms. These personal values were very helpful to the business organisations in

pursuit of their values of productivity, efficiency and effectiveness. One’s job or service was considered as

an essential means of livelihood and was one’s central like interest. With new winds of change, a new set of

values have appeared in the field of job or service. In pursuit of higher living standards, employees search for

more than one source of income and devise new ways and alternatives to find out new avocations and

assignments. It is no joke that many public sector employees in India regard their job salary as pension and

are always in search of some additional source of income from outside their organisation. Obviously, this

change in attitudes and values can only lead to less pride in work and hence inefficiency. New values raise

new demands. The effect of values can be positive as well as negative. For example, if workers have an

existential view of life, then they are likely to prefer quality of life to quantity, equity to efficiency, diversity to

conformity and individual to the organisation.

Moreover, extended periods of education, flexible life styles, improved social security and welfare

benefits may affect workforce participation rates. Motivating and satisfying social needs of workforce during

periods of varying values is a great challenge to personnel department.

(ii) Technological Challenges: Technological challenges mean changes in equipment, methods,

techniques and procedures. In developing countries like India, import or transfer of advanced technology is

likely to be a critical factor affecting management in general and personnel management in particular. Change

in technology may affect the growth of entire industries and hence human resource needs employment

opportunities. Technological changes are a great challenge to personnel management. Technological

unemployment is caused by introduction of machines and innovations. For example, automation and introduction

of computers may lead to some unemployment and reduction in manpower needs. Personnel departments

may have to devise some programmes aiming at early retirement of employees. The scheme known as

“Golden Handshake”, launched by some public sector companies in India, a few years ago, is a classic

example of such a programme. Technological changes not only affect changes in productivity levels, they

affect personnel management in many other ways.

25

(iii) Economic Challenges: Economic challenges comprise of factors like market pressures, business

cycle, boom or recession, general market conditions and Government economic monetary and fiscal policies.

In case of expansion of economy, the demand for new employees and for training and development would

increase. Employees and their unions demand higher wages, improved working conditions and better benefits.

In case of declining business, the organisation would like to maintain reduced workforce and reduced labour

cost. Personnel departments need to devise means and ways to reduce hours of work, to freeze new

employment, and lay off, if necessary. Thus changes in economic environment create new challenges for

personnel department.

(iv) Government and Legal Challenges: These challenges are represented in Government-business

relations and Government laws or what can be termed as changing demands of the Government. They have

immediate impact on the organisations and employer-employee relations and are a great challenge to personnel

management.

• Government-Business relations: The macro-economic policies of Government influence the

flexibility of product, labour and financial markets. For example, high structural budgetary deficits

and hikes in administrative prices of petroleum products and the like pre-empt savings, increase

prices and adversely affect business confidence and consequently working class. On the other hand

a stable macro-economic environment with a consistent budgetary mix is conducive to price stability

and building business confidence and poses less problems for personnel department. Again elimination

or curtailment of regulatory barriers or liberalization of economy will help restructuring of business

enterprises and personnel programmes.

• Legal Challenges: The Government passes laws to regulate employer-employees relations. The

Government enforces these laws and ensures their compliance. These laws have a direct and immediate

impact on personnel function. They usually aim at curbing those practices which are unfair to employees.

For example, in India we have the Indian Contract Act, Factories Act, Workmen’s Compensation

Act, Minimum Wages Act, Payment of Bonus Act and other legislation concerning social security

and safety. Organisations and their personnel departments are required to comply with them. This

helps in fulfilling societal objectives.

(v) Political Challenges: Political challenges stem from political environment which includes political

climate and stability, political parties and their philosophies, political influence of trade unions, Government

policies and international policies. Political environment and changes therein offer many challenges to personnel

management.

Internationalisation of management poses a great challenge to personnel management. Till recently,

the posts or jobs in Government departments or public sector companies and organisations were considered

prestigious as compared to those in private sector as they fetched higher salaries and benefits besides providing

security of service.

Now multi-national companies and some Indian private companies are offering fabulous salaries and

perks to higher level and middle level personnel, and professionals, salaries unheard and unimaginable only a

few years back, with the result that employees working in public sector companies and Government departments

are demanding higher wages and more benefits, and service in government establishments and public sector

organisations is becoming less attractive. Migration of some experienced and competent personnel with

specialization from public sector organisations to those in private sector has already started. This poses a

very serious challenge to personnel departments and organisations in public sector and domestic private

26

sector. Personnel management, in the circumstances, has to play an important and difficult role in coping with

this trend. Salary offers of Rs. 600,000/- and above p.a. plus car plus perks for some managerial positions are

common in newspaper advertisements now-a-days.

(vi) Demands of Interest groups on Third party interests (Societal Challenges): Government,

unions and special interest groups make demands on organisation. As the needs of society grow, the interest

of third parties may grow closer to those of organisations. As more people realize that the well being of

society is bound to the health of its organisations, pressures may mount for increased Government business

cooperation. Again competition in world markets and entry of multinationals etc. may convince unions about

the benefits of greater cooperation with the employers. To be successful, managements will have to be

sensitive to the demands of the society at large.

(vii) Other Challenges: Changes in society and business practices imply that there will be many

other challenges facing personnel management in future. Each of these challenges holds unseen implications.

As the list grows, the role of personnel management will grow and become more dynamic. The need for

innovation will be the greatest challenge of all.

2.7 SELF CHECK EXERCISE

1. Define Personnel Management.

2. Discuss in brief the nature of Personnel Management.

3. What do you mean by welfarism? Discuss in brief.

4. Write a short note on functions of Personnel Management.

5. Discuss in brief the challenges faced by Personnel Management.

2.8 SUMMARY

The function of personnel management is to provide the enterprise with efficient and competent

work force as per its requirements. The objectives of the personnel management are to develop desirable

working relationships between employers and employees to ensure maximum individual development and

lead human resources to attain individual, institutional and social objectives. The field of personnel management

has evolved as a result of shifting values over a long period of time stretching too many centuries under the

influence of many forces. These are many challenges that are likely to affect the tasks of personnel

departments and personnel managers. These challenges broadly include organizational challenges and external

challenges.

2.9 GLOSSARY

• Hawthorne Effect is when subjects of an experimental study attempt to change or improve their

behavior simply because it is being evaluated or studied. The term was coined during experiments

that took place at Western Electric's factory in the Hawthorne suburb of Chicago in the late 1920s

and early 1930s.

• Industrial revolution is defined as the changes in manufacturing and transportation that began with

fewer things being made by hand but instead made using machines in larger-scale factories.

• Paternalism is the interference with the liberty or autonomy of another person, with the intent of

promoting good or preventing harm to that person.

• Personnel manager is a manager responsible for administrative works such as recruitment, job

analysis, job evaluation, managing wages and salaries, training administration, resolving disputes,

labor law compliance and related tasks.

27

• Personnel management is defined as an administrative specialization that focuses on hiring and

developing employees to become more valuable to the company. It is sometimes considered to be

a sub-category of human resources that only focuses on administration.

2.10 ANSWERS TO SELF CHECK EXERCISE

1. For answer refer to section 2.2.

2. For answer refer to section 2.3.

3. For answer refer to section 2.4.

4. For answer refer to section 2.5.

5. For answer refer to section 2.6.

2.11 TERMINAL QUESTIONS

1. Define personnel management. Give its nature and functions.

2. What are the various approaches to personnel management? Discuss.

3. Explain the various challenges to personnel management.

2.12 SUGGESTED READINGS

1. Yoder D, Heneman H.G. and Turnbull J.G. and Stove C.H., Handbook of Personnel Management

and Labour Relations, McGraw Hill, New York.

2. Ahmad, S., Human Resource Management and Technical changes, Kalpaz Publications, New Delhi.

3. Formburn C.J. et al. Strategic Human Resource Management, Wiley, New York.

4. Bemardin, H.J. and Russel J, Human Resource Management, McGraw Hill, New York.

5. Gramin H.T. and Bennett R., Human Resource Management, Pitman Publishing, Delhi.

6. Decenzo, D.A. and Robbins, S.P., Personnel/Human Resource Management, PHI, New Delhi.

7. Dessler, Gary, Human Resource Management, PHI, New Delhi.

*****

28

LESSON-3

ROLE AND RESPONSIBILITIES OF PERSONNEL

MANAGER

STRUCTURE

3.0 INTRODUCTION

3.1 LEARNING OBJETCIVES

3.2 ROLE OF PEROSNNEL MANAGER

3.3 RESPONSIBILITES OF PERSONNEL MANAGER

3.4 PERSONNEL MANAGEMENT AND PROFESSIONALISM

3.5 SELF CHECK EXERCISE

3.6 SUMMARY

3.7 GLOSSARY

3.8 ANSWERS TO SELF CHECK EXERCISE

3.9 TERMINAL QUESTIONS

3.10 SUGGESTED READINGS

3.0 INTRODUCTION

Personnel management is concerned with people at work and their relationships with each other. It

may be defined as a set of programmes, functions and activities designed to maximize both personal and

organizational goals. It ensures that the organisation attracts and hires qualified, imaginative and competent

people. It involves the establishment of various policies to deal with employees and to retain them. To this

end, it lays out the rules regarding working conditions, designs appropriate compensation plans, and strengthens

employer-employee relations.

3.1 L EARNING OBJECTIVES

After reading this lesson, you should be able to

(a) Describe the role played by a personnel manager.

(b) Understand the responsibilities of a personnel manager.

(c) Describe the personnel management as a profession.

3.2 Role of Personnel Manager

Personnel managers, now-a-days, wear many hats. They perform mainly three different types of

roles, while meeting the requirement of employees and customers, namely administrative, operational and

strategic.

(a) Administrative Roles

The administrative roles of personnel management include policy formulation and implementation,

housekeeping, records maintenance, welfare administration, legal compliance etc.

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• Policy Maker: The human resource manager helps management in the formation of policies governing

talent acquisition and retention, wage and salary administration, welfare activities, personnel records,

working conditions etc. He also helps in interpreting personnel policies in an appropriate manner.

• Administrative expert: The administrative role of a personnel manager is heavily oriented to

processing and record keeping. Maintaining employee files, and HR-related databases, processing

employee benefits claims, answering queries regarding leave, transport and medical facilities, submitting

required reports to regulatory agencies are examples of the administrative nature of personnel

management. These activities must be performed efficiently and effectively to meet changing

requirements of employees, customers and the Government.

• Advisor: It is said that personnel management is not a line responsibility but a staff function. The

personnel manager performs his functions by advising, suggesting, counseling and helping the line

manager in discharging their responsibilities relating to grievance redressal, conflict resolution, employee

selection and training. Personnel advice includes preparation of reports, communication of guidelines

for the interpretation and implementation of policies, providing information regarding labour laws,

etc.

• Housekeeper: The administrative roles of a personnel manager in managing the show include

recruiting, pre-employment testing, reference checking, employee surveys, time keeping, wage and

salary administration, benefits and pension administration, wellness programmes, maintenance of

records, etc.

• Counsellor: The personnel manager discusses various problems of the employees relating to work,

career, their supervisors, colleagues, health, family, financial, social, etc. and advises them on minimizing

and overcoming problems, if any.

• Welfare Officer: Personnel manager is expected to be the Welfare Officer of the company. As a

welfare officer he provides and maintains (on behalf of the company) canteens, hospitals, crèches,

education institutes, clubs, libraries, conveyance facilities, co-operative credit societies and consumer

stores. Under the Factories Act, welfare officers are expected to take care of safety, health and

welfare of employees. The personnel manager are often asked to oversee everything in line with the

company legislation and stipulation.

• Legal Consultant: Personnel manager plays a role of grievance handling, settling of disputes,

handling disciplinary cases, doing collective bargaining, enabling the process of joint consultation,

interpretation and implementation of various labour laws, contacting lawyers regarding court cases,

filing suits in labour courts, industrial tribunals, civil courts and the like.

In some organisations, the above administrative functions are being outsourced to external providers

in recent times, with a view to increasing efficiency as also cutting operational costs. Technology is being put

to good use to automate many of the administrative tasks.

(b) Operational Roles

These roles are tactical in nature and include recruiting, training and developing employees, coordinating

HR activities with the actions of managers and supervisors throughout the organisation and resolving differences

between employees.

• Recruiter: “Winning the war for talent” has become an important job of personnel managers in

recent times in view of the growing competition for people possessing requisite knowledge, skills and

experience. Personnel managers have to use their experience to good effect while laying down

lucrative career paths to new recruits without increasing the financial burden to the company.

30

• Trainer, developer and motivator: Apart from talent acquisition, talent retention is also important.

To this end, personnel managers have to find skill deficiencies from time to time, offer meaningful

training opportunities, and bring out the latent potential of people through intrinsic and extrinsic rewards

which are valued by employees.

• Coordinator/linking pin: The personnel manager is often deputed to act as a linking pin between

various divisions/departments of an organisation. The whole exercise is meant to develop rapport

with divisional heads, using public relations and communication skills of HR executives to the maximum

possible extent.

• Mediator: The personnel manager acts as a mediator in case of friction between two employees,

groups of employees, superiors and subordinates and employees and management with the sole

objective of maintaining industrial harmony.

• Employee champion: Personnel managers have traditionally been viewed as ‘company morale

officers’ or employee advocates. Liberalisation, privatization and globalization pressures have changed

the situation dramatically. HR professionals have had to move closer to the hearts of employees in

their own self interest. To deliver results they are now seriously preoccupied with:

o Placing people on the right job.

o Charting a suitable career path for each employee.

o Rewarding creditable performance.

o Resolving differences between employees and groups smoothly.

o Adopting family-friendly policies.

o Ensuring fair and equitable treatment to all people regardless of their background.

o Striking a happy balance between the employee’s personal/professional as also the larger

organizational needs.

o Representing workers’ issues, problems and concerns to the management in order to deliver

effective results. Personnel managers have to treat their employees as valuable assets.

Such an approach helps to ensure that HR practices and principles are in sync with the

organisation’s overall strategy. It forces the organisation to invest in its best employees and

ensure that performance standards are not compromised.

(c) Strategic Roles

An organisation’s success increasingly depends on the knowledge, skills and abilities of its employees,

particularly as they help establish a set of core competencies (activities that the firm performs especially well

when compared to its competitors and through which the firm adds value to its goods and services over a long

period of time, e.g. ONGC’s oil exploration capabilities and Dell’s ability to deliver low cost, high-quality

computers at an amazing speed) that distinguish an organisation from its competitors. When employees’

talents are valuable, rare, difficult to imitate and organised, a firm can achieve sustained competitive advantage

through its people. The strategic role of personnel management focuses attention on how to enable ordinary

employees to turn out extraordinary performance, taking care of their ever changing expectations. The key

areas of attention in this era of global competition include effective management of key resources (employees,

technology, work processes), while delivering cost effective, value-enhancing solutions.

31

• Change agent: Strategic HR as it is popularly called now aims at building the organisation’s capacity

to embrace and capitalize on change. It makes sure that change initiatives that are focused on

creating high-performing teams, reducing cycle time for innovation, or implementing new technology

are defined, developed and delivered in a timely manner. The personnel manager in his new avtar

would help employees translate the vision statements into a meaningful format. HR’s role as a

change agent is to replace resistance with resolve, planning with results and fear of change with

excitement about its possibilities. Human resources helps an organisation identify the key success

factors for change and assess the organisation’s strengths and weaknesses regarding each factor. It

may not decide what changes the organisation is going to embrace, but it would certainly lead the

process to make them explicit. In helping to bring about a new HR environment there needs to be

clarity on issues like who is responsible for bringing about change? Who else needs to be involved?

How will it be measured? How will it be institutionalized? How will it be measured? How will it get

initiated, developed and sustained?

• Strategic partner: HR’s role is not just to adapt its activities to the firm’s business strategy, or

certainly to carry out fire-fighting operational like compensating employees. Instead, it must deliver

strategic services cost effectively by building a competent, consumer-oriented work force. It must

assume important roles in strategy formulation as well strategy implementation. To this end, it must

identify external opportunities from time to time, develop HR based competitive advantages and

move into close the gaps advantageously (like excellent training centre, design centre, automation

centre etc. which would be used by others as well). While implementing strategies, HR should

develop appropriate ways to restructure work processes smoothly.

3.3 Responsibilities of Personnel Manager

Planning, organizing, directing and controlling of procurement, development, compensation, integration,

maintenance and separation of human resources is to be done in such a way that individual, organizational

and societal objectives are achieved.

It must be noted that workforce or staff is primary and key resource and is thus a key instrument of

the organisation through which objectives are achieved. Again workforce is composed of human beings of

various types with complex changing needs and values. Providing and shaping the instrument of workforce

involves a number of activities to be performed by a personnel manager. The following are responsibilities of

personnel manager:

(i) To advise and counsel line managers in formulation and administering policies relating to personnel.

(ii) To analyse and ascertain the organizational health of the organisation with the help of records of

productive efficiency, absenteeism, labour turnover, accidents, internal mobility and complaints and

grievances.

(iii) To provide personnel procedures and services which are helpful to line managers in effective utilization

of human efforts.

(iv) To secure co-ordination of all these activities which are relevant to the efficient recruitment of

employees in the organisation.

(v) To ensure uniform and consistent administration of personal policies.

(vi) To ensure that employer observes the provisions of the Act relating to labour welfare.

(vii) To maintain harmonious relations between labour and management.

(viii) To interpret workers problems to the management.

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3.4 Personal Management and Professionalism

In order to cope with internal and external challenges effectively, a personnel expert or manager is

required to develop a professional approach or what is called professionalism in management. Professionalism

is a major challenge. Personnel functions and activities are too important to be done by unqualified and

untrained persons. The need for education, professional training and development is being felt more and

more. With the explosion of knowledge and new developments in the fields of personnel management and

behavioural sciences, personnel manager is required to stay informed about advances in these fields. This

requires self-renewal on his part through reading, seminars, workshops with special association of experts.

He needs to learn continuously, and to strive hard to acquire human and managerial skills for achieving the

high standards expected to professionals. Profession of technical ability, proficiency in management and

resource utilization and acquisition of human relations (inter-personal) skills go a long way in enhancing

effectiveness of a personnel manager in today’s environment.

A proactive approach on the part of a personnel manager requires increased professionalism otherwise

he will not be able to meet the challenges of changing demographic factors, values, third party pressures and

other internal and external challenges. There is an urgent need for a statutory body or institute of personnel

management to look after matters concerned with it.

Management is a social process. Before describing the particular tasks, responsibility and obligations

of personnel managers and professionals, a study of social role of managers in general and of the concept of

social responsibility will be helpful. The important features of a profession are:

• Well-defined body of knowledge: A profession must have a systematic body of principles,

techniques and skills.

• Formal education and training: Everybody cannot enter a profession. An individual can enter a

profession only after acquiring knowledge and skills through formal education and training.

• Minimum qualification: An individual can enter a profession after obtaining a degree or diploma

from a reputed college, institute or university.

• Representative body: A representative body of professionals must exist to regulate and develop

professional activities in a systematic manner (like conducting exams, issuing certificate of practice,

carrying out research work).

• Service above self: A person must be committed to service to society. It must be acceded highest

priority apart from financial rewards or political gains.

• Ethical conduct: A strict code of conduct exists in every profession. Members of a profession,

however, are expected to follow the code sincerely and honestly.

Personnel management, over the years, has emerged as a highly respected profession in India. Prestigious

management institute have started imparting personnel management principles, techniques and practices in a

meaningful way. The specialised knowledge, experience and expertise in this discipline has found expression

in a growing body of literature represented by books, articles, research reports and surveys. The practitioners

and academicians in the field have formed representatives bodies (like Indian Institute of Personnel Managers,

Kolkatta and National Institute of Labour Management, Mumbai). Previously they were regulating the affairs

of the profession but are now a merged entity called, National Institute of Personnel Management (NIPM).

However, it does not regulate the profession of personal management on the same lines as the Institute of

Chartered Accountants of India, ICWA, ICSI etc. However, it conducts a two-year post graduate programme

33

which is accepted as an academic qualification for the post of personnel manager in various organisations. It

also conducts training programmes, seminars, conferences and workshops in order to contribute to aspects

relating to policy formulation, standardization of terminology etc. It has also devised a code of conduct for its

members.

It is, however, not possible for HR professionals to adhere to a strict code of ethical behaviour

always due to increasing pressures from political, economic and social forces. Such practices as gift giving,

hiring those recommended by powerful politicians, falsifying records of impress stock market analysts, drug

or alcohol abuse, sexual harassment, cheating on expense accounts, lying about sick leave, accepting bribe

and kick backs have all become part of organizational life everywhere. One way to overcome ethics related

problems is to conduct training of executives, managers and employees at regular intervals.

3.5 SELF CHECK EXERCISE

1. Define personnel management.

2. Discuss in brief the administrative role of personnel manager.

3. Write a short-note on strategic role played by personnel manager.

4. What are the responsibilities of personnel manager? Discuss in brief.

5. Write a short-note on relationship between personnel management and professionalism.

3.6 SUMMARY

Personnel management is concerned with the procurement and maintenance of a competent workforce

and inspiring employees individually and in groups to give their most while relating to organizational goals. The

personnel manager performs three roles namely administrative, operational and strategic. It is important for

the personnel manager to be a strategic business contributor in organisation. There are a number of

responsibilities of a personnel manager. He must have knowledge of the organisation and its overall functioning.

Personnel management as a profession has reached respectable heights, over the years.

3.7 GLOSSARY

• Administration refers to the group of individuals who are in charge of creating and enforcing rules

and regulations, or those in leadership positions who complete important tasks.

• Personnel management is defined as an administrative specialization that focuses on hiring and

developing employees to become more valuable to the company. It is sometimes considered to be

a sub-category of human resources that only focuses on administration.

• Policy is a set of ideas or plans that is used as a basis for making decisions, especially in politics,

economics, or business. An official organization's policy on a particular issue or towards a country

is their attitude and actions regarding that issue or country.

• Professionalism is "the conduct, aims, or qualities that characterize or mark a profession or a

professional person"; and it defines a profession as "a calling requiring specialized knowledge and

often long and intensive academic preparation."

• Recruitment refers to the overall process of attracting, short listing, selecting and appointing suitable

candidates for jobs (either permanent or temporary) within an organization. Internet-based

technologies which support all aspects of recruitment have become widespread.

34

3.8 ANSWERS TO SELF CHECK EXERCISE

1. For answer refer to section 3.1.

2. For answer refer to section 3.2.

3. For answer refer to section 3.2 (c).

4. For answer refer to section 3.3.

5. For answer refer to section 3.4.

3.9 TERMINAL QUESTIONS

1. Explain the various roles performed by a personnel manager.

2. What are the responsibilities of a personnel manager? Discuss.

3. Write a detailed note on personnel management and professionalism in India.

3.10 SUGGESTED READINGS

Davar, R.S., Personnel Management and Industrial Relations, Vikas Publishing House, New Delhi.

Dessler, G., Human Resource Management, Prentice Hall of India, New Delhi.

Khanka, S.S., Human Resource Management, S. Chand & Co., New Delhi.

Bernardin, H.J., Human Resource Management, Tata McGraw Hill, New Delhi.

Ivancevich, J.M., Human Resource management, McGraw Hill, Irwin.

*****

35

LESSON-4

HUMAN RESOURCE PLANNING

STRUCTURE

4.0 INTRODUCTION

4.1 LEARNING OBJECTIVES

4.2 CONCEPT OF HUMAN RESOURCE PLANNING

4.3 OBJECTIVES OF HUMAN RESOURCE PLANNING

4.4 SIGNIFICANCE OF HUMAN RESOURCE PLANNING

4.5 ADVANTAGES OF HUMAN RESOURCE PLANNING

4.6 HUMAN RESOURCE PLANNING PROCESS

4.7 PROBLEMS OF HUMAN RESORUCE PLANNING

4.8 SUGGESTIONS TO MAKE HUMAN RESOURCE PLANNING EFFECTIVE

4.9 SELF CHECK EXERCISE

4.10 SUMMARY

4.11 GLOSSARY

4.12 ANSWERS TO SELF CHECK EXERCISE

4.13 TERMINAL QUESTIONS

4.14 SUGGESTED READINGS

4.0 INTRODUCTION

Human resource is an important corporate asset and the overall performance of company depends

upon the way it is put to use. In order to realise company objectives, it is essential to have a human resource

plan. Human Resource Planning (also called employment or personnel planning) is essentially the process of

getting the right number of qualified people into the right job at the right time so that an organisation can meet

its objectives. It is a system of matching the supply of people (existing employees and those to be hired or

searched for) with openings the organisation expects over a given time frame.

Human Resource Planning (HRP) is a forward looking function. It tries to assess human resource

requirements in advance keeping the production schedules, market fluctuations, demand forecasts, etc., in

the background. The human resource plan is subject to revision, of course, and is tuned to the requirements

of an organisation from time to time. It is an integral part of the overall corporate plan and reflects the broad

thinking of management about manpower needs within the organisation. The focus of the plan is always on

getting right number of qualified people into the organisation at the right time. To this end, human resource

plans are prepared for varying time periods, i.e., short term plans covering a time frame of two years and long

term plans encompassing a period of five or more years.

4.1 LEARNING OBJECTIVES

After reading this lesson, you should be able to

(a) Define human resource planning and appreciate the objectives and significance of human resource

planning.

36

(b) Outline and elaborate the process involved in human resource planning.

(c) Explain the problems which complicate and distoran effectiveness of human resource planning.

(d) Discuss how human resource planning can be made effective?

4.2 Concept of Human Resource Planning

In simple words, human resource planning is a process of sticking balance between human resources

required and acquired in an organisation. In other words, HRP is a process by which an organisation determines

how it should acquire its desired manpower to achieve the organizational goals. Thus, HRP helps an organisation

to have the right number and kind of people at the right place and right time to successfully achieve its overall

objectives. Let us also consider a few important definitions of HRP.

According to Terry L. Leap and Michael D. Crino, “HRP includes estimation of how many qualified

people are necessary to carry out the assigned activities, how many people will be available and what, if

anything, must be done to ensure that personnel supply equals personnel demand at the appropriate point in

the future.”

In the words of Beach, “Human resource planning is a process of determining and assuming that the

organisation will have an adequate number of qualified persons, available at the proper times, performing jobs

which meet the needs of enterprise and which provide performing jobs which meet the needs of enterprise

and which provide satisfaction for the individuals involved”

Geisler opines, “HRP is the process-including forecasting, developing and controlling-by which a firm

ensures that it has the right number of people and the right kind of people at the right kind of people at the right

places at the right time doing work for which they are economically most useful.”

Having gone through above definitions, HRP can now be defined as the comparison of an organisation’s

existing labour resources with forecast labour demand, and hence the scheduling of activities for acquiring,

training, redeploying and possibly discarding labour. It seeks to ensure that an adequate supply of labour is

available precisely when required.

HRP could be seen as a process, consisting of the following series of activities:

(a) Forecasting future personnel requirements, either in terms of mathematical projections of trends

in the economy and developments in the industry, or of judgements estimates based upon specific

future plans of the company.

(b) Present manpower resources and analyzing the degree to which these re-sources are employed

optimally.

(c) Anticipating manpower problems by projecting present resources into the future and comparing

them with the forecast of requirements, to determine their adequacy, both quantitatively and

qualitatively.

(d) Planning the necessary programmes of recruitment, selection, training, employment, utilization,

transfer, promotion, development, motivation and compensation so that future manpower

requirements will be duly met.

4.3 Objectives of Human Resource Planning

The basic purpose of having a human resource plan is to have an accurate estimate of the number of

employees required, with matching skill requirements to meet organizational objectives. It provides information

about the manner in which existing personnel are employed, the kind of skills required for different categories

37

of jobs and human resource requirements over a period of time in relation to organizational objectives. It

would also give an indication of the lead time that is available to select and train the required number of

additional manpower.

More specifically, human resource planning is required to meet the following objectives:

• Forecast personnel requirements: Human Resource planning is essential to determine the future

manpower needs in an organisation. In the absence of such a plan, it would be difficult to have the

services of right kind of people at the right time.

• Cope with changes: Human Resource planning is required to cope with changes in market conditions,

technology, products and government regulations in an effective way. These changes may often

require the services of people with the requisite technical knowledge and training. In the absence of

human resource plan, we may not be in a position to enlist their services in time.

• Use existing manpower productively: By keeping an inventory of existing personnel in an enterprise

by skill, level, training, educational qualifications, work experience, it will be possible to utilize the

existing resources more usefully in relation to the job requirements. This also helps in decreasing

wage and salary costs in the long run.

• Promote employees in a systematic manner: Human resource planning provides useful information

on the basis of which management decides on the promotion of eligible personnel in the organisation.

In the absence of an HR plan, it may be difficult to ensure regular promotions to competent people on

a justifiable basis.

4.4 Significance of Human Resource Planning

The failure in planning and in developing personnel will prove to be a limiting factor in attributing to

the organizational objectives. If the number of persons in an organization is less than the number of persons

required to carry out the organizational plans, there will be disruptions in the flow of work and the production

will also be lowered. But if, on the other hand, some persons are surplus in an organization, they will have to

be paid remuneration. The sound personnel policy requires that there should be adequate number of persons

of the right type to attain its objectives. For this the human resource planner should be concerned with the

training and the scheduling of the planning of personnel and persuading the management of use the results of

human resource planning studies in the conduct of the business. Every industrial or commercial organization

has the need of proper system of human resource so as to bring efficiency and economy in the organization.

Smaller concerns and those with simpler organizations also require human resource though at a small scale.

Human resource planning can prove to be an important aid to frame the training and development programmes

for the personnel because it takes into account the effects of anticipated changes in technology, markets and

products on manpower requirements and educational and training programme requirements.

Human resource planning is relatively a difficult task for the personnel management. It is particularly

so in business enterprises which are often subject to forces outside their control such as social, political and

economical changes. Manpower is a key resource required for the achievement of business objectives.

Materials, equipments, power and other resources can be effectively and efficiently used, only if there is

manpower capable of processing them into required goods and services. It takes a long time to develop the

manpower of right type to use these resources. Therefore, decisions concerning human resource development

must be taken many years in advance. However, management may stick to short periods for rank and file

employees, but it will have to concentrate upon the problems of replacing key professional and managerial

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personnel on a long term basis. In as-much-as many big organizations do prepare long-range forecasts in

production, marketing and capital investment, it should not be surprising if it makes long term projections in

regard to its personnel. However, human resource plans cannot be rigid or static, they can be modified or

adjusted according to the change in the circumstances.

4.5 Advantages of Human Resource Planning

An organisation must plan out its human resource requirements well in advance so that it could

complete effectively with its competitors in the market. A well thought-out human resource plan provides

adequate lead time for recruitment, selection and training of personnel. It becomes all the more crucial

because the lead time for procuring personnel is a time consuming process and in certain cases one may not

always get the requisite type of personnel needed for the jobs. Non-availability of suitable manpower may

result in postponement or delays in executing new projects and expansion programmes which ultimately lead

to lower efficiency and productivity further. To be specific, the following are the advantages of human

planning:

(i) It Reduces Personnel Costs: It reduces personnel costs, because of management’s ability to

anticipate shortages or surpluses of manpower and correct these imbalances before they become

unmanageable and expensive.

(ii) To Plan the Development of the Employees: A better basis for planning employees

development that is designed to take optimum use of worker’s attitudes within the organisation.

(iii) Manpower Inventory: Personnel or manpower inventory can provide information to

management for the interval succession of managerial personnel if there is a turnover which is

not anticipated.

(iv) It Helps in Formulating Managerial Succession Plans: Human resource planning helps in

formulating managerial succession plans as a part of the replacement planning process which is

a necessitated when job change plans for managers are formulated.

(v) Thorough Performance Appraisal and Identification: Human resource planning enables

thorough performance appraisals, identification of gaps of the existing manpower so that corrective

training could be imparted. Thus, the training programme becomes more effective.

(vi) Improvement in Business Planning Process: Further, it leads to the improvement of business

planning process.

(vii) Employment Opportunities: More employment opportunities including women and minority

groups in future growth plans and identifying the specific development or training programme

needed today to make specific skills available tomorrow.

(viii) Greater Awareness among Workers: Greater awareness among workers is the importance

of sound manpower management throughout at all levels of the organisation.

4.6 Human Resource Planning Process

How to have the right number of people with right skill at right times? The process of human resource

planning helps in this regard. The human resource planning process consists of activities relating to future

demand for and supply of manpower and matching the two in the context of overall organizational plans and

objectives.

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The various activities involved in the process of human resource planning are now discussed one by

one.

(i) Analysing Organisational Plans and Objectives: The process of human resource planning begins

with analyzing the overall plans and objectives of organisation. The reason being the human resource

plans stem from business plans. Analysis of business plans into sub-sectional and functional plans such as

technology, production, finance, marketing, expansion and diversification provides for assessing the human

resource requirements for each activity in each section and department.

Similarly, the analysis of organizational objectives also provides for human resources required by an

organisation. For example, if the objective of the organisation is rapid growth and expansion, it would

require more human resources for its all functional areas. Thus, it is evident that the human resource

planning needs to be made in accordance to the overall organizational plans and objectives.

(ii) Analysing Objectives of Human Resource Planning: The main purpose of human resource planning

is matching employees abilities to enterprise requirements, with an emphasis on future instead of present

arrangements. The ultimate mission or purpose of human resource planning is to relate future human

resource to future enterprise need so as to maximize the future return on investment in human resources.

For this, managers need to specify the objectives of human resource planning with regard to the utilization

of human resources in the organisation. While developing specific objectives of human resource planning,

certain questions need to be addressed like:

••••• Whether the vacancies, as and when these arise, will be filled in by promotion, transfer or from

external sources?

••••• What will be the selection procedure?

••••• How will provisions be made for training and developments of employees?

••••• How to restructure job positions, i.e., how to abolish the old or boring jobs and replace these by the

challenging ones?

••••• How to downsize the organisation in the light of changing business and industrial environment?

(iii) Forecasting Demand for Human Resources: The demand for human resources in an organisation is

subject to vary from time to time, depending upon both external and internal factors. External factors

include competition, economic and political climate, technological changes, government policy, etc. Among

the internal factors include growth and expansion, design and structural changes, management philosophy,

change in leadership style, employees resignation, retirement, termination, death, etc. Therefore, while

forecasting future demand for human resources in the organisation, these factors need to be taken into

consideration.

Forecasting demand for human resources is good for several reasons because it can help: (i) quantify the

number of jobs required at a given time for producing a given number of goods, or offering a given

amount of services. (ii) ascertain a staff-mix needed at different points of time in the future, and (iii)

ensure adequate availability of people with varying qualifications and skills as and when required in the

organisation.

How to forecast requirement for human resources in the future? There are various techniques varying

from simple to sophisticated ones employed in human resource forecasting. These include:

a. Management Judgment

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b. Work-Study Method

c. Ratio-Trend Analysis

d. Delphi Technique

e. Flow Models

f. Mathematical Models

These are described one by one:

a. Management Judgement: This technique is very simple and time-saving. Under this technique,

either a “bottom-up” or a ‘top-down’ approach is employed for forecasting future human resource requirement

of an organisation. In case of bottom-up approach, line managers prepare departmental requirements for

human resource and submit it to the top managers for their review and consideration. In the ‘top-down’

approach, the top managers prepare the departmental forecasts which are reviewed with the departmental

heads or managers. However, neither of these approaches is accurate. Forecasts based on these approaches

suffer from subjectivity. This technique is suitable only for small firms or in those organisations where sufficient

data-base is not readily available.

b. Work-Study Method: This method can be used when it is possible to measure work and set

standards and where job methods do not change frequently. In this method, as used by Fredrick Winslow

Taylor in his ‘Scientific Management’, time and motion study are used to ascertain standard time for doing a

standard work. Based on this, the number of workers required to do standard work is worked out. The

following example illustrates this method:

Planned output for next year 25,000 units

Standard hours per unit 4

Planned hours required for the year (25000x4) 1,00,000

Productive hours per worker/year (after allowing

Normal overtime, absenteeism and idle time) 2,000

Number of workers required

1,00,000 50

2,000

Supposing, the span of control is ten, then, there will be requirement for five (50/10) supervisors also

to supervise the work of 50 workers as forecast just above.

c. Ratio-trend Analysis: This is one of the quickest forecasting technique. Under this method,

forecasting for future human resource requirements is made on the basis of time series data. In other words,

this technique involves studying past ratios (e.g., total output/number of workers, total sales volume/number

of sales persons and based on these, forecasting is made for future ratios. While calculating future ratios,

allowances can be made for expected changes in organisation, methods and jobs. The demand for human

resources is calculated on the basis of established ratios between two variables.

d. Delphi Technique: Delphi technique is named after the ancient Greek oracle at the city of

Delphi. This is one of the judgemental methods of forecasting human resource needs. It is a more complex

and time consuming technique which does not allow group members to meet face-to-face. Therefore, it does

not require the physical presence of the group members. The following steps characterize the Delphi technique:

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(i) The members are asked to provide their estimates of human resource requirements through a

series of carefully designed questionnaires.

(ii) Each member anonymously and independently completes the first questionnaire.

(iii) Results of the first questionnaire are complied at a central location, transcribed, and copied.

(iv) Each member receives the copy of the result.

(v) After viewing the results, members are again asked to review their estimates. The initial results

typically trigger new estimates of cause changes in the original position.

(vi) Steps 4 and 5 are repeated as often as necessary until a consensus is reached.

The Delphi technique insulates group members from the undue influence of others. Also, since it

does not require the physical presence of group members, even a global company could use this technique

with members/ managers stationed in different countries. As the technique is extremely time consuming, it is

frequently not appropriate when a speedy decision is necessary. Further, the technique might not develop the

rich pool of alternatives that interacting or nominal groups do. The ideas that might arise from the heat of

face-to-face interaction might never come up.

e. Flow Models: Among the flow models, the simplest one is called the Markov model. This model

involves the following:

(i) Determination of time period that will be covered under forecast.

(ii) Establishment of employee’s categories, also called states. There should not be overlapping among

the various categories.

(iii) Enumeration of annual flows among various categories or states for several time periods.

(iv) Estimation of probability of flows or movements from one category to another based on past trends

in this regard.

However, the Markovian model suffers from disadvantages like heavy reliance on past data, which may

not be accurate in abnormal situations like periods of turbulent change, and individual accuracy in forecast is

sacrificed at the cost of group accuracy.

f. Mathematical Models: Mathematical models express relationship between independent variables

(e.g., production, sales, etc.) and dependent variable (e.g., number of workers required). The following is one

such widely used mathematical model for forecasting employees need:

(Laggn+G)1/%

En =

Y

Where,

En is the estimated number of workers required in n number of years. Lagg refers to the overall value (in

rupee terms) of current business operations. G denotes the overall growth in business activity over n years at

current value terms i.e. in rupees.

G implies average improvement in productivity estimated during n number of years. Y is level of business

activity per worker. Following above formula, estimates for manpower requirements in future are made. Due

allowance can also be made for expected changes in business strategy in future.

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(iv) Preparing Manpower Inventory (Supply Forecasting): The basic purpose of preparing manpower

inventory is to find out the size and quality of personnel available within the organisation to man various

positions. Every organisation will have two major sources of supply of manpower: internal and external.

(a) Internal Labour Supply: A profile of employees in terms of age, sex, education, training, experience, job

level, past performance and future potential should be kept ready for use whenever required. Requirements

in terms of growth/diversification, internal movement of employees (transfer, promotions, retirements, etc.)

must also be assessed in advance. The possibilities of absenteeism and turnover should be kept in mind while

preparing the workforce analysis. Through replacement charts or successions plans, the organisation can

even find out the approximate date(s) by which important positions may fall vacant. Frequent manpower

audits may be carried out to find out the available talent in terms of skills, performance and potential.

Some of the important forecasting techniques may be summarized thus:

••••• Staffing table: It shows the number of employees in each job. It tries to classify employees on the basis of

age, position, category, experience, qualifications, skills etc. A study of the table indicates whether current

employees are properly utilized or not.

••••• Markov analysis: This technique uses historical rates of promotions, transfer and turnover to estimate

future availabilities in the workforce. Based on past probabilities, one can estimate the number of employees

who will be in various positions with the organisation in future.

••••• Skills inventory: A skills inventory is an assessment of the knowledge, skills, abilities, experience and

career aspirations of each of the current employees. This record should be updated at least every two years

and should include changes such as new skills, additional qualifications, changed job duties etc. Of course,

confidentiality is an important issue in setting up such an inventory. Once established, such a record helps an

organisation to quickly match forthcoming job openings with employee backgrounds.

••••• Replacement Chart: It shows the profile of job holders department-wise and offers a snapshot of who will

replace whom if there is a job opening.

(b) External labour supply: When the organisation grows rapidly, diversifies into newer areas of operations

(merchant banking, capital market operations, mutual funds, etc. in the case of a bank) or when it is not able

to find the people internally to fill the vacancies, it has to look into outside sources. To the extent an organisation

is able to anticipate its outside recruitment needs and looks into the possible sources of supply keeping the

market trends in mind, its problem in finding the right personnel with appropriate skills at the required time

would become easier.

Organisations, now-a-days, do not generally track the qualifications of thousands of employees manually.

Details of employees in terms of knowledge, skills, experience, abilities, etc., are computerized, using various

packaged software systems.

(v) Determining Manpower Gaps: The existing number of personnel and their skills (from human resource

inventory) are compared with the forecasted manpower needs (demand forecasting) to determine the

quantitative and qualitative gaps in the workforce. A reconciliation of demand and supply forecasts will give

the number of people to be recruited or made redundant as the case may be.

(vi) Formulating HR Plans: Organisations operate in a changing environment. Consequently, human resource

requirements also change continually. Changes in product mix, union agreements, competitive actions are

some of the important things that need special attention. The human resource requirements identified need to

be translated into a concrete HR plan, backed up by detailed policies, programmes and strategies (for recruitment,

selection, training, promotion, retirement, replacement, etc.).

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• Recruitment plan: This will indicate the number and type of people required and when they are

needed; special plans to recruit right people and how they are to be dealt with via the recruitment

programme.

• Redeployment plan: This will indicate the programmes for transferring or retraining existing

employees for new jobs.

• Redundancy plan: This will indicate who is redundant, when and where; the plans for retraining,

where this is possible; and plans for golden handshake, retrenchment, lay-off, etc.

• Training plan: This will indicate the number of trainees or apprentices required and the programme

for recruiting or training them; existing staff requiring training or retraining, new courses to be developed

or changes to be effected in existing courses.

• Productivity plan: This will indicate reasons for employee productivity or reducing employee costs

through work simplification studies, mechanization, productivity bargaining, incentives and profit sharing

schemes, job redesign, etc.

• Retention plan: This will indicate reasons for employee turnover and show strategies to avoid

wastage through compensation policies, changes in work requirements and improvement in working

conditions.

• Control Points: The entire manpower plan be subjected to close monitoring from time to time.

Control points be set up to find out deficiencies, periodic updating of manpower inventory, in the light

of changing circumstances, be undertaken to remove deficiencies and develop future plans.

4.7 Problems / Barriers to Human Resource Planning

Human resource planning is not so easy to make. The planners face various problems while formulating

human resource plans. The major ones are discussed as follows:

(i) People perceive that people are available in abundance in our labour surplus economy. Then, why to

spend time and money in forecasting human resources? Surprisingly, this perception about human

resource planning is also held by the top management.

(ii) Another problem in human resource planning is that the demand for and supply of human resources

is not cent percent accurate. Experience suggests that longer the time horizon for forecasting human

resource requirements, greater is the possibility of inaccuracy in estimates of human resource needs.

(iii) Various types of uncertainties like labour turnover, absenteeism, seasonal employment, market

fluctuations and changes in technology render human resource planning ineffective. The reason

being these uncertainties make human resource forecast mere a guess far from reality.

(iv) Sometimes human resource planning suffers from a conflict between quantitative and qualitative

approaches used for it. Some people view human resource planning as a mere numbers game to

track the flow of people across the departments and in and out of the organisation. Conversely,

others take a qualitative approach focusing on the quality of human resources like career planning

development, skill, morale, etc.

(v) Generally, human resource planning is perceived as experts in handling personnel matters. But, they

are not experts more than often. Hence, human resource requirements estimated by such people are

not realistic ones. The organizational plans based on such estimates are endangered to be flopped.

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6. As human resource planning is based on data relating to human resources, the same is not maintained

in a proper manner in some of the industrial organisations. Then, in the absence of reliable data, it

becomes difficult to develop effective human resource plans.

In sum and substance, problems in human resource planning arise both from inherent limitations of

forecasting, on the one hand, and from weaknesses of human who do it, on the other. But, both can be

overcome.

4.8 Suggestions to make HRP Effective

Following are some of the steps that may improve the effectiveness of human resource planning:

(a) Human resource plans must be viewed as an integral part of corporate planning. So to say, human

resources plans should be tailored with the objectives, strategies and overall environment of the

particular organisation.

(b) The support and commitment of the top management be ensured before starting the process of

human resource planning.

(c) Personnel records must be complete, up-to-date and readily available to ensure an adequate and

strong data-base. Data-base serves as backbone for human resource planning.

(d) The time horizon of the human resource plan should be appropriate to accommodate the changing

needs and circumstances of the particular organisation.

(e) Both quantitative and qualitative aspects of human resource plans should be stressed in a balanced

manner in order to avoid conflicts between the two.

4.9 SELF CHECK EXERCISE

1. HR planning is a forward looking function. How? Discuss in brief.

2. Define HR Planning.

3. What are the objectives of HR Planning? Discuss in brief.

4. Discuss in brief the importance of HR Planning.

5. Write a short-note on Delphi Techniques of forecasting demand for Human Resources.

6. Discuss in brief the problems faced by personnel's while doing HR Planning.

7. Give any three suggestions to make HR Planning effective.

4.10 SUMMARY

Human resource planning is essentially the process of getting the right number of qualified people

into the right job at the right time. So then an organisation can meet its objectives. The importance of human

resource planning is explained by the fact that it maintains a fine balance between demand for and supply of

human resources required to effectively compute those tasks that help organisation to achieve its objectives.

Organisation use human resource planning as a means of achieving greater effectiveness. Human resource

planning systematically attempts to forecast personnel demand, assess supply and reconcile the two. The

process of human resource planning includes activities like analysing organisational plans and objectives,

forecasting demand for and supply of human resource matching demand and supply and monitoring and

controlling of human resource plans. The major problems in human resource planning are misconception,

inaccuracy, uncertainties, unrealistic, unbalanced focus, inefficient information system etc. Support of the top

management, tailor- made approach, appropriate time horizon and balance focus are the pre-requisites for

making human resource planning effective.

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4.11 GLOSSARY

• Delphi Technique typically includes at least two rounds of experts answering questions and giving

justification for their answers, providing the opportunity between rounds for changes and revisions.

• Forecasting human resource demand is the process of estimating the future human resource

requirement of right quality and right number. As discussed earlier, potential human resource

requirement is to be estimated keeping in view the organisation's plans over a given period of time.

• Human resources is used to describe both the people who work for a company or organization and

the department responsible for managing resources related to employees.

• Human Resource supply forecasting is the process of estimating availability of human resource

followed after demand for testing of human resource. Source of external supply of human resource

is availability of labour force in the market and new recruitment.

• Human resource planning (HRP) is the continuous process of systematic planning ahead to achieve

optimum use of an organization's most valuable asset-quality employees. Human resources planning

ensure the best fit between employees and jobs while avoiding manpower shortages or surpluses.

4.12 ANSWERS TO SELF CHECK EXERCISE

1. For answer refer to section 4.0.

2 For answer refer to section 4.2.

3. For answer refer to section 4.3.

4. For answer refer to section 4.4.

5. For answer refer to section 4.6.

6. For answer refer to section 4.7.

7. For answer refer to section 4.8.

4.13 TERMINAL QUESTIONS

1. Define human resource planning. Discuss the objectives of human resource planning.

2. “Human resource planning is a pre-requisite for effective management of human resources of an

organisation”. Discuss.

3. Explain the steps involved in human resource planning process.

4. Discuss the problems in human resource planning. How can these problems be overcome?

5. How is demand for human resource forecast?

4.14 SUGGESTED READINGS

Dessler, G., Human Resource Management, Prentice Hall of India, New Delhi.

Khanka, S.S., Human Resource Management, S. Chand & Co., New Delhi.

Bernardin, H.J., Human Resource Management, Tata McGraw Hill, New Delhi.

Ivancevich, J.M., Human Resource management, McGraw Hill, Irwin.

*****

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LESSON-5

RECRUTIMENT AND SELCTION

STRUCTURE

5.0 INTRODUCTION

5.1 LEARNING OBJECTIVES

5.2 MEANING OF RECRUITMENT

5.3 FACTORS AFFECTING RECRUITMENT

5.4 CONSTRAINTS OF RECRUITMENT

5.5 SOURCES OF RECRUITMENT

5.5.1 INTERNAL SOURCES

5.5.1.1 MERITS OF INTERNAL SOURCES

5.5.1.2 DEMERITS OF INTERNAL SOURCES

5.5.2 EXTERNAL SOURCES

5.5.2.1 MERITS OF EXTERNAL SOURCES

5.5.2.2 DEMERITS OF EXTERNAL SOURCES

5.6 THE CONCEPT OF SELECTION

5.7 DIFFERENCE BETWEEN RECRUITMENT AND SELECTION

5.8 SIGNIFICANCE OF SELECTION

5.9 STAGES IN SELECTION PROCEDURE

5.10 SELF CHECK EXERCISE

5.11 SUMMARY

5.12 GLOSSARY

5.13 ANSWERS TO SELF CHECK EXERCISE

5.14 TERMINAL QUESTIONS

5.15 SUGGESTED READINGS

5.0 INTRODUCTION

The human resources are the most important assets of an organisation. The success of failure of an

organisation is largely dependent on the caliber of the people working therein. Without positive and creative

contributions from people, organisations cannot progress and prosper. In order to achieve the goals or perform

the activities of an organisation, therefore, we need to recruit people with requisite skills, qualifications and

experience. While doing so, we have to keep the present as well as the future requirements of the organisation

in mind. Through the process of recruitment, a company tries to locate perspective employees and encourages

them to apply for vacancies at various levels. Recruiting, thus, provides a pool of applications for selection.

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5.1 LEARNING OBJECTIVES

After reading this lesson, you should be able to

(a) Define recruitment and list the factors that affect recruitment.

(b) Describe different sources of recruitment.

(c) Define selection and appreciate the need for scientific selection.

(d) Discuss the steps involved in selection process.

5.2 Meaning of Recruitment

Recruitment is the process of searching for prospective employees and stimulating them to apply for

jobs in the organisation. When more persons apply for jobs then there will be a scope for recruiting better

persons. The job-seekers too, on the other hand, are in search of organisations offering them employment

opportunities. Recruitment is a linkage activity bringing together those with jobs and those seeking jobs.

In the words of Yoder, “Recruitment is a process to discover the sources of manpower to meet the

requirements of the staffing schedule and to employ effective measures for attracting that manpower in

adequate numbers to facilitate effective selection of an efficient working force”. Recruitment is the process

which prompts people to offer for selection in an organisation. This involves locating sources of manpower to

meet job requirements. It is a process of searching for prospective employees and stimulating and encouraging

them to apply for jobs in an organisation.

5.3 Factors Affecting Recruitment

Every organisation, big or small, has to engage in recruitment of persons. A number of factors

influence this process. Some factors have been discussed as follows:

(a) Size of Organisation: The number of persons to be recruited will depend upon the size of an

organisation. A big enterprise needs more persons at regular intervals while a small undertaking

employs sometimes only. A big business house will always be in touch with sources of supply and

shall try to attract more and more persons for making a proper selection. It can afford to spend

more amount in locating prospective candidates. So the size of an enterprise will influence the

process of recruitment.

(b) Employment Conditions: The employment conditions in a country greatly influence recruitment

process. In under developed countries, employment opportunities are limited and there is no dearth

of prospective candidates. At the same time suitable candidates may not be available because of

lack of educational and technical facilities. In India, the availability of persons for white collar jobs

is large whereas the supply of technical persons is limited. If the supply of persons is more, then

selection from large number becomes easy.

(c) Salary Structure and Working Conditions: The wages offered and working conditions prevailing

in an enterprise greatly influence the supply of personnel. If higher wages are paid as compared to

similar concerns then the organisation will not face any difficulty in making recruitments. A concern

offering low wages will always face to problem of labour turnover.

The working conditions in an organisation will determine job satisfaction of employees. An enterprise

offering good working conditions like proper sanitation, lighting, ventilation, etc. will give more job

satisfaction to employees and they may not like to leave their present jobs. On the other hand, if

employees leave the jobs due to unsatisfactory working conditions there will be a need for recruitment

of more persons.

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(d) Rate of Growth: The growth rate of an enterprise also influences recruitment process. An expanding

concern will require regular employment of new employees. There will also be promotions of

existing employees to higher jobs necessitating the filling up of those vacancies. A stagnant enterprise

will recruit persons only when present incumbent vacates his position on retirement, etc.

5.4 Constraints of Recruitment

An enterprise may not be able to recruit freely even though it offers better salaries and other amenities.

A number of constraints may be faced in recruitment which are as follows:

(a) Image of Organisation: The image of the enterprise in the community largely influences recruitment

to it. A prospective candidate may not be interested to get a job in some organisation because its

reputation is not good. An enterprise may attract adverse reputation because of undesirable attitude

of the management, bad working conditions, etc. Such organisations do not get sufficient number of

personnel even if they offer high wages.

(b) Unattractive jobs: If the job is boring, hazardous, tension ridden, lack opportunities for advancement,

very few persons will be available for such jobs. On the other hand, if it carries good salaries, has

promotional avenues, has good working conditions there will be sufficient persons available for

such jobs.

(c) Organisational Policies: Internal policies of the organisation may also act as a constraint on

recruitment of new persons. A policy of filling up higher positions from outside will discourage

competent persons to join such an organisation.

(d) Union Requirements: In some cases, agreements with workers’ union may also act as constraints

to employ persons from outside. An understanding with union to fill up certain percentage of posts

through it may restrict the choice of management in recruiting on its own.

(e) Government Policies: Government policies may also act as constraints on recruitment policy.

Government legislation may require to reserve certain percentage of posts for weaker sections of

society or for persons belonging to specific caste. Another legislation may require the enterprise to

recruit new persons only from the lists supplied by government employment exchange. Such

legislations restrict the choice of management in recruiting any type of persons.

5.5 Sources of Recruitment

In general there are two sources of recruitment:

I Internal sources

II External sources

5.5.1 Internal Sources

Internal source is one of the important sources of recruitment. The employees already working the

organisation may be more suitable for higher jobs than those recruited from outside. The present employees

may help in the recruitment of new persons also. Internal sources are discussed as follows:

(i) Transfers: Transfer involves shifting of persons from present jobs to other similar places. These

do not involve any change in rank, responsibility and prestige. The number of persons does not

increase with transfers but vacant posts may be attended to.

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(ii) Promotions: Promotions refer to shifting of persons to positions carrying better prestige, higher

responsibilities and more salaries. 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 avenues motivate employees

to improve their performance so that they get promotions to higher positions.

5.5.1.1 Merits of Internal Sources

The merits of internal source of recruitment are:

(i) Improves Morale: The internal sources of recruitment will boost morale of employees. They are

assured of higher positions whenever vacancies arise. Existing employees are given preference in

promotions. Outsiders are employed only when suitable candidates are not available from within.

(ii) Proper Evaluation: The management is in a better position to evaluate the performance of existing

employees before considering them for higher positions. An outsider employed just on the basis of

an interview may not prove suitable later on. The service records of existing employees will be a

guide to study their suitability for ensuring vacancies.

(iii) Economical: The method of internal recruitment is economical also. The cost in selecting a person

is saved. Moreover, internal candidates do not require any training since they are well acquainted

with various jobs in the organisation.

(iv) Promotes Loyalty: Internal sources of recruitment promote loyalty among employees. They are

preferred to consider at the time of filling up higher positions. They will feel a part and parcel of the

organisation and will always try to promote its interests.

5.5.1.2 Demerits of Internal Sources

Following are the demerits of internal source:

(a) Limited Options: The recruitment of only internal candidates restricts the choice of management.

The present employees may not be suitable to take up positions of higher responsibility but there

will be no option. A person will be selected only out of the available candidates. The outside candidates,

even though they may be suitable, will not get a chance to show their talent.

Internal sources may dry up in the meantime and filling up of higher positions will become a problem.

(b) Lack of Originality: The present employees may not be able to bring new ideas. They will be

accustomed to carry on things in the same old ways. New persons will bring fresh thinking and new

methods may be tried.

5.5.2 EXTERNAL SOURCES

Every enterprise has to use external sources for recruitment to higher positions when existing employees

are not suitable. More persons are needed when expansions are undertaken. External methods are discussed

as follows:

(a) Advertisement: Advertisement is the best method of recruiting persons for higher and experienced

jobs. The advertisements are given in local or national press, trade or professional journals. The

requirements of jobs are given in the advertisement. The prospective candidates evaluate themselves

against the requirements of jobs before sending their applications. Management gets a wider range

of candidates for selection.

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(b) Employment Exchanges: Employment exchanges run by the Government are also a good source

of recruitment. Unemployed persons get themselves registered with these exchanges. The vacancies

may be notified with the exchanges, whenever there is need. The exchange supplies a list of

candidates fulfilling required qualifications. Exchanges are a suitable source of recruitment for

filling unskilled, semi-skilled, skilled and operative posts. The job-seekers and job-givers are brought

into contact by the employment exchanges.

Private agencies also helps in recruiting qualified and experienced. persons. These agencies remain

in contact with employers and persons seeking change in jobs for higher posts.

(c) Educational Institutions: The jobs in trade and industry are becoming technical and complex.

These jobs require certain amount of educational and technical qualifications. The employers maintain

a close liaison with universities and technical institutions. The students are spotted during the course

of their studies. The students are assured of jobs on the completion of their studies. Junior level

executives or managerial trainees may be recruited in this way.

(d) Unsolicited Applicants: Persons in search of employment may contact employers through

telephone, by post or in person. Generally, employers with good reputation get more unsolicited

applications. If an opening is there or is likely to be there then these persons are considered for such

jobs. Personnel department may maintain a record of unsolicited applications. When jobs suitable

for those persons are available those are considered for employment.

(e) Casual Callers: Management may appoint persons who casually call on them for meeting short-

term demands. This will avoid following a regular procedure of selection. These persons are appointed

for short periods only. They need not be paid retrenchment or lay off allowance. This method of

recruitment is economical because management does not incur a liability in pensions, insurance and

fringe benefits.

(f) Labour Contractors: It is quite common to engage contractors for the supply of labour, when

workers are required for short periods and are hired without going through the full procedure of

selection etc. Contractors or jobbers are the best source of getting them. The contractors maintain

regular contracts with workers at their places and also bring them to the cities at their own expense.

The persons hired under this system are generally unskilled workers.

5.5.2.1 Merits of External Sources

The merits of external source are:

(a) Availability of Suitable Persons: Internal sources, sometimes, may not be able to supply suitable

persons from within. External sources will give a wide choice for selection 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 skills, training and education.

(b) 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. The present employees may not

be able to infuse new thinking because their ways of thinking will remain the same.

5.5.2.2 Demerits of External Sources

Following are the limitations of external sources:

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(a) Demoralisation: When new persons from outside join the organisation then present employees

feel demoralised because these positions should have gone to them. There will be a heart burning

among old employees. Some employees may even leave the enterprise to find out better avenues in

other concerns.

(b) 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.

(c) Expensive: The process of recruiting from outside is very expensive. It starts with giving costly

advertisements in the media and then arranging written tests and conducting interviews. Inspite of

all this if suitable persons are not available among the applicants then the whole process will have

to be repeated.

(d) 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.

5.6 The Concept of Selection

The process of selection leads to employment of persons having the ability and qualifications to

perform the jobs which have fallen vacant in an organization. It divides the candidates for employment into

two categories, namely, those who will be offered employment and those who will not be. This process is

more of ‘rejection’ since more candidates may be turned away than are hired. That is why, selection is

frequently described as a negative process in contrast with the positive process of recruitment. The basic

purpose of the selection process is choosing right type of candidates to man various positions in the organization.

In order to achieve this purpose, a well organized selection procedure involves many steps and at each step

more and more information is obtained about the candidates.

5.7 Difference between Recruitment and Selection

Following are the differences between recruitment and selection:

(a) Recruitment is the process of searching for prospective employees and stimulating them to apply for

jobs in the organization. On the other hand, selection means employment of workers or establishing

a contractual relationship between the employer and the worker.

(b) Recruitment is a positive process of searching for prospective employees, whereas selection is a

negative process because it involves rejection of unsuitable candidates.

(c) The purpose of recruitment is to create a large pool of applicants for the jobs in the organization. But

selection aims at eliminating unsuitable candidates and ensuring most competent people for the jobs.

(d) Recruitment is a relatively simple process as the candidates are required to fill in the prescribed

forms and deposit with the employer. But selection is a complex and lengthy process under which the

candidates have to pass through a number of stages before getting the offer for a job.

5.8 Significance of Selection

Selection has become a critical process these days because it requires a heavy investment of money

to get right types of people. Induction and training costs are also high. If the right types of persons are not

chosen, it will lead to a huge loss of the employer in terms of time, effort and money. Therefore, it is essential

to devise a suitable selection procedure. Each step in the selection procedure should help in getting more and

more information about the applicant to facilitate decision-making in the area of selection.

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Absenteeism and employee turnover are the important problems which are being faced by most of

the organizations. The intensity of these problems can be reduced if, in the future, all selections are made

carefully so that there are ‘round pegs in the round holes’. Whenever unsuitable employees are appointed,

the efficiency of the organization goes down. Such employees will shirk work and absent themselves from

the work quite often. They may also be compelled to leave their jobs. If this happens, all the expenses

incurred on the selection and training of such employees will go waste.

Proper selection and placement of personnel goes a long way towards building up a stable work-

force. It keeps the rates of absenteeism and labour turnover low and increase the morale of the employees.

If the employees are quite suitable according to the requirements of the jobs, they show higher efficiency and

productivity. This enables the organization to achieve its objectives effectively.

5.9 Stages in Selection Procedure

There can not be a rigid procedure of selection suitable for all types of organizations. The number of

steps in the selection procedure and the sequence of steps vary from organization to organization. For instance,

some organizations do not hold preliminary interview, test or screening, whereas in other organizations such

as commercial banks, preliminary tests are given to eliminate a large number of unsuitable applicants. Similarly,

in some cases, medical examination is given before final selection and in others, medical check up follows

final selection. Thus, every organization designs a selection procedure which suits its requirements. However,

the main steps which could be incorporated in the selection procedure are discussed below:

(A) Preliminary Interview: In most of the organizations, the selection programme begins with

preliminary interview or screening. The preliminary interview is generally brief and does the job of

eliminating the totally unsuitable candidates. The preliminary interview offers advantages not only

to the organization, but also to the applicants. If an applicant is eliminated at this stage, the organization

will be saved from the expenses of processing him through the remaining steps of the selection

procedure and the unsuitable candidate will be saved from the trouble of passing through the long

procedure. Preliminary interview may take place across the counter in the organization’s employment

office. It may consist of a short exchange of information with respect to organization’s interest in

hiring and the candidate’s enquiry. It may serve primarily to determine whether it is worthwhile for

the applicant to fill in an application blank. Candidates who pass this crude screening are usually

asked to fill in the application blank.

(B) Receipt of Applications: Whenever there is a vacancy, it is advertised or enquiries are made

from the suitable sources, and applications are received from the candidates. Standard application

forms may be drawn up for all jobs and supplied to the candidates on request. The application form

is useful for several reasons. It gives a preliminary idea of the candidate to the interviewer and

helps him in formulating the questions to be asked from the candidate. The written information

about age, qualifications, experience, etc. may prove to be of great value to the interviewers. Forms

make the processing of application very easy since there is uniformity of filling the data in the

application form.

(C) Screening of Applications: After the applications are received, they are screened by the screening

committee and a list is prepared of the candidates to be interviewed. Applicants may be called for

interview on some specific criteria like gender, desired age group, experience and qualifications.

The number of candidates to be called for interview is normally five to seven times the number of

posts to the filled up.

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(D) Employment Tests: Employment tests are used to select persons for various jobs. They help in

matching the characteristics of individuals with the vacant jobs so as to employ right kinds of

personnel. The following types of tests have gained popularity these days:

(i) Intelligence Tests: Intelligence tests are used to judge the mental capacity of the applicant. They

evaluate the ability of an individual to understand instructions and make decisions. They are widely

used in all types of organizations for the purpose of proper selection.

(ii) Aptitude Tests: Aptitude means the potential which an individual has for learning the skills

required to do a job efficiently. Aptitude tests measure an applicant’s capacity and his potential of

development. Aptitude tests are the most promising indices for predicting a worker’s success.

(iii) Proficiency Tests: Proficiency tests are designed to measure the skills already acquired by the

individuals. They are also known as performance, occupational or trade tests. They are used to test

the level of knowledge and proficiency acquired by an applicant. A trade test takes a sample of

individual’s behaviour which is designed as replica of the actual work situation such as typing. A

trade test should be differentiated from the aptitude test. An aptitude test measures the potentials of

the applicant to learn skills required on a job.

(iv) Interest Tests: Interest tests identify patterns of interest in those areas in which the individual

shows special concern, fascination and involvement. These tests suggest what types of jobs may

be satisfying to the employees. Interest tests are more often used for vocational guidance. They

help the individuals in selecting occupations of their interest.

(v) Personality Tests: Personality tests probe for the qualities of the personality as a whole, the

combination of aptitude, interest and usual mood and temperature. It is vary difficult to devise and

use personality tests because they are concerned with discovering clues to an individual’s value

system, his emotional reactions, maturity, etc.

(vi) Interview: Although application blank and employment tests provide a lot of valuable information

about the candidate, yet they do not provide the complete set of information required about the

applicant. Hence, interview may be used to secure more information about the candidate. The main

purposes of an employment interview are: (i) to find out the suitability of the candidate, (ii) to seek

more information about the candidate, and (iii) to give him an accurate picture of the job with details

of terms and conditions and some idea of organization’s policies. The actual data of the applicant

given in the application form may also be checked and more information may be taken from the

candidate. This occasion is also utilized for testing the capability and personality of the applicant.

Thus, interview affords an opportunity to develop a clear picture of the candidate.

It is customary to have an interview in several stages especially for senior positions. There may be

a preliminary interview by the head of the department. The final interview is taken by the interview

or selection committee consisting of chairman of the organization, head of department, personnel

manager and may be some outside experts. During the interview, the members of the selection

committee appraise each candidate according to merits. At the end of interview of each candidate,

the chairman consults the members and after a brief discussion finalizes the grading of the candidate.

After the completion of interview of all the candidates, a panel is prepared. The number of persons

in the panel is generally about two to three times the number of vacancies to be filled up.

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Although personal interview is perhaps the most widely used method for selecting the personnel, it

has certain limitations too. Firstly, it can test only the personality of the candidate and not his skills

and ability for the job. Secondly, it depends too much on the personal judgment of the interviewer

which may not always be accurate. That is why, in most of the organizations, occupational and

other tests are given to the candidates before they are called for the final interview.

(E) Medical Examination: The pre-employment physical examination or medical test of a candidate

is an important step in the selection procedure. Though in the suggested selection procedure, medical

test is located near the end, but this sequence need not be rigid. The organizations may place the

medical examination relatively early in the process so as to avoid time and expenditure to be incurred

on the selection of medically unfit persons. Some organizations either place the examination relatively

early in the selection procedure or they advise the candidates to get themselves examined by a

medical expert so as to avoid disappointment at the end.

The objectives of physical examination are: (i) to ascertain the applicant’s physical capabilities to

meet the job requirements; (ii) to protect the organization against the unwarranted claims under the

Workmen’s Compensation Act or against law suits for damages; and (iii) to prevent communicable

diseases entering the organization. The physical examination should disclose the physical

characteristics of the individual that are significant from the standpoint of his efficient performance

of the job he may be assigned or of those jobs to which he may reasonable be expected to be

transferred or promoted. A qualified medical expert appointed by the organization should certify

whether the candidate is physically fit to the requirements of a job. A proper medical examination

will ensure higher standards of health and physical fitness of the employees and will reduce the

rates of accident, labour turnover and absenteeism.

(F) Background Investigation: A referee is potentially an important source of information about the

candidate’s ability and personality if he holds a responsible position in some organization or has

been the boss or employer of the candidate. Prior to final selection, the prospective employer

normally makes an investigation on the references supplied by the applicant and undertakes more

or less a thorough search into the candidate’s past employment, education, personal reputation,

financial condition, police record, etc. However, it is often difficult to persuade a referee to give his

opinion frankly. The organization may persuade him to do so by giving an assurance that all

information will be treated as strictly confidential.

(G) Final Selection: After a candidate has cleared all the hurdles in the selection procedure, he is

formally appointed by issuing him an appointment letter or by concluding with him a service agreement.

The appointment letter contains the terms and conditions of employment and pay scale and other

benefits associated with the job.

5.10 SELF CHECK EXERCISE

1. Define recruitment.

2. Discuss in brief the factors affecting recruitment.

3. What are the problems faced by the organisations while recruiting? Discuss in brief.

4. Write short-note internal sources of recruitment.

5. What are the external sources of recruitment? Discuss in brief.

6. Define selection.

7. Write a brief note on selection process.

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5.11 SUMMARY

Once the requirement of manpower is known, the process of recruitment starts. Recruitment is the

process of identifying the sources for prospective candidates and to stimulate them to apply for the jobs. Job

recruits can be drawn from within or outside the organization. The process of selection leads to employment

of persons having the ability and qualifications to perform the jobs which have fallen vacant in an organization.

There are several advantages of a proper selection procedure. As the employees are placed in the jobs for

which they are best suited, they derive maximum job satisfaction and reap maximum wages. Labour turnover

is reduced and the overall efficiency of the concern is increased.

5.12 GLOSSARY

• External Sources of Recruitment means hiring people from outside the organization. In other words,

seeking applicants from those who are external to the organization. For certain job vacancies, it is

mandatory for every organization to provide details about it to the employment exchange.

• Hiring process is the process of reviewing applications, selecting the right candidates to interview,

testing candidates, choosing between candidates to make the hiring decision and performing various

pre-employment tests and checks.

• Internal Sources of Recruitment means hiring people from within the organization. In other words,

seeking applicants for the job positions from those who are currently employed with the firm. The

employee is familiar with the working of the organization.

• Recruitment is a positive process of searching for prospective employees and stimulating them to

apply for the jobs in the organisation. In simple words, the term recruitment refers to discovering

the source from where potential employees may be selected.

• Selection is the process of picking or choosing the right candidate, who is most suitable for a vacant

job position in an organization. Employee selection is a process of matching organization's

requirements with the skills and the qualifications of individuals.

• Selection process can be defined as the process of selection and short listing of the right candidates

with the necessary qualifications and skill set to fill the vacancies in an organisation. The selection

process varies from industry to industry, company to company and even amongst departments of

the same company.

5.13 ANSWERS TO SELF CHECK EXERCISE

1. For answer refer to section 5.2.

2. For answer refer to section 5.3.

3. For answer refer to section 5.4.

4. For answer refer to section 5.5.1.

5. For answer refer to section 5.5.2.

6. For answer refer to section 5.6.

7. For answer refer to section 5.9.

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5.14 TERMINAL QUESTIONS

1. What is meant by recruitment? How does it differ from selection?

2. Critically discuss the various sources of requirement of employee. What sources of recruitment will

you recommend for the appointment of managerial personnel?

3. Discuss in brief the significance of proper selection of personnel. What steps are involved in the

selection procedure? Explain.

4. Explain various types of employment tests normally taken by the industrial organisations.

5.15 SUGGESTED READINGS

• Beandwell, Ian, and Holden, Len, Human Resource Management, Macmillan India Ltd., New Delhi.

• Robbins, S.P., and Coultes, M., Management, Prentice Hall of India, New Delhi.

• Saiyadin, M.S., Human Resource Management, Tata McGraw Hill Publishing Co., New Delhi.

• Yodes, Dale Personnel Management and Industrial Relations, Prentice Hall of India, New Delhi.

*****

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LESSON-6

PLACEMENT, INDUSTIN AND SOCIALISATION

STRUCTURE

6.0 INTRODUCTION

6.1 LEARNING OBJECTIVES

6.2 MEANING OF PLACEMENT

6.3 PRINCIPLES OF PLACEMENT

6.4 PROBLEMS IN PLACEMENT

6.5 CONCEPT OF INDUSTION

6.6 OBJECTIVES OF INDUCTION

6.7 BENEFITS OF INDUCTION PROGRAMME

6.8 CONTENTS OF INDUCTION PROGRAMME

6.9 PHASES OF INDUCTION PROGRAMME

6.10 SUGGESTIONS TO MAKE INDUCTION PROGRAMME EFFECTIVE

6.11 PROBLEMS IN INDUCTION

6.12 CONCEPT OF SOCIALISATION

6.13 PHASES OF SOCIALISATION PROCESS

6.14 SELF CHECK EXERCISE

6.15 SUMMARY

6.16 GLOSSARY

6.17 ANSWERS TO SELF CHECK EXERCISE

6.18 TERMINAL QUESTIONS

6.19 SUGGESTED READINGS

6.0 INTRODUCTION

Once a candidate has been selected, he/she needs to be placed on a suitable job. In fact, placing the

right person on the right job is as important as selecting right person. The person put on a suitable job needs

to be made familiar with his/her job, the organisation and the other employees through induction or orientation

so as to enable him/her to contribute the maximum. This lesson is, therefore, devoted to a detailed discussion

of placement, induction, and socialization.

6.1 LEARNING OBJECTIVES

After reading this lesson, you should be able to

(a) Define placement and explain the principles of placement.

(b) Explain the objectives, contents and phases of induction programme.

(c) Outline the elements that make an induction programme effective.

(d) Define socialization and discuss the stages of socialization process.

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6.2 Meaning of Placement

Placement is understood as assigning jobs to the selected candidates. Assigning jobs to employees

may involve a new job or different job. Thus, placement may include initial assignment of job to new employee,

on transfer, promotion or demotion of the present employees. In this section, placement refers to the assignment

of jobs to new employees only. Placement arising out of transfers, promotions, and demotions are not discussed

in the present lesson.

Placement involves assigning a specific job to each one of the selected candidates. However, placement

is not so simple as it looks. Instead, it involves striking a fit between the requirements of a job and the

qualification of a candidate. Pigors and Myers have defined placement as “the determination of the job to

which an accepted candidate is to be assigned, and his assignment to that job. It is a matching of what the

supervisor has reason to think he can do with the job demands (job requirements), and what he offers in the

form of pay rolls, companionship with others, promotional possibilities, etc.”

The importance of placement lies in the fact that a proper placement of employees reduces employees

turnover, absenteeism, accidents and dissatisfaction, on the one hand, and improves their morale, on the other.

It has been customary in most of the organisations to put employees initially on a probation period

with a view to adjudge their suitability for the job in the organisation. The probation period may vary from

organisation to organisation ranging from one to two years. Having found the employees performance

satisfactory during the probation period, their jobs are regularised.

6.3 Principles of Placement

A few basic principles should be followed at the time of placement of a worker on the job. These

may be enumerated as below:

(a) Man should be placed on the job according to the requirements of the job. The job should not be

adjusted according to the qualifications or requirements of the man. Job first, man next, should

be the principle of placement.

(b) The job should be offered to the man according to his qualifications. The placement should

neither be higher nor lower than the qualifications.

(c) The employee should be made conversant with the working conditions prevailing in the industry

and all things relating to the job. He should also be made aware of the penalties if he commits

a wrong.

(d) While introducing the job to the new employee, an effort should be made to develop a sense of

loyalty and cooperation in him so that he may realize his responsibilities better towards the job

and the organisation.

(e) The placement should be ready before the joining date of the newly selected person.

(f) The placement in the initial period may be temporary as changes are likely after the completion

of training. The employee may be later transferred to the job where he can do better justice.

Proper placement helps to improve employee morale. The capacity of the employee can be utilized

fully if he is placed on the job for which he is most suitable. Right placement also helps to reduce labour

turnover, absenteeism and accident rates. If a candidate adjusts himself to the job and continues to perform

as per expectations, it might mean that the candidate is properly placed.

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6.4 Problems in Placement

The main problem with placement arises when the recruiters look at the individual but not at the job.

Often, the individual does not work independent of the others. Jobs in this context are classified into two

categories:

(A) Independent Jobs: In independent jobs, non-overlapping routes or territories are allotted to each employee

e.g. in field sales. In such situations, the activities of one employee have little bearing on the activities of other

workers. Independent jobs do not pose great problems in placement. Each employee has to be evaluated

between his capabilities and interests and those required on the job. The objectives of placement will be:

(a) To fill the job with people who have at least the minimum required qualifications.

(b) People should be placed on the job that will make the best possible use of their talents, given

available job and HR constraints.

(B) Dependent jobs: Dependent jobs may be sequential or pooled. In sequential jobs, the activities of one

employee are dependent on the activities of a fellow employee. Assembly lines are the best example of such

jobs.

In pooled jobs, there is high interdependence among jobs. The final output is the result of the contribution

of all the workers.

In dependent jobs, an employee is placed in a specific sub group. While placing, care must be taken

to match characteristics of the employee with that of the sub group. Because, in such jobs, team work

matters a lot.

6.5 Concept of Induction

Introduction of a new entrant into any existing group of people has been a common feature we come

across in our every day life. Recall, the bride on joining to your family was introduced to your family members

and manners. Remember your own joining to your present Department of Business Management. On joining

the Department, you may have been told about the Department’s rules and regulations, the procedure for

academic activities such as sessional tests, assignments, seminar presentations, summer training, semester

examination, papers to be taught with the names of the teachers, etc. You were probably introduced to your

seniors by organizing ‘freshers welcome’. Similarly, when a person joins a new job, he/she also needs the

same type of introduction to his/her job and the organisation. This introduction is called ‘induction’. Induction

is also known as ‘orientation’ and ‘indoctrination’.

A new entrant joins an organisation as a stranger to his co-workers, job and organisation. This causes

the initial anxiety for the new entrant. It culminates at times to surprise resignation by the new employee.

Hence, arrangements need to be made to make the integration of the new employee into the organisation as

smooth and as free of anxiety as possible. Induction helps do so.

Induction is welcoming a new employee to the organisation. In other words, it is a well orchestrated

event to socialize the new entrant with the people and the work environment in a particular organisation.

According to Michael Armstrong, “Induction is the process of receiving and welcoming an employee

when he first joins a company and giving him basic information he needs to settle down quickly and happily

and start work”.

R.P. Billimoria defined induction as “a technique by which a new employee is rehabilitated into the

changes surroundings and introduced to the practices, policies and purposes of the organisation.”

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In short, induction is, therefore, the process of welcoming, indoctrination and socialization of new

employee to his/her job and organisation.

6.6 Objectives of Induction

When a new entrant joins an organisation, he/she is an utter stranger to the co-workers, work place

and work environment. As such, he/she may feel insecure, shy and nervous. The first few days may be all

anxious and disturbing ones for the new entrant. Particularly when a new entrant comes from rural area, he/

she finds himself/herself completely at sea in an industrial town and city. Then, induction helps reduce such

anxieties and dispels doubts and nervousness from the mind of the new entrant. Therefore, an induction

programme is designed to achieve the following objectives:

(i) To promote a feeling of belonging and loyalty to the organisation among new comers so that

they may not form false impression regarding the company because first impression is the

last impression.

(ii) To build up the new employee’s confidence in the organisation and in himself so that he may

become an efficient employee.

(iii) To bring an agreement between the organisations goals and the personal goals of the

organisation.

(iv) To give the new employee information regarding company (its structure, product, policies,

rules and regulations) and facilities provided by the company such as cafeterias, locker

room, break time, leave rules etc.

(v) To introduce the new worker to the supervisor and the fellow workers with whom he has to

work.

(vi) To create a sense of security for the worker in his job by impressing the idea that fairness to

the worker is the inherent policy of the organisation.

(vii) To lessen or reduce the cost of replacing the worker in the early impressionable period

because of lack of information or incorrect business impressions.

6.7 Benefits of Induction Programme

A formal induction programme may provide the following benefits to the new comer and the organisation:

a. A well-designed induction programme reduces anxiety, nervousness, and absenteeism and employee

turnover.

b. Induction helps minimize the reality or cultural shock new employees undergo on joining a new

organisation.

c. Effective induction also helps integrate the new employees into the organisation and fosters the

feeling of belongingness to the new organisation.

d. Induction also binds the newcomer and the present employee in a team.

6.8 Contents of Induction Programme

Every organisation has an obligation to make integration of the individual into it as smooth and

comfortable as possible. Small organisations may do it through informal orientation by the employee’s immediate

supervisor whereas large organisations usually develop formal orientation programmes. The range of information

that may be covered under orientation training is as follows:

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(i) Company’s history, philosophy and operations

(ii) Products and services of the company

(iii) Company’s organisation structure

(iv) Location of departments and employee services

(v) Personnel policies and practices

(vi) Employee’s activities

(vii) Rules and regulations

(viii) Grievance procedure

(ix) Safety measures

(x) Standing orders

(xi) Terms and conditions of service

(xii) Benefits and services for employees

(xiii) Opportunities for training, promotions, transfers etc.

6.9 Phases of Induction Programme

A carefully designed induction programme consists of the following three phases:

a. General Induction

b. Specific Induction

c. Follow-up induction

A brief description of these follows:

(a) General Induction: The first phase of induction is conducted by the HR department. The focus

of the induction is to expose the new entrant to the organisation by explaining him the mission, objectives,

history and philosophy of the organisation. The new employee is also briefed about his service conditions,

pays and perks, promotion procedure, personnel policies and grievance handling mechanism practiced in the

organisation. This phase of induction inculcates pride for the employee to work in the organisation. The

period of induction, depending on the organisation, may vary from a few days to few weeks.

(b) Specific Induction: This induction is given by the new employee’s supervisor. The focus is on

the overall exposition of the new employee to his job. Accordingly, the employee is introduced to the job,

shown place of work and around the premises, introduced to his co-workers and briefed about the procedures

and methods, custom and routines, rules and regulations regarding his job. This training/induction helps the

new employee adjust with his work environment. The induction may last for few weeks or even months.

(c) Follow-up Induction: The main objective of the follow-up induction is to verify whether the

new employee is getting himself adjusted with the work and organisation or not. This induction is given by the

employee’s supervisor or a qualified specialist on industrial psychology. While giving induction training, the

employee’s suggestions on adequacy or otherwise of the already conducted induction programmes and on

any other related aspects, if any, are duly taken into consideration to make the induction more and more

effective. Such feedback can also be used to assess the requirements of guidance and counseling for the new

entrants. The duration of follow-up induction may vary from some weeks to few months.

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6.10 Suggestions to make an Induction Programme Effective

Giving induction to the new employees is essential but is not so simple. Only carefully designed and

implemented induction programme are observed effective. Following are some of the requisites of an effective

induction programme:

(a) Receiving New Employees: The new employees need to be duly received by the organisation.

This inculcates a feeling in the new entrants that they are required in the organisation. Such a feeling serves

as a corner stone to be interested to integrate into the organisation.

(b) Determining the New Employees’ Need for Information: The central element that guides

the designing of an induction programme is to decide first “What do the new employees need to know now?”

Many a times, the new employees are given information which is not immediately required but the required

one is not given. Such information lack tends to make the new comer confused about the job and the

organisation. Therefore, it is important to decide the vital information a new entrant needs to receive on his

joining the organisation.

(c) Determining How to Present the Information: Having being decided what information

employees want, the next important thing to be decided is how to present the same to the new employees.

Obviously, the required information needs to be presented to the new employees in the right from and manner

to have its maximum impact on the employees.

(d) Delivering Induction Training by the Right Instructor: Much of the effectiveness of an

induction programme depends on who conducts the induction training. This is because induction training

cannot be given by anyone, but by the right instructor/trainer only. Possession of the required skill, knowledge

and attitude are considered to be the requisites of a right instructor. Therefore, the induction programme

needs to be conducted by the right trainer only. If required the trainer be given induction training before he/

she conducts the induction training for the new entrants to the organisation.

(e) Evaluating the Induction Programme: Like all other training programmes, whether or not an

induction programme is effective is determined by evaluating the programme. This is necessary to know

whether to continue the programme in future also or not or whether the programme needs any improvement

in future. In fact, it is the evaluation of the induction programme that makes the organisation knows whether

the amount incurred in induction programme remains as an expenditure or has turned into an investment.

There are various methods employed to measure the effectiveness of training programmes.

6.11 Problems in Induction

An orientation programme can go wrong for a number of reasons. The HR department should try to

avoid these errors:

(i) The supervisor who has to induct the employee may not be trained or may be too bossy.

(ii) Employee is overwhelmed with too much information in a short time.

(iii) Employee is confused with a wide variety of forms to be filled.

(iv) In the initial stage, employee is given only manual jobs that discourage job interest and

company loyalty.

(v) Employee is asked to perform challenging jobs where there are high chances of failure that

could needlessly discourage the employee.

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(vi) Employee is given only a sketchy induction under the mistaken belief that “trial and error”

method is the best induction.

(vii) Employee is forced to balance between a broad orientation by the HR department and a

narrow orientation at the departmental level.

(viii) Employee is thrown into action too soon. His mistakes can damage the company.

(ix) Employee may be asked to work on a number of jobs and he may develop wrong perceptions

because of short periods spent on each job.

6.12 Concept of Socialisation

In simple words, socialization is the process of adaptation. Different thinkers have defined socialization

differently. For example, Feldoman has defined socialization as “Acquisition of work skills and abilities,

adoption of appropriate role behaviours and adjustments to the norms and values of the work group”.

In the opinion of Maanen and Schein, “Socialisation can be conceptualized as a process made up of

three stages: pre-arrival, encounter and metamorphosis”.

Thus, socialization can be defined as a process of adoption that takes place as individuals attempt to

learn the values and norms of work roles.

6.13 Phases of Socialisation Process

The socialization process involves the following three phases:

(a) Pre-arrival

(b) Encounter

(c) Metamorphosis

It is interesting to note that these phases show striking similarity with phases of behavioural modification

theory propounded by Kurt Lewin, i.e., unfreezing, changing and refreezing. A brief description of the phases

of socialization follows:

(a) Pre-arrival: The pre-arrival phase explicitly recognizes that all the new recruits arrive the

organisation with a set of values, attitudes, expectations and learning. In other words, pre-arrival refers to all

the learning that occurs before a new member joins the organisation. For example, an MBA graduate knows

from the Professors what business is like, what to expect in a business career and acquire the kind of

attitudes that will help fit in the organisation. He also comes to know about the organisation and the job during

the selection process. Based on this pre-arrival knowledge, the individual forms some expectations of

organisation.

(b) Encounter: Upon entry into organisation, the new member enters the encounter stage. The role

playing starts here. The member starts comparing expectations, the image of the organisation which he had

formed during pre-arrival phase with reality. If expectations and reality concur the encounter is smooth. But

seldom has it concurred. When the two differ, stress and frustration set in. What follows thereafter is a

mental process of adjustment. In the process of adjustment, the individual tries to replace his/her own values

and norms with those of the organisation. At the other extreme, the member simply can not reconcile to those

value and norms of the organisation and gets disillusioned and quits the job.

(c) Metamorphosis: In this stage, the member masters the skills required to adjust with the

organisation’s norms and values. This is a stage going through changes. Hence, this is called metamorphosis

stage. This is, of course, a voluntary process and a conscious decision which enables the new member to

become compatible with the organisation. This signals the completion of socialization process.

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6.14 SELF CHECK EXERCISE

1. Define Placement.

2. Write a short-note on principles of placement.

3. Discuss in brief the problems faced by organisations.

4. Define Induction.

5. Write a short-note on objectives of Induction.

6. Discuss in brief the benefits of induction programme in the organisation.

7. Define socialization.

8. Write a short-note on encounter phase of socialization process.

6.15 SUMMARY

Placement is the process of assigning a specific job to each one of the selected candidates. Matching

the requirements of the job with the qualifications of a candidate is the essence of placement. The main

problem with placement arises when the recruiters look at the individual but not at the job. Induction is the

task of introducing the new employees to the organisation and its policies, procedures and rules. Improvement

in employee morale, reduction in anxiety, absenteeism, turnovers and nervousness are the major benefits

induction offers to the organisation as well as employees. A formal induction programme consists of three

phases, namely general induction, specific induction and follow-up induction. Socialisation is a process through

which a new recruit begins to understand and accept the values, norms and beliefs held by others in the

organisation.

6.16 GLOSSARY

• Human resources (HR) is the department within a business that is responsible for all things worker-

related. That includes recruiting, vetting, selecting, hiring, on boarding, training, promoting, paying,

and firing employees and independent contractors.

• Induction is the process of introducing a new employee to his/her job and organization and giving

him all the necessary information required by him/her to start his work. Induction helps to reduce

the anxiety of a new entrant in the organization and helps him to feel a sense of belongingness in the

organization.

• Placement is the act of organizing people or things into a certain order, the act of putting items in a

certain location, or the act of finding a job for someone. When kids are put into classes based on

their scores on an intelligence test, this is an example of when placement is based on performance.

• Socialization refers to the adaptation that takes place when an individual passes from outside the

organization to role of an inside member. Socialization is a process of adaptation, adjustment, making

arrangements for setting one employee in the organizational environment.

6.17 ANSWERS TO SELF CHECK EXERCISE

1. For answer refer to section 6.2.

2. For answer refer to section 6.3.

3. For answer refer to section 6.4.

4. For answer refer to section 6.5.

5. For answer refer to section 6.6.

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6. For answer refer to section 6.7.

7. For answer refer to section 6.12.

8. For answer refer to section 6.13.

6.18 TERMINAL QUESTIONS

1. Define placement. Describe the principles of placement.

2. What is the purpose of induction programme? State the contents of induction programme.

3. What benefits can induction provide for an employee and organisation ?

4. Explain the measures to be taken to make induction programme effective.

5. “Selection is a substitute for socialization.” Do you agree or not? Discuss.

6.19 SUGGESTED READINGS

1. Monappa, A., Managing Human Resources, Macmillan India Ltd., New Delhi.

2. Werther, W.B. and Davis, K., Human Resource and Personnel Management, Tata McGraw Hill,

New York.

3. Cascio, W.F., Managing Human Resources, Tata McGraw Hill, New Delhi.

4. Yodes, Dale, Personnel Management and Industrial Relations, Prentice Hall of India, New Delhi.

5. Davar, R.S., Personnel Management and Industrial Relations in India, Vikas Publishing House, New

Delhi.

*****

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LESSON-7

TRAINING

STRUCTURE

7.0 INTRODUCTION

7.1 LEARNING OBJECTIVES

7.2 DEFINITION OF TRAINING

7.3 NEED FOR TRAINING

7.4 OBJECTIVES OF TRAINING

7.5 DIFFERENCE BETWEEN TRAINING AND DEVELOPMENT

7.6 BENEFITS OF TRAINING

7.6.1 BENEFITS OF TRAINING TO EMPLOYERS

7.6.2 BENEFITS OF TRAINING TO EMPLOYEES

7.7 ORGANISATIONAL STRUCTURE OF TRAINING DEPARTMENT

7.8 METHODS OF TRAINING

7.9 SELF CHECK EXERCISE

7.10 SUMMARY

7.11 GLOSSARY

7.12 ANSWERS TO SELF CHECK EXERCISE

7.13 TERMINAL QUESTIONS

7.14 SUGGESTED READINGS

7.0 INTRODUCTION

In the knowledge driven world of today, the pace of change is so fast that it even defies Moor’s law.

Even to stay at the same place, the organizations have to run fast. Strategic advantage to the organizations

comes only from the core competences, which are developed by the individuals working in it. Such levels of

excellence can be achieved only by investing in people. Investment must not confine to compensation only,

but must entail the inputs aimed at updating the skills of the employees. Training is one such potion to cure the

organizations of the sluggishness, which may creep in because of the organizational inertia.

7.1 LEARNING OBJECTIVE

This lesson shall develop the concept of training and management development and explain the

concept and methods of training, as practiced in organizations.

7.2 DEFINITION OF TRAINING

Training is often looked upon as an organized activity for increasing the knowledge and skills of

people for a definite purpose. It involves systematic procedures for transferring technical know-how to the

employees so as to increase their knowledge and skills for doing specific jobs with proficiency. In other

words, the trainees acquire technical knowledge, skills and problem solving ability by undergoing the training

programme.

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There are several textbook definitions of training, but the one by Edwin B Flippo is generally well

accepted. According to Flippo, “Training is the act of increasing the knowledge and skills of an employee

for doing a particular job”.

Training involves the development of skills that are usually necessary to perform a specific job. Its

purpose is to achieve a change in the behaviour of those trained and to enable them to do their jobs better.

Training makes newly appointed employees fully productive in lesser time. Training is equally necessary for

the old employees whenever new machines and equipment are introduced and/or there is a change in the

techniques of doing the things.

7.3 NEED FOR TRAINING

Training is a continuous process and does not stop anywhere. The top management should ensure

that any training programme should attempt to bring about positive changes in the knowledge, skills, and

attitudes of the employees. The need for training can arise because of the following reasons:

(i) Changing Technology.

Technology is changing at a fast pace. Be it any industry, technological changes are changing the

way in which operations were done. Newer machines are being used for automation of the processes.

Computers have made the controls very easy.

In order to keep themselves abreast with the changes, the employees must learn new techniques to

make use of advances in the technology. Training needs to be treated as a continuous process to update the

employees in new methods and procedures.

(ii) Demanding Customers.

As the free markets become stronger, customers are becoming more and more demanding. They are

much more informed about the products. They have many sources of information. Intensified competition

forces the organizations to provide better and better products and services to them. Added to the customer

conscious, their requirements keep on changing. In order to satisfy the customers and to provide best of the

quality of products and services, the skills of those producing them need to be continuously improved through

training.

(iii) Thrust on Productivity.

In the competitive times, organizations cannot afford the extravaganza of lethargy. They have to be

productive in order to survive and grow. Continuous improvement of the employees’ skills is an essential

requirement for maintaining high standards of productivity. Productivity in the present times stems from

knowledge, which has to be relearned continuously.

(iv) Improved motivation.

Training is a source of motivation for the employees as well. They find themselves more updated

while facing the challenging situations at job. Such skill development contributes to their career development

as well. Motivated employees have lesser turnover, providing an organization with a stable work force, which

ahs several advantages in the long run.

(v) Accuracy of output

Trained workers handle their job better. They run their machines safely. They achieve greater accuracy

is whatever job they do. This reduces accidents in the organizations. Adherence to accuracy infuses high

standards of quality in the products and services, thus giving them a competitive edge in the difficult times.

Quality reduces wastages and ensures better customer satisfaction.

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7.4 OBJECTIVES OF TRAINING

The objectives of training can vary, depending upon a large number of factors. The objectives depend

on the nature of the organization where training has to be provided, the skills desired and the current skill

levels. It is difficult to draw generalizations of the objectives of training; still they can be stated as under:

(a) To increase the knowledge of workers in doing specific jobs.

(b) To systematically impart new skills to the human resources so that they learn quickly.

(c) To bring about change in the attitudes of the workers towards fellow workers, supervisor

and the organization.

(d) To improve the overall performance of the organization.

(e) To make the employees handle materials, machines and equipment efficiently and thus to

check wastage of time and resources.

(f) To reduce the number of accidents by providing safety training to employees.

(g) To prepare employees for higher jobs by developing advanced skills in them.

7.5 DIFFERENCE BETWEEM TRAINING AND DEVELOPMENT

No longer do the organizations talk of training in isolation. It is usually addressed along with

development. Although the terms training and development are used together, they are often confused.

Training means learning the basic skills and knowledge necessary for a particular job or a group of jobs. In

other words, training is the act of increasing the knowledge for doing a particular job. But development refers

to the growth of an individual in all respects. An organization works for the development of its executives or

potential executives in order to enable them to be more effective in performing the various functions of

management. An executive development programme aims at increasing the capacities of the individuals to

achieve the desired objectives. Executive capacities imply his personal abilities and potentials. Desired

objectives imply consideration for tile goals of the organization and individuals. Increasing the capacities

implies that change must, occur in the executive and through him in his subordinates. The distinction between

training and development is shown in Table 7.1.

Exhibit 7.1 Training vs. Development

Training

1. Training means learning skills and knowledge

for doing a particular job and increases skills

required for a job.

2. Training generally imparts specific skills to the

employees.

3. Training is concerned with maintaining and

improving current job performance. Thus, it has

a short-term perspective.

4. Training is job centered in nature.

5. The role of trainer or supervisor is very

important in training.

Development

1. Development refers to the growth of an

employee in all respects. It is more concerned

with shaping the attitudes.

2. Development is more general in nature and

aims at overall growth of the executives.

3. Development builds up competences for future

performance and has has a long-term

perspective

4. Development is career-centered in nature.

5. All development is 'self-development' and the

executive has to be internally motivated for

the same.

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7.6 Benefits of Training

7.6.1 Benefits of Training to Employers

The employers invest in training because they reap several benefits out of the exercise, which can be summed

up as under:

(i) Faster learning of new skills

Training helps the employers to reduce the learning time of their employees and achieve higher

standards of performance. The employees need not waste time in learning by observing others. If a formal

training programme exists in the organization, the qualified instructors will help the new employees to acquire

the skills and knowledge to do particular jobs quickly.

(ii) Increased productivity

Training increases the skill of the new employee in while performing a particular job. An increased

skill level usually helps in increasing both quantity and quality of output. Training can be of great help even to

the existing employees. It helps them to increase their level of performance on their present job assignments

and prepares them for future assignments.

(iii) Standardization of procedures

Training can help the standardization of operating procedures, which can be learnt by the employees.

Standardization of work procedures makes high levels of performance rule rather than exception. Employees

work intelligently and make fewer mistakes when they possess the required know-how and skills.

(iv) Lesser need for supervision

As a generalization, it can be stated safely that trained employees need lesser supervision. Training

does not eliminate the need for supervision, but it reduces the need for detailed and constant supervision. A

well-trained employee can be self-reliant in his/her work because s/he knows what to do and how to do.

Under such situations, close supervision might not be required.

(v) Economy of operations

Trained personnel will be able to make better and economical use of the materials and the equipment

and reduce wastage. Also, the trained employees reduce the rate of accidents and damage to machinery and

equipment. Such reductions can contribute to increased cost savings and overall economy of operations.

(vi) Higher morale

The morale of employees is increased if they are given proper training. A good training programme

moulds employees’ attitudes towards organizational activities and generates better cooperation and greater

loyalty. With the help of training, dissatisfactions, complaints, absenteeism and turnover can also be reduced

among the employees. Thus, training helps in building an efficient and co-operative work force.

(vii) Managerial Development

The top management can identify the talent, who can be groomed for handling positions of responsibility

in the organizations. Newer talent increases the productivity of the organizations. By providing opportunity

for self-development, employees put in their best effort to contribute to the growth of the organization.

7.6.2 Benefits of Training to Employees

The employees are the ultimate link in an any organization, who carry out the operations. Training

can help them in several ways, as mentioned below:

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(i) Increasing Confidence

Training creates a feeling of confidence in the minds of employees, who feel comfortable while

handling newer challenges. It gives a feeling of safety and security to them at the work place.

(ii) New Skills

Training develops skills, which serves as a valuable personal asset of a worker. It remains permanently

with the worker himself.

(iii) Career advancement

The managers can develop their skills to take up higher challenges and work in newer job dimensions.

Such an exercise leads to the career development of the employees, who can move up the corporate hierarchy

faster.

(iv) Higher Earnings

Higher earnings are a consequence of career development. A highly trained employee can command

high salary in the job market and feel more contended.

(v) Resilience to change

In the fast changing times of today, training develops adaptability among workers. The employees

feel motivated to work under newer circumstances and they do not feel threatened or resist any change.

Such adaptability is essential for survival and growth of an organization in the present times.

(vi) Increased Safety

Trained workers handle the machines safely. They also know the use of various safely devices in the

factory, thus, they are less prone to accidents.

7.7 Organizational Structure of Training Department

The exact position of the training department must be specified in the organizational structure of the

company. Training, being a staff function has a risk of being sidelined in a large organization. Some of the

typical structures of training department can be:

a) As a part of the personnel department

In most companies, human resource development is entrusted upon HRD/Personnel department. In

such situation, the training department would function within the authoritative control of the HRD manager.

Usually, the new employees undergo an orientation/induction programme, which is organized by this department.

In such department, there can be a permanent training manager, who shall plan and manage the training

programmes. He shall also evaluate the training programmes and report to the HRD manager. Although rare,

organization might hire some permanent faculty to provide the training. The common practice is that some

core faculty might be hired, while the external experts might impart specialized training. Usually, the training

imparted by this department is more generic in nature.

b) In the form of a matrix organization

The training manager might not be a specialist in all functional areas. While imparting sophisticated

training, the common practice is to take a manager from the functional department. For example, if sales

training was to be given to the representatives, the sales manager might be asked to plan the same. In such

a situation, he shall design the training programme and identify the faculty who shall provide the training. He

might even identify the trainees who need to be trained. The training manager, who shall be under the HRD

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manager, shall organize the training according to the plan suggested by the sales manager. He might arrange

for the hotel, training facilities and other necessary paraphernalia required for the training. In such a situation,

the training activity is conducted in the form of a matrix organization, where the training manager merely

becomes a facilitator of a training programme.

c) Training by functional heads

When training is not a very regular exercise, even the functional heads, such as marketing manager/

production manager etc. might undertake the task of organizing the training programmes. They plan and

organize the entire programme themselves.

d) External Organization

Several organizations, such as consultancy organizations, professional bodies, government departments,

educational institutions etc. specialize in providing training. They contact the prospective organizations and

put forth their proposals to conduct training programmes for them. The clients review their proposal and if

satisfied, they might nominate their staff to participate in these events.

7.8 Methods of Training

There is a wide range of training methods and techniques have been developed over the years by

various organizations and training experts as shown in Table 7.2. Different training methods are suitable for

different categories of people in the organization. There can be several categories of personnel in an

organization, e.g. managerial and non-managerial, technical, administrative, skilled, unskilled, senior, junior

etc. Each organization has to choose the methods and techniques of training which are relevant for its training

needs.

Various methods of training may be classified into the following categories:

Table 7.2. Methods of Training

l. On-the-job Training (at the place of work)

(i) Coaching

(ii) Understudy

(iii) Position Rotation

II. Vestibule Training (adapted to the environment at the place of work)

III. Off-the-job Training (away from the place of work)

(i) Special Lecture-cum-Discussion

(ii) Conference

(iii) Case Study

(iv) Sensitivity training

(v) Special projects

(vi) Committee assignments.

a) On-The-Job Training

On-the-job training is considered to be the most effective method of training the operative personnel.

Under this method, the worker is given training at the work place by his immediate supervisor. In other

words, the worker learns in the actual work environment. It is based on the principle of ‘learning by doing’.

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On-the-job training is suitable for imparting skills that can be learnt in a relatively short period of time,

It has the chief advantage of strongly motivating the trainee to learn. It is not located in an artificial situation.

It permits the trainee to learn on the equipment and in the work-environment. On-the-job training methods are

relatively cheaper and less time consuming. Another important factor about on-the-job training is that supervisors

play an important part in training the subordinates.

There are four methods of on-the-job training explained below:

(i) Coaching.

Under this method, the supervisor imparts job knowledge and skills to his subordinate. The emphasis

in coaching or instructing the subordinate is on learning by doing. This method is very effective if the superior

has sufficient time to provide coaching to his subordinates.

(ii) Understudy.

The superior gives training to a subordinate as his understudy or assistant. The subordinate learns

through experience and observation. It prepares the subordinate to assume the responsibilities of the superior’s

job in case the superior leaves the organization.

(iii) Position Rotation.

The purpose of Position rotation is to broaden the background of the trainee in various positions. The

trainee is periodically rotated from job to job instead of sticking to one job so that he acquires a general

background of different jobs. However, rotation of an employee from one job to another should not be done

frequently. He should be allowed to stay on a job for a sufficient period so that he may acquire the full

knowledge of the job.

b) Vestibule Training

Vestibule means a cabin and the term ‘vestibule training’ is used to designate training in a cabin (or a

classroom) for semi-skilled jobs. It is more suitable where a large number of employees have be trained at the

same time for the same kind of work. Where this method is used, there should be well-qualified instructors in

charge of training programme. Here the emphasis tends to be on learning rather than production. It is frequently

used to train clerks, machine operators, typists, etc.

Vestibule training is adapted to the same general type of training problem that is faced by on-the-job training.

A vestibule school is run as a special endeavour of the personnel department. An attempt is made to duplicate,

as nearly as possible, the actual material, equipment and conditions found in the real work place. The vestibule

school may be started when the training work exceeds the capacity of the line supervisors. Thus, in vestibule

training, the workers are trained on specific jobs in a school run by the organization. An attempt is made to

create working conditions, which are similar to the actual workshop conditions. The learning conditions are

also carefully controlled.

c) Off-the-Job Training

The biggest merit of on-the-job training methods is that they do not require the worker to be absent

from his work place. There is no disruption in the normal activities. However, when the training is specialized,

or needs the use of sophisticated equipment, or needs a specialist trainer, it might not be feasible to provide

the training while on job. For such situations, off-the-job training methods are used by the organizations.

Off-the-job training methods require the worker to undergo training for a specific period away from

the work-place. These methods are concerned with both knowledge and skills in doing certain jobs. The

workers are free of tension of work while they are learning.

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There are several off-the-job methods of training and development as described below:

(i) Special Lecture cum Discussion

Training through special lectures is also known as ‘class-room training’. It is more associated with

imparting knowledge than with skills. Some executives of the organization or specialists from vocational and

professional institutes may deliver the special lectures. Many firms also follow the practice of inviting experts

for special lectures for the staff on matters like health, safety, productivity, quality, etc. There are

certain aspects of nearly all jobs that can be learnt better in the classroom than on the job. Orientation about

organization and safety training can be accomplished more effectively in the classroom. The standard

instructional method suitable for operative employees is a ‘formal lecture’ by in instructor to the trainees. The

lecturer possesses a considerable depth of knowledge of the subject at hand. He seeks to communicate his

thoughts in such a manner as to interest the class and cause the trainees to retain what he has said. The

trainees generally take notes as an aid to learning.

(ii) Conference / Seminar Training

The literal meaning of conference is ‘consultation’. But in practice, conference implies sharing some

information with an audience of a large number of people. It is conducted in a big hall where the participants

are allowed w exchange their views and raise queries. The proceedings of the conference are conducted by

the chairman who is also responsible for summing up the proceedings of the conference. These days video

conferencing is also gaining popularity under which people can participate in the conference through link via

satellite.

Seminars are also used for bringing various people to a platform where they discuss various issues

relating to work. This helps them in understanding others’ viewpoints, making themselves understand and

seeking solutions to the problems, which they might not be able to solve themselves. Seminars offer brainstorming

platforms where more than one brains work on solving work-related problems. Seminars can include lecturing

by external experts as well. Seminars can be within the organization or the trainees can be nominated to

participate in those being organized by other institutions.

(iii) Case Study

The case method is a means of simulating experience in the classroom. Under this method, the

trainees are given a problem or case which is more or less related to the concepts and principles already

taught. They analyse the problem and suggest solutions which are discussed in the class. The instructor helps

them reach a common solution to the problem. This method gives the trainee an opportunity to apply his

knowledge to the solution of realistic problems.

(iv) Role Playing

In this technique, the trainees are made to experience what others feel of a particular situation. They

understand the viewpoint of others and come to know of constrains within which others are working. Such an

interaction and understanding helps in reducing the dysfunctional conflicts within the organizations. Many

times, various departments of the organizations disagree because they do not understand each others’ viewpoint.

Role playing is an effective training technique to bridge the differences between them. Besides, this, it is an

effective method to prepare the trainees to face the situations that they are likely to face while discharging

their duties. For example, the sales staff is often asked to play the role of the customers to understand how

they might behave in a given situation. They become trained enough to face the likely situations.

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(v) Behavioural Simulation Games

These focus primarily on the process of inter-personal relations, on how decisions are made, and

with what consequences, rather than on the substance of the decisions. Sometimes, structured exercises is

used to connote all types of simulations, but there exists a distinction between a game and an exercise.

1. Games have set rules and have predictable results. Often, their design is hidden in order to

highlight a behavioural process and to dramatize its effects.

(vi) In-basket Exercises

These are more elaborate simulation exercises in which a complex organization is created in the

form of an office environment. The trainees work in an office setting with their in-basket full of interdepartmental

memos, letters, reports, forecasts and other data on their desks, as one receives in an office. The normal

phone calls, emails and face to face meetings also keep on happening to give a real office-like environment.

Such a simulation of the office in-basket familiarizes the trainees with the role that they are expected to play.

They also get acquainted with the nature of communication that they have to perform in the work-settings.

Critical incidents are also included in the in-basket to familiarize to the trainees.

(vii) Laboratory training

Laboratory training provides the participants with an extensive experience of how various groups

and individuals interact in group situations. Laboratory is a controlled environment for training where the

external factor are not allowed to interfere with the training process. The biggest advantage of laboratory

training if its effectiveness and the limitation is that controlled conditions might nor provide a real-life enactment

of the situations.

7.9 SELF CHECK EXERCISE

1. Define Training.

2. Write a short-note on need of training.

3. What are the objectives of training program? Discuss in brief.

4. Write a short note on benefits of training.

5. What do you understand by vestibule training? Discuss in brief.

7.10 Summary

In the rapidly changing times, the human resources have to be updated with the ongoing changes.

Training is an important activity in all the organizations and its significance has increased even further in the

highly competitive times of today. The training function can be imparted by a training department within the

organization, or by an external organization, depending upon the training objectives and the organization’s

resources. Several training methods have been developed, which include on-the-job, vestibule and of-the-job

training methods. Each of these have their own merits and demerits.

7.11 GLOSSARY

• Education means inculcating moral values, positive thinking, attitude of helping, attitude of giving to

society and ethical values these kind of students are only able to bring changes in society.

• Employee development is defined as a process where the employee with the support of his/her

employer undergoes various training programs to enhance his/her skills and acquire new knowledge

and skills.

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• Off-the-Job Training is the training method wherein the workers/employees learn their job roles

away from the actual work floor.

• On-the-Job training refers to the methods that are used at the workplace, while the employee is

actually working. It means 'learning while doing'. The trainees learn in the real work environment

and gain practical experience dealing with the tasks and challenges during a normal working day.

• Training constitutes a basic concept in human resource development. Training is a highly useful tool

that can bring an employee into a position where they can do their job correctly, effectively, and

conscientiously. Training is the act of increasing the knowledge and skill of an employee for doing

a particular job.

• Training Process comprises of a series of steps that needs to be followed systematically to have an

efficient training programme. The Training is a systematic activity performed to modify the skills,

attitudes and the behavior of an employee to perform a particular job.

7.12 ANSWERS TO SELF CHECK EXERCISE

1. For answer refer to section 7.2.

2. For answer refer to section 7.3.

3. For answer refer to section 7.4.

4. For answer refer to section 7.6.

5. For answer refer to section 7.8 (b).

7.13 TERMINAL QUESTIONS

Q.1 Why is it important to train the human resources in organizations? Define training and explain its

need?

Q.2 What can be various objectives of training?

Q.3 How can the training function be organized? Is it better to have external; organization for training?

Why/Why not?

Q.4 What are various methods of on-the-job training?

Q.5 Briefly explain some on-the-job training methods practiced in business organizations.

7.14 SUGGESTED READINGS

1. Udai Pareek (1997) Training Instruments for HRD, Tata McGraw Hill, New Delhi.

2. Rolf Lynton and Udai Pareek (2000) Training for organizational transformation, Sage Publications,

New Delhi.

3. Rolf Lynton and Udai Pareek (2000) Training for organizational transformation, Sage Publications,

New Delhi.

4. Pepper, A.D. (1986), Managing the training and development function, Gower.

5. Rae, L. (1986), How to Measure Training Effectiveness, Gower.

*****

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LESSON-8

EVALUATING TRAINING EFFECTIVENESS

STRUCTURE

8.0 INTRODUCTION

8.1 LEARNING OBJECTIVES

8.2 CONCEPT OF TRAINING EFFECTIVENESS

8.3 CRITERIA FOR EVALUATING TRAINING EFFECTIVENESS

8.4 POST TRAINING EVALUATION

8.5 TRAINING EVALUATION TECHNIQUES

8.6 SELF CHECK EXERCISE

8.7 SUMMARY

8.8 GLOSSARY

8.9 ANSWERS TO SELF CHECK EXERCISE

8.10 TERMINAL QUESTIONS

8.11 SUGGESTED READINGS

8.0 Introduction

The results of training are not evident immediately. So, the justification of all training programmes

can be made only when they are critically evaluated in terms of the advantages that an organization gets in

comparison to the investment made. While the investments can be measured in terms of money, the advantages

can be both monetary as well as non-monetary. Being an activity, which involves a great degree of human

factor, the evaluation to training has always been difficult.

8.1 LEARNING OBJECTIVES

After studying this lesson you will able to understand the concept of evaluating training effectiveness

and what is training effectiveness? The criteria used for evaluating training effectiveness. The different

techniques used for evaluating training programme.

8.2 CONCEPT OF TRAINING EFFECTIVENESS

Training effectiveness is the degree to which trainees are able to learn and apply the knowledge and

skills acquired during the programme. The attitudes, interests, values and expectations of the trainees and the

training environment influence it. A training programme is likely to be more effective when the trainees are

involved in their jobs and have career plans. Contents of training programme, and the ability of trainers also

determine training effectiveness to a certain extent.

8.3 Criteria for evaluating training effectiveness

The following criteria may be used to measure the effectiveness of training:

(i) Reactions

Trainees’ reactions to the objectives, contents and methods of training are good indicators of

effectiveness. In case the trainees considered the programme worthwhile and liked it, the training can be

considered effective.

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(ii) Learning

The extent to which the trainees have gained the desired knowledge and skills during the training

period is a useful basis of evaluating training effectiveness.

(iii) Behaviour

Improvement in the job behaviour of the trainees reflects the manner and extent, to which, the

learning has been put to practice.

(iv) Results

Productivity improvement, quality improvement, cost reduction, accident reduction, reduction in labor

turnover and absenteeism are the outcomes of training which can be used for evaluating effectiveness.

8.4 Post Training Evaluation

Training is a human phenomenon. So, there is a large variation in its results. The results of training

can show themselves in both long-run as well as short-run. There can be varying effect of training on the

trainees. So, post-training becomes a very tedious exercise for the trainers. Any mistake can lead to wrongful

conclusions and even hamper the training process in future.

In general terms, post-training evaluation can be understood in terms of three distinct phases:

(i) Immediate effect of training

This relates to changes in knowledge, skill or behaviour immediately after a training experience.

Such an evaluation attempts to assess whether or not training has been effective in communicating the

message. Immediate evaluation help in answering the following questions:

• Do the trainees understand what is now required of them?

• Have they acquired the necessary behavioural skills to be able to implement the learning?

(ii) Intermediate

This phase of evaluation is conducted after some time period has elapsed after the training. During

this period, the trainees would have put the skills learnt during training into practice. This evaluation shows

whether the knowledge, skill and behaviour, which have been learned during the training, is being put into use

on the job. In other words, the evaluation seeks to find whether the change in behaviour, skills and attitude as

a result of the training can be identified.

(iii) Long term

This refers to the long-term effectiveness of the training on an individual, the unit and/or even the

organization.

This evaluation is determines the value of the training delivered and assesses:

Ø The effectiveness of the training towards achievement of the training objectives.

Ø The effectiveness of the learning process - in other words, whether the trainees have learned

what was set out to teach them.

Ø Whether the learning has been applied into practice or not.

Ø Whether the applied learning has brought about the changes required in relation to attitudes,

skill or behaviour.

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8.5 Training Evaluation Techniques

The commonly used training evaluation techniques are :-

a) Post-course assessments

Post-course assessments are often conducted immediately after the end of a training programme

and are the most frequently used method for evaluating a training programme. This evaluation is based on the

fact that if the training has been effective and has been delivered in and acceptable manner, the trainees shall

respond positively. However, it has been observed by some researchers that the positive response of the

trainees is not so much because of the effectiveness of the learning process, but because of their enjoyment

of it. Hence, the trainers should not place too much emphasis on individual comments taken from a post-

course assessment. However, complete analysis of a set of assessment forms can provide useful insights into

those parts of the programme, which the trainees believe to have been the most effective. Despite this

limitation, the views and opinions of the trainees should not be discarded lightly, particularly if a consistent

view is expressed by a range of people.

This method can be especially useful in assisting the trainer to evaluate and assess the effectiveness

of particular instructors or presenters, especially if evidence about similar sessions or courses being presented

by other people is available. It may well be that one of the most useful benefits of a post-course assessment

is in assisting the trainer to assess the skill of the instructor.

b) Pre and post-course tests

An ideal way of measuring learning is to measure it before (i.e at the start of a programme) and then

to measure the same set of knowledge when it is over. It is often helpful in deciding what needs to be built on,

particularly when teaching a specific skill. The gains made by a training are quite visible by such an evaluation.

However, the problem is that reliable techniques for pre and post evaluation might not be available.

c) Management briefing

In this technique, the trainer moves out of the area within his own responsibility and becomes much

more reliant on the trainee’s line manager. Ideally, training should always be the responsibility of the line

manager, but in actual practice, they are reluctant to accept this as part of their responsibility. They prefer to

pass it on to the trainer. Management briefing can be a useful way of involving line managers, as well as

assisting the trainer in the evaluation process. The commonest way of conducting a management briefing is

for the trainer to provide the manager with a detailed set of objectives and an outline of the content of a

particular programme. The manager then discusses this with the trainee, and together they work out some

personal and specific objectives which may be related to the trainee’s knowledge, skill or attitude. The trainee

who attends a programme having been fully briefed by the manager and who is fully committed to achieving

personal objectives will be well prepared for the learning process.

d) Management de-briefing

This method of evaluation also requires the complete commitment of line managers. They should

review the learning process with the trainee after the programme. However, It is important to note that it is

but the application of the learning within that the job the trainee is expected to do has to be evaluated and not

merely the learning process itself. A fundamental problem, identified by the vast majority of people who

attend training programmes, is that there is little or no opportunity for them to apply the learning gained when

they return to an inevitably busy work situation. Management debriefing can overcome this problem, not only

by reviewing the learning, but also by assisting the trainee to understand how to apply it in the work situation.

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e) Questionnaires

Questionnaire is a very useful instrument to gather information about the effectiveness of training.

Any systematic training evaluation must involve the Training Department in following up, at various intervals,

people who have attended specific programmes. If the objective is to assess retention and application, the

questionnaire should be designed primarily to assess the level of skill or knowledge which the trainee has

retained during the period following the training – after three, six or twelve months, whichever period the

trainer deems to be appropriate. Trainees should be encouraged to answer honestly and openly without

reference to notes or handouts.

A second but no less important use of questionnaires is to identify how and how well the learning has

been applied. A trainer might seek answers to the following questions:

• What benefits have trainees gained and what opportunities do they now have for increasing their

learning?

• Considerable benefit can also of course be obtained from negative responses. The trainer would

want to know what learning has not been applied and why.

§ Is it because the learning has not been relevant?

§ Is it because the timing was not opportune?

On the basis of such responses, the trainer can assess whether or not the training being delivered is

relevant and applicable to the particular circumstances which need to be evaluated. Questionnaires allow the

flexibility of covering up a large number of responses. The respondent might feel more free to respond on a

questionnaire than a face to face dialogue.

f) Training Appraisals

An essential part of any training appraisal system should be to assess the effectiveness of training

delivered during the previous period, and also to assess training needs in relation to future objectives. The

application of training effectiveness for the previous period can be assessed by a few simple questions. This

applies whether training has been carried out on formal programmes, by the process of self-development or

by learning on the job. Because the immediate supervisor of the trainee usually conducts the appraisal, it

should be possible for the two people working together to assess the applicability of the training needs of the

trainee.

This method provides a very effective feedback, both in terms of evaluation and in terms of the value

of the training, which has been delivered.

g) Training for promotion

One of the major objectives of any training is to train the prospective managers after promotion. A

manager has to perform newer roles after being promoted to a higher position. Leaders’ role might be quite

difficult for some. The degree of effectiveness of a manager after promotion can be an indicator of an

effective training.

The value of this method depends partly on who is responsible for promotion procedures within an

organization. If they are the one-off responsibility of departmental line managers, for example, it may be less

valuable. Decisions maybe dismissed as particular idiosyncrasies of the manager. On the other hand if promotion

procedures are well considered and involve some objective form of assessment, the training experience of

individuals who are promoted is likely to have some relevance to an evaluation of training procedures. Trainers

80

should track and monitor the career progress of trainees, relating their promotion back to course performance.

If people who attend programmes are not coming through in terms of promotion some serious questions must

be asked about the value of the training being given. If, on the other hand, those having undergone training are

promoted on a regular basis, the trainer will get a better response to training.

This method also assists the trainer in assessing whether the training is genuinely associated with,

and related to, business needs. In. a company with well-considered promotion procedures, only those people

who are capable of meeting business needs are likely to be promoted.

i) Assessment/development centers

Many companies now run centers designed to assess employees’ potential, also called as assessment

centers. The practice to provide people with an opportunity to assess their own development needs along

with skilled assessors development centers is also becoming popular. Both these exercises provide a lot of

useful information to the trainer, which can be of relevance to the processes of evaluation. In assessment

centers, the potential identified frequently relates back to previous training experience and assists the trainer

in evaluating how effective previous training programmes have been.

Development centers enables the trainer to find out whether the identified training needs of individuals

are being met or not. Trainers cannot say it with proof that they are responding to the direct and individually

identified needs of a group of trainees. Evidence which emerges from development center work, however,

provides an ideal basis on which to build evaluation programmes designed to test the effectiveness of training

delivered against a check list of specifically identified needs assuming that other techniques of evaluation are

applied to the training given.

j) Repertory grids

Grid analysis helps trainers assess performance on two dimensions simultaneously. Usually, the

trainer is concerned over assessing performance both in relation to the skill level and the motivational level.

Many people who have the necessary degree of skill to do a job effectively lack the motivation, and vice

versa. Grid analysis assists the trainer to evaluate both factors and to plot them on a grid. Working with line

managers, this type of approach enables the trainer to assess real training requirements and also to follow up

the delivery of the training once it has been completed.

k) Surveys

Many organizations conduct a lot market research into customer attitudes. Even surveys into employee

attitudes and communications audits are a common management experience. Such information provides a

useful base on which to assess current performance and to build future performance. On similar lines,

surveys are being conducted to the find out the organizations’ training needs and they apply with equal force

to the evaluation of training delivery. A full-scale or even a shorter, more qualitative survey can be carried out

effectively in most of organizations. Sometimes the information the trainer is seeking may be of a more

confidential nature. Then, it may be necessary either to employ he services of an external consultant or to

allow people to respond anonymously.

Questionnaires can also be used to find out how people perceive the benefits from training experiences

in the past and also to identify what they believe would be the most valuable training experience for them in

the future. This method of survey is often most effective if it is followed up by shorter qualitative interviews

based on the initial findings.

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l) Trainer interviews

Interviewing the former trainees provides useful insights into their experiences with training. Structured

interviews are more effective, with each interviewee being asked the same set of questions. This allows

effective analysis of response, and also helps in keeping the interview on track. Interviewing is time consuming

and needs a lot of resources. So, a proper assessment of the costs and benefits must be done before using

them as an assessment tool.

The greatest benefit of interview-based evaluation is that the trainer can gain a great deal of information

through a mixture of closed and open questions designed to probe in detail the trainee’s responses. Such an

approach can cover knowledge, skill arid attitude assessment, both in the initial and latter phases of evaluation.

If this approach is linked with a more quantitative approach, as outlined earlier, it can provide trainers with a

good feel for the effectiveness of the programmes they have been responsible for delivering.

m) Trainer-observed behaviour

This evaluation method is most valuable in relation to action-based learning, including role-plays and

simulations. The trainer can observe how behaviour has changed as a result of learning and feedback, and

can reinforce this with additional feedback to the trainee after a particular exercise or experience. It should

be noted that feedback is an essential part of this type of evaluation, and the trainers cannot expect sound

behaviour they observe to be repeated unless they provide some kind of positive reinforcement. Putting the

learnt behaviour into practice can contribute to the success of such a training programme.

n) Participant observation

Observation is a good method of any evaluation programme. As with trainer observation, trainees

learn a great deal from their colleagues who can observe and give opinions, particularly about the behaviour

identified with the training. However, an objective feedback is an essential aspect of such an exercise.

Observation is most effective where the trainer or participant is concerned with immediate evaluation of the

learning, and has less application to the long-term benefits of training.

o) Records of performance

Many organizations keep a record of the performance, either through detailed appraisal systems or

through the use of effective personnel reports. In such a situation, it is possible to use them to identify training

needs and or to evaluate the training delivered. Working closely with the line manager, the trainer needs to

identify through performance records how effective an individual employee has been in relation to the training

received. As with all methods of evaluation, the relevant performance records only can provide a real measure

of training effectiveness.

If, the trainers can identity those people who have been most successful after the training, they can

assume it to be a clear indication of training effectiveness. It is also possible for the trainer in this situation to

identify those people with low performance levels who perhaps pave not received the same training experiences

as the others. Again, this can provide evidence of training need, as well as a measure of the effectiveness of

training within that department.

p) Action plan follow-up

It is a common practice that after most training experiences, trainers usually asks the participants to

complete an action plan. However, these action plans (which can be in the form of projects etc.) are not

referred by the trainee nor the trainer. If used judiciously such plans can be used effectively as a means of

evaluating the training effectiveness. It requires a joint effort by the line manager and the trainers who can

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follow up by interviews, a surveyor just a brief letter to all participants to assess whether or not the action

plans so ‘enthusiastically’ made on the final morning of the course have now been implemented – and if not,

why not. What, in other words, have been the barriers to implementation? If this method of follow-up is to be

effective, trainers must develop close relationships with line managers and must be seen to have a genuine

desire to assist and evaluate rather than to forcibly impose their own solution which, in any event, are unlikely

to be as effective as if they had been undertaken willingly.

8.6 SELF CHECK EXERCISE

1. How training effectiveness is evaluated? Discuss in brief.

2. Write a short-note on criteria used for evaluating training effectiveness.

3. Write a short-note on management briefing.

4. Write a short-note on surveys.

5. What do you mean by records of performance? Discuss in brief.

6. Discuss in brief the team follow -up.

8.7 Summary

Evaluation of training is necessary because its results are not visible immediately and are also not

clearly measurable. In a rapidly changing scenario like the present times, the human resources have to be

constantly updated as newer skills. Continued training is an important activity in most modern knowledge-

based industries. So, evaluation of the effectiveness of training is an important pre-requisite for planning and

setting the training objectives. There are several techniques available for evaluating the effectiveness of

training, the choice of which would depend upon several factors, such as the training objectives, available

resources, capacity of the subordinates as well as that of the supervisors, etc.

8.8 GLOSSARY

• Measures of effectiveness are the emergency response time, false alarm rate, operational availability,

and total cost of ownership. The target value for each measures of effectiveness is established to

achieve a competitive advantage.

• Questionnaire is a research instrument consisting of a series of questions (or other types of prompts)

for the purpose of gathering information from respondents. Although questionnaires are often designed

for statistical analysis of the responses, this is not always the case.

• Survey is defined as a research method used for collecting data from a pre-defined group of

respondents to gain information and insights on various topics of interest. Surveys have a variety of

purposes and can be carried out in many ways depending on the methodology chosen and the

objectives to be achieved.

• Training effectiveness is fundamentally an evaluation that inspects the level to which training enhanced

the employee's skill, knowledge, and behaviour inside the association.

• Training evaluation is a systematic process to analyze if training programs and initiatives are effective

and efficient. Trainers and human resource professionals use training evaluation to assess if the

employee training programs are aligned with the company's goals and objectives.

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8.9 ANSWERS TO SELF CHECK EXERCISE

1. For answer refer to section 8.2.

2. For answer refer to section 8.3.

3. For answer refer to section 8.5 (c).

4. For answer refer to section 8.5 (k).

5. For answer refer to section 8.5 (o).

6. For answer refer to section 8.5 (p).

8.10 TERMINAL QUESTIONS:

1. Explain the importance of evaluating training. Are the results of training visible immediately? Why/

Why not?

2. ‘Immediate post-training evaluation is the most reliable evaluation technique’ Comment.

3. Differentiate between management briefing and management debriefing.

4. Of various techniques for evaluating training effectiveness, how would you decide which technique

should be used?

5. Write short notes on:

a. Repository Grid

b. Questionnaire

8.11 Suggested Reading

1. Bramley, P. (1986), Evaluation of Training, BACIE.

2. Jackson, T. (1989), Evaluation : relating training to business performance, Kogan Page.

3. Pepper, A.D. (1986), Managing the training and development function, Gower.

4. Rae, L. (1986), How to Measure Training Effectiveness, Gower.

*****

84

LESSON-9

WAGES AND SALARY ADMINISTRARTION

STRUCTURE

9.0 INTRODUCTION

9.1 LEARNING OBJECTIVES

9.2 MEANING OF WAGE AND SALARY ADMINSTRATION

9.3 OBJECTIVES OF WAGE AND SALARY ADMINISTRATION

9.4 PRINCIPLES OF WAGE AND SALARY ADMINISTRATION

9.5 FACTORS AFFECTING WAGE RATES

9.6 WAGE AND SALARY DETERMINATION PROCESS

9.7 THEORIES OF WAGES

9.8 WAGE LEGISLATIONS IN INDIA

9.9 WAGE DIFFERANTIALS

9.10 SELF CHECK EXERCISE

9.11 SUMMARY

9.12 GLOSSARY

9.13 ANSWERS TO SELF CHECK EXERCISE

9.14 TERMINAL QUESTIONS

9.15 SUGGESTED READINGS

9.0 INTRODUCTION

Wage and salary administration affect levels of employee commitment to the organisation. However,

fascinating the individual’s job assignment is, the employee must be paid. Pay affects the way people work-

how much and how well. A large part of the compensation that people receive from work is monetary.

Although managers are expected to conserve money and distribute it wisely, many employees feel that they

should get more of it for what they do. Wages, salaries and many employee benefits and services are form of

compensation.

Contemporary employment reward system attaches great prominence to wages and salaries. In the

evolution of economies, the role of financial rewards has grown. The sophistication of wage and salary

administration has increased as industrialized economies have become more complex. New suggestions for

managing compensation systems are constantly emerging.

9.1 LEARNING OBJECTIVES

After reading this lesson, you should be able to

(a) Explain the objectives of wage and salary administration.

(b) State the principles governing wage and salary administration.

(c) Indicate the process of wage and salary administration.

(d) Highlight the theories of wages.

(e) State the main provisions of wage legislations in India.

85

9.2 Meaning of Wage and Salary Administration

Employee compensation may be classified into two types – base compensation and supplementary

compensation. Base compensation refers to monetary payments to employees in the form of wages and

salaries. The term ‘wages’ implies remuneration to workers doing manual work. The term ‘salaries’ is

usually defined to mean compensation to office, managerial, technical and professional staff. The distinction,

however, is rarely observed in actual practice. Base compensation, is a fixed and non-incentive payment on

the basis of time spent by an employee on the job. Supplementary compensation signifies incentive payments

based on actual performance of an employee or a group of employees. The term ‘compensation administration’

or wage and salary administration denotes the process of managing a company’s compensation programme.

According to D.S. Beach “Wage and Salary Administration refers to the establishment and

implementation of sound policies and practices of employee compensation”. It includes such areas as job

evaluation, surveys of wage and salaries, analysis of relevant organizational problems, development and

maintenance of wage structure, establishing rules for administrating wages, wage payment incentives, profit

sharing, wage changes and adjustments, supplementary payments, control of compensation costs and other

related items.”

According to S.P. Robbins, “The term compensation administration or wage and salary administration

denotes the process of managing a company’s compensation programme. The goals of compensation

administration are to design a cost-effective pay structure that will attract, motivate and retain competent

employees.”

Thus, wage and salary administration aims to establish and maintain an equitable wage and salary

structure and an equitable labour cost structure.

9.3 Objectives of Wage and Salary Administration

The objectives of wage and salary administration are numerous and sometimes conflict with each

other. The important among them are:

(a) To Acquire Qualified Competent Personnel: Candidates decide upon their career in a particular

organization mostly on the basis of the amount of remuneration the organization offers. Qualified and competent

people join the best-paid organizations. As such, the organizations should aim at payment of salaries at that

level, where they can attract competent and qualified people.

(b) To Retain the Present Employees: If the salary level does not compare favourably with that

of other similar organizations, employees quit the present one and join other organizations. The organization

must keep the wage levels at the competitive level, in order to prevent such quits.

(c) To Secure Internal and External Equity: Internal equity mean payment of similar wages for

similar jobs within the organization. External equity implies payment of similar wages to similar jobs in

comparable organizations.

(d) To Ensure Desired Behaviour: Good rewards reinforce desired behaviour like performance,

loyalty, accepting new responsibilities and changes, etc.

(e) To Keep Labour and Administrative Costs in line with the ability of the organization to pay.

(f) To Protect in Pubic as Progressive Employers and to comply with the wage legislations.

(g) To Pay According to the Content and difficulty of the job and in tune with the effort and merit

of the employees.

86

(h) To Facilitate Pay Roll administration of budgeting and wage and salary control.

(i) To Simplify Collective Bargaining procedures and negotiations.

(j) To Promote Organization feasibility

9.4 Principles of Wage and Salary Administration

The following principles should be followed for an effective wage and salary administration:

(a) Wage policy should be developed keeping in view the interests of all concerned parties viz. employer,

employees, the consumers and the society.

(b) Wage and salary plans should be sufficiently flexible or responsive to changes in internal and

external conditions of the organisation.

(c) Efforts should be made to ensure that differences in pay for jobs are based on variations in job

requirements such as skill, responsibility, efforts and mental and physical requirements.

(d) Wage and salary administration plans must always be consistent with overall organizational plans

and programmes.

(e) Wage and salary administration plans must be in conformity with the social and economic objectives

of the country like attainment of equality in income distribution and controlling inflation etc.

(f) These plans and programmes should be responsive to the changing local and national conditions.

(g) Wage and salary plans should expedite and simplify administrative process.

(h) Workers should be associated, as far as possible, in formulation and implementation of wage

policy.

(i) An adequate data base and a proper orgnisational set up should be developed for compensation

determination and administration.

(j) The general level of wages and salaries should be reasonably in line with that prevailing in the

labour market.

(k) There should be a clearly established procedure for hearing and adjusting wage complaints. This

may be integrated with the regular grievance procedure, if it exists.

(l) The workers should receive a guaranteed minimum wage to protect them against conditions

beyond their control.

(m) Prompt and correct payments to the employees should be ensured and arrears of payment should

not accumulate.

(n) The wage and salary payments must fulfill a wide variety of human needs including the need for

self actualization.

(o) Wage policy and programme should be reviewed and revised periodically in conformity with

changing needs. For revision of wages, a wage committee should always be preferred to the

individual judgement, however unbiased of a manager.

9.5 Factors Affecting Wage Rates

There are several factors, which influence the wage rates. The variations in wage structure in

various industries are the results of these factors. Some important factors are: ­

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(i) Demand and Supply: The wage rates are fixed by the demand and supply position of the

workers in the labour market. If labour is in short supply, the workers will offer their services only if they are

paid well. On the other hand, labour may be available at cheaper rates if their supply is in plenty.

(ii) Bargaining Power: Wages also depend to a considerable extent on the relative bargaining

power of the labour unions and the employers. Where labour unions are strong enough to force the hand of

employers, the wages will be determined at a higher level in comparison to other units where unions are

weak.

(iii) Cost of Living: Progressive employers do not leave the wages to be determined by the blind

forces of demand and supply. They take due notice of the cost of living for the workers at that place and try

to fix the wages as to ensure a decent living wage to the workers. Cost of living varies under inflationary and

deflationary pressures. Where employers do not show enough awareness, labour unions, if strong, come out

with a demand of wage adjustment according to the cost of living index number.

(iv) Condition of Product Market: The wage levels will be influenced by the degree of competition

prevailing in the market for the product of the industry. If it is a perfect competitive market the wage level

may be at part with the value of the net additions made by the workers to the total output. But in any given

industry or occupation, wages may not reach this level it imperfect competition exists in the product market.

(v) Comparative Wages: Wages paid by other firms in the same market for similar work also

influence the wage levels. Wage rates must also be in consistent with the wages paid by other firms in the

same industry. The comparative wages will increase the job satisfaction among the workers.

(vi) Ability to Pay: Wage rates are influenced by the ability of industry or firm to pay its workers.

Those firms, which are earning huge profits, may naturally afford much better wage rates and more facilities

to its workers in comparison to those firms, which are earning only marginal profits.

(vii) Productivity of Labour: Productivity is considered to be the main basis of wage determination.

In firms, where productivity lab OUT is high, higher wages are paid as compared to other firms where it is low.

(viii) Job Requirements: A worker is compensated according to the job requirements. If a job

requires higher skill, greater responsibility and risk, the worker placed on that job will naturally get higher

wages in comparison to other jobs which do not require the same degree of skill, responsibility or risk.

(ix) Government Policy: Since the bargaining power of the workers is not enough to ensure fair

wages in all industries, the Government has to interfere in regulating wage rates to guarantee minimum wage

rates in order to cover the essentials of a decent living.

(x) Goodwill of the Company: A few employers want to establish themselves as good employer in

the society and fix higher wages for their workers. It attracts qualified employees.

9.6 Wage and Salary Determination Process

Usually, the steps involved in determining wage and salary rates are as follows:

(a) Job Analysis: A job analysis describes the duties, responsibilities, working conditions and

interrelationships between the job as it is and the other jobs with which it is associated. Job descriptions are

crucial in designing pay systems, for they help to identify important job characteristics. They also help determine,

define and weigh compensable factors (factors for which an organisation is willing to pay-skill, experience,

effort and working environment). After determining the job specifications, the actual process of grading,

rating or evaluating the job occurs. A job is rated in order to determine its value in relation to all the other jobs

in the organisation which are subject to evaluation. The next step is that of providing the job with a price. This

involves converting the relative job values into specific monetary values or translating the job classes into rate

ranges.

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(b) Conducting the Salary Survey: Compensation or salary surveys play a central role in pricing

jobs. Virtually every employer, therefore, conducts at least an informal survey. Employers use salary surveys

in three ways (i) Survey data are used to price bench mark jobs that anchor the employer’s pay scale and

around which the other jobs are slotted, based on their relative worth to the firm (ii) Some jobs (generally 20%

or more) of an employer’s position are usually priced directly in the market place (rather than relative to the

firm’s benchmark jobs), based on a formal or informal survey of what competitive firms are paying for

comparable jobs (iii) Surveys also collect data on benefits like insurance, sick leave and vacations to provide

a basis for decisions regarding employee benefits.

Salary surveys can be formal or informal. Informal telephone surveys are good for quickly checking

on a relatively small number of easily identified and quickly recognized jobs. Such as when a company’s HR

manager wants to confirm and salary at which to advertise a newly open cashier’s job. In formal surveys,

most firms either use the results of packaged surveys available from the research bodies, employer’s

associations, government labour bureaus etc. or they participate in wage surveys and receive copies of

results or else they conduct their own. These surveys may be carried out by mailed questionnaire, telephone,

or personal interviews with other managers and personnel agencies.

Wage and salary surveys provide many kinds of useful information about differences in wage levels

for particular kinds of occupations. This can have a great influence on an organisation’s compensation policy.

(c) Group Similar Jobs into Pay Grades: After the results of job analysis and salary surveys have

been received, the committee can turn to the task of assigning pay rates to each job, but it will usually want

to first group jobs into pay grades. A pay grade in comprised of jobs of approximately equal difficulty or

importance as determined by job evaluation. Pay grading is essential for pay purposes because instead of

having to deal with hundreds of pay rates, the committee might only have to focus on say 10 or 12.

(d) Price Each Pay Grade: The next step is to assign pay rates to pay grades. Assigning pay rates

to each pay grade is usually accomplished with a wage curve. The wage curve depicts graphically the pay

rates currently being paid for jobs in each pay grade, relative to the points or rankings assigned to each job or

grade by the job evaluation. The purpose of wage curve is to show the relationship between (i) the value of

the job as determined by one of the job evaluation methods and (ii) the current average pay rates for the

grades.

If there is reason to believe that the present pay rates are substantially out of step with the prevailing

market pay rates for those jobs, bench mark jobs within each grade are chosen and priced via a salary survey.

The new market based pay rates are then plotted on the wage curve. The steps involved in pricing jobs with

a wage curve are:

(i) Find the average pay for each pay grade, since each of the pay grades consists of several

jobs.

(ii) Plot the pay rates for each pay grade. Then fit a line, called a wage line through the points

just plotted. This can be done either free hand or by using a statistical method.

(iii) Price the Jobs. Wages along the wage line are the target wages or salary rates for the jobs

in each pay grade.

(e) Fine-Tune Pay Rates: Fine tuning involves correcting out of lines rates and developing rate

ranges.

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(f) Developing Rate Ranges: Most employers do not pay just one rate for all jobs in a particular

pay grade. Instead, they develop rate ranges for each grade so that there might be different levels and

corresponding pay rates within each pay grade. The rate range is usually built around the wage line or curve.

One alternative is to arbitrarily decide on a maximum and minimum rate for each grade. As an alternative,

some employers allow the rate range for each grade to become wider for the higher pay ranges reflecting the

greater demands and performance variability inherent in these more complex jobs.

There are several benefits of using rate ranges for each pay grade. Firstly, the employer can take a

more flexible stance with respect to the labour market. It becomes easier to attract experienced, higher paid

employees into a pay grade where the starting salary for the lowest step may be too low to attract such

experienced personnel. Secondly, rate ranges can also allow the employer to provide for performance

differences among employees within the same grade or between those with different seniorities.

(ii) Correcting out of Line Rates: The average current pay for a job may be too high or too low,

relative to other jobs in the firm. If a rate falls well below the line, a pay rise for that job may be required. If

the rate falls well above the wage line, pay cuts or a pay freeze may be required.

Underpaid employees should have their wages raised to the minimum of the rate range for their pay

grade, assuming the organisation wants to retain those employees and has the funds to do so. This can be

done immediately or in one or two steps.

There are several ways to cope with the over paid employees:

(i) To freeze the rate paid to employees in this grade unless general salary increases bring the

other jobs into line with it.

(ii) To transfer or promote some or all of the employees involved to jobs for which they can

legitimately be paid their current pay rates.

(iii) To freeze the rate for sometime, during which time the overpaid employees should be

transferred or promoted. If it cannot be done, then the rate at which these employees are

paid is cut to the maximum in the pay range for their pay grade.

6. Wage Administration Rules: The development of rules of wage administration has to be done

in the next step. It is considered advisable in the interests of the concern and the employees that the information

about average salaries and ranges in the salaries of group should be made known to the employees concerned;

for secrecy in this matter may create dissatisfaction and it may also vitiate the potential motivating effects of

disclosure. Finally, the employee is appraised and the wage fixed for the grade he is found fit.

9.7 Theories of Wages

There are number of theories on wages. Important among them are discussed hereunder: ­

(i) The Just Wage Theory: This was the first theory on wages advocated during medieval period.

The essence of this theory is that the worker should be paid on the level of maintaining himself and his family.

(ii) Subsistence Theory: According to Ricardo “the labourers are paid to enable them to subsist

and perpetuate the race without increase or diminution”.

(iii) Standard of Living Theory: Karl Marx pointed out that the “wage of labour is determined by

a traditional standard of living, which, in turn, is determined by the mode of production of the country concerned”.

(iv) The Wage Fund Theory: According to J.S. Mill, the wages are determined on the basis of the

relationship between the amount of fund allocated for the purpose of wage payment and number of workers

in a country.

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Wage = Amount of fund allocated for wage payment

Number of workers

(v) Residual Claimant Theory: According to Walker, the wages are determined on the basis of the

amount left after the payment of rent, profits and interest to land, entrepreneur and capital respectively out of

the production value.

The amount of wages = Production value – (Rent + Profits + Interest).

(vi) Marginal Productivity Theory: According to J .B. Clark, the wages are determined on the

basis of marginal contributions of the worker to the production. The employer stops employing further workers

where the contributions of the most recently employed worker are equal to his wages.

(vii) The Bargaining Theory of Wages: According to this theory the wages and other terms of

employment are determined on the basis of the relative bargaining strength of the two parties, viz., the

employer and the employees. Webbs stated that, “the haggling of the market which under a system of free

competition and individual bargaining determines the conditions of employment....”

(viii) Contribution of Behavioural Scientists to the Wage Theories: According to behavioural

scientists, wages are determined on the basis of several factors like the size, nature, prestige of the organization,

strength of the union, social norms, traditions, customs, prestige of certain jobs in terms of authority, responsibility

and status, level of job satisfaction, morale, desired lines of employee behaviour and level of performance.

Thus, the first five wage theories influenced the wage determination until 19th century. But the

influence of these theories had been reduced to a greater extent during the 20th century. The bargaining

theory of wages and the behaviour theory of wages influence much the determination during the present

century. The modern and important system of salary administration is job evaluation.

9.8 Wage Legislations in India

Government has enacted various legislative measures from time to time to protect the interest of

workers and also to emphasize the obligations on the part of management in this regard. We shall briefly

discuss the main measures in this regard as contained in the four legislations.

(a) The Payment of Wages Act, 1936

The primary objective of the Act is to ensure that wages are paid properly and regularly and prevent

the exploitation of workers by malpractices like nonpayment or short-payment, or payment in cash. The Act

is applicable to all those employed in factories/establishments declared as factories under section 85 of

Factories Act, 1948 and drawing less than Rs. 1,600 per month. The Act provides for the wage period as one

month and the mode of payment, i.e., cash on a working day which should be paid before the seventh for

organisations with less than a thousand employees and by the tenth for larger organisations. The Act also

stipulates the rate of payment for overtime work and penal deductions for participation in illegal strikes. An

employer can also levy a fine on employee only after due notice is given.

(b) The Minimum Wages Act, 1948

The main purpose of the Act is to avoid exploitation of workers by underpaying them for their efforts.

Though the central legislation, but it is implemented by both the Central and State Governments in their

respective spheres.

The Act does not define ‘minimum wages’. The definition given by the Fair Wages Committee, 1948,

is considered for legal interpretation. Nonetheless, it takes into account the bare minimum that is needed to

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keep a man’s “body and soul” together. The Act provides for setting up a tripartite body consisting of

representatives of employers, trade unions, and the Government, to advise and assist in fixing and revising

minimum wage rates. The minimum wages can be fixed by hour, day, month or such other large period. As

per the amendments made to the Minimum Wages Act, 1948, the minimum wages fixed once needs to be

revised at intervals not exceeding 5 years, taking into consideration the Variable Dearness Allowance (VDA).

(c) The Payment of Bonus Act, 1965

The issue of bonus has been the main bone of contention between the employees and the employers.

This spate of industrial disputes to the bonus issue was sought to be ended with the passage of the Bonus Act.

The main purpose of Bonus Act is to provide for the payment of bonus to persons employed in certain

establishments and for matters connected therewith. The Act also extends to all factories as defined in

Section 2(m) of the Factories Act, 1948 and to all other establishments in which 20 or more persons are

employed on any day during an accounting year.

The Act is applicable to employees whose earning in Rs. 2,500 p.m. (w.e.f. 2-5-93) basic plus

dearness allowance and who have worked in the unit for not less than 30 working days in a year. The Act also

sets the formula for calculating the allocable surplus/profit from which bonus is to be paid. The minimum

bonus is to be paid has been raised from 4 per cent to 8 1/3 per cent (w.e.f. 25.9.75). Of course, by a process

of collective bargaining, the workers through their representative union can negotiate for more than what the

Bonus Act provides. But, the minimum bonus has to be paid to the employees even if there is a loss. In such

case, bonus is treated as a ‘deferred wage’. The Act has been under attack of criticism mainly on the issue

of bonus quantum and the formula used for calculating the allocable surplus for bonus.

(d) The Equal Remuneration Act, 1976

The basic purpose of this Act is to provide for the payment of equal wages/remuneration to men and

women doing the same or similar work and thus, avoid sex discrimination in the matter of remuneration. The

Act stipulates punishments for contravention of the provisions of the Act. This Act is in consonance with the

recommendations made by the International Labour Organisation (ILO) Convention (No. 100), Industrial

Courts, Labour Tribunals, and the Minimum Wages Committee and the Fair Wages Committee for ‘Equal

pay for equal work’.

9.9 Wage Differentials

As there are individual differences, so are wage differentials also. Wage differentials mean differences

or disparities in wages. Wages differ in different employments or occupations, industries and localities and

also between persons in the same employment or grade. Wage differentials may be:

(a) Occupational Differentials: The reasons for occupational wage differentials can be varying

requirements of skill, knowledge, demand supply situation, degree of responsibilities involved etc. In countries

adopting a course of planned economic development, skill differentials play an important role in manpower

and employment programmes, for they considerably help in bringing about an adequate supply of labour with

skills corresponding to the requirements of product plans.

(b) Inter Firm Differentials: Inter firm differentials reflect the relative wage levels of workers in

different plants in the same area and occupation. The reasons for inter firm differentials are ability of employer

to pay, employees bargaining power, degree of unionisation, skills needs etc.

(c) Inter-Area Differentials: Such differentials arise when workers in the same industry, and in the

same occupational group, but living in different geographical areas are paid different wages. Varying

requirements of skill, knowledge, demand-supply situation are generally the reasons for such differential. In

some cases these differentials are used to encourage planned mobility of labour.

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(d) Inter-personal Wage Differentials: These differentials are between workers working in the

same plant and the same occupation. These may be due to differentials in sex, skills, age, knowledge or

experience.

After all, what is the rationale behind wage differentials? There are two views about it. One, in view

of the principles of socialistic pattern of society in which the object of the representative Government is to

minimise inequalities in incomes and distribution of wealth. Two, wages differentials are justified given the

wide differences in demand and supply of jobs alongwith wide variations in job requirements like skill, ability,

aptitude, knowledge, experience and so on. That wage differentials ensure full employment of the national

resources is yet another justification given in support of wage differentials.

9.10 SELF CHECK EXERCISE

1. What do you understand by wage and salary administration? Discuss in brief.

2. Write a short-note on objectives of wages and salary administration.

3. Discuss in brief principles of wages and salary administration.

4. Write a short-note on factors influencing wage rates.

5. Discuss in brief the following: -

a) The Payment of Wages Act, 1936.

b) The Minimum Wages Act, 1948.

c) The Payment of Bonus Act, 1965.

6. Write a short-note on wage differentials.

9.11 SUMMARY

The main objective of wage and salary administration is to establish and maintain an equitable wage

and salary system to obtain, retain and motivate people of required skill is an organisation. There are numerous

objectives of wage and salary administration and sometimes conflict with each other. The variations in wage

structure in various industries are the results of various factors affecting wage rates. The steps involved in

wage and salary determination process are job analysis, salary survey, grouping similar jobs, pricing each pay

grade and fine tuning pay rates. Theories of wages include just wage theory, subsistence theory standard of

living theory, marginal productivity theory, bargaining theory of wages, and residual claimant theory. Payment

of Wages Act, Minimum Wages Act, Payment of Bonus Act and Equal Remuneration Act has been enacted

by Government of India to protect the interest of workers. Wage differentiates are the result of occupational

differences, inter-firm differentials, inter-area differentials and inter-personal wage differentials.

9.12 GLOSSARY

• Remuneration is the pay or other financial compensation provided in exchange for an employee's

services performed or donating, or the act of providing to a number of complementary benefits in

addition to pay are increasingly popular remuneration mechanisms.

• Salary is a type of payment a person gets for work done for a job. A salary is usually paid for a fixed

period of time, such as a month or a week. Generally, it does not matter how many hours are

worked, the salary remains the same.

• Wage is a fixed regular payment earned for work or services, typically paid on a daily or weekly

basis.

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• Wage differential refers to the difference in wages between people with similar skills within differing

localities or industries. There are also geographical wage differentials where people with the same

job may be paid different amounts based on where exactly they live and the attractiveness of the

area.

• Wage and salary administration is a collection of practices and procedures used for planning and

distributing company-wide compensation programs for employees. These practices include employees

at all levels and are usually handled by the accounting department of a company.

9.13 ANSWERS TO SELF CHECK EXERCISE

1. For answer refer to section 9.2.

2. For answer refer to section 9.3.

3. For answer refer to section 9.4.

4. For answer refer to section 9.5.

5. a) For answer refer to section 9.8.

b) For answer refer to section 9.8.

c) For answer refer to section 9.8.

6. For answer refer to section 9.9.

914 TERMINAL QUESTIONS

1. Define wage and salary administration. Explain the basic objectives and principles of wage and

salary administration.

2. What factors affect the wage rates? Explain.

3. Indicate the steps to be followed in designing salary structure.

4. Explain the theories of wage payments.

5. Are wage differentials justified? Comment.

9.15 SUGGESTED READINGS

1. Subrammanium, K.N., Wages in India, Tata McGraw Hill, New Delhi.

2. Dessles, G., Human Resource Management, Prentice Hall of India, New Delhi.

3. Gopalji, Personnel Management in India Industries, Himalaya Publishing House, Mumbai.

4. Monappa, A. and Saiyadain, M.S., Personnel Management, Tata McGraw Hill Publishing Co., New

Delhi.

5. Davar, R.S., Personnel Management and Industrial Relations in India, Vikas Publishing House, New

Delhi.

*****

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LESSON-10

DISCIPLINE

STRUCTURE

10.0 INTRODUCTION

10.1 LEARNING OBJECTIVES

10.2 MEANING AND FEATURES OF DISCIPLINE

10.3 OBJECTIVES OF DISCIPLINE

10.4 TYPES OF DISCIPLINE

10.5 CAUSES OF INDISCIPLINE

10.6 ESSENTIALS OF A GOOD DISCIPLINARY SYSTEM

10.7 PROCEDURE OF DISCIPLINARY ACTION

10.8 DISCIPLINARY ACTIONS

10.9 THE RED HOT STOVE RULE

10.10 STATUTORY PROVISIONS CONCERNING INDISCIPLINES

10.11 CODE OF DISCIPLINE

10.12 SELF CHECK EXERCISE

10.13 SUMMARY

10.14 GLOSSARY

10.15 ANSWERS TO SELF CHECK EXERCISE

10.16 TERMINAL QUESTIONS

10.17 SUGGESTED READINGS

10.0 INTRODUCTION

Disciplined behaviour of its work force is a pre-condition of efficient and effective performance for

any enterprise. Only disciplined employees can meet the various environment challenges and contribute to

organizational goals to the best of their efforts. Contrary to grievances, disciplinary matters are initiated by

the management. Traditionally discipline means obedient and orderly behaviour of employees. But behavioral

scientists take discipline as self control of employees to meet organizational standards and objectives.

Like grievances, indiscipline is also inevitable in organisation, as all the employees may not accept the

responsibility of self-discipline and will require some degree of extrinsic disciplinary action. In this sense,

discipline is action by the management to enforce organizational standards. It is also referred to as enforcement

of penalties for violation of rules and regulations.

10.1 LEARNING OBJECTIVES

After reading this lesson, you should be able to

(a) Define discipline and discuss the objectives of imposing discipline among employees.

(b) State the types of discipline and identify the causes of indiscipline.

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(c) Describe the procedure involved in taking a disciplinary action.

(d) Outline the statutory provisions concerning discipline and also code of discipline.

10.2 Meaning and Features of Discipline

According to Richard D. Calhoon, “Discipline may be considered as a force that promotes individuals

or groups to observe the rules, regulations and procedures which are deemed to be necessary for the effective

functioning of an organisation.” The discipline is used as a tool for implementing various rules and regulations

for the smooth running of the organisation.

As per Spriegel, “Discipline is the force that prompts an individual or a group to observe the rules,

regulations and procedures which are deemed to be necessary to the attainment of an objective; it is force or

fear of force which restrains an individual or a group from doing things which are deemed to be destructive

of group objectives. It is also the exercise of restraint or the enforcement of penalties for the violation of

group regulations.”

Spriegal gives the punitive side of enforcing discipline. According to him, discipline is essential for

achieving organizational goals. The non-observance of discipline will mean an obstruction in the way of

achieving goals. The organisation should enforce discipline through fears of punishment.

Earl R. Bremblett takes discipline as co-operation for smooth working in the organisation. He does

not stress on the rigidity of observing rules and regulations but their compliance in some orderly way. In his

words, “Discipline in the broad sense means orderliness – the opposite of confusion. It does not mean a strict

and technical observance of rigid rules and regulations. It simply means working, co-operating, and behaving

in a normal and orderly way, as any responsible person would expect an employer to do.”

Ordway Tead observes, “Discipline is the orderly conduct of affairs by the members of an organisation

who adhere to its necessary regulations because they desire to co-operate harmoniously in forwarding the

end which the group has in view, and willingly recognize that, to do this, their wishes must be brought into a

reasonable unison, with the requirements of the group in action.” In Tead’s view discipline is the outcome of

group’s harmonious behaviour for making concerted efforts to achieve the goals.

Discipline is positive and negative. Positive discipline refers to the willingness of individuals and

groups to carry out the instructions that have to be issued to them. Negative discipline is the one where

management has to exert pressure by fear or punishment for asking persons to undertake some activities and

restrain them from undertaking others.

Thus, discipline can now be defined as a condition in the organisation when employees conduct

themselves in accordance with the organisation’s rules and standards of acceptable behaviour.

The main features of characteristics of discipline that flow from above definitions are:

(a) Discipline is self-discipline: It refers to one’s efforts at self-control to conform to organizational

rules, regulations and procedures which have been established to ensure the successful attainment of

organizational goals.

(b) It is a negative approach: It means discipline encourages people to undertake some activities,

on the one hand, and restrains them from undertaking others, or the other.

(c) It is a punitive approach: It means that discipline also imposes penalty or punishment if the

rules and regulations framed by the organisation are not obeyed or ignored by the members. Punishment is

imposed not to change past behaviour but to prevent its recurrence in future.

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10.3 Objectives of Discipline

The objectives of discipline are to:

(a) Motivate an employee to comply with the company’s performance standards: An employee

receives discipline after failing to meet some obligation of job. The failure could be either directly related to

the tasks performed by the employee or ignoring rules and regulations that define proper conduct at work.

(b) Maintain respect and trust between the supervisor and employee: Discipline if not properly

administered can create problems like low morale, resentment, and ill will between the supervisor and employee.

In such case, improvement in employee’s behaviour, if any, will be relatively short-lived and the supervisor

will need to discipline the employee again and again. On the contrary, properly administered discipline will not

only improve employee behaviour but will also minimize future disciplinary problems through good relationship

between the supervisor and the employee.

(c) Improve the performance of the employee: Discipline for poor task performance should not

be applied while employees are on training or learning the job. Nor should employees be disciplined for

problems beyond their control, for example, failure to meet output standards due to the lack of raw materials.

Discipline should be exercised when employees are found responsible for unsatisfactory performance.

(d) Increase the morale and working efficiency of the employees.

(e) Foster industrial peace which is the very foundation of industrial democracy.

10.4 Types of Discipline

Discipline may be either preventive or corrective in nature. In other words it can be termed as

positive and negative discipline respectively. In case of preventive discipline employees are encouraged to

follow organizational rules and standards willingly. The basic objective here is to infuse a sense of self-

discipline among the employees so that a system relationship in the organisation may be maintained. In this

relationship the management strives to work with all parts of the system to develop it. In this way the

management has not to impose discipline, the employees maintain it themselves.

Positive discipline applies reason to the achievement of common objective. It enables him to have

greater self expression and freedom so much so that he identifies the objective as his own. Corrective

discipline is meant for taking corrective action that follows the infraction of a rule. It is also termed as

negative discipline as some disciplinary action will follow for the violation of rule of standards, which is

usually not liked by the employees. Further it requires attention to due process where concern for employees

rights must be shown.

10.5 Causes of Indiscipline

Mostly non-cooperation results in indiscipline. Various factors like social, economic and cultural also

play a significant role in causing indiscipline. Henry Fayol observed that, “discipline is what the leaders make

it”. Many times indiscipline is due to managerial faults, lapses, thoughtless words, deeds and poor management.

The common causes of indiscipline are:

(a) Absence of effective leadership: Absence of effective leadership results in poor management in

the areas of direction, guidance, instructions, etc. This, is turn, leads to indiscipline.

(b) Unfair Management Practices: Management sometimes indulges in unfair practices like wage

discrimination, non-compliance with promotional policies and transfer policies, discrimination in

allotment of work, defective handling of grievances, payment of low wages, delay in payment of

wages, creating low quality work life, etc. These unfair management practices gradually result in

indiscipline.

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(c) Communication barriers: Communication barriers alongwith absence of upward communication,

absence of humane and understanding approach on the part of superiors result in frustration and

leads to indiscipline.

(d) Non-uniform disciplinary action: Management has to treat all cases of indiscipline in a fair and

equitable way. But management may undertake disciplinary actions in a discriminating way, leading

to violent protests from various quarters (especially while dealing with people who are close to

management).

(e) Divide and rule policy: Managers may often divide the employees into groups, get the information

from different groups about others and encourage the spying activity. Henry Fayol pointed out that

dividing enemy forces to weaken them is clever, but dividing one’s own team is a grave sin against

the business. Building a team is highly difficult when compared to dividing the team. Dividing the

team results in indiscipline.

(f) Inadequate attention to personnel problems and delay in solving personnel problems creates

frustration among individual workers.

(g) Victimization and excessive pressures on the work of the subordinate may also lead to indiscipline.

10.6 Essentials of a Good Disciplinary System

To avoid conflict and lawsuits, managers must administer discipline properly. This entails ensuring

that disciplined employees receive due process. Due process is based on the notion that employees have the

right to be fairly treated, particularly when being disciplined. Effective discipline, again, should be aimed at the

behaviour, not at the employee personally, because the reason for discipline is to improve performance. Some

of the factors lending weight to effective disciplinary procedures in an organisation may be listed as follows:

(a) Rules and performance criteria: Employees should be aware of the rules and standards and

the consequences of violating them.

(b) Documentation of the facts: Managers should gather a convincing amount of evidence to

justify any disciplinary action. This evidence should be carefully documented so that no one can find fault

with the process followed.

(c) Consistent response to rule violations: It is important for employees to believe that discipline

is administered consistently, predictably, and without discrimination or favoritism.

(d) Training of supervisors: Training supervisors and managers on how and when discipline should

be used is important.

(e) Prompt action: Effective discipline is immediate. The longer the time that transpires between

the offence and the disciplinary action, the less effective the discipline will be.

(f) Impersonal discipline: Effective discipline is handled impersonally by focusing on behaviours,

not on the person. The objective should be to correct undesirable, behaviours and not merely punishing the

delinquent employee. Make disciplinary action corrective rather than punitive.

(g) Reasonable penalty: It is desirable for discipline to be progressive beginning with an oral

warning and proceeding through a written warning, suspension followed by dismissal in most serious cases.

(h) Follow-up: Organisational policies, procedures and rules should be appraised at regular intervals

to ensure that they are in tune with the times. If a particular rule is violated time and again (e.g., no smoking),

it should be examined thoroughly to discover and remove the causes of such violations. Continual infractions

may require a different type of discipline from that applied to isolated instances of misconduct.

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10.7 Procedure of Disciplinary Action

Positive discipline is not just a simple act of supervisor discussing performance problems with an

employee. Rather, it is a procedure comprising a number of steps. Important steps in that procedure are:

(a) Location of Responsibility: Who should administer discipline is a subject to some debate. In

one view, the responsibility for administering discipline should fall on the shoulders of immediate supervisor of

the employee. The reason being the immediate supervisor is responsible for employee’s output. He/she also

knows better about employee’s performance problems. The contrary opinion expressed in this regard is that

discipline should be administered on an equitable and uniform basis by the H.R. department. However, this

approach has its drawbacks: first, the HR department must spend inordinate amounts of time on disciplinary

matters and the second; the supervisor will lose some control over subordinates.

In order to overcome the problem of where to place the responsibility for discipline, the supervisor

should be entrusted with the responsibility to administer less severe forms of discipline, such as an oral

warning or a written notice. For serious situations involving discharge or suspension, the supervisor should

consult with HR representatives in order to administer such disciplines.

(b) Define Performance Expectations: A core ingredient in every disciplinary procedure is to

clearly define the standard of behaviour that management expects from its employees. Employee standards

of performance or behaviour must be in conformity with the organizational objectives. Obviously, these

standards need to be revised alongwith change in organizational goals and objectives. Many organisations

provide their employees with written principles of behaviour in the form of “Employee Manuals.”

(c) Communication of Policy, Procedures and Rules: In order to maintain satisfactory levels of

employee performance, the disciplinary policy, procedures and rules formulated by the organisation need to

be clearly communicated to the employees. Employees about their expected behavior should be communicated

through employee handbooks/manuals, orientation programmes, rules and regulations distributed in writing to

employees or pasted on bulletin boards.

(d) Collection of Performance Data: Before an employee is said to have undisciplined, it is of the

utmost importance to prove that some rule, regulation or standard is violated and, thus, unsatisfactory

performance has taken place. Here, one problem is while collection of some performance data is easy, others

are difficult. For example, an employee’s absence routinely recorded is rarely subject to misinterpretation.

However, there are some measures of performance such as horseplay, insubordination, and abusive language

to supervisors which are some what subjective and difficult to record.

Knowledge about concrete records of unsatisfactory performance of employees is considered

important for three reasons. First, the burden of proof lies with the manager or employer. This is based on the

common law that a person is innocent until proven guilty. Second, an employee if convinced with proof about

his unsatisfactory performance is more likely to improve his/her behaviour or performance. Third, if the

accused employee questions the punishment awarded to him/her and the grievance reaches arbitration, the

arbitrator may ask the employer to supply the proof of employee misconduct or undesirable behaviour.

(e) Framing Charges and Intimation: Once the prima fascia case of employee misconduct is

established, the employer then issues a notice to employee stating charges labeled against him. Such a notice

is generally known as a ‘show cause notice’. In the notice, each charge needs to be clearly specified. Also,

the accused employee should be given an opportunity to explain his/her position.

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(f) Consideration of Explanation: On receipt of explanation from the accused employee, the

management may consider any one of the three types of options available to it:

(i) If the accused employee confesses the charge labeled against him/her, the management can

dispense any further enquiry and award punishment to the accused employee.

(ii) In case the management is satisfied with the explanation given by the accused, the charged

against him/her can be cancelled and quashed.

(iii) If the management is not satisfied with the explanation given by the accused, the management

can proceed to further probing of the matter so that the fact is established and an appropriate

action can be taken.

(g) Awarding Punishment: Once the unsatisfactory performance of the accused is well established,

the management then awards punishment to the accused employee. As already mentioned, while awarding

punishment, the management should follow a procedure of progressive discipline. The progressive discipline

is characterised by either a penalty commensurate with the offense or a series of increasing serious penalties

for continue unsatisfactory performance.

(h) Follow Up: The last step in the procedure of positive discipline is follow-up. It means, once the

punishment is awarded, it is necessary to keep vigil whether the punishment has any salutary effect on the

behaviour and performance of the accused employee or not. If not the corrective measures like corrective

counseling should be introduced to improve the accuser’s behaviour.

10.8 Disciplinary Actions

The ultimate disciplinary action which a management may resort to is separation of employee from

the company for cause i.e. discharges. But keeping in view human limitations, the management should avoid

this kind of stringent action giving employees every chance to improve themselves. But while taking any

action management should follow “Hot-Stove Rule”. The rule states that the disciplinary action should have

similar features to the consequences a person suffers from touching a hot stove. In other words the action

should be imposed with warning, should be immediate, consistent (i.e. fair and not discriminatory), and

impersonal. As Werther and Keith Davis have observed, “effective discipline condemns the employee’s

wrongful act, not the employee as a person.” Progressive discipline will require higher penalties for repeated

violation of discipline. The different kinds of disciplinary action may be as under:

(a) Verbal Warning: It is the mildest form of disciplinary action. A temporary record of reprimand

is then placed in the employee’s file retained by the manager for future reference. A verbal warning, if

communicated in a private and informal environment, will give desired results. However, the employee must

be told that a stringent action may follow if he does not improve his behaviour.

(b) Written Warning: Basically it is the first formal stage of disciplinary procedure. Once issued to

the employee, it becomes a part of employee’s personal file maintained by personnel department.

(c) Suspension: If the earlier steps do not show the desired results, suspension or lay-off may

follow. This temporary separation continues till the employee clarifies his position. Once the suspended

employee regains the faith of the management by proving himself without fault he may be paid for the lost

days.

(d) Demotion and Pay Cut: If the dismissal is not possible due to any reason, demotion and pay-cut

are the alternative disciplinary actions which management can apply. On the applicability of these actions,

either the employee will leave the organisation on his own or will try to improve himself. In both the cases the

problem of indiscipline will be automatically solved.

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(e) Dismissal: The ultimate disciplinary punishment is dismissing or discharge of problem employee.

This decision should be given long and hard consideration and should be used very sparingly and only for the

most serious offences, as discharging of an experienced employee will attract numerous problems for the

organisation.

10.9 The Red Hot Stove Rule

Disciplinary action against an undisciplined employee is painful and generates resentment on the part

of employees. Hence, a question arises as to how to impose discipline without generating resentment? Douglas

McGregor suggested The Red Hot Stove Rule to guide managers in enforcing discipline. This rule is based on

an analogy between touching a red hot stove and violating rules of discipline. According to this rule, the

disciplinary action should have the following consequences:

(a) Burns Immediately: When a person touches a hot stove the burn is immediate. Similarly, if a

disciplinary action is to be taken, it must occur immediately so that the individual will understand the reason

for it. With the passage of time, people have the tendency to convince themselves that they are not at fault.

(b) Provides Warning: As you move closer to a stove, you are warned by its heat that you will be

burned if you touch it. Similarly, it is very important to provide advance warning that punishment would follow

unacceptable behaviour.

(c) Consistent: The effect of red hot stove is consistent. Everyone who touches it will be burnt.

Disciplinary action should also be consistent in that everyone who performs the same act will be punished

accordingly.

(d) Impersonal: The effect of a red hot stove is impersonal. A person is burnt because he touched

the stove not because of who he is. Disciplinary action should be impersonal. There are no favorites when

this approach is followed.

(e) Repetition: A person who repeatedly touches the hot stove is burnt more than one who touched

it only once. This effect is commensurate with the gravity of misconduct. A single incidence of indiscipline

will get less punishment as compared to repeated incidences.

10.10 Statutory Provisions Concerning Indiscipline

The Indian law on indiscipline consists of the following:

(a) Industrial Employment (Standing Orders) Act, 1946: This Act requires the employers in

specified industrial establishments to define precisely the conditions of employment including the rules of

discipline and procedure of punishment for indiscipline and also to make them known to workmen. Among

other matters standing orders define disciplinary action for misconduct, acts or omissions which constitute

misconduct and various forms punishment.

(b) The Industrial Disputes Act, 1947: Under Section 11-A of this Act, a Labour Court, Labour

Tribunal or National Tribunal can set aside the order of discharge or dismissal of employee. In case of

protected workmen, prior permission for dismissal and discharge is essential. These protected workmen are

trade union officers who are declared as such to save them from being victimized for raising the dispute.

(c) The Payment of Wages Act, 1936: Section 8 of this law places restrictions on the imposition of

fines on an accused employee.

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10.11 Code of Discipline

The Indian Labour Conference at its 15th session held at New Delhi in July 1957, after a long and

hard discussion formulated a ‘Code of Discipline’ for the purpose of maintaining discipline in the Indian

Industries-both private and public sector industries. The principles laid down for governing discipline in the

industries are classified into the three broad categories. These are:

I. Mutual Agreement between Management and Union

• There should be no strike or lock-out without due notice.

• There should not be unilateral action on either side.

• There should be no recourse to go slowdown.

• Industrial disputes, if any, should be settled utilizing existing machinery.

• Neither party should be indulged in the acts of violence, coercion or intimidation.

• Both parties should agree to set up a grievance procedure and should also abide by it.

• Both managers and employees should be properly educated about their duties, responsibilities and

obligations to the organisation.

II. Agreement on the Part of Management

• Not to increase workload unless agreed upon or settled otherwise.

• Not to encourage unfair labour practices such as discrimination, coercion, victimization, etc.

• Take prompt actions to implement awards and agreements.

• Take immediate and appropriate disciplinary action against officers found guilty of precipitating

indiscipline among workers in the organisation.

• Recognize trade union in accordance with the criteria evolved at the 16th session of the Indian

Labour Conference held in May 1958.

III. Agreement on the Part of Trade Unions

• Not to encourage or support any form of physical duress.

• Not to permit violent demonstrations and rowdyism.

• Not to encourage unfair labour practices such as negligence of duty, insubordination, go-slow,

carelessness, etc.

• Take immediate action to implement awards, agreements, settlements and decisions.

• Display at a prominent place the Code of Discipline in the local language for the knowledge of

workers.

• Disapprove the actions of the members found violating the Code of Discipline.

10.12 SELF CHECK EXERCISE

1. Define Discipline.

2. Write a short-note on features of discipline.

3. Discuss in brief the objectives of discipline.

4. What are the causes of indiscipline? Discuss on brief.

5. What are the essentials of a good disciplinary system? Discuss in brief.

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6. Discuss in brief the procedure of disciplinary action.

7. Write a short-note on the Industrial Disputes Act, 1947.

10.13 SUMMARY

Discipline refers to a procedure that corrects or punishes a subordinate because a rule or procedure

has been violated. The main objectives of discipline are to motivate employees to comply with the organisation’s

performance standards, maintain respect and trust between the supervisor and employee and improve

employee’s performance. The common causes of indiscipline are absence of effective leadership, unfair

management practices, divide and rule policies, communication barriers, victimization etc. The general guidelines

in administrating discipline include making disciplinary actions corrective, making disciplinary actions progressive

and following the hot stove rule. Disciplinary action follows a procedure comprising a number of steps.

Disciplinary actions taken against the accused employee include oral warning, written notice, suspension,

demotion and dismissal.

10.14 GLOSSARY

• Discipline is defined as the regulations or conditions that are imposed on employees by management

in order to either correct or prevent behaviors that are detrimental to an organization. The purpose

of employee discipline is not to embarrass or degrade an employee.

• Disciplinary action is a response by the employer to problems with employee performance or

behavior. It may come in the form of a verbal or written reprimand or the loss of employee privileges.

The purpose of disciplinary action is to correct behavior and document issues.

• Good discipline means that employees are willing to abide by company rules and executive orders

and behave in the desired fashion. Discipline implies the absence of chaos, irregularity and confusion

in the behaviour of a worker.

• Indiscipline or misconduct is the deviation or by passing of the established rules which should be

followed without any discretion. It is an act or a conduct which is prejudicial to the interests of the

employer or which is likely to impair his reputation or create unrest among other employees.

• Industrial Dispute Act of 1947 came into force on the first day of April, 1947. The unique object of

the Act is to promote collective bargaining and to maintain a peaceful atmosphere in industries by

avoiding illegal strikes and lock outs. The Act also provides for regulation of lay off and retrenchment.

10.15 ANSWERS TO SELF CHECK EXERCISE

1. For answer refer to section 10.2.

2. For answer refer to section 10.2.

3. For answer refer to section 10.3.

4. For answer refer to section 10.5.

5. For answer refer to section 10.6.

6. For answer refer to section 10.7.

7. For answer refer to section 10.10.

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10.16 TERMINAL QUESTIONS

1. Define discipline. Discuss the features and objectives of discipline.

2. What are the causes of indiscipline in the Indian industries? Explain.

3. Outline the procedure involved in a disciplinary action.

4. What are the statutory provisions laid down concerning discipline in the Indian Industries?

10.17 SUGGESTED READINGS

1. Mamoria, C.B., Personnel Management, Himalaya Publishing House, New Delhi.

2. Jucius, M.J., Personnel Management, Homewood, Irwin.

3. Megginson, L.C., Personnel and Human Resource Administration, Homewood, Irwin.

4. Personnel Management in India, Indian Institute of Personnel Management, Kolkata.

*****

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LESSON-11

EMPLOYEE GRIEVANCES

STRUCTURE

11.0 INTRODUCTION

11.1 LEARING OBJECTIVES

11.2 MEANING AND FEATURES OF GRIEVANCE

11.3 CAUSES OF GRIEVANCES

11.4 NEED FOR A GRIEVANCE PROCEDURE

11.5 THE DISCOVERY OF GRIEVANCE

11.6 ESSENTIALS PRE-REQUISITES OF GRIEVRENCE PRODUCER

11.7 GRIEVANCE PROCEDURE

11.8 MODEL OF GRIEVANCE PROCEDURE

11.9 GRIEVANCE MANAGEMENT IN INDIAN INDUSTRY

11.10 GUIDELINES FOR HANDLINGS GRIEVANCES

11.11 SELF CHECK EXERCISE

11.12 SUMMARY

11.13 GLOSSARY

11.14 ANSWERS TO SELF CHECK EXERCISE

11.15 TERMINAL QUESTIONS

11.16 SUGGESTED READINGS

111111.0 INTRODUCTION

In a sense, discipline and grievance are the two sides of the same coin. When employees behave in

an undesirable manner, it constitutes, what the employers or managers consider it, indiscipline. On the other

side, when employees feel violation of the employment contract by the employers or managers, it constitutes

the employee grievance. In order to ensure the smooth functioning of organisation both indiscipline and

grievance need to be settled.

Every employee has certain expectations which he thinks must be fulfilled by the organisation he is

working for. When the organisation fails to do this, he develops a feeling of discontent or dissatisfaction.

When an employee feels that something is unfair in the organisation, he is said to have a grievance.

11.1 LEARNING OBJECTIVES

After reading this lesson, you should be able to

(a) Define grievance and list the causes of grievances.

(b) State the essential prerequisites of a grievance procedure.

(c) Discuss the various steps involved in a grievance procedure.

(d) Describe how grievances are redressed in Indian Industry.

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11.2 Meaning and Features of Grievance

In a broader perspective, any discontent or dissatisfaction, real or imaginary, experienced, by an

employee about his or her employment constitutes a grievance. In their working lives, employees occasionally

become aggrieved at the treatment meted out to them by the supervisors or the management on certain

service conditions, managerial decisions, practices, etc.

According to J.M. Jucius, “A grievance is any discontent or dissatisfaction whether expressed or not,

whether valid or not, arising out of anything connected with the company which an employee thinks, believes

or even feels to be unfair, unjust or inequitable”.

In the words of Edward Flippo, “It is a type of discontent which must always be expressed. A

grievance is usually more formal in character than a complaint. It can be valid or ridiculous and must grow out

of something connected with company operations or policy. It must involve an interpretation or application of

the provisions of the labour contract.

The Model Grievance Procedure has provided the following definition of grievances.

“Complaints affecting one or more individual workers in respect of their wage payments, overtime,

leave, transfer, promotions, seniority, work assignment and discharge would constitute grievance. Where the

points at dispute are of general applicability or considerable magnitude, they will fall outside the scope of this

procedure.”

Now, grievance can be defined as a complaint expressed verbally or in writing where an employee

feels injustice has been done to him by the management. Usually, a complaint based on interpretation or

application of the provisions of negotiated contract between the union and the management constitutes a

grievance.

On the analysis of the definitions of grievance, some noticeable features emerge clearly:

(i) A grievance reflects dissatisfaction or discontent or a feeling of injustice with any aspect of

the organisation.

(ii) The dissatisfaction must arise out of employment and not from personal or family problems.

(iii) The dissatisfaction can arise out of real or imaginary reasons. The reasons may be valid or

invalid, legitimate or irrational, justifiable or ridiculous.

(iv) A grievance arises only when an employee feels that injustice has been done to him.

(v) The dissatisfaction may be expressed or implied. It may be expressed verbally or in writing.

Initially the employee complains orally or in writing. If this is not looked into properly, the

discontent grows and takes the shape of a grievance.

(vi) The grievance results from perceived non-fulfillment of one’s expectations from the

organisation.

(vii) Grievances, if not redressed in time, tend to lower morale and productivity of employees.

11.3 Causes of Grievances

Grievances are related to the human behaviour which differ from person to person. There may be

various reasons for the arising of grievances, which are summarized as follows:

(a) Employment Conditions: Workers may be aggrieved because of the employment conditions.

They may desire labour welfare facilities or improvement in the working conditions.

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(b) Effect of Trade Unions: Sometimes, trade unions in the organisation may be the cause of

grievances among the employees where trade unions are new and/or strong and they are bent upon doing

something for the welfare of the employees. Grievances arise if the management does not agree to the

proposals made by it.

(c) Difference of Opinion: Grievance may also arise because of a difference of opinion or thought.

When both the parties stick to their views, which are contradictory and it becomes a prestige point for both

the parties, grievance may arise.

(d) Social Injustice: Grievance may be caused by social injustice. If a facility is provided in a

similar unit, the employee of the unit where the facility is not provided may feel aggrieved.

(e) Adherence to Rules: Grievance may arise if company does not adhere to its policies or procedures

or if the rules are followed but in a biased manner or they are being assigned a different explanation.

(f) Psychological Reason: Sometimes, doubts and fears in the minds of workers for any injustice to

be committed to them may give rise to grievance.

11.4 Need for a Grievance Procedure

Grievances affect not only the employees and managers but also the organisation as a whole. In

view of these adverse effects, the management has to identify and redress the grievances in a prompt

manner. If the individual grievances are left ignored and unattended, there is a danger that these grievances

may result in collective disputes. They affect the employee morale adversely. Hence, it is essential to have a

proper grievance handling

The following are some of the distinct advantages of having a grievances handling procedure:

(a) The management can know the employees’ feeling and opinions about the company’s policies

and practices. It can feel the ‘pulse’ of the employees.

(b) With the existence of a grievance handling procedure, the employee gets a chance to ventilate

his feelings. He can let off steam through an official channel. Certain problems of workers

cannot be solved by first line supervisors, for these supervisors lack the expertise that the top

management has, by virtue of their professional knowledge and experience.

(c) It keeps a check on the supervisor’s attitude and behaviour towards their subordinates. They

are compelled to listen to subordinates patiently and sympathetically.

(d) The morale of the employees will be high with the existence of proper grievance handling

procedure. Employees can get their grievances redressed in a just manner.

11.5 The Discovery of Grievances

Grievances can be uncovered in a number of ways. Gossip and grapevine offer vital clues about

employee grievances. Gripe boxes, open door policies, periodic interviews, exit surveys could also be undertaken

to uncover the mystery surrounding grievances. These methods are discussed below:

(a) Observation: A manager/supervisor can usually track the behaviours of people working under

him. If a particular employee is not getting along with people, spoiling materials due to carelessness or

recklessness, showing indifference to commands, reporting late for work or is remaining absent the signals

are fairly obvious. Since the supervisor is close to the scene of action, he can always find out such unusual

behaviours and report promptly.

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(b) Grievance Procedure: A systematic grievance procedure is the best means to highlight employee

dissatisfaction at various levels. Management, to this end, must encourage employees to use it whenever they

have anything to say. In the absence of such a procedure, grievances pile up and explode in violent forms at

a future date. By that time things might have taken an ugly shape altogether, impairing cordial relations

between labour and management. If management fails to induce employees to express their grievances,

unions will take over and emerge as powerful bargaining representatives.

(c) Gripe Boxes: Gripe boxes may be kept at prominent locations in the factory for lodging anonymous

complaints pertaining to any aspect relating to work. Since the complainant need not reveal his identity, he

can express his feelings of injustice or discontent frankly and without any fear of victimization.

(d) Open door policy: This is a kind of walk-in-meeting with the manager when the employee can

express his feelings openly about any work-related grievance. The manager can cross-check the details of

the complaint through various means at his disposal.

(e) Exit Interview: Employees usually leave their current jobs due to dissatisfaction or better

prospects outside. If the manager tries sincerely through an exit interview, he might be able to find out the real

reason why employee is leaving the organisation. To elicit valuable information, the manager must encourage

the employees to give a correct picture so as to rectify the mistakes promptly. If the employee is not providing

fearless answers, he may be given a questionnaire to fill up and post the same after getting all his dues

cleared from the organisation where he is currently employed.

(f) Opinion Surveys: Surveys may be conducted periodically to elicit the opinions of employees

about the organisation and its policies.

It is better to use as many channels as possible, if the intention is to uncover the truth behind the

curtain.

11.6 Essential Pre-requisites of a Grievance Procedure

Every organisation should have a systematic grievance procedure in order to redress the grievances

effectively. As explained above, unattended grievances may culminate in the form of violent conflicts later

on. The grievance procedure, to be sound and effective should possess certain pre-requisites:

(a) Conformity with statutory provisions: Due consideration must be given to the prevailing

legislation while designing the grievance handling procedure.

(b) Unambiguity: Every aspect of the grievance handling procedure should be clear and unambiguous.

All employees should know whom to approach first when they have a grievance, whether the complaint

should be written or oral, the maximum time in which the redressal is assured, etc. The redressing official

should also know the limits within which he can take the required action.

(c) Simplicity: The grievance handling procedure should be simple and short. If the procedure is

complicated it may discourage employees and they may fail to make use of it in a proper manner.

(d) Promptness: The grievance of the employee should be promptly handled and necessary action

must be taken immediately. This is good for both the employees and management, because if the wrong doer

is punished late, it may affect the morale of other employees as well.

(e) Training: The supervisors and the union representatives should be properly trained in all aspects

of grievance handling beforehand or else it will complicate the problem.

(f) Follow up: The personnel department should keep track of the effectiveness and the functioning

of grievance handling procedure and make necessary changes to improve it from time to time.

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11.7 Grievance Procedure

Grievance which indicates discontent and dissatisfaction among employees adversely affects their

productivity. In other words, by not initiating timely action to deal with grievance, the organisation tends to

lose the productive efforts of the discounted employee. It is indeed unrealistic to assume that an aggrieved or

dissatisfied employee with put his or her best efforts on the job. The redressal of the employees grievances,

therefore, assumes importance. The procedure the management applies to deal with the employees grievances

can be states as follows:

(a) Timely Action: The first and foremost requisite in grievance handling is to settle them immediately

as and when they arise. Or say, grievances need to be nipped in the bud. Sooner the grievance is settled,

lesser will be its effects on employees’ performance. This requires the first line supervisors be trained in

recognizing and handling a grievance properly and promptly.

(b) Accepting the Grievance: The supervisor should try to recognize and accept the employee

grievance as and when it is expressed. It must be noted that acceptance does not necessarily mean agreeing

with the grievance, it simply shows the willingness of the supervisor to look into the complaint objectively and

dispassionately to deal with the grievance. Evidence suggests that more the supervisor shows his or her

concern for the employees, lesser is the number of grievances raised by the employees.

(c) Identifying the Problem: As stated earlier, the grievance expressed by the employee may be at

times simply emotionally, overtones, imaginary or vague. The supervisor, therefore, needs to identify or

diagnose the problem stated by the employee.

(d) Collecting the Facts: Once the problem is identified as a real problem, the supervisor should,

then, collect all the relevant facts and proofs relating to the grievance. The facts so collected need to be

separated from the opinions and feeling to avoid distortions the facts. It is useful to maintain the facts for

future uses as and when these are required.

(e) Analysing the cause of the Grievance: Having collected all the facts and figures relating to

the grievance, the next step involved in the grievance procedure is to establish and analyse the cause that led

to grievance. The analysis of the cause will involve studying various aspects of the grievance such as the

employees past history, frequency of the occurrence, management practices, union practices, etc. Identification

of the cause of the grievance helps the management take corrective measures to settle the grievance and

also to prevent its recurrence.

(f) Taking Decision: In order to take the best decision to handle the grievance, alternative courses

of actions are worked out. These are, then, evaluated in view of their consequences on the aggrieved employee,

the union and the management. Finally, a decision is taken which is best suited to the given situation in the

organisation. Such decision should serve as a precedent both within the department and the organisation.

(g) Implementing the Decision: The decision whatsoever taken must be immediately communicated

to the employee and also implemented by the competent authority. McGregor’s “Hot Stove Rule” should be

strictly followed while implementing the decision. The decision, thus, implemented should also be reviewed to

know whether the grievance has been satisfactorily resolved or not. In case, it is not resolved, the supervisor

once again needs to go back to the whole procedure step by step to find out an appropriate decision or

solution to resolve the grievance.

However, if the grievance is not resolved at the internal level, the grievance is, then, referred to an

arbitrator who is acceptable to the employee as well as the management. The arbitrator follows a quasi-

judicial process where both the parties present evidence. Based on the evidences so produced, the matter is

cross-examined in thread-bare. The arbitrator then thinks, applies his mind and arrives at a decision. The

decision taken by arbitrator is final and binding on both the parties.

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11.8 Model of Grievance Procedure

The National Commission on Labour has suggested a model grievance which would ensure the

speedy settlement of grievance. The model comprises of the five steps as outlined below:

(a) The aggrieved employee shall convey his or her grievance verbally to the officer designated

by the management to deal with grievance. The officer will have to reply to the complaints

within forty-eight hours of its presentation to him or her.

(b) If the grievant is not satisfied with the answer or does not receive the answer within forty-

eight hours, he or she shall, then, present the grievance to the departmental head nominated

for this purpose. The head must give his or her reply within three days of the presentation of

the grievance.

(c) If the aggrieved employee is still not satisfied with the decision of the departmental head or

does not receive within the stipulated period, the employee can approach to the Grievance

Committee for the settlement of his or her grievance. The Grievance Committee has to give

its recommendations in seven days and report the same to the management. The management

must communicate the decision to the grievant within three days.

(d) If still employee is not satisfied either with the decision made by the Grievance Committee or

does not receive decision from the committee, he or she can make appeal to the management

for revision of the decision taken. The management can take a week period for appeal to be

considered and can revise the decision and inform the grievant.

(e) If the employee is still not satisfied with the management’s decision, the grievance is referred

to a voluntary arbitration within a week after decision taken by the management at stage 4.

The decision of the arbitrator is final and binding on both the parties, i.e., the management

and the union.

11.9 Grievance Management in Indian Industry

At present, there are three legislations dealing with grievances of employees working in industries.

The Industrial Employment (Standing Orders) Act, 1946, requires that every establishment employing 100 or

more workers should frame standing orders. These should contain, among other things, a provision for redressal

of grievances of workers against unfair treatment and wrongful actions by the employer or his agents. The

Factories Act, 1948, provides for the appointment of a Welfare Officer in every factory ordinarily employing

500 or more workers. These welfare officers also look after complaints and grievances of workers. They

also look after proper implementation of the existing labour legislation. Besides, individual disputes relating to

discharge, dismissal or retrenchment can be taken up for relief under the Industrial Disputes Act, 1947,

amended in 1965.

However, the existing labour legislation is not being implemented properly by employers. There is

lack of fairness on their part. Welfare officers have also not been keen on protecting the interests of workers

in the organized sector. In certain cases, they are playing a double role. It is unfortunate that the public sector,

which should set up an example for the private sector, has not been implementing labour laws properly.

In India, a Model Grievance Procedure was adopted by the Indian Labour Conference in its 16th

session held in 1958. At present, Indian industries are adopting either the Model Grievance Procedure or

procedures formulated by themselves with modifications in the Model Grievance Procedure. In other words,

the grievance procedures are mostly voluntary in nature.

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11.10 Guidelines for Handling Grievances

The following guidelines may help a supervisor while dealing with grievance. He need not follow

all these steps in every case. It is sufficient to keep these views in mind while handling grievances:

• Treat each case as important and get the grievance in writing.

• Talk to the employee directly. Encourage him to speak the truth. Give him a patient hearing.

• Discuss in a private place. Ensure confidentiality, if necessary.

• Handle each case within a time frame.

• Examine company provisions in each case. Identify violations, if any. Do not hold back the remedy if

the company is wrong. Inform your superior about all grievances.

• Get all relevant facts about the grievance. Examine the personal record of the aggrieved workers.

See whether any witnesses are available. Visit the work area. The idea is to find where things have

gone wrong and who is at fault.

• Gather information from the union representative, what he has to say, what he wants, etc. Give short

replies, uncovering the truth as well as provisions. Treat him properly.

• Control your emotions, your remarks and behaviour.

• Maintain proper records and follow up the action taken in each case.

• Be proactive, if possible. Some companies in India actually invite workers to ventilate their grievances

freely, listen to the other side patiently, explain the reasons why the problems arose and redress the

grievances promptly.

11.11 SELF CHECK EXERCISE

1. Define Grievance.

2. Discuss in brief features of Grievance.

3. What are the causes of grievance? Discuss in brief.

4. Write a short-note on Grievance Procedure.

5. Discuss in brief the guidelines followed for handling grievances at workplace.

11.12 SUMMARY

A grievance refers to any form of discontent of dissatisfaction, arising of employment regarding

certain organizational issues. Working conditions, management policy and practices, union practices and

personality traits cause grievances. If grievances are not identified and redressed properly, they may adversely

affect the workers, managers and the organisation. An effective grievance procedure contains characteristics

such as timely, simple, legal sanctity, acceptability, training and follows up. A typical grievance procedure

consists of different steps such as timely action acceptance of the grievance, identification of the problem,

collection of facts, analysis of the cause, taking decision and implementation and follow up of the decision.

11.13 GLOSSARY

• Condition of employment refers to something that both the employee and employer agree to at the

beginning of a worker's employment. A condition may also include a contract that states that an

employee is given employment for a certain length of time so long as the employee does not violate

the terms of the contract.

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• Grievances are concerns, problems or complaints that employees raise with their employer. There

is no legally binding process that you or your employer must follow when raising or handling a

grievance at work.

• Grievance handling is the management of employee dissatisfaction or complaints (e.g. favouritism,

workplace harassment, or wage cuts). By establishing formal grievance handling procedures, you

provide a safe environment for your employees to raise their concerns.

• Grievance procedures are a means of dispute resolution that can be used by a company to address

complaints by employees, suppliers, customers, and/or competitors. A grievance procedure provides

a hierarchical structure for presenting and settling workplace disputes.

• Observation is the act of noticing something or a judgment or inference from something seen or

experienced. An example of observation is the watching of Haley's Comet. An example of observation

is making the statement that a teacher is proficient from watching him teach several times.

11.14 ANSWERS TO SELF CHECK EXERCISE

1. For answer refer to section 11.2.

2. For answer refer to section 11.2.

3. For answer refer to section 11.3.

4. For answer refer to section 11.7.

5. For answer refer to section 11.10.

11.15 TERMINAL QUESTIONS

1. Define grievance. Identify the various causes of grievances.

2. “An effective grievance procedure must contain some essential characteristics”. Explain.

3. How can the managers discover the grievances of the employees?

4. How is a grievance redressed? Outline the grievance procedure.

5. Discuss the model grievance procedure that is applicable in India.

11.16 SUGGESTED READINGS

1. Jucious, M.J., Personnel Managmenet, Richard D. Irwin, Illinois.

2. Monappa, A. and Saiyadain, M.S., Personnel Management, Tata McGraw Hill, New Delhi.

3. Carrell, M. and Arvin, C.H., Labour Relations and Collective Bargaining, Prentice Hall, N.J.

4. Dwivedi, R.S., Managing Human Resources, Galgotia Publishing Company, New Delhi.

*****

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LESSON-12

EMPLOYEE HEALTH AND SAFETY

STRUCTURE

12.0 INTRODUCTION

12.1 LEARING OBJECTIVES

12.2 MEANING OF HEALTH

12.3 IMPORTANCE OF HEALTH

12.4 OCCUPATIONAL HAZARDS AND DISEASES

12.5. PROTECTION AGAINST HAZARDS

12.6 STATUTARY PROVISIONS REGARDING HEALTH

12.7 MEASURES TO PROMOTE EMPLOYEE HEALTH

12.8 EMPLOYEE SAFETY

12.9 TYPES AND CASUES OF ACCIDENTS

12.10 SIGNIFICANCE OF INDUSTRIAL POLICY

12.11 EFFECTIVE SAFETY MANAGEMENT

12.12 STATUTARY PROVISIONS REGARDING SAFETY IN INDIA

12.13 SELF CHECK EXERCISE

12.14 SUMMARY

12.15 GLOSSARY

12.16 ANSWERS TO SELF CHECK EXERCISE

12.17 TERMINAL QUESTIONS

12.18 SUGGESTED READINGS

12.0 INTRODUCTION

A safe and hygienic work environment is the basic and common requirement of every employee

irrespective of his position or status in the organisation. And it is the moral as well as legal responsibility of

every employer to provide a workplace to its employees which is not hazardous to their physical or mental

health. Human engineering or ergonomics which is the study of work and of work methods can help the

organisations in protecting their employees against the dangers of accidents and industrial diseases. Very

minor accidents may create major industrial disputes. Therefore, designing and operations of man, machine

environment scientifically will ensure mental and physical rest to the human beings. Scientific management,

therefore, is a necessity for the organisations as it will strengthen industrial relations and will enhance job

satisfaction.

12.1 LEARNING OBJECTIVES

After reading this lesson, you should be able to

(a) Define health and discuss the importance of health.

(b) Outline the measures to protect health.

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(c) Specify the legal provisions regarding health.

(d) State the importance of industrial safety.

(e) Enumerate the various types of accidents and their causes.

(f) Elaborate legal provisions for maintaining safety.

12.2 Meaning of Health

Health is a stage of compete physical, mental and social well being and not merely the absence of

any disease. A person is considered healthy if he is well adjusted to the environment in which he works.

According to the Joint I.L.O/W.H.O. Committee on Organisational Health, Industrial health is (i) the

prevention and maintenance of physical, mental and social well being of workers in all occupations (ii)

prevention among workers of ill health caused by the working conditions (iii) protection of workers in their

employment from risks resulting from factors averse to health and (iv) placing and maintenance of the

worker in an occupational environment adapted to his physical and psychological equipment.

The World Health Organisation (WHO) defined health as “a state of complete physical, mental and

social well being and not merely an absence of disease or infirmity”.

According to the First Five Year Plan “Health is positive state of well being in which harmonious

development of mental and physical capabilities of the individuals lead to the enjoyment of a rich and full life.

It implies adjustment of the individual to his total environment – physical and social.”

In simple words, one can say that health is a condition under which an individual is able to mobilize all

his resources-intellectual, emotional and physical for optimum living.

Health has found an important place in the constitution of all the countries and UN agencies. The

Preamble of the WHO Constitution states that the enjoyment of the highest attainable standard of health is a

fundamental right of every human being and those governments are responsible for the health of their people

and can fulfill that responsibility by taking appropriate health and social welfare measures.

There are two types of employee’s health: physical health and mental health. A brief mention of

these follows:

Physical Health: The physical health refers to infirmity in the employee’s health. Employee’s physical

health and his work are intimately related. While an unhealthy employee works less both quantitatively and

qualitatively, commits accidents, and remain absent from work, a healthy employee produces results opposite

to these. The same underlines the need for and importance of healthy employees in an organisation.

Mental Health: This refers to the mental soundness of the employees. As is physical health important

for good performance, so is mental health also. Experience suggests that three factors, namely, mental

breakdowns, mental disturbances, and mental illness impair the mental health of employees.

12.3 Importance of Health

The trite saying ‘Health is wealth’ explains the importance of health. Ill-health results in high rate of

absenteeism and turnover, industrial discontent and indiscipline, poor performance and low productivity and

more accidents. On the contrary, the natural consequences of good health are reduction in the rate of

absenteeism and turnover, accidents and occupational diseases. Besides, employee health also provides other

benefits such as reduced spoilage, improved morale of employee, increased productivity of employee and

also longer working period of an employee which, of course, cannot be easily measured.

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In long and short, employee health is important because it helps to:

• Maintain and improve the employee performance both quantitatively and qualitatively.

• Reduce employee absenteeism and turnover.

• Minimize industrial unrest and indiscipline.

• Improve employee morale and motivation.

In India, the Royal Commission on Labour (1931), the Labour Investigation Committee (1946), the

Health Safety and Development Committee (1943), the Labour Welfare Committee (1969) and the National

Commission on Labour (1969), all have expressed concern for employee health. These emphasized upon the

creation and maintenance of as healthy an environment as possible, in the homes of the employees as well as

in all places where they congregate for work, amusement or recreation.

The I.L.O. in its Recommendation No.112 envisaged the importance of employee health in these

words:

“Occupational health service should be established in or near a place of employment for the purpose

of: (i) protecting the workers against any health hazard arising out of work or conditions in which it is carried

on; (ii) contributing towards worker’s physical and mental adjustment; and (iii) contributing to establishment

and maintenance of the highest possible degree of physical and mental well-being of the workers.”

12.4 Occupational Hazards and Diseases

Employees in certain industries are exposed to certain occupational hazards and diseases. Ronald

Blake has classified occupational hazards into the following four categories:

(a) Chemical Hazards: The common chemical substances, such as carbon monoxide, carbon dioxide,

nitrogen dioxide, sulphur dioxide, hydrocarbons, sulphuric acid, tannic acid, acetic acid, fumeric acid, ozone,

limes and alkalies cause injury to the employees when they are absorbed through skin and inhaling or ingesting.

Workers may suffer from respiratory diseases, skin diseases, allergy, heart disease, cancer and neurological

disorders. These diseases may be temporary or chronic in nature. Often a disease may be difficult to diagnose

because neither its symptoms may appear after a long dormant period or may not be apparent at all. These

diseases often shorten employee’s life expectancy.

(b) Biological Hazards: These hazards are manifested by diseases caused by bacteria, fungi,

viruses, insects, dietary deficiencies, excessive drinking, allergies, brain fever, imbalances, tetanus, stresses

and strains. All these tell upon employee’s health.

(c) Environmental Hazards: Environmental hazards may include noise pollution, vibration and

shocks, illumination, radiation, heat, ventilation, air and water pollution. These hazards cause redness of eyes,

genetic disorders, cancer, sterility, hearing loss, nerve injury etc., to workers.

(d) Psychological Hazards: Industrial/job stress caused by various stressors, such as task and role

demands, organizational leadership, lack of group cohesion, inter-group and interpersonal conflicts, life and

career changes, etc., lead to emotional disturbances which, in turn, lead to fatigue and exhaustion. All these

affect health of employees.

Apart from occupational hazards, there are some occupational diseases also that impair health of

employees in industries. A brief mention of these follows:

Occupational Diseases: Occupational diseases are caused by working conditions prevalent in

industries. Let these be exemplified with a few examples.

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Workers working on lead (e.g., cable-makers, lead pipe makers, compositors, painters and plumbers)

fall prey to ‘painter’s colic’ or ‘wrist drop’ disease. This disease causes vomiting, stomach pains, joint pains

and loss of appetite. It may even lead the workers to collapse.

Workers working in handling wool, hoofs, hides, hair bristles, animal carcasses etc., become victim of

anthrax.

Like occupational hazards, occupational diseases also develop with worker’s frequent exposure to

unhealthy working conditions. They develop slowly with accumulated effects over an extended period of

time.

12.5 Protection against Hazards

Industrial establishments can take two types of measures to protect worker’s health against

occupational hazards:

(A) Preventive Measures

These are based on the philosophy that prevention is better than cure. The preventive measures to

protect employee against occupational health hazards may include:

• Pre-employment medical examination.

• Periodic post-employment medical examination.

• Removal of hazardous conditions of the extent possible.

• Surveillance of special classes of workers such as women workers and child labourers exposed to

health hazards.

• Emergency treatment in case of accidents.

• Education of workers in health and hygiene.

• Training in first-aid to workers.

• Proper factory layout and illumination.

• Proper effluent Disposal Treatment Plants.

• Proper redesign of job to remove monotony and fatigue.

• Proper scheduling of the work with adequate rest.

(B) Curative Measures

The curative measures begin once a worker actually suffers from ill-health or sickness or disease.

The curative measures include the following:

• Adequate and timely medical treatment.

• Allowing the employee adequate period of convalescing and recuperating.

• Adequate compensation.

• Allowing the needed best medical treatment from outside hospitals.

12.6Statutory Provisions Regarding Health

The Factories Act, 1948 insists that the following provisions must be made in industrial establishment

for safeguarding employee health.

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(A) Cleanliness (Sec.11): According to Section 11, the factory shall be kept clean and free from

foul smell arising from any drain, toilet or any other nuisance. Dirt and refuse shall be removed daily by

sweeping or washing the floor, benches, staircases and passages. The floor of every work room shall be

cleaned at least once a week by washing, using disinfectants where necessary or by some other effective

method. Where a floor becomes wet during the manufacturing process, effective mean of drainage shall be

provided for. All inside walls and partitions, all ceilings or tops of the rooms and all walls, sides and tops of

passages and staircases shall be kept white washed, colour washed or painted as the case may be from time

to time as per provisions of the Act. All doors and window frames and other wooden or metallic frame work

and shutters shall be kept painted or varnished and the painting or varnishing shall be carried out at least once

in every five years.

(B) Disposal of wastes and effluents: According to Section 12, effective arrangement shall be

made in every factory for the disposal of wastes arising due to the manufacturing process carried on therein,

so as to make them harmless. The State Government may make rules prescribing the arrangements to be

made in this regard.

(C) Ventilation and temperature: According to Section 13, every factory must provide for in

every work room adequate ventilation by the circulation of fresh air. It will also ensure in the work room such

a temperature as will secure to workers therein reasonable conditions of comfort and prevent injury to health.

Thus, the walls and roofs of the work rooms shall be of such material and design as are helpful to keep the

temperature reasonably low. The State Government may prescribe a standard of adequate ventilation and

reasonable temperature and make rules providing for the keeping of thermometers in specified places and

adoption of methods which will keep the temperature low.

(D) Dust and Fume: According to Section 14, effective arrangements must be made in every

factory for the prevention of the inhalation or accumulation of dust or fume given off by any manufacturing

process in any work room which may be injurious to the health of the workers. If any exhaust appliance is

necessary for this purpose it shall be installed as near as possible to the point of origin of the dust, fume or

other impurity. No internal combustion engine which is stationary shall be operated unless its exhaust is

conducted into the open air.

(E) Artificial humidification: According to Section 15, in respect of all the factories, in which the

humidity of air is artificially increased, the State Government may make rules regarding the permissible

standards of humidity, tests for determining humidity and methods to be adopted for securing adequate

ventilation and cooling of the air in the work rooms. The water used for humidification shall be taken from a

public supply or other source of drinking water and must be purified before actual use. The inspector of

factories may also specify measures in this regard which should be carried out before the specified date.

(F) Overcrowding: According to Section 16, no room in any factory shall be overcrowded to an

extent which is injurious to the health of the workers employed therein. At least 9.9 cubic meters of space per

worker shall be provided in a factory which was in existence on the date of commencement of this Act.

However, in factories built after the commencement of this Act, at least 14.2 cubic meters of space per

worker shall be provided. In determining the space, no account shall be taken of any space which is more

than 4.2 meters above the level of the floor of the room. The chief inspector may, however, by order in writing

specify the maximum number of workers who may be employed in a particular work room in compliance

with the provision of this section if he is satisfied that such an order does not harm the health of the workers

employed therein.

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(G) Lighting: According to Section 17, there shall be sufficient and suitable lighting arrangement,

natural or artificial or both, in every part of a factory where workers are working or passing through. Under

this provision, all glazed window and sky lights used for the lighting of the workroom shall be kept clean or

both the inner and the outer sides to allow free flow of light. Effective provision shall be made for the

prevention of glare, either directly from a source of light or by reflection. The formation of shadows that

causes strain on the eyes or risk of accident to any worker shall also be prevented. The State Government

may prescribe standards of sufficient and suitable lighting for factories.

(H) Drinking water: According to Section 18, in every factory, effective arrangements shall be

made to provide sufficient and pure drinking water to all the workers employed therein. The water points

should be conveniently situated and properly maintained. All such points shall be legibly marked “Drinking

Water” in a language understood by majority of the workers employed in the factory. No such point shall be

situated within six meters of any washing place, urinal, latrine, spittoon, open drain etc. In a factory where

more than 250 workers are employed, provision shall be made for cool drinking water during hot weathers.

(I) Latrines and urinals: According to Section 19, separate arrangement for latrines and urinals for

men and women shall be provided for every factory. Such an accommodation shall be adequately lighted and

ventilated and maintained in good sanitary conditions. Sufficient number of sweepers should be provided for

to clean latrines and urinals. In a factory where more than 250 workers are ordinarily employed, all latrines

and urinal accommodation shall be of the prescribed sanitary types. Here the floors and the internal walls,

upto a height of 90 cms, of the latrines and urinals and the sanitary blocks shall be laid in gaized tiles or

otherwise finished to provide a smooth polished surface. Latrines and urinals shall be thoroughly cleaned by

washing at least once in a week by using disinfectants.

(J) Spittoons: According to Section 20, a sufficient number of spittoons must be provided at

convenient places in every factory. They must be maintained in a clean and hygienic condition. The State

Government may make rules regarding their number, locations and maintenance. No person shall spit except

in the spittoons. If a person does so he may be fined upto Rs. 5.

12.7 Measures to Promote Employee Health

Health promotion at the work place may be broadly defined as any effort to prevent disease or

premature death through behavioural and organizational change. Health promotion focuses on prevention

rather than treatment or cure. Therefore the health programme at the company is planned around improvement

and prevention of controllable risk factors such as smooking, obesity, high level of cholesterol, stress, hypertension

and low level of physical fitness, which are responsible for most major diseases. Promoting health consciousness

is not an easy task. It requires continuous education, systematic campaign and genuine support from top

management. Before the company starts planning for the programme, it must investigate the needs and

resources of both the employees and the organisation. The planning programme, basically, involves five steps:

setting goals, developing the plan, allocation of resources, implementation and evaluation of the plan. The

core health promotion activities may cover such areas as:

(a) Healthy living

(b) Eating wisely

(c) Exercise and physical fitness

(d) Smoking cessation

(e) Stress management

(f) Protecting one self from workplace hazards.

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The initial effort and investment required to institute such health promotion programmes may prove

to be quite heavy but the long-run rewards are quite fruitful. Improvements in employees health result in

better work attitudes, higher morale, job satisfaction, reduced absenteeism and turnover.

12.8 Employee Safety

The main purpose of effective safety programmes in an organisation is to prevent work – related

injuries and accidents. A well managed factory will see to it that there are no physical hazards such as (i)

slipping and falling hazards, (ii) collision and obstruction hazards (iii) equipment hazards, (iv) fire hazards (v)

hazards from falling objects, etc.

(A) Slipping, tripping, or falling on the floor hazards: People fall when they slip. Highly polished

surfaces, accumulation of water, soap, or oil, etc. on the floor, torn or loose coverings cause the floor to be

slippery.

(B) Obstruction and collision hazards: When the factory layout and space management are poor,

it result in improper placement of furniture and equipment causing collision of employees with equipment and

machinery, tables, chairs, etc. Further, overcrowding and a narrow space for movement also results in accidental

collision between employees.

(C) Equipment hazards: Quite often, unguarded moving parts, wiring, switches and cards, edges

of metal equipment, etc., can cause injuries to employees working in these surroundings. Further, waste

paper baskets, lobbies, plumbing fixtures and small snail carts also cause problems for employees. All these

should be guarded against.

(D) Hazards from falling objects: When file cabinets, lockers and shelves are not properly placed,

they could fall on employees and injure them. Also, the stocked materials, paper stands, when placed on the

working tables might fall on employees.

(E) Fire hazards: The places where paperwork is heavy and precautionary measures taken are nil,

the possibilities of accidents are high. Improper disposal facilities for smokers, lack of provision of safety

cans for inflammable materials, non-existence of fire escapes and exits are the factors that contribute to fire

accidents. It is necessary for the manager to see that fire protection equipment and fire extinguishers are

available at all times in the factory.

12.9 Types and Causes of Accidents

The ever increasing mechanisation, electrification, chemicalisation and sophistication have made

industrial jobs more and more complex and intricate. This has led to increased dangers to human life in

industries through accidents and injuries. In fact, the same underlines the need for and importance of industrial

safety. Let us first understand what industrial accident actually means.

a) Industrial Accident

An accident (industrial) is a sudden and unexpected occurrence in the industry which interrupts the

orderly progress of the work. According to the Factories Act, 1948: “It is an occurrence in an industrial

establishment causing bodily injury to a person which makes him unfit to resume his duties in the next 48

hours”. In other words, accident is an unexpected event in the course of employment which is neither

anticipated nor designed to occur. Thus, an accident is an unplanned and uncontrolled event in which an

action or reaction of an object, a substance, a person, or a radiation results in personal injury. It is important

to note that self-inflicted injuries cannot be regarded as accidents.

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An industrial injury is defined as “a personal injury to an employee which has been caused by an

accident or an occupational disease and which arises out of or in the course of employment and which could

entitle such employee to compensation under Workers Compensation Act, 1923.

b) Types of Accidents

Accidents may be of different types depending upon the severity, durability and degree of the injury.

An accident causing death or permanent or prolonged disability to the injured employee is called ‘major’

accident. A cut that does not render the employee disabled is termed as ‘minor’ accident. When an employee

gets injury with external signs of it, it is external injury. Injury without showing external signs such as a

fractured bone is called an internal one. When an injury renders an injured employees disabled for a short

period, say, a day or a week, it is a temporary accident. On the contrary, making injured employee disabled for

ever is called permanent accident. Disability caused by accident may be partial or total, fatal or non-fatal.

c) Causes of Accidents

The industrial safety experts have classified the causes of accidents into three broad categories:

(i) Unsafe Conditions (work-related): Unsafe working conditions are the biggest cause of accidents.

These are associated with defective plants, tools, equipments, machines and materials. Such causes are

known as technical causes. They arise when there are improper guarded equipments, defective equipments,

faulty layout of plant, inadequate lighting arrangements and ventilation, unsafe storage, inadequate safety

devices, etc. Besides, the psychological reasons such as working over time, monotony, fatigue, tiredness,

frustration and anxiety are also some other causes that cause accidents. Safety experts identify that there are

some high danger zones in an industry. These are, for example, handlift trucks, wheel-barrows, gears and

pulleys, saws and hand rails, chisels and screw drivers, electric drop lights, etc., where about one-third of

industrial accidents occur.

(ii) Unsafe Acts: Industrial accidents occur due to certain acts on the part of workers. These acts

may be the result of lack of knowledge or skill on the part of the worker, certain bodily defects and wrong

attitude. Examples of these acts are:

(a) Operating without authority.

(b) Failure to use safe attire or personal protective equipments.

(c) Careless throwing of material at the work place.

(d) Working at unsafe speed, i.e. too fast or too low.

(e) Using unsafe equipment, or using equipments unsafely.

(f) Removing safety devices.

(g) Taking unsafe position under suspended loads.

(h) Distracting, teasing, abusing, quarreling, day-dreaming, horseplay

(i) One’s own accident prone personality and behaviour.

(iii) Other Causes: These causes arise out of unsafe situational and climatic conditions and variations.

These may include excessive noise, very high temperature, humid conditions, bad working conditions, unhealthy

environment, slippery floors, excessive glare, dust and fume, arrogant behaviour of domineering supervisors,

etc.

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12.10 Significance of Industrial Safety

Safety i.e. accident-free industry enjoys certain benefits. The following are the major ones:

(i) It saves costs: Occurrence of an accident involves two types of costs: direct costs and indirect

costs. The direct cost is in the form of compensation payable to the dependents of the victim employee, and

medical expenses incurred in treating the patient employee if the accident is not fatal. However, the management

has not to bear the direct cost if the victim is insured under the ESI Scheme. The indirect costs, also called the

‘hidden costs’, include loss on account of down-time of operators, slowed-up production rate of other workers,

materials spoiled, and damages to equipment. Added to these is the injured employee’s work performance

less than his normal efficiency. Research evidences indicate that the indirect costs are three to four times

higher than the direct costs. But, the safety by avoiding accidents eliminates these direct and indirect costs.

(ii) It improves productivity: As safe conditions at the work place keep employees free from

worrying about their safety, they devote more time to improving the quantity and quality of their output. Thus,

safety in the industry promotes productivity.

(iii) It develops moral: An industrial employee is a worker in the factory and at the same time,

bread-earner for his/her family. Hence, the happiness of his/her family is tagged to the well-being of the

worker. Safety is, therefore, important on human grounds as well.

(iv) Safety is a legal requirement: The maintenance of safety in the factory premises is a legal

requirement for the industry. There are laws and acts for ensuring safety measures in the factory, and

imposing penalties on non-compliance of the same has become quite severe.

12.11 Effective Safety Management

Effective safety management considers the type of safety problems, accidents, employees and

technology in the organizational setting. The role of human beings in safety related problems should also be

looked into. Safety efforts will not be successful if we try to engineer machines without paying attention to

behavioural reactions of employees. A comprehensive approach to safety includes the following steps:

(a) Safety Policy: Every factory must formulate and implement a safety policy. The objective of

such a policy should be to eliminate or reduce accidents and injuries in the workplace.

(b) Top Management Support: The safety policy must be supported by top management firmly.

Safety commitment should begin with top management. The commitment manifests itself in top managements’

being personally involved in safety activities in a routine way, giving safety matters top priority in company

meetings and production scheduling, giving company safety officer high rank and status and including safety

training in new workers’ training.

(c) Safety committee: To promote safety consciousness among employees, safety committees

could be constituted, under the chairmanship of a safety officer. The committee should consist of representatives

from workers and supervisors from various departments and levels. It must meet regularly to conduct safety

reviews and make recommendations for changes necessary to avoid future accidents.

(d) Safety discipline motivation: Safety rules must be enforced strictly. Violations should not be

tolerated. Frequent reinforcement of the need for safe behaviour and feedback on positive safety practices

have been found to be extremely effective in improving workers’ safety. Rewards and certificates could be

offered to employees for good safety records. To promote employee involvement and motivation, safety

contests could be held followed by incentives for safe work behaviour.

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(e) Safety engineering: To minimize workplace accidents, proper engineering procedures could be

followed. Fencing of machinery, adequate space between machines, parts and equipment, use of material

handling equipment, safety devices, proper maintenance of machines, etc., are undertaken to prevent accidents

from occurring.

(f) Safety training and communications: Safety training can also reduce accidents. It is especially

useful in case of new recruits. Training in safe practices, procedures, material handling, first aid, fire prevention

etc., could be offered to them. Posters, newsletters, displays, slogans and signs could also be used to promote

safety consciousness throughout the organisation. Another way to communicate safety ideas is through

safety films and videotapes.

(g) Accident investigation and research: When accidents takes place, they should be thoroughly

investigated to find the actual reason (poor lighting, poor ventilation, wet floor etc.) as early as possible. Such

an early probe is necessary to ensure that conditions under which the accident occurred have not changed

significantly. Photographs, videotapes could be used to gain better view of the actual scene. In the next step,

the injured employee or his supervisors should be interviewed to find out what happened and how the accident

occurred. In the third place, on accident investigation report should be prepared indicating what has happened

and recommending steps to prevent similar accidents from occurring.

(h) Evaluation of Safety effort: Organisations should monitor and evaluate safety efforts by conducting

safety audits at intervals. Accident and injury statistics should be periodically compared with previous accident

patterns to find any important changes. This analysis should be designed to measure progress in safety

management.

(i) Governmental support: To extend support to safety related activities the Government of India

established the National Safety Council in 1966. The principle job of this council is to promote safety

consciousness at the plant level and conduct safety programmes. The National Safety Day is celebrated

every year to signify the foundation day of the council. National safety awards are given every year to

industrial units for ensuring accident-free environments.

12.12 Statutory Provisions Regarding Safety in India

The International Labour Organisation (ILO) organised a Tripartite Technical Conference in 1948 to

formulate a ‘Model Code’ of Safety Regulations for Industrial Establishments for the guidance of governments

and industry. The code covers various areas of unsafe conditions and unsafe acts.

In India, The Factories Act, 1948 lays down safety provisions contained in Sections 21 to 41. These

provisions are obligatory on the part of industrial establishment. A brief of these is presented as follows:

(a) Fencing of Machinery (Section 21): It is obligatory on the part of the management to fence

machinery with guards of a substantial construction. The same shall be constantly maintained and kept in its

proper position when any part of the machine is in motion or movement.

(b) Work on or Near Machinery in Motion (Section 22): A trained adult made worker wearing

tight fitting clothing should examine and operate the machine in motion. He should not handle a belt on a

moving pulley more than fifteen centimeters in width. No young children or women should handle a machine

which is in motion.

(c) Employment of Adolescents on Dangerous Machines (Section 23): Young persons should

not be allowed to work on dangerous machines unless he has been fully instructed as to the dangers involved

and he has received sufficient training to work on the machine under the supervision of a person having

thorough knowledge and experience of working on that machine.

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(d) Striking Gear or Device for Cutting off Power (Section 24): Every factory must provide

suitable striking gear to move driving belt to and from fast and loose pulleys which form part of transmission

machinery. These should also be a locking device to prevent accidental starting of transmission machinery to

which the device is fitted.

(e) Self-Acting Machines (Section 25): No traversing part of a self-acting machine and no material

carried thereon shall be allowed to run within a distance of 45 centimeters from any fixed structure which is

not a part of the machine.

(f) Casting of New Machinery (Section 26): All machinery driven by power and installed in any

factory after April 1, 1949, every set crew, bolt or key, spindle shall be sunk or securely guarded to prevent

any danger. Further, all spur, worm and toothed or friction gearing while in operation shall be completely

uneased unless it is safely situated.

(g) Prohibition of Employment of Woman and Children near Cotton Openers (Section 27):

Women and children shall not be employed in any part of a factory for pressing cottons when cotton opener

is in operation. However, women and children may be employed in a room which is separated from opener.

(h) Hoists and Lifts (Section 28): In every factory, hoists and lifts should be in good condition and

should be examined once in every six months.

(i) Lifting Machines, Tackles, Chains and Ropes (Section 29): Similarly, in every factory,

lifting machines chains, ropes and lifting tackles must be in good construction and should be examined once in

a year.

(j) Revolving Machinery (Section 30): In every room where grinding work is going on, a notice

indicating the maximum safe working peripherals speed of the machine shall be affixed near it. Effective

measures will also be taken in every factory to ensure that the safe working peripheral speed of every

revolving vessel, cage, basket, flywheel, pulley, or similar other appliances driven by power is not exceeded.

(k) Pressure Plants (Section 31): If in any factory, any plant or its part is operated at a pressure

above atmospheric pressure, the pressure should not be allowed to exceed by taking effective measures in

this regard.

(l) Floors, Stairs and Other Means of Access (Section 32): In every factory, all floors, steps,

stairs, passage and gangway shall be of sound construction and be properly maintained.

(m) Pits and Openings in Floors (Section 33): Since every fixed vessel, sumps, tank, pit, or

opening in a floor may be a source of danger, therefore, shall be securely covered or fenced.

(n) Excessive Weights (Section 34): No person shall be employed in the factory to lift or carry

excess load/weight so as to cause him/her physical injury.

(o) Protection of Eyes (Section 35): In every factory, adequate provisions of goggles or screen to

protect persons working on machine which might cause damage to their eyesight shall be made.

(p) Precaution against Dangerous Fumes (Section 36): No employee in any factory shall be

allowed to enter any chamber, tank, pit, vat, pipe, flue or such other confined place in which any gas or fume

is present.

(Q) Explosive of Inflammable Gas or Dust (Section 37): In any factory which produces through

its manufacturing process dust, gas, fume or vapour of such nature exploding or ignition, effective measures

such as enclosure of the plant or machinery used in the process, removal of accumulated dust or fume and

effective enclosure of all possible source of ignition, should be taken to prevent explosion likely to be caused

by gas or fume.

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(r) Precaution in Case of Fire (Section 38): In every factory, effective measures be taken to

prevent outbreak of fire and its spread. These may include exit door to escape in case of fire, necessary

equipments and facilities for extinguishing fire and adequate arrangement to raise alarm in case of fire,

preferably a siren.

(s) Power to Require Specification of Defective Parts or Tests of Stability (Section 39): If

it appears to the factory inspector that any building or part of it is in such a condition that it is dangerous to

human life, he/she may ask for details about them or insist on suitable tests to determine their safety.

(t) Safety of Building and Machinery (Section 40): Where unsafe condition of building and

machinery is reported, the inspector having being satisfied may ask the occupier or manager to repair it

suitably.

(u) Power to Make Rules (Section 41): The state Government is empowered to make rules

requiring the provision in any factory of such further devices and measures for securing safety of persons

employed therein.

12.13 SELF CHECK EXERCISE

1. Define Health.

2. Define Physical health.

3. Define mental health.

4. Discuss in brief importance of health.

5. Write a short-note on impact of chemical hazards.

6. Discuss in brief importance of cleanliness.

7. What do you mean by employee safety? Discuss in brief.

8. Write a short-note on industrial accidents.

9. Discuss in brief significance of industrial safety.

12.14 SUMMARY

Health refers to a complete mental, physical and social well-being of individual workers. Safety

involves protecting the physical well being of people. The importance of health lies in improved productivity,

reduced absenteeism and turnover, minimized industrial unrest and indiscipline and improved employee morale

and motivation. The main occupational hazards are chemical, biological, environmental and psychological

hazards. Both preventive and curative measures help protect health of industrial workers. The main purpose

of effective safety programmes in an organisation is to prevent work-related injuries and accidents. Unsafe

working conditions, unsafe acts and other environmental factors cause industrial accidents. Factories Act,

1948 has laid down provisions for maintaining safety at the work place.

12.15 GLOSSARY

• Chemical hazard is a type of occupational hazard caused by exposure to chemicals in the workplace.

Exposure to chemicals in the workplace can cause acute or long-term detrimental health effects.

These hazards can cause physical and/or health risks.

• Cleanliness means that there is no dirt, no dust, no stains, no bad smells. The goals of cleanliness

are health, beauty, absence of offensive odor and to avoid the spreading of dirt and contaminants to

oneself and others. In the case of glass objects such as windows or windshields, the purpose can

also be transparency.

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• Health is "a state of complete physical, mental and social well-being and not merely an absence of

disease or infirmity."

• Human resources describe the people who make up the workforce of an organization, business

sector, or economy. "Human capital" is sometimes used synonymously with "human resources",

although human capital typically refers to a narrower effect (i.e., the knowledge the individuals

embody and economic growth).

• Industrial accident may be defined as an occurrence which interrupts or interferes with the orderly

progress of work in an industrial establishment.

• Industrial safety refers to the management of all operations and events within an industry in order

to protect its employees and assets by minimizing hazards, risks, accidents, and near misses. Industrial

safety is overseen by federal, state, and local laws and regulations.

• Safety of workers refers to the provision of a safe environment, safe equipment and safe procedures

in the workplace in order to ensure workers' health and safety.

12.16 ANSWERS TO SELF CHECK EXERCISE

1. For answer refer to section 12.2.

2. For answer refer to section 12.2.

3. For answer refer to section 12.2.

4. For answer refer to section 12.3.

5. For answer refer to section 12.4.

6. For answer refer to section 12.6.

7. For answer refer to section 12.8.

8. For answer refer to section 12.9.

9. For answer refer to section 12.10.

12.17 TERMINAL QUESTIONS

1. Define health. Explain the various ways and means to protect employee’s health in industries.

2. Highlight the various legal provisions for health.

3. “Accidents do not just happen, they are caused.” Comment.

4. What steps should be taken by management to increase motivation for safety?

5. Explain the statutory provisions regarding safety in India.

12.18 SUGGESTED READINGS

1. Cascio, W.F., Managing Human Resources, Tata McGraw Hill, New Delhi.

2. Aswathappa, K., Human Resource and Personnel Management Tata McGraw Hill, New Delhi.

3. Dessles, G., Human Resource Management, Prentice Hall of India, New Delhi.

4. Pylee, M.V. and Simon, G.A., Industrial Relation and Personal Management, Vikas Publishing House,

New Delhi.

*****

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LESSON-13JOB ANALYSIS

Learning Objectives

1. To introduce students to the concept of Job Analysis, Job Description, Job Specification and Job Design.

2. To make students conversant with merits and demerits of various components of job analysis.

3. To familiarize students with the techniques of Job Design.

Contents

MEANING AND DEFINITIONS

TYPES OF JOB ANALYSIS

USES/ ADVANTAGES OF JOB ANALYSIS

PROCESS OF JOB ANALYSIS

METHODS OF JOB ANALYSIS

JOB DESCRIPTION

USES OF JOB DESCRIPTION

CONTENTS OF JOB DESCRIPTION

JOB SPECIFICATION

USES OF JOB SPECIFICATION

ROLE ANALYSIS

JOB DESIGN

TECHNIQUES OF JOB DESIGN

MEANING AND DEFINITIONS

A job is defined as a collection of duties and responsibilities which are given together to an individual

employee. Job analysis is the process of studying and collecting information relating to operations and

responsibilities of a specific job. Information thus collected is analyzed and the facts about nature of job,

working condition and qualities in employee can be easily known.

‘Position’ is someone’s rank or status in an organisation. It is the place that someone or something

has in a list or competition.

While “position” and “job” are often used interchangeably, there is a difference:

A Job is a generic summary of key responsibilities which includes the general nature of work

performed, the level of work performed, the skills and knowledge required for competent performance, and

other elements. The job description is used to determine the appropriate salary grade.

A Position is unique to an employee, and is used for budgeting and posting purposes. It is a more

detailed summary of the duties specific to the individual employee.

According to Dale Yoder, “Job analysis is the procedure by which facts with respect to each job are

systematically discovered and noted.”

In the words of Flippo: “Job Analysis is the process of studying and collecting information relating to

the operations and responsibilities of specific job.”

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Job study is another name of job analysis.

TYPES OF JOB ANALYSIS

From the viewpoint of the purpose, there are two types of job analysis: single purpose job analysis

and multipurpose job analysis.

i. Single purpose Job Analysis: When data is gathered and studied with a specific single purpose in

mind, then it is known as a single purpose job analysis. This type of job analysis is useful in tackling a

particular problem at hand.

ii. Multipurpose Job Analysis: When data is gathered and studied with more than one purpose in

mind, it is known as a multipurpose job analysis. For example better selection, better training, more

effective control etc may be the object of job analysis. Obviously, multipurpose job analysis is more

useful than single purpose job analysis.

USES/ ADVANTAGES OF JOB ANALYSIS

The uses of job analysis may be summarized as under:

1. Human resource planning: Job analysis helps in forecasting human resource requirements in terms

of knowledge and skills. Accordingly, promotions, transfers, training etc can be planned. It also helps in

determining quality of human resources needed in an organisation.

2. Recruitment & Selection: Job analysis is used to find out how and when to hire people for future job

openings. It shows to the employment officer what the job is and what qualifications are required in

employees to perform the job. Thus, the study of a job helps in job specifications on the basis of which

employees are selected.

3. Placement and orientation: After selecting people, we have to place them on jobs best suited to

their interests, activities and aptitude. If we are not sure about what needs to be done on a job, it is not

possible to identify the right person suited for the job. To teach a new employee how to handle a job,

we have to clearly define the job.

4. Training: If there is any confusion about what the job is and what is supposed to be done, proper

training efforts cannot be initiated. Job analysis helps in framing training programmes. It would suggest

what is to be taught, whom the training has to be imparted, and how it is to be taught.

5. Counseling: Managers can properly counsel employees about their careers when they understand

the different jobs in the organisation. Likewise, employees can better appreciate their career options

when they understand the specific needs of various other jobs. Job analysis can point out areas that an

employee might need to develop to further a career.

6. Employee safety: A thorough job analysis reveals unsafe conditions associated with a job. By studying

how the various operations are taken up in a job, managers can find unsafe practices. This helps

management in devising safety programmes.

7. Reduces Fatigue: Job analysis helps in reducing fatigue and boredom by eliminating unnecessary

movements of the employees. It helps also in designing better methods of production and thus increases

productivity.

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8. Performance appraisal: By comparing what an employee is supposed to do and what is he doing

actually, the worth of that person can be assessed. Ultimately, every organisation has to pay a fair

remuneration to people based on their performance. To achieve this, it is necessary to compare what

individuals should do (as per performance standards) with what they have actually done (as per job

analysis).

9. Job design and redesign: Once the jobs are understood properly, it is easy to locate weak spots and

undertake remedial steps. We can eliminate unnecessary movements, simplify certain steps and improve

the existing ones through continuous monitoring. In short, we can redesign jobs to match the mental

make-up of employees.

10. Improvement in Efficiency: Job study can help in improving efficiency and morale of the employees

by placing right persons on the right jobs. The tragedy of misfit can be avoided. Hence, production

becomes more efficient. It results into job satisfaction among employees. Thus, the overall efficiency

of the organisation can be increased.

11. Job evaluation: Job analysis helps in finding the relative worth of a job, based on criteria such as

degree of difficulty, type of work done, skills and knowledge needed, etc. This, in turn, assists in

designing proper wage policies and other compensations.

12. Settlement of Disputes: Since a scientific wage structure is established and since jobs are

systematically compared with one another, on the basis of risks and responsibilities involved, it becomes

easier to settle industrial disputes. In fact, it will reduce the possibility of industrial disputes.

PROCESS OF JOB ANALYSIS

A successful Job Analysis has to pass through below mentioned stages:

Identification of Job Analysis Purpose

↓Who Will Conduct Job Analysis

↓How to Conduct the Process

↓Data Collection

↓Documentation, Verification and Review

↓Developing Job Description and Job Specification

1. Identification of Job Analysis Purpose: 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.

2. 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.

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3. How to Conduct the Process: Deciding the way in which job analysis process needs to be conducted

is surely the next step. Several alternative methods of collecting job information are available and may

be used. They are as follows:

i. Questionnaire Method: This is the oldest and widely used method of collecting job information.

Each employee has to write answers to questions included in a questionnaire about his job. Of course,

the necessary guidance is given to the employee in this regard. The size of the questionnaire has to be

ideal i.e. neither too short nor too long.

ii. Interview Method: Conducting interview with workers by the specialized job analysts is a more

expensive method. They may be interviewed individually or collectively. Their answers are systematically

recorded on the job-information sheets.

iii. Observation: Under this method, the job analysts would actually observe the actual performance of

the job. Of course, they may seek clarification from the workers or from the supervisors on the

matters that crate doubts in their minds. This method is generally regarded as providing the best

information about job.

4. 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 activities, reporting hierarchy,

required human traits, job activities, duties and responsibilities involved and employee behaviour.

5. 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.

6. 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.

METHODS OF JOB ANALYSIS

The few of job analysis methods that are commonly used by the organisations to investigate the

demands of a specific job are discussed below:

Job Analysis Methods

Most Common Methods of Job Analysis

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i. Questionnaire Method: This is the oldest and widely used method of collecting job information.

Each employee has to write answers to questions included in a questionnaire about his job. Of course,

the necessary guidance is given to the employee in this regard. The size of the questionnaire has to be

ideal i.e. neither too short nor too long. In order to get the true job-related information, management

should effectively communicate it to the staff that data collected will be used for their own good. It is

very important to ensure them that it won’t be used against them in anyway. If it is not done properly,

it will be a sheer wastage of time, money and human resources.

ii. Interview Method: Conducting interview with workers by the specialized job analysts is a more

expensive method. They may be interviewed individually or collectively. Their answers are systematically

recorded on the job-information sheets. This method helps interviewer know what exactly an employee

thinks about his or her own job and responsibilities involved in it. It involves analysis of job by employee

himself. In order to generate honest and true feedback or collect genuine data, questions asked during

the interview should be carefully decided.

iii. Observation: Under this method, the job analysts would actually observe the actual performance of

the job. Of course, they may seek clarification from the workers or from the supervisors on the

matters that create doubts in their minds. This method is generally regarded as providing the best

information about job. It is due to the fact that every person has his own way of observing things.

Different people think different and interpret the findings in different ways. Therefore, the process

may involve personal biasness or likes and dislikes and may not produce genuine results. This error can

be avoided by proper training of job analyst or whoever will be conducting the job analysis process.

Other Methods

1. Computerized Job Analysis:As computer technology has expanded, researchers have developed

computerized job analysis systems. A computerized job analysis system often can reduce the time and

effort involved in writing job descriptions. This method allows firms to develop more accurate and

comprehensive job descriptions, linked to compensation programs, and performance appraisal systems.

These processes can also provide better data for future reference.

2. Checklists: The checklist method of job data collection differs from the questionnaire method in the

sense that it contains a few objective questions in the form of yes or no. The job holder is asked to tick

the questions that are related to his/her job.

Like questionnaire method, the checklist method is suitable in the large organisations wherein a large

number of workers are assigned one particular job. Since the method is costly, it is not suitable for

small organisations.

3. Technical Conference Method: In this method, a conference is organised for the supervisors who

possess extensive knowledge about job. They deliberate and discuss on various aspects of the job. The

job analyst obtains job information from the discussion held among these experts/supervisors. The

method consumes less amount of time. However, the main drawback of this method is that it lacks

accuracy and authenticity as the actual job holders are not involved in collecting job information.

4. Critical Incidents: This method is based on the job holder’s past experiences on the job. They are

asked to recapitulate and describe the past incidents that they consider incidental to their jobs. The

incidents so reported by the job holders are then, classified into various categories and analyzed in

detail. Yes, the job analyst requires a high degree of skill to analyze the incidents appropriately described

by the job holders. However, this method is also time-consuming one.

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5. Diaries or Log Records: In this method, the job holder is asked to maintain a diary recording in detail

the job-related activities each day. If done judiciously, this method provides accurate and comprehensive

information about the job. This overcomes memory lapses on the part of the job holder. The disadvantage

associated with this method is that it remains incomplete because it does not give desirable data on

supervisor relationship, the equipment used and working conditions prevalent at the work place. It also

engages considerable time of a production worker.

6. Combination Methods: There are indeed a number of different ways to obtain and analyze information

about a job. No specific job analysis method has received the stamp of approval from the various

courts in all situations. Each of the methods has strengths and weaknesses, and a combination of

methods generally is preferred over one method alone.

JOB DESCRIPTION

Job Description is an important document, which is basically descriptive in nature and contains a

statement of job Analysis. It provides both organisational information’s (like location in structure, authority

etc) and functional information (what the work is).

It gives information about the scope of job activities, major responsibilities and positioning of the job

in the organisation. This information gives the worker, analyst, and supervisor with a clear idea of what the

worker must do to meet the demand of the job.

In the words of Dale Yoder, “Job description is a systematic out line of data collected through job

analysis.”

SPECIMEN OF JOB DESCRIPTION

Business logo Name of Business with Address & Contacts

Job title:

Place of work: Department/Unit:

Working hours: Salary Range:

Description of the Company

Reports to: Supervises:

Works with: Size of the work team:

Job purpose:

Duties & responsibilities:

Working conditions (travel, work space, etc.)

Minimum level of Education:

Skills required: (e.g. good analytical and reporting skills, etc.)

Competencies required: (e.g. communication, teamwork, problem solving, etc.)

Qualifications/trainings required: (e.g. certificates of specific trainings)

Promotion:

Prior experience:

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USES OF JOB DESCRIPTION

There are several uses of job description because of which it is important. The major ones are cited below:

1. Job description makes the work of personnel department easy. The information about jobs is useful to

them in recruitment, training, promotion, transfer and settle of disputes.

2. It helps in establishing just and proper wage structure.

3. It helps in the development of job specification.

4. It acts as a tool during the orientation of new employees, to learn duties & responsibilities. It can act as

a basic document used in developing performance standards.

CONTENTS OF JOB DESCRIPTION

Job description is in the form of statement. Following are its main contents:

1. Name of the job, its code number and its department.

2. Brief description of the job.

3. Description of job duty – what is to be done, how it is to be done, within how much time and why

it is to be done.

4. Its relationships with other jobs.

5. Machines, tools and materials used.

6. Conditions under which job is to be done.

7. Training requirements.

8. From whom guidance and instructions will be received.

9. Salary scale applicable to the job.

JOB SPECIFICATION

Job Specification translates the job description into terms of the human qualifications, which are

required for performance of a job. They are intended to serve as a guide in hiring and job evaluation.

Job specification is a written statement of qualifications, traits, physical and mental

characteristics that an individual must possess to perform the job duties and discharge responsibilities

effectively. It is a summary of the required qualities to perform a job. It specifies the type of employee

required and the working conditions which will be encountered on the job.

According to Flippo, “A job specification is a statement of minimum acceptable human qualities

necessary to perform a job properly.”

Job Specification Information:

The first step in the programme of job specification is to prepare a list of all jobs in the company and

where they are located. The second step is to write up information about each of the jobs in the organisation.

Usually this information includes:

1. Physical specifications: Physical specifications include the physical qualifications or physical

capacities that vary from job to job. Physical qualifications or capacities include physical features

like height, weight, vision, hearing, ability to lift weight, capacity to use or operate machines, tools,

equipment etc.

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2. Mental specifications: Mental specifications include ability to perform, arithmetical calculations,

to interpret data, information blue prints, to read electrical circuits, ability to plan, reading abilities,

scientific abilities, judgment, ability to concentrate, ability to handle variable factors, general

intelligence, memory etc.

3. Emotional and social specifications: Emotional and social specifications are more important for

the post of managers, supervisors, foremen etc. These include emotional stability, flexibility, social

adaptability in human relationships, personal appearance including dress, posture etc.

4. Behavioral Specifications: Behavioral specifications play an important role in selecting the

candidates for higher-level jobs in the organisational hierarchy. This specification seeks to describe

the acts of managers rather than the traits that cause the acts. These specifications include judgments,

research, creativity, teaching ability, maturity trial of conciliation, self-reliance, dominance etc.

Specimen of Job Specification for the post of Account Manager

Name of the Job Marketing Research Officer

Department Marketing Department

Job Duty To conduct marketing research, find out opportunities for

market expansion, collect information about customers

changing taste, habits, fashion, customs etc., prepare the report

and submit the same to the managing director and give advice

to marketing manager

Special Job Requirements 1. Mental aptitude for research

2. Competence and skill to conduct marketing research

independently

3. Knowledge of customers social, economic and cultural

environment.

Educational Requirements MBA Degree from a recognized university with marketing

management.

Experience Two to five years of research experience in any business

unit.

USES OF JOB SPECIFICATION

Job specification is useful to management in recruitment and selection of employees and is useful to both

management and employees in the following ways:

1. For Advertisement Planning: The minimum physical and mental qualities indicted by job specification

are useful in contracting advertisement.

2. For Scientific Recruitment: It is useful in preparing objective tests like intelligence tests, personality

tests, trade tests etc in one of the stages of scientific selection process of employees.

3. Providing Guidance: It is also useful in providing guidance about the transfer or promotion of employees

along the posts having similar job specification.

4. Training Programme: Proper training programme can be planned on the basis of information provided

by job specification.

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5. Self Development: Due to job specification, the employee himself gets acquainted with his own

weaknesses and he would himself try to remove them.

ROLE ANALYSIS

Role analysis is used to help employees get a better grasp on their role in an organisation. It is

necessary to supplement the job analysis process with the role analysis in order to have a clear picture of

what the job actually demands.

A position holder may perform three types of roles in day to day life like the expected role, the

perceived role and the actual role. The expected role is what other people expect from a person. For

example: School teacher is expected to come to the school and teach properly. The perceived role is how

the individual thinks he should behave to fulfill the expected role. For example: A teacher may think that he

may able to complete the given course within the prescribed time limit. The actual role is the way the person

actually behaves in an organisation. For example: The teacher completes the given course before few months

by taking extra lectures.

Over a period of time, the roles to be played by a job holder may undergo a complete transformation

identifying important job related behaviors that may lead to effective performance. Role analysis provides a

satisfactory answer to this problem.

JOB DESIGN

Job design involves conscious efforts to organize tasks, duties and responsibilities into a unit of work

to achieve certain objectives. Job design follows job analysis i.e. it is the next step after job analysis.

Job design also calls for work arrangement or rearrangement aimed at reducing or overcoming job

dissatisfaction among employees arising from repetitive and mechanistic tasks. Through job design, organisations

try to raise productivity levels in the organisation. Job enlargement, job enrichment, job rotation, and job

simplification are the various techniques used in a job design exercise. It outlines the job responsibilities very

clearly and also helps in attracting the right candidates to the right job.

The characteristics of job design are as follows:

1. Organisational Structure: The job design specifies the contents and procedures of performing the

task in the organisation. Hence, it helps in designing organisational structure. The organisational structure

is determined by the job design process.

2. Human at the Centre: In the modern concept of job design, a human being is at the centre and his

needs and convenience are given prime importance.

3. Structure of Competent Employee: Job design is a systematic approach of providing job-related

data and information on skills, knowledge and ability of the incumbent to perform the task. On the basis

of the information provided by it, the job description and job specification schedule are prepared, which

helps to the best suited candidate for the job.

4. Motivation and Commitment of Employees: Job design makes the work more interesting and

challenging, which motivates the employees for higher level of performance.

5. Environmental Adaptation: The process of job design and job redesign is prepared in such a way

that it adapts the change in the environmental forces.

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6. Labor Relation: A well prepared job design brings a harmonious relation between employees and

management. On the other hand, poorly prepared job design creates employee-grievances, greater

employee turnover, greater absenteeism and conflict.

7. Quality of Work Life: A quality of work life is understood as an efficient relationship between

employees and organisational working environment. A properly prepared job design leads to improvements

in quality of work life.

8. Job Redesign: A job design has to be reconsidered from time to time in the light of developments in

production techniques and technologies. In other words, the concept of job design includes job redesign

also.

9. Job Satisfaction: A job is designed in such a way that it gives meaning and satisfaction to employees.

This ultimately results in increased production and productivity. Thus, employees as well as organisations

are benefited from the situation.

TECHNIQUES OF JOB DESIGN

1. JOB ROTATION

Job Rotation is a management approach where employees are shifted between two or more

assignments or jobs at regular intervals of time in order to expose them to all verticals of an organisation. It is

a pre-planned approach. Its objective is to test the employee skills and competencies in order to place him or

her at the right place. Besides, it reduces the monotony of the job and gives them a wider experience and

helps them gain more insights.

Job rotation is a well-planned practice to reduce the boredom or fatigue of doing same type of job

everyday and explore the hidden potential of an employee. It helps management in discovering the talent of

employees and determining what he or she is best at. On the other hand, it gives an individual a chance to

explore his or her own interests and gain experience in different fields or operations.

2. JOB ENLARGEMENT

According to Robert Cooper, “Job enlargement is adding more to the present job design and introducing

variety into it.”

Job enlargement is considered horizontal expansion, which means that the tasks added are at the

same level as those in the current position. Job enlargement may also result in greater workforce flexibility. In

other words, job enlargement is a job design technique in which the number of tasks associated with a job is

increased (and appropriate training provided) to add greater variety to activities, thus reducing monotony.

After performing the same position for a while, employees can get bored. As an example, we’ll look

at John, an accountant in a large corporation. For his position, John is responsible for posting entries and

creating financial statements for several small companies the corporation owns. He’s been doing this for a

couple of years now, and the tasks required each month are found in a checklist he works down for each

company. Although he likes accounting, his work is getting a bit monotonous.

3. JOB ENRICHMENT

According to Stephen Robbins, “Job enrichment refers to the vertical expansion of jobs and increases

the degree to which the worker controls the planning execution and evaluation of his job.”

Typically job enrichment involves combining various existing and new tasks into one large module of

work. The work is then handed over to an employee, which means there is an increase in responsibilities and

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scope. This increase in responsibility is often vertical. The idea is to group various tasks together such that

natural work units are created. Job enrichment also opens up a feedback channel for the employees. Employees

are frequently apprised of their performance. This keeps them on track and helps them know their weak and

strong points. Performance standards are set for the employees themselves and future performances are

matched against the benchmarks. Research studies on job enrichment found out decreased levels of absenteeism

among the employees, reduced employee turnover and a manifold increase in job satisfaction.

4. WORK SIMPLIFICATION: Work simplification means dividing the job into small parts i.e. different

operations in a product line or process which can improve the production or job performance. Job analysis

provides the information related to job and this data can be used to make process or job simple.

Work simplification techniques range from low-tech (such as using no-scrub cleaners) to high-tech

(such as using voice recognition software for typing).

Some other examples include:

• Using an automated can opener instead of the manual version.

• Lengthening a short handle on a dustpan to avoid bending.

• Using pre-pressed clothes that eliminate the need for ironing.

• Sliding heavy objects or using a wheeled cart to avoid lifting.

*****

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LESSON-14

JOB EVALUATIONLearning Objectives

1. To introduce students with the concept, meaning and definitions of Job Evaluation.

2. To highlight objectives, principles as well as merits and demerits of Job Evaluation.

3. To elaborate the process and various methods of Job Evaluation.

CONTENTS

MEANING AND DEFINITIONS

OBJECTIVES OF JOB EVALUATION

PRINCIPLES OF JOB EVALUATION

PROCESS OF JOB EVALUATION

METHODS OF JOB EVALUATION

ADVANTAGES OF JOB EVALUATION

LIMITATIONS OF JOB-EVALUATION

MEANING AND DEFINITIONS

Job evaluation is an orderly and systematic process of determining the wages (or worth) of the job in

relation to other jobs. It is a process of rewarding the job after it has been analysed. According to the

International Labour Office (I.L.O.), “job evaluation is an attempt to determine and compare the

demands which the normal performance of a particular job makes on normal workers, without taking

into account the individual abilities or performance of the workers concerned”.

DEFINITION

“Job evaluation represents an effort to determine the relative value of every job in a plant to determine

what the fair basic wage for such a job should be.”

-Kimball and Kimball

OBJECTIVES OF JOB EVALUATION

Job Evaluation is undertaken with the following objectives:

1. To have external and internal consistency in wage structure. Thus, inequalities in wages must be

removed. If a foreman gets less wages than the supervisor, it is a case of internal inconsistency.

2. To have a systematic evaluation of jobs and fixation of wages on that basis helps in solving wage

controversies.

3. To remove subjectiveness in the fixation of wages, introduce objectiveness and also facilitate union

management negotiations on wages.

4. To conduct wage surveys and compare our wage systems with other concerns.

5. To fix minimum and maximum wages throughout the organisation.

6. To generate standardisation in wage differentials.

7. To help in the selection of candidates for the vacant jobs. The factors determined for job evaluation

are taken into account while selecting a candidate. It reduces selection and recruitment costs.

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8. To ensures that same wages are paid to all qualified employees doing similar type of work.

9. To establish a rational basis for incentive and bonus schemes.

10. To provide a framework for periodic review and revision of wage rates and a basis for wage negotiation

with trade unions.

11. To enable the management to gauge and control payroll costs.

PRINCIPLES OF JOB EVALUATION

1. It is important to keep in mind that we should do the rating of the job rather than the rating of the man

who is doing the job (which is covered in merit rating). The man doing the job may be a misfit.

2. The factors selected should be less in number. Usually the factors selected are skill, effort, responsibility

and working conditions. Each factor should be precisely defined.

3. The job-evaluation plan must be acceptable to employees. In other words, such a plan must be ‘told’

to employees by explaining its advantages and objectives.

4. The value or weightage given to the factors should not be disclosed to the foreman or supervisor

while discussing the job evaluation plan with them. In case monetary values are also explained, it will

result in the biased evaluation.

5. There should be limited number of occupational wages i.e., there should be few categories of jobs

and they should be arranged in terms of their value.

6. The foreman of the concerned department should also participate in job evaluation.

7. Maximum co-operation of employees for the programme of job evaluation is very essential for its

success.

PROCESS OF JOB EVALUATION

The process of job evaluation involves the following steps:

1. Gaining Acceptance: At the very outset, the support and cooperation of top management, employees

and trade unions should be obtained through communication and participation. To acquaint them with the

aim of job evaluation, conference, letters and booklets can be used.

2. Constituting Job Evaluation Committee: For evaluating the jobs, a committee consisting of

experienced and respected representatives of management and workers and outside experts should be

constituted. The participation of employees in the committee will reduce their doubts and apprehension

about the programme.

3. Selecting Jobs to be Evaluated: Due to constraints of time and money, it may not be possible to

evaluate each job. Therefore, some key jobs may be selected in each department, which are representative

of the type of work performed. The key jobs are evaluated in detail and other jobs are then compared

with the key jobs.

4. Describing the Jobs: A detailed job description is prepared for every job, indicating the duties and

responsibilities involved in it. The acceptance of the employees performing the job is also obtained to the

job description.

5. Selecting the Method of Evaluation: There are several methods available for evaluating jobs. According

to the nature of the job and the organization, an appropriate method or sometimes, more than one methods

are chosen for evaluation.

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6. Weighting Job Factors: A job is compared with other jobs in terms of significant factors which may be

as follows:

a) Efforts and Initiative

b) Skill-mental and manual

c) Responsibilities to be undertaken

d) Experience

e) Supervision required

f) Working Conditions

Weights are assigned to each job factor and total weights for a job indicate its relative value. Different

jobs are arranged in a sequence in terms of their relative worth to the company.

7. Assigning Money Values: Each job is priced according to its worth. In other words, the sequence of

jobs in terms of their relative worth is related to a money scale.

8. Periodic Review: A periodic review and revision of job descriptions will help to tone down the feelings

of employees who believe that their work was not properly evaluated and will also enable the management

to update the job description in the light of technological and other changes.

METHODS OF JOB EVALUATION

Various methods of job evaluation may be grouped as under:

METHODS OF JOB EVALUATION

QUANTITATIVE NON-QUANTITATIVE

METHODS METHODS OR

QUALITATIVE METHODS

POINT FACTOR RANKING OR JOB GRADING

RATING

SYSTEM COMPARISON JOB COMPARISON

METHOD METHOD

1. Point Rating Method

This is the most widely used method of job evaluation. Under the point method, a detailed analysis of job’s

worth is made for determining the fair wages.

The following is the procedure for job evaluation under this method:

a) All factors influencing various jobs should be considered beforehand.

b) The job description is prepared for the job if it is not available.

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c) All factors are evaluated in terms of points depending on the degree of their importance in a particular

job.

d) Each job is rated factor by factor and then the values of points are added up. The total points for a job

indicate its relative worth or value.

e) All jobs with same (more or less) points are classified into one grade. Thereafter, wages for each job

are fixed on the basis of total points.

The table of National Metal Traders Association (NMTA) of U.S.A. is given here for understanding

the allocation of points to various factors:

Job elements and degree value points assigned to each factor and key to grades for machine operators:

Factors No. of 1st 2nd 3rd 4th 5th

points degree degree degree degree degree

1. Skill 250

(i) Education 70 14 28 42 56 70

(ii) Experience 110 22 44 66 88 110

(iii) Initiative and ingenuity 70 14 28 42 56 70

2. Effort 75

(iv) Physical demand 50 10 20 30 40 50

(v) Mental or visual demand 25

3. Responsibility 100 5 10 15 20 25

(vi) Equipment process 25 5 10 15 20 25

(vii) Material or Product 25 5 10 15 20 25

(viii) Safety of others 25 5 10 15 20 25

(ix) Work of others 25 5 10 15 20 25

4. Job conditions 75

(x) Working Conditions 50 10 20 30 40 50

(xi) Hazards 25 5 10 15 20 25

In the above table, the total points for a job are 500. Skill carries 50% of the points and these are

further subdivided into education, experience, initiative and ingenuity.

The last step is to evaluate the jobs by assigning points to various factors as laid down in the job

specifications. The total points of a job indicate its relative worth and thereby, its wages.

2. Factor Comparison Method: The factors comparison method was developed in 1926 by E.J. Benge.

This method is different from point method only in respect of yardstick provided for evaluating jobs. Under

this method, only few jobs, called ‘Key Jobs’ are evaluated at the first instance. While selecting key jobs,

the analysts must see that job descriptions of key jobs are available. Key jobs serve as standards against

which other jobs can be compared. A key job is one having standardized contents and well accepted pay

rate. Key jobs should be cross section of all jobs in the organization representing all levels of pay. Job

descriptions are then carefully analysed and the key jobs are then rated in terms of the selected factors by

considering one factor at a time.

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Steps in Factor Comparison Method

SELECT JOB SELECT KEY DETERMINE

FACTORS JOBS CORRECT RATES

OF KEY JOBS

EVALUATE ALL OTHER ALLOCATE THE CORRECT RANK

JOBS IN TERMS OF RATE OF EACH KEY AMONG JOB FACTORS

THESE FACTORS AS JOB FACTORS

YARDSTICKS

DESIGN, ADJUST

AND OPERATE THE

WAGE STRUCTURE

The factors to be used in this method are generally restricted to 7. Usually the factors considered

are the same as under point system viz., skills, responsibility, working conditions, physical and mental efforts.

Suppose five key jobs are selected. Each job will be given a rank in relation to job factors. For example, five

jobs may be ranked as follows:

Skill Responsibility Efforts Working

Conditions

E C A B

D E B A

C D E C

B A C D

A B D E

The amount is then allocated among the factors for each key job and wages are determined. The

following example shows as to how the wages of key jobs are calculated:

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Job Factors Job A Rs. Job B Rs. Job C Rs. Job D Rs. Job E Rs.

1. Skill 13.50 6.00 4.50 3.00 12.00

2. Effort 6.00 4.50 5.70 1.50 5.25

3. Responsibility 2.25 1.50 2.55 1.20 3.00

4. Working Conditions 3.75 5.25 3.00 5.40 5.40

Suppose job Z is similar to job A in skill (Rs. 13.50), job B in effort (Rs. 4.50), job C in responsibility

(Rs. 2.55) and job D in working conditions (Rs. 5.40), then correct wage will be Rs. 25.95 (Rs. 13.50 + Rs.

4.50 + Rs. 2.55 + Rs. 5.40).

3. Ranking Method

Rank means ‘to arrange according to classes’. Under this method, each job is compared with other

jobs and then all jobs in an organization are arranged according to their worth or importance as judged by

duties, responsibilities and demands on the job holder. For this purposes, a committee comprising certain

executives is formed. Under this method specific factors are not considered, but the committee does keep in

mind certain factors e.g., type of work, responsibilities involved, working conditions and supervision required.

No weight or points are specified for these factors. The following techniques can be used for ranking jobs:

(a) Job Description: In this technique, a written job description is prepared for every job. The job

descriptions are then studied and analysed to note the differences between them in terms of duties,

responsibilities, skill requirement etc. Each job is then assigned a rank according to its relative

importance. Several raters may independently rank each job from which average ratings are

calculated to determine the final ratings. In this method, the rater is required to keep in mind all the

jobs being ranked which may not be possible when the number of jobs is large. Further, the rater

may overlook significant differences among jobs, due to which accuracy of ranking may be low.

(b) Paired Comparisons: In this method, each job is paired with every other job in the series. The

more difficult job in each pair is identified. Rank is then assigned on the basis of the number of times

a job is rated more difficult.

(c) Ranking along a Number Line: In this technique, ranks obtained through job descriptions and

paired comparisons are spread along a number line. Each job is then placed along the line on the

basis of its closeness to the highest ranked job.

4. Job Grading (or Job Classification Method)

Under this method, yardstick is provided in the form of job classes or grades. The committee goes

through the job description of each job and assigns it a particular grade depending on how well its characteristics

match the grade definitions. A job grade is a group of different jobs of similar difficulty or requiring similar

knowledge and skills to perform. There are different rates of wages for different classes. The jobs may be

graded as skilled, unskilled, routine, administrative etc.

This method is an improvement over ranking method in the sense that predetermined yardstick is

available. Each grade should be sufficiently large to include a number of jobs. The following steps are

involved in job grading:

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PREPARATION PREPARATION SELECTION OF

OF JOB DESCRIPTION OF GRADE KEY JOBS

DESCRIPTION

CLASSIFY JOBS ASSIGNING A

BY PRE-DETERMINED GRADE TO

GRADES KEY JOBS

ADVANTAGES OF JOB EVALUATION

Job evaluation results in following advantages:

1. The wage differentials are rationally and systematically established.

2. Job evaluation is a logical and objective technique of ranking jobs and thereby removing wage

inequities. Thus it helps in establishing an equitable, rational and consistent wage and salary structure.

3. It helps to improve industrial relations by reducing employee doubts and grievances arising out of

wages.

4. It helps in fitting new jobs at their appropriate places in the existing wage structure.

5. It provides a clear and objective basis for wage negotiations and collective bargaining.

6. It is acceptable to management as well as employees as it reveals jobs which require less or more

skilled workers than those already performing these jobs. In this way job evaluation facilitates

better utilization of the work force.

7. Due to increasing mechanization and automation, performance depends in many cases more on the

machine than on the worker. In such cases, it is unrealistic to pay workers on the basis of their

output. Job evaluation is a realistic basis of wage fixation in these cases.

8. Job evaluation involves detailed analysis of a job. Data generated in job evaluation is very useful in

selection, placement and training of employees.

9. Any dispute relating to wages can be easily settled by referring it to the job evaluating committee.

10. With technological changes, job contents also change. Job evaluation reviews the job rates.

11. It helps in bringing uniformity in wage structure.

12. It provides a sound base for bonus schemes and helps in job classification and work simplification.

LIMITATIONS OF JOB-EVALUATION

1. Job-evaluation cannot be scientific and objective though it is claimed to be so because it is based on

judgement. It is not automatic and is subject to all human limitations. There is no standard list of factors

and some job factors cannot be measured accurately.

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2. Job evaluation fails to consider several factors which influence the value of a given job from workers’

point of view. Demand and supply of a particular skill, social status, nature of supervision, security of

service, career prospects etc. are such factors.

3. Factors applied, though presumed to be independent, usually overlap. Thus weightage given to them

and their reliability becomes questionable.

4. The effectiveness of a job may differ for the workers, though the jobs are equal on the basis of various

factors. If wages of these jobs are disturbed, it will result into new kinds of problems.

5. Job evaluation makes the wage and salary structure inflexible by freezing wage differentials between

jobs. It makes little provision for adjusting to prevailing wage rates and changing conditions.

6. Its usefulness is restricted only to big concerns as its installation requires time and finance. As job

contents change, revaluation of jobs becomes necessary. Moreover, job standardization essential for

proper evaluation may be difficult under changing conditions.

7. It limits the right of the trade unions to negotiate with the management in respect of fixation of wages.

8. It gives a false impression about the accuracy of fixation of wages. In fact, much has to be done

afterwards for eliminating wages controversies.

9. Usually the factors selected are skill, responsibility, effort and working conditions. Workers insist that

few more should be added viz., supervision received, amount of overtime, innovative plans etc.

10. Some methods of job evaluation are difficult to understand. Workers and trade unions often oppose job

evaluation. They fear that it will do away with collective bargaining for settlement of wage rates.

11 Job evaluation is not well suited to determining the relative worth of managerial jobs. These jobs

involve considerable planning, decision making and supervision of others. These executive skills cannot

be measured in quantitative terms.

*****

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LESSON-15

INTERNATIONAL HUMAN RESOURCE MANAGEMENT

Learning Objectives:

1. To make students conversant with the concept, meaning and definition of international HRM.

2. To highlight the differences between domestic and international HRM.

3. To study the factors influencing global HRM.

CONTENTS

INTRODUCTION AND MEANING

IMPORTANCE OF IHRM

DIFFERENCES BETWEEN DOMESTIC AND INTERNATIONAL HRM

FACTORS MODERATING THE DIFFERENCES BETWEEN DOMESTIC AND INTERNATIONAL

HRM

FACTORS INFLUENCING THE GLOBAL HRM

INTRODUCTION AND MEANING

International orientation assumes greater relevance as business gets increasingly interlinked across

nations. Maintaining or improving on employment and its quality in a particular country requires that its HR

markets must be responsive not only to changes related to development and growth within the country but

also to changing conditions worldwide. At the same time globalisation creates scope for MNCs and TNCs to

play a role in generating and upgrading of employment and development of human resources in host countries.

Just as the success of a domestic business depends on its human resources, so is the case with an international

business. The competitive edge of MNC in international market depends on the type of people, the willingness

with which they work and the commitment they exhibit towards the organization. The MNC may be having

best of resources at its home country base but without using the manpower these resources cannot be

effectively utilized or transferred to foreign countries.

Thus, an international business must procure, motivate, retain and effectively utilize services of

people both at the corporate office in the home country and at plants in the host countries. This process of

procurement, allocation, the effective utilisation of human resources in an international business is called

International Human Resource Management (IHRM)

Morgan has developed a model of IHRM. According to Morgan, IHRM as the interplay among

three dimensionshumans resource activities, types of employees and countries of operations.

1. The three broad activities of IHRM, namely procurement, allocation and utilization cover all the six

activities of domestic HRM i.e. HR planning, employee hiring, training and development, remuneration,

performance management and industrial relations.

2. The national or country categories involved in IHRM activities are:

(a) the host country where a subsidiary may be located.

(b) The home country where the firm has its headquarters and

(c) Other countries that may be source of labour, finance and other inputs.

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3. The three categories of employees of an international firm are:

• Host country nationals

• Parent country nationals and

• Third country nationals

Morgan’s model can be illustrated with the help of the following model.

FIGURE 1: TYPE OF EMPLOYEES

A useful definition of IHRM has been offered by Schuler and his colleagues, which takes on board

both strategic and international dimensions of MNC’s HRM and also moves away from the narrower function

of expatriation.

According to them “Strategic IHRM is human resource management issues, functions, policies

and practices that result from the strategic activities of multinational enterprises and their impact on

the international concerns and goals of those enterprises.”

IMPORTANCE OF IHRM

International HRM is of growing importance for a number of reasons, the most significant of these are:

1. Globalisation of business has added to a number of multinational enterprises across the global

resulting in greater mobilisation of human resources.

2. The effective management of human resources internationally is increasingly being recognised as

a major determinant of success or failure in international business.

3. Underperformance or failure in overseas assignments is costly, both in terms of human resources

and finance and the indirect costs of poor performance in international assignments such as damage

to foreign customer relations may be particularly costly.

4. In international business, HR play a significant role in implementation and control of strategies.

Implementation, which is more crucial than crafting of strategies, is not possible through structural

innovation but can be done with radical organization cultures. Cultures are built by proactive HR

policies and actions.

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Research evidence shows that:

• Shortage of international managers is becoming an increasing problem for international firms.

• To a large extent the successful implementation of global strategies depends on the existence of an

adequate supply of internationally experienced managers.

• Business failure in the international arena may often be linked to poor management of human

resources and

• Expatriate failures continue to be a significant problem for many international firms.

In view of the above problems it can be argued that:

i. HRM at any level is important to strategy implementation. The movement away from more traditional

hierarchical organizational structures towards the network organization has been facilitated by the

development of networks of personal relationships and horizontal communication channels and

undoubtedly, human resources play a very significant role in network organizations.

(ii) Major strategic components of MNCs have a significant bearing on international management

issues, functional policies and practices.

(iii) Many of these characteristics of strategic IHRM can help or hinder the MNCs in their attempt to

achieve their goals and objectives and

(iv) There are various factors that make the relationship between MNCs and strategic IHRM complex,

thereby making the study of IHRM important.

DIFFERENCES BETWEEN DOMESTIC AND INTERNATIONAL HRM

Major points of distinction between domestic and international HRM are as follows:

1. More Human Resource Activities: The scope of IHRM is much broader than the domestic

HRM. Be it employee selection, training or compensation, IHRM adds new dimensions which are

neither being felt nor observed in DHRM. In addition to the basic human resource activities, IHRM

has to take into consideration host country laws and regulations, language, translation services,

international taxation, international orientation and re-allocation and administrative services for

expatriates.

2. Perspective: IHRM requires a much broader perspective on even the most common HR activities

as compared to the domestic HRM. For example, while dealing with pay issues, the corporate HR

manager must co-ordinate pay systems in different countries with different currencies that may

change in relative value to one another over time. Similar complications tend to arise while handling

fringe benefits. The most common HR activities have to be handled in different ways in IHRM,

because HR managers working in the global environment face the problem of designing and

administering programmes for more than one country. People in different nations have different

perceptions about different things. MNCs operating in these countries need to be aware of the

varied perceptions. They have to modify some of their policies to suit the local sentiments. For

example, in Australia and Singapore, if the work load increases, firms are most likely to add more

staff, whereas in Korea and Japan, firms prefer that the existing employees work longer hours. A

strong practice in Korea, Singapore, Japan and Indonesia has been that a family man should be paid

more for the same job than a single woman. This conviction is strongly opposed by female workers

in Asia.

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3. Human Resource Services: Majority of international business houses maintain international human

resource services section to provide services to the parent country and third country nationals such

as handling of their banking, investments, housing arrangements, health care and co-ordinating home

visits etc. The HR department needs to ensure that the expatriate employees understand all these

arrangements related to their foreign assignments. A great degree of involvement is thus needed in

the personal lives of the employees for selection, training and effective management of parent country

and third country nationals.

Involvement of the HR department in the personal lives of the employees is very much limited in

domestic HRM. Domestic HRM may provide employee insurance or at the time of transfer, some

assistance may be provided in relocating the employee and his family. But the domestic HRM does

not involve itself in the personal lives of the employees more than these. In the international setting,

however, the HR department must involve itself more and understand the personal lives to provide

the service and support needed by them. Some firms in addition to providing suitable housing and

schooling in the assigned location also help children who are left behind at boarding schools in the

home country. These issues are not considered in domestic HRM.

4. Enhanced Emphasis: Once the international business develops, the emphasis placed on various

HR activities change. The need to enhance emphasis in HR activities, as the MNC develops, broadens

the responsibilities of the local HR activities. For example, in the initial stages, the MNCs use the

employees from the home country or the third nation and the emphasis of HR activities is on expatriates,

their relocation, orientation, welfare etc. But as the MNC matures, trained locals become available

and the emphasis shifts to selection, training and development. Thus, with the development of MNCs

the emphasis on HR activities keeps on changing, whereas in domestic HR, the emphasis remains

the same.

5. Exposure to Risks: Domestic HR is less exposed to risks as compared to IHRM. Unfair hiring

practices of the firm may result in a firm being charged with the violation of constitutional provisions.

Any violation of such provisions can result in penalties imposed on the firm. Risks of strikes and

labour unrest can result from the failure to maintain cordial relations with the worker unions.

In IHRM, the above mentioned risks exist and in addition, there are some other unique and more

threatening risks:

(a) Depending on the countries where the MNCs operate, physical safety of the employees is a major

concern for the HR managers as well as for the headquarter. Terrorism poses a great risk to

international operations. Firms have to spend a major portion of their revenues on protection against

terrorism. Such risks are not faced by domestic HR managers.

(b) In highly volatile assignment locations the HR department may also be required to devise emergency

evacuation procedure.

(c) The risks associated with wrong selection-decision are very high. If managers/employees do not

perform well and have to be recalled to the home country, their failure brings huge financial losses

for the firm.

(d) Another risk is that of expropriation or seizure of MNC’s assets in a foreign country by the Government

of that country.

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(e) In many countries kidnapping and terrorism pose a great risk to international operations.

If the unions, political groups or government of the host country are not happy with the policies of the

MNC, the firm may be asked to leave the country, have its assets seized or the government taking

the majority control of its operations. This type of risk is not faced by local HRM.

6. External Influence: External factors influence the international HRM to a larger extent as compared

to the local HRM. MNCs occupy an important and more visible place in the host countries, particularly

in the developing countries. The HR managers of these companies have to deal with ministers,

political leaders and many economic and social interest groups which DHR managers would not

encounter. Host country government can dictate the selection procedures also. The HR managers

also need to learn and interpret the local ways of doing business and the general code of conduct

regarding various other activities e.g. giving gifts etc. In developed countries, labour is more expensive

and better organized than in less developed countries and governments require compliance with

guidelines such as labour relations, taxation, health and safety. Further, the HR manager will become

more involved in administering benefits such as housing, education and other facilities that are readily

available in the host country.

FACTORS MODERATING THE DIFFERENCES BETWEEN DOMESTIC AND

INTERNATIONAL HRM

The above discussion indicates that the complexity involved in operating in different countries and

employing different national categories of employees is a key variable that differentiates between domestic

and international HRM. In addition to complexity, there are three other variables that moderate (either diminish

or accentuate) differences between domestic and international HRM. These four moderators are:

• The Cultural Environment

• The Industry (industries) with which the MNC is primarily involved.

• The Extent of Reliance of the multinational on its home country domestic markets.

(A)THE CULTURAL ENVIRONMENT

Management of human resources of a company does not take place in a vacuum. Various factors

inside and outside the company influence its shape and content. One of the major external factors is the

cultural environment within which the company operates. Because international business involves the interaction

and movement of people across national boundaries, an appreciation of cultural differences and when these

differences are important becomes all the more essential.

Culture is a concept which has aroused controversy and confusion among scholars as to its precise

meaning and definition. The term is usually used to describe a shaping process. That is, members of a group

or society share a distinct way of life with common values, attitudes and behaviour that are transmitted over

time in a gradual, yet dynamic process. People are not born with culture, rather they acquire it through the

socialisation process that begins at birth. Culture is different between nations. A nation’s culture is shaped by

historical, geographical and philosophical factors. In management studies, the recognition of cultural differences

among different people is even more important as it helps in understanding the motives and behaviour of

those with whom we interact. Many scholars have written in detail about various culturally influenced work

related attitudes and values and explored how they might affect different aspects of organization and their

interaction with their cultural context. In addition it has been argued that certain people related issues such as

HRM more readily influenced by culture as compared with the hard aspects such as financial and technical

matters.

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An awareness of cultural differences is essential for the HR managers at the corporate headquarters

as well as in the host location. The culturally insensitive attitudes and behaviours stemming from ignorance or

from neglected beliefs like ‘My way is best’ or ‘what works at home will work here’, are not only inappropriate

but often cause international business failure.

The major cultural work related attitudes and values which are likely to shape human behaviour

include attitude to power and authority, tolerance for ambiguity and uncertainty, attitude to risk and risk taking,

individualism, self orientation, collectivism, group orientation, acceptance of responsibility, interpersonal trust,

attitude to the other persons’ opinions, attitude to sharing information and knowledge with others, preference

for certain leadership behaviour, preference for independence and autonomy, self confidence, self reliance,

achievement orientation, ambition, attitudes to conflict and harmony, work ethics, etc.

Coping with cultural differences and recognising how these differences are relevant are a constant

challenge for international firms. Helping to prepare staff and their families for working and living in a new

cultural environment has become a key activity for HR departments in those MNCs that appreciate or have

been forced to appreciate the impact that the cultural environment can have on staff performance and well

being.

(B) THE INDUSTRY TYPE

The industry (or industries if the MNC is a conglomerate) in which the MNC is engaged is of

considerable importance because patterns of international competition vary widely from one industry to

another. At one end of the continuum of international competition is the Multidomestic industry in which

competition in each country is essentially independent of competition in other countries. Traditional examples

of this industry are retailing, distribution and insurance. At the other end of the continuum is the Global

Industry, one in which a firm’s competitive position in one country is significantly influenced by its position in

other countries. Examples of this industry are commercial aircraft, semi-conductors etc.

The role of the HRM function in multidomestic and global industries can be analysed using Porter’s

model. According to Porter, “The global industry is not merely a collection of industries but a series of

linked domestic industries in which the rivals compete against each other on a truly world wide basis.

In a multidomestic industry, the international strategy collapses to a series of domestic strategies. The

issues that are uniquely international revolve around how to do business abroad, how to select good

countries in which to compete or to assess country risk and mechanisms to achieve the one time

transfer of know-how. In a global industry, however, managing international activities like a portfolio

will undermine the possibility of achieving competitive advantage. In a global industry, a firm must in

some way integrate its activities on a world wide basis to capture the linkages among countries.”

If the firm is in a multidomestic industry, the role of the HR department will most likely be more

domestic in structure and orientation. The main role for HRM function would be to support the primary

activities of the firm in each domestic market to achieve a competitive advantage through either cost efficiency

or product/service differentiation. At times, there may be demand for international services from the HRM

function but these activities would not be pivotal-indeed many of these services may be provided via consultants

and/or temporary employees.

If the firm is in a global industry, the HRM function will be structured to deliver the international

support required by the primary activities of the multinational.

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(C) RELIANCE OF THE MNC ON ITS HOME COUNTRY DOMESTIC MARKET

A very important but often ignored factor which influence the HR practices in multinationals is the

extent of the reliance of the MNC on its home country domestic market. However, size is not the only key

variable when looking at a MNC - the extent of reliance of the MNC on its home country domestic market is

also very important. In fact, for many firms, a small home market is one of the major motives for going global.

According to a survey of foreign direct investments conducted by the UNCTAD, the top ten MNCs of the

world are RIO Tinto (UK/Australia), Thomoson Corporation (Canada), ABB (Switzerland), Nestle

(Switzerland), British American Tobacco (UK), Electrolux (Sweden), Interbrew (Belgium), Anglo American

(UK), Astrazeneca (UK) and Philips Electronics (Netherlands).

There is not a single US firm in the above mentioned list. The reason for this is as obvious as it is

important - the size of the domestic market for US firms. The demands of a large domestic market present a

challenge to the globalisation of many US firms. MNCs from small advanced economies like Sweden,

Switzerland, Belgium and the Netherlands are in a very different position to US MNCs based in the largest

single national market in the world.

FACTORS INFLUENCING THE GLOBAL HRM

Environmental changes provoke managerial responses which, in turn alter the global

work environment. The various factors which influence the global HRM are:

◆ Forces for change

◆ Requirements for MNCs

◆ Managerial responses

All these elements are crucial for the survival and growth of the international firms. These are

discussed in detail as follows:

1. Forces for Change

The most predominant features of our current environment is one of rapid change. In the current

global workplace, the key trends that are generally accepted to be forces for change are as follows:

(i) Growth in Mergers, Acquisitions and Alliances: A contributing element as well as a response to

global competition has been an increase in the number of mergers and acquisitions (M and As) and the

formation of strategic alliances. The past decade has seen a plethora of mergers and acquisitions as a

form of market entry and expansion. There are considerable challenges involved in successful M and

As. It is never a simple process to integrate two existing firms into one entity. The recent merger of the

computers firms Hewlett-Packard and Compaq highlights the complexity of the integration process.

Most M and As fail because the integration of the acquired company into the new company does not go

well. One must have the human side of it done very well - who is staying, who is leaving, those who are

staying have to be moulded to suit the company’s value proposition and culture.

(ii) Global Competition: As more and more firms from numerous countries become internationalised, the

levels of competition increase. Increased global competition not only impacts the firm’s competitive

position, but also the dealings with issues related to business ethics and social responsibility, that has

become a priority for MNCs involving HR managers. As firms from developing nations and transitional

economies become more involved with global economies (such as the emergence of Chinese MNCs),

concerns have been expressed about the desirability of globalisation of trade and business. Demonstration

and debates in various countries against ‘globalisation’ are perhaps indicative of this.

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(iii) Organisational Restructuring: Organisational change is a fact of life. Firms have to constantly

restructure their operations and activities to support changes as a consequence of growth and changes

in environment. However, the rate of structural changes has increased exponentially with global

competition. The past decade has seen large scale retrenchments as firms outsource these activities,

sell underperforming units, engage in plant rationalisation, integrate acquired operations and merge

businesses. In order to perform their role in a better way, it would seem important that the HR managers

understand the various international structural options-alongwith the control and coordination elements

imposed by international growth and the HR implications that accompany the range of operation modes.

(iv) Advances in Technology and Tele-Communication: Advances in technology and telecommunication

have developed new ways of conducting international business, although these have not yet lived up to

expectations. Arrangements such as virtual teams have facilitated project work across time zones and

national boundaries, constant communication via digital mobile phones and email have assisted managerial

handling of crisis and situations. Computerised processes and procedures have enhanced production

and improved working conditions. All these changes have implications for the way in which people are

managed.

2. Requirements for Multinational Management

As a consequence of the above forces for change, following are the impacts on multinational

management:

(i) Flexibility: The MN management must provide for flexibility in terms of management approaches

and action. Large firms have tended to become bureaucratic over time as control and coordination

concerns arise.

(ii) Local Responsiveness: The mantra of 1990s was ‘Think Global-Act Local’. A slogan to remind

managers in global firms that subsidiaries required some freedom to act according to their local

environment with a simultaneous requirement for anover all view of the firm’s global position. The

challenge is how to enable local responsiveness without affecting overall corporate cohesion. Firms

are still trying hard to find ways in which to achieve this objective.

(iii) Knowledge Sharing: Knowledge sharing is an important consideration for the managers of the firms

growing internationally. Structural changes need to be made in order to dismantle functional and unit

boundaries to counter the mentality of those employees who protect their territory and are unwilling to

share resources and knowledge. The challenge before the management is how to leverage knowledge

and information that is embedded in the various parts of the MNC so that the necessary know how can

be transferred where needed. Organisations need to provide an encouraging environment-using reward

systems and communication networks that promote knowledge sharing.

According to Kamoche, “The scope for organizational learning exists if the knowledge acquired

by individuals in international assignments can be diffused across the organisation.

(iv) Transfer of Competence: Competence is also regarded an a source of competitive advantage.

Human competence refers to the knowledge, skills and abilities required in competent work performance

and is fundamental to organisational viability. Firms can develop required levels of competence through

hiring practices and training programmes.

According to Hamel and Prahalad “A core competence is the sum of learning across individual

skills, sets and individual organisational units.”

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The management challenges is to identify what is core competence, where it resides and how it can be

protected, nurtured and exploited for competitive advantage. The challenge is more for the dispersed

MNC with diversed global units and employees from different global backgrounds. The management

must develop an effective mechanism to encourage openness to new ideas and new ways of working

to counter the negative attitudes that form barriers to the transfer of new skills.

3. Managerial Responses

The various managerial responses to the requirement of multinational management are discussed as

follows:

i. Developing Global Mindset: A global mindset or perspective should be developed throughout

the firm to encourage employees in various locations and functions to view activities as part of the

corporate whole. Regional and global meetings and training programmes held in rotating locations,

staff exchanges and cross border teams are ways in which MNCs can provide opportunities for

employees to see the bigger picture.

ii. Informal Control Mechanisms: Informal control mechanisms like personal networks and corporate

culture have been advocated as a way of developing responsibility to enhance local responsiveness

and flexibility. Infact, there is a strong argument that organisations are tending to place more weightage

on the informal mechanisms to facilitate control and coordination.

Organisations need processes and forums where staff from various units can develop personal

relationships that can be used for organisational purposes, because network relationships are built

and maintained through personal contracts.

There has been evidence of MNCs where corporate culture is superimposed upon national cultures

in subsidiary operations. However, its advocates emphasise on developing voluntary adherence to

corporate behavioural norms and expectations through the process of internalisation of corporate

values and beliefs. Building shared values across global units represents an alternative solution to

the governance problems in MNCs.

iii. Horizontal Communication: Horizontal communication, fostered through the use of less

hierarchical structures flowing through informal conducts such as personal networks, has also been

suggested as a way of enhancing a global perspective and encouraging knowledge sharing.

iv. Cross-Border and Virtual Teams: The formation of cross border even virtual teams is another

way of encouraging network building, knowledge sharing, competency development and transfer.

v. International Assignments: International assignments have been a time honoured way of achieving

a broader perspective at the individual level and as a mechanism for transferring information, skills

and knowledge for the benefit of the organisation, while maintaining cohesion and control.

*****

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LESSON-16

MANAGING INTERNATIONAL HR ACTIVITIES

Learning Objectives:

1. To give general idea of the term ‘international HR activities’.

2. To make students conversant with the process of international HR activities.

CONTENTS

MEANING OF INTERNATIONAL HR ACTIVITIES

PROCESS OF MANAGING INTERNATIONAL HR ACTIVITIES

MEANING OF INTERNATIONAL HR ACTIVITIES

International Human Resource Management (IHRM) can be defined as a set of activities targeting

human resource management at the international level. It strives to meet organizational objectives and achieve

competitive advantage over competitors at national and international level.

PROCESS OF MANAGING INTERNATIONAL HR ACTIVITIES

Managing interactional HR activities is an elaborate and complex task. The following Figure 2 outlines

the basic steps involved in international HR activities.

I) HR Planning (HRP)

HRP assumes greater relevance in intemational businesses where efficient use of human resotlrces

is necessary to realise strategic global objectives. But the implementation of HRP procedures may be difficult

in some host countries than in others. In cultures where people are viewed as being basically subjugated to

nature, there is very little need for HRP. The implementation of extensive HRP systems in such cultures

would be met with bewilderment at best and significant resistance at worst. Likewise, societies that are

oriented towards the present would not view longterm planning as valuable. In societies oriented towards the

past, planning would tend to focus on purely historical data and the use of these data in predicting furure HR

needs. Such an approach might be appropriate for firms that operate in relatively stable environments, but

would not work well for firms operating in highly volatile environments, where the past has little to do with the

future.

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FIGURE 2: BASIC STEPS IN INTERNATIONAL HRM

HRP

Recruitment & Selection

Training & Development

Performance Management

Remuneration

Repatriation

Employee Relations

Multicultural Management

Some major issues in HR planning in international business are as follows:

(i) The potential of the international top management has to be identified at the earliest stage.

(ii) For future international managers, critical success factors have to be identified.

(iii) Development opportunities for the personnel have to be provided for.

(iv) Commitment to individuals in international career plans have to be identified and maintained.

(v) Strategic business planning has to be co-ordinated with the HR planning.

(vi) Global and regionally focused strategies have to be achieved and simultaneously multiple business

units have to be dealt with.

The major functions of the IHRM are related to recruitment, selection and development of employees.

These functions are explained in detail as follows:

II) RECRUITMENT AND SELECTION

Recruitment is the process of searching for prospective employees and stimulating them to apply for

jobs in the organisation. When more persons apply for jobs then there will be a scope for recruiting better

persons. The job-seekers too, on the other hand, are in search of organisations offering them employment.

Recruitment is a linkage activity bringing together those with jobs and those seeking jobs.

Recruitment, according to Yoder, “is a process to discover the sources of manpower to meet the

requirements of the staffing schedule and to employ effective measures for attracting that manpower

in adequate numbers to facilitate effective selection of an efficient working force.” Recruitment is the

process which prompts people to offer for selection in an organisation. This involves locating sources of

O

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G

A

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I

S

A

T

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manpower to meet job requirements. In his words, “It is a process of searching for prospective employees

and stimulating and encouraging them to apply for jobs in an organisation. It is often termed positive

in that it stimulates people to apply for jobs to increase the hiring ratio, i.e., the number of applicants

for a job.”

The appointment of suitable persons on various jobs is very essential. The selection of a wrong

candidate will mean loss of time and money which have been incurred in this process. It also leads to

absenteeism and retrenchment. This calls for a properly planned recruitment and selection process. After the

receipt of appropriate number of applications through various sources of recruitment, the selection process

starts. It is concerned with securing relevant information about the applicants. The purpose of the selection

process is to determine whether a candidate is suitable for employment in the organisation or not. All persons

who have applied may not be suitable. Moreover, the number of applicants will be much more than the

positions vacant. It becomes all the more important to scrutinize applications properly so that those who are

found unsuitable at the first instance should not be called for tests or interviews. This will save time and

money of the enterprise as well as the candidates.

The procedure to be followed for selecting an employee may be different for various jobs. If the job

is not very important then a simple procedure may be followed. For employing unskilled workers, the personnel

manager may select them after a brief interview. If skilled and unskilled persons are to be selected then

foreman may interview them and also test their experience by asking them to work on jobs. When the

position to be filled is important, then a number of steps may be followed before a person is finally selected.

III) TRAINING AND DEVELOPMENT

Every organisation needs the services of trained persons for performing the activities in a systematic

way. The fast changing technological development makes the knowledge of employees obsolete. They require

constant training to cope with the needs of the jobs. Training is an organised procedure for increasing the

knowledge and skills of people for a specific purpose. The trainees acquire new skills, technical knowledge,

problem-solving ability, etc. It also gives an awareness of the rules and procedures to guide their behaviour.

Training improves the performance of employees on present jobs and prepares them for taking up new

assignments in future.

The mangers or executives are the most important and valuable assets of an organisation. Their

development has become one of the most important and complex tasks of human resource management.

Since World War II, tremendous emphasis has been laid on the development of executive talent in the field of

management. The dramatic change in the area of management development has been named as ‘Management

Revolution’. It has now been well recognised that qualified executives are needed throughout the industry

and trade and do not just emerge from labour force without consciously planned action on the part of the

organisation. The process of development and training are often confused. Training means learning the basic

skill and knowledge for a particular job or a group of jobs and there is no choice with the employer whether

to train or not. The only choice is that of the method to be employed. It occurs as a result of controlled

external stimulation but development takes place when the individual is internally motivated.

Development means self development and an organisation is only to provide the necessary conditions

for the development. The initiative for development should be taken by the individual himself. Moreover, it

develops the overall personality of the individual while on the other hand, the training programme seeks to

develop the skills and knowledge for a particular job.

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According to Dale Yoder, “The use of the terms training and development in today’s employment

setting is far more appropriate than training alone since human resources can exert their full potential

only when the learning process goes far beyond simple routine.”

Executive development consists of all the activities by which executives learn to improve their behaviour

and performance. It is designed to improve the effectiveness of managers in their present jobs and to prepare

them for higher jobs in future.

According to Michael J. Jucius, “Executive development is the programme by which executive

capacities to achieve desired objectives are increased.”

Management development according to Edwin B. Flippo, “includes the process by which the

managers and executives acquire not only skills and competency in their present jobs but also

capabilities for future managerial tasks of increasing difficulty and scope.”

Thus executive development is a planned effort to improve current and future managerial performance.

The executive development programme is needed for all levels of executives-top, medium and low, who

direct, control and coordinate various activities of people and organisation.

FEATURES OF EXECUTIVE DEVELOPMENT

An analysis of the above mentioned definitions reveals the following characteristics of executive

development:

1. Executive development is a planned, organised and systematic process of learning.

2. It is a continuous process, it continues throughout an executive’s entire professional career because

there is no end to learning.

3. Managerial skills cannot be developed over night or in one shot. It is a long-term process.

4. Executive development is guided by self development.

According to Michael Armstrong, “Executive development is eventually something that the

executive has to attain himself. But he will do this much better if he is given encouragement,

guidance and opportunity by his company.

5. The aim of development is to prepare managers for better performance and helping them to realise

their full potential.

TRAINING AND DEVELOPMENT IN INTERNATIONAL HRM

Any person, who has to leave for a foreign assignment, needs pre-departure training.

A few commonly understood objectives of training in the multinational corporations are:

1. Bridging the cultural gaps between the host and the parent organizations.

2. Recognising that orientation/induction challenges are different for the parent and the host unit.

3. Ensuring that organizational success is critical in achievement of global objectives.

4. Building a united corporate culture across subsidiaries.

Expatriate training is needed to reduce the failure rate. Following are the various kinds of training needed by

the expatriates :

1. Cross Cultural Training (CCT): Cross Cultural Training seeks to foster an appreciation for the host

country/s culture. The belief is that understanding the host country/s culture will help the manager

empathise with the culture, which will enhance his or her effectiveness in interacting with host-country

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citizens. An expatriate should receive training in the host country’s culture, history, politics, economy,

religion, and social and business practices. If possible, it is also advisable to arrange for a familiarization

trip to the host country before the formal transfer, as this is likely to ease a likely cultural shock. Given

the problems related to adaptation of spouse in the host country, it is important that the spouse and

perhaps the whole family, be included in the training programs. Often, CCT includes counseling on

return to home base to prevent reverse culture stock.

The increased globalisation of business all over the world has made the cultural training more important

as more and more people are travelling around the globe frequently on business deals. Ranbaxy and

Mafatlal are the groups which have recognised the importance of cultural training.

Advantages of CCT

◆ Increases chances of success in global assignment

◆ Provides a comprehensive global perspective for managers

◆ Instills a sense of confidence into people

◆ Foreign employees can be managed better

◆ Reduces culture shock.

Disadvantages

◆ Develops a false sense confidence among expatriates

◆ May not remove cultural biases and prejudices

◆ May not be taken seriously by the recipients

◆ May not make a visible difference on business volumes.

2. Language Training: Language training is a seemingly obvious and desirable component of a pre-

departure programme. English is the major and universal language of international business and

majority of people working in MNCs speak their language. But people who can speak only English

are at a disadvantage in nonEnglish speaking countries like China, Russia and Germany. Language

training acquaints people with the language of the host country. This training is a very obvious and

desirable component of overseas training. Ability to communicate in the host country language will

help build rapport with local employees and improve the employee’s effectiveness. Hence, language

training is very important. However, most of the MNCs do not give much importance to language

training.

3. Practical Training: Practical training seeks to help the expatriate manager and family feel ‘at

home’ in the host-country. Sooner the expatriate settles down, better are the prospects that he/she

and his/her family will adapt successfully. One important need is for a support network of friends.

Where an expatriate community exists, firms often try to integrate the new expatriate family quickly

into that group.

The expatriate community can be a useful source of support and information, and can help the

family to adapt to an alien culture.

HCN Training

It is not that an expatriate alone who needs to be trained. A HCN who is tipped to head a subsidiary

should also be trained. In selecting a host country national for a subsidiary the focus is on ascertaining the

technical and managerial fit for the role. In preparing a host country national for the assignment, the priority

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in training is the knowledge and the awareness of the parent company, beginning with the history and genesis

of the organisation, connecting with its vision/mission, goals and the specific objectives of the subsidiary.

Specifically, HCN training should focus on gaining knowledge about the parent organisation and its global

presence and objectives, on acquisition of technical know-how specific to the organization, on role of the

subsidiary in the MNCs road map both from the technological as well as corporate cultural perspective and

on general awareness of the parent country cultural norms.

MANAGEMENT DEVELOPMENT

MNCs are using management development as a strategic tool. This is particularly true in firms

pursing a multinational strategy which is a common feature among firms these days. Such firms need a

strong, unifying corporate culture and informal management networks to assist in co-ordination and control.

In addition, MNCs need to be able to detect pressure to conduct business in a locally-responsive manner. This

obviously demands knowledge about country culture. The management development programmes help build

a corporate culture by encouraging new managers to socialise and imbibe the values and norms of the firm.

In-house training progammes and interaction during off site training can develop a spirit of espirit-de-corps,

shared experiences as well as competencies. These programmes often include picnics, songs and sports

events that develop feelings of togetherness. Bringing managers together in one location for extended periods

and rotating them through several jobs in different countries help the firm in building an informal management

network. An example in this context is Ericsson, a Swedish telecommunications company. Inter unit co-

operation is extremely important at Ericsson, particularly for transferring know-how and core competencies

from the parent company to its subsidiaries, from subsidiaries to the parent and among the subsidiaries

themselves. To facilitate co-operation, Ericsson transfers large numbers of people back and forth between

headquarters and subsidiaries. This establishes a network of interpersonal contacts. This philosophy is effective

for both giving shape to a common culture in the company and co-ordinating the firm’s globally dispersed

operations.

IV) PERFORMANCE MANAGEMENT

One of the most challenging tasks of IHRM is managing the performance of a firm’s various

international facilities. While recruitment, selection, and training and development tend to focus on pre-

assignment issues, performance management looks at post-assignment performance-related issues.

Performance management may be understood as a process that enables an MNC to evaluate and facilitate

continuous improvement of individuals, subsidiary units, and corporate performance, against clearly-define,

pre-set goals and targets. Obviously, performance management is comprehensive in as much as it includes

assessment of the performance of not only individuals but the activities of the firm and its subsidiaries too.

The focus is mainly on assessment of expatriate performance. In the international context, expatriate

performance management comprises several steps: linkage with organisational strategy, setting performance

goals, identifying variables impacting performance, appraising the performance, providing feedback, offering

opportunities for improvement and linking results with rewards.

V) REMUNERATION/COMPENSATION

Yet another activity that receives considerable attention of the international HR manager is designing

attractive remuneration packages for the expatriates. HR managers spend a great deal of time developing

effective compensation and benefits programmes for international employees because they are high cost

employees. To successfully manage these programmes, the HR managers require knowledge of employment

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and taxation laws, customs, environment and employment practices of many foreign countries, familiarity

with currency fluctuations and the effect of inflation on compensation and an understanding of why and when

special allowances must be supplied and which allowances are necessary in which countries. The level of

local knowledge needed in many of these areas requires specialist advice and many MNCs retain the services

of consulting firms which may offer a wide range of services or provide highly specialized services relevant

to HRM in a global context.

While developing international compensation a firm seeks to achieve several objectives such as:

1. The compensation policy should be consistent with the overall strategy, structure and business needs

of the MNC.

2. The policy must work to attract and retain staff in the areas where the MNC has the greatest need and

opportunities. Hence the policy must be competitive and recognise factors such as incentive for foreign

service, tax equalisation and reimbursement of reasonable costs.

3. The policy should facilitate the transfer of international employees in the most cost effective manner

for the firm.

4. The policy must give due consideration to equity and case of administration. The international employees

have the following expectations from the firm’s compensation policy:

(i) The employees expect the policy to offer financial protection in terms of benefits, social security and

living costs in the foreign location.

(ii) The employee will expect a foreign assignment to offer opportunities for financial achievement through

income and/or savings.

(iii) The employees will expect issues such as housing, education of children and recreation to be addressed

in the policy.

(iv) The employees also have expectations in terms of career advancement. Generally, the following problems

crop up while designing an international remuneration package:

l. Discrepancies in pay between parent, host and third-country nationals.

2. The need to vary expatriate compensation, depending on the ‘stage of life cycle’of the expatriate’s

family (e.g. young children, children in college, etc).

3. Remuneration issues related to re-entry into the parent-country organisation.

4. Remuneration issues to deal adequately with new waves of change in the international business

environment.

Expatriate compensation depends on internal as well as external factors as shown in the following

figure. Internal factors include goal orientation, capacity to pay, labour relations, subsidiary role and the

like. Parent nationality, local culture, industry type and the like constitute external factors of expat

compensation. These variables are self-explanatory.

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FIGURE 6: FACTORS INFLUENCING INTERNATIONAL COMPENSATION

The expat remuneration package generally comprises salary benefits, allowances, incentives and taxes.

Base Salary: The term base salary acquires a somewhat different meaning when employees go

abroad. In a domestic setting, base salary denotes the amount of cash compensation that serves as a benchmark

for other components (e.g. bonuses and benefits). For expatriates, base salary is the primary component of a

package of allowances, many of which are directly related to the base salary (e.g. foreign service premium,

cost-of-living allowance, housing allowance) as well as the basis for in-service benefits and pension

contributions. It may be paid in home-country or host-country currency. The base salary is the foundation

block for international remuneration whether the employee is a parent-country or third-country national.

FIGURE 7: COMPONENTS OF EXPAT COMPENSATION

Salary

Taxes Benefits

Expart

Compensation

Incentives Allowances

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Benefits: Benefits constitute a major element of the remuneration of a regular employee. These

benefits comprise a similar, or even larger, portion of expatriate remuneration. However, several thorny

issues surround benefits package to expatriates. These include:

l. Whether MNCs should maintain expatriates in the home-country benefits prograrnmes, particularly if

these programmes are not tax-deductible,

2. Whether MNCs have the option of enrolling expatriates in the host-country benefits programmes and/

or making up for any difference in coverage,

3. Whether host-country legislations regarding termination of employment affect the employee benefits

entitlement,

4. Whether the home or the host country is responsible for the expatriate social security benefits,

5. Whether the benefits should be subject to the requirement of the home or the host country,

6. Which country should pay for the benefits,

7. Whether other benefits should be used to offset any shortfall in the coverage and

8. Whether home-country benefits programmes should be available to local citizens.

Allowances: Allowances are an expensive feature of expatriate remuneration package. One common

allowance relates to the cost-of-living allowance-a payment for differences between the home-country and

the overseas assignment. This allowance is designed to provide the expatriate with the same standard of

living that he or she enjoyed in the home-country and it may cover a variety of expenses, including relocation,

housing, education, and hardship. In any expatriate remuneration package, the unique feature is spouse

assistance. Many MNCs offer spouse assistance to help guard against or offset the income lost by an

expatriate’s spouse as a result of relocation abroad. Although, some firms may pay an allowance to make up

for a spouse’s lost income, the US firms are beginning to focus on providing spouses with employment

opportunities abroad, either by offering job search assistance or employment in the firm’s foreign subsidiary.

Incentives: In recent years, some MNCs have been designing special incentives programmes for

keeping expatriates motivated. In the process, a growing number of firms have dropped the ongoing premium

for overseas assignment and replaced it with one-time lump-sum premium. For example, in the early 1990s,

over 60 per cent of MNCs gave ongoing premiums to their expatriates. Today, the figures have come down

to 50 per cent and the declining trend continues.

The lump-sum payment has at least three advantages. First, expatriates realise that they are paid this

only once and that too when they accept an overseas assignment. So the payment tends to retain its motivational

value. Second, costs to the company are less because there is only one payment and no future financial

commitment. This is so because incentive is a separate payment, distinguishable from a regular pay, and it is

more readily available for saving or spending.

Taxes: The final component of the expatriate’s remuneration relates to taxes. MNCs generally select one of

the following approaches to handle international taxation.

1. Tax equalization: Firms withhold an amount equal to the home-country tax obligation of the expatriate,

and pay all taxes in the host country.

2. Tax protection: The employee pays up to the amount of taxes he or she would pay on remuneration

in the home country. In such a situation, the employee is entitled to any windfall received if total taxes

are less in the foreign country than in the home country.

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Tailoring the Package: Working within the components described above, MNCs seek to tailor

remuneration packages to fit with the specific situation. For example, senior-level managers in Japan are paid

four times more than their junior staff members. This is in sharp contrast to the US, where the gap is much

higher. Many senior-level managers in Europe are paid much less than their US counterparts. In designing an

expat’s remuneration, MNCs generally follow a number of approaches. The most common is the Balance-

Sheet Approach, which envisages a compensation package that seeks to equate or balance an expat’s

purchasing power in the host country with the purchasing power in his or her home country. In order to

balance the compensation received for the international assignment with compensation received in the home

country, MNCs usually provide additional salary.

This increased salary includes adjustments for differences in taxes, housing, and the costs of basic

goods and services. Goods and services include items such as food, recreation, personal care, clothing,

education, furnishing. transportation and medical care. This approach is most common and majority of MNCs

use balance sheet approach to compensate their expats.

A second approach to expat compensation is the Going-Rate Approach. In this, the expat

compensation is linked to the salary structure in the host country. A third approach is Lump Sum Method,

which involves giving the expat a predetermined pay and letting the individual decide about how to spend it.

Fourth is the Cafeteria Approach, which entails giving expats a series of options and then leaving him or her

how to spend the available funds. Last is the Regional System, under which the MNC sets a compensation

system for all expats who are assigned to a particular region. Thus, everyone going to Europe falls under one

particular system and everyone going to South Africa falls under a different system.

VI) REPATRIATION

Any discussion on expatriates should include their repatriation-the activity of bringing the expatriate

back to the home country. It has been the knowledge of practitioners and academics that re-entry into the

home country presents new challenges as the repatriate (returning person) copes with what has been termed

re-entry shock, or reverse culture shock. While people expect life in a new country to be different, they may

be less prepared for a possible problem of adjustment upon home-coming. As a consequence, it can be a

traumatic experience for some, even more than what was encountered in a foreign location. An MNC may

think that repatriation is the final phase in the expatriation process, but its ability to attract future expatriates

depends on how well the firm handles its repatriation programmes. There are several reasons for repatriation.

The most common reason for returning is that the period of contractual posting got over . A second common

reason is that expatriates want their children in a home-country school, and the longer they are away, less

likely it is that this will happen. The third reason can be that the assignees are not happy in their overseas

assignments. Unhappiness can stem from one’s inability to adjust to host country environment, spouse’s or

children’s unwillingness to stay and moral support from headquarters did not come when there was a crisis.

Finally, expatriates return because of failure to do a good job. Such failure often spells trouble for the assignees

and may result in demotion and termination.

VII) EMPLOYEE RELATIONS

The last component of IHRM is labour or employee relations. From a strategic perspective, the key

issue in international employee relations is the degree to which organised labour can limit the choices to

integrate and consolidate its global operations. A firm’s ability to integrate and consolidate its global operations

to realise experience curve and location economies can be halted by organised labour, constraining the pursuit

of a global strategy. An example to be stated here is General Motors which bought peace with labour unions

by agreeing not to integrate and consolidate operations in the most efficient manner.

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Key Issues in International Labour Relatians

One issue relates to the responsibility of handling labour relations. Who should take up this responsibility-

the headquarters or the subsidiary plant in the concerned country? Because national differences in economics,

political, and legal systems produce different labour-relations systems across countries, MNCs generally

delegate the management of labour relations to their foreign subsidiaries.

However, a policy of decentralisation does not keep the corporate office away from exercising some

co-ordination over labour-relations strategy. Generally, the corporate office becomes involved in over- seas

labour agreements made by foreign subsidiaries because these agreements may affect the international plans

of the firm and/or create precedents for negotiations in other countries. However, the involvement of the

MNC headquarters in host-country labour relations is influenced by several factors. First the labour-relations

function is centralised and is coordinated by headquarters when there is a high degree of inter-subsidiary

production integration. Labour relations throughout a system become crucial to corporate headquarters when

transnational sourcing patterns are developed, that is, when a subsidiary in one country relies on another

foreign subsidiary as a source of components or as an user of its output. In this context, a co-ordinated

labourrelations policy is one of the key factors in a successful global-production strategy.

Second, the nationality of ownership of the subsidiary has an impact on who handles employee

relations. For example, there are differences between European and US firms in terms of headquarters

involvement in employee relations. US firms tend to exercise a greater centralised control over labour relations

than British or European firms. Finally, subsidiary characters also influence on who should handle employee

relations. For example, subsidiaries that are formed through acquisition of well-established indigenous firms

tend to be given much more autonomy over labour relations than are green-field sites set up by an MNC.

Similarly, greater intervention would be expected when the subsidiary is of key strategic importance to the

MNC, particularly when it is young. Further, where a subsidiary depends more on its parent company for

resources, there will be an increased corporate involvement in labourrelations and HR management. Again,

a poor subsidiary performance tends to be accompanied by an increased corporate involvement in employee

relations.

What should be the Union Tactics? Unions use several tactics to deal with international business. By

far the most common union tactic is strike. A strike is a concerted and temporary suspension of functions,

designed to exert pressure upon others in the same unit. Strike is a very powerful ploy as it suspends production,

cuts out the creation of profit, cuts off the firm from its market, sources of materials may be lost, and fixed

charges such as interest, taxes, and salaries for officials continue to be incurred during the strike period. The

very existence of the firm may be threatened by a prolonged strike.

Unions should be cautions before resorting to a strike. An MNC enjoys formidable financial strength.

It can absorb losses in a particular foreign subsidiary that is in dispute with a national union and still show an

overall profit on worldwide operations. The bargaining power of a union may be threatened or weakened by

the financial resources of a multinational. This is particularly evident where an MNC has adopted a practice

of transnational sourcing and cross-subsidisation of its products or components across different countries.

An MNC has the ability to move the production facilities to their locations from the place of industrial

dispute. Ford, for example, threatened British unions with a plan to move manufacturing to continental Europe

unless British workers abandoned their demands. National relative advantages provide MNCs with the choice

of location of units. Threats by MNCs, whether real or professional, to reorganise production facilities

internationally, with the accompanying risk of plant closure or rationalisation will have serious impact on the

ability of a union to organise strikes.

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The second tactic used by labour unions is to form International Trade Secretariats (ITSs). There are

15 ITSs which function as a loose confederation to provide worldwide links for the national unions in a

particular trade or industry (e.g. metals, transport, and chemicals) world wide. The secretariats operate

mainly to facilitate the exchange of information. The primary goal of each ITS is to achieve transactional

bargaining with each of the MNCs in its industry.

Next tactic sought by the labour unions is lobbying for restrictive national legislations. The motivation

for labour unions to pursue restrictive national legislations is based on a desire to prevent the export of jobs via

multinational investment policies.

Finally, labour unions seek intervention from the Internatioaal Labour Organisation (ILO), the United

Nations Conference on Trade and Development (UNCTAD), the European Union (EU), and Organisation

for Economic Co-operation and Development (OECD). The ILO has identified a number of work-place

related principles that should be respected by all nations. These are-freedom of associations, the right to

organise and collectively bargain, abolition of forced labour, and non-discrimination in employment. In 1991 ,

the ILO adopted a code of conduct for MNCs. The code has been influential in drafting of the OECD

guidelines for MNCs. These voluntary guidelines cover disclosure of information, competition, financing,

taxation, employment and industrial relations and science and technology.

VIII) MULTICULTURALISM

Culture is understood as the customs, belief, norms and values that guide behaviour of people in a

society and passed on from one generation to the next. Multiculturalism means that people from many

cultures (many countries) interact regularly. Global firms are the repositories of multiculturalism. Not that

domestic firms have only mono cultures. Domestic firms too will have employees with different nationalities.

Infosys, for example has foreigners representing nine per cent of the total employee strength, so also Wipro

which has overseas citizens accounting for four per cent of its total number of employees. Domestic firms

have multiculturalism, may be by choice but it is by design with MNCs. Multiculturalism does not mean that

each subsidiary of an international business has its own distinct culture. If this happens, subsidiaries might

become stand-alone companies. International business, therefore, needs to maintain a united culture that

knits all the subsidiaries together.

Multicultural management offers the following benefits:

◆ Greater creativity and innovation

◆ Awareness about the need to maintain sensitivity in dealing with foreign customers

◆ Possibilities of hiring the best talent

◆ Creating a ‘super organisational culture’, using the best of all cultures

◆ Evolving universally acceptable HR policies and practices.

The IHR manager needs cross-cultural competence to manage multiculturalism. Specifically, the IHR manager

needs to:

◆ Possess strong personal identity

◆ Have knowledge of beliefs and values of different cultures

◆ Display sensitivity to the affective processes of culture.

◆ Communicate clearly in the language of a given cultural group.

◆ Cultivate cosmopolitan outlook and attitudes.

*****

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LESSON-17

INTERNATIONAL SELECTION AND ITS APPROACHES

Learning Objectives:

1. To give a brief outline of the concept of international selection.

2. To present various approaches that are applied while selecting an employee in IHRM.

CONTENTS

INTRODUCTION

APPROACHES IN SELECTION IN IHRM

INTRODUCTION

The appointment of suitable persons on various jobs is very essential. The selection of a wrong

candidate will mean loss of time and money which have been incurred in this process. It also leads to

absenteeism and retrenchment. This calls for a properly planned recruitment and selection process. After the

receipt of appropriate number of applications through various sources of recruitment, the selection process

starts. It is concerned with securing relevant information about the applicants. The purpose of the selection

process is to determine whether a candidate is suitable for employment in the organisation or not. All persons

who have applied may not be suitable.

Moreover, the number of applicants will be much more than the positions vacant. It becomes all the

more important to scrutinize applications properly so that those who are found unsuitable at the first instance

should not be called for tests or interviews.

This will save time and money of the enterprise as well as the candidates. The procedure to be

followed for selecting an employee may be different for various jobs. If the job is not very important then a

simple procedure may be followed. For employing unskilled workers, the personnel manager may select them

after a brief interview. If skilled and unskilled persons are to be selected then foreman may interview them

and also test their experience by asking them to work on jobs. When the position to be filled is important, then

a number of steps may be followed before a person is finally selected.

VARIOUS APPROACHES IN SELECTION IN IHRM

HRP, having done, the intemational HR manager must proceed with the job of hiring the right number

of people of the right type. The international HR manager must not only select people with skills, but also

employees who can mix with the organisation’s culture. General Electric, for example, is not just hiring people

who have skills required to perform particular jobs, it wants to hire employees whose styles, beliefs, and value

systems are consistent with those of the firm.

International businesses are said to adopt three approaches to staffing – ethnocentric, polycentric,

and geocentric.

(A) Ethnocentric Approach: In this approach, all key management positions are held by parent-country

nationals. This strategy may be appropriate during the early phases of international business, because firms at

that stage are concerned with transplanting a part of the business that has worked well in their home country.

This practice was widespread at one time. Firms such as Procter and Gamble, Philips, NV, and Matsushita

originally followed the ethnocentric approach. In the Dutch film Philips, for example, all important positions in

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most foreign subsidiaries were at one time held by Dutch nationals who were referred to by their non-Dutch

colleagues as the Dutch Mafia. In many Japanese and South Korean firms today, such as Toyota,

Matsushita, and Samsung, key positions in international operations are still held by the home-country nationals.

Advantages of the Ethnocentric Approach

(i) Perceived lack of qualified host country nationals (HCNs).

(ii) The necessity to maintain and consolidate good communication, coordination and control links with

the organisation’s headquarters.

(iii) The assurance that the foreign subsidiary or unit will comply with corporate objectives, policies,

standards etc.

(iv) PCNs may be most suitable because they have the requisite skills and experience.

(v) Promising managers are given the opportunity of international experience.

Disadvantages

(i) Its limits the promotional opportunity of HCNs.

(ii) PCN expatriate managers may experience adjustment problems.

(iii) PCN expatriate managers may attempt to impose styles which are appropriate at the organisation’s

headquarters but which may be deemed inappropriate in the host country.

(iv) The compensation packages of PCN expatriate managers may be at a level considered unjustified

by the HCNs. PCN expatriate managers are expensive.

(B) Polycentric Approach: Polycentric approach is just the opposite of ethnocentric approach. The polycentric

staffing requires host-country nationals to be hired to manage subsidiaries, while parent-country nationals

occupy key positions at corporate headquarters. Although top management positions are filled by homecountry

personnel, this is not always the case. For example, Hindustan Unilever ltd. (HUL), the Indian subsidiary of

Unilever, has locals as its chiefs. Preference for home-country citizens for key positions does not fit into a

pattern, unless government interventions dictated selection process. In Brazil, for example, two-thirds of the

employees in any foreign subsidiary traditionally had to be Brazilians. In addition, many countries exert real

and subtle pressure to staff the upper management ranks with nationals. In the past, these pressures by host

countries have led companies such as Standard Oil to change their approach to selecting managers.

Advantages of Polycentric Approach

(i) It eliminates language barriers, avoids adjustment problems of expatriate managers and their families

and removes the need for expensive cultural awareness training programmes.

(ii) Hiring costs are reduced.

(iii) No work permit required.

(iv) Motivation effect because HCNs see a career potential.

(v) Lower organisational profile in sensitive political situations.

(vi) Continuity of management improves because the HCNs stay longer in the organisation.

(vii) Local responsiveness and sensitivity.

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Disadvantages of Polycentric Approach

(i) More difficulty in bridging the gap (objectives, policies, standards. communication, control, culture

and attitudes etc.) between the HC unit and the organisation’s parent headquarters.

(ii) Tends to encourage too much decentralization.

(iii) HCN managers have limited career opportunities outside the subsidiary or unit.

(iv) Unit opportunities for PCN expatriate managers to gain foreign experience adversely affecting their

insight and hence strategic decision making and resources allocation.

(C) Geocentric Approach: The most popular and practical approach to staffing is the geocentric approach.

This staffing philosophy seeks the best people for key jobs throughout the organization regardless of nationality.

Selecting the best person for the job, irrespective of nationality, is most consistent with the underlying philosophy

of a global corporation. Colgate-Palmolive is an example of a company which follows geocentric approach.

It had been operating internationally for more than 50 years, and its products are household names in more

than 170 countries. Sixty per cent of the company’s expatriates are from countries other than the US. All the

top executives speak at least two languages, and important meetings routinely take place all over the globe.

Assumptions for the success of Geocentric Approach

For the Geocentric approach to be successful, five assumptions must be met:

(i) Highly competent employees are available at the headquarters as well as the subsidiaries.

(ii) International experience is a condition for selection in top positions.

(iii) Managers with high potential and ambition for promotion are constantly ready to be transferred from

one country to another.

(iv) Open disposition and high adaptability on the part of competent and mobile managers to different

assignment conditions.

(v) Open disposition and high adaptability can be learnt with more foreign experience.

Advantages of Geocentric Approach

(i) Facilitates the development of an international team.

(ii) Overcomes the decentralisation effect of the polycentric approach.

Disadvantages

(i) Immigration controls and work permits for the foreign manager and his family.

(ii) Provision of extensive, time consuming and sometimes expensive information and documentation for

foreign nationals.

(iii) Large numbers of PCNs, HCNs and TCNs must be sent to foreign locations in order to create a

successful geocentric staffing policy.

(iv) High training and relocation cost.

(v) Devising an appropriate compensation structure.

(vi) More centralized control over staffing and loss of autonomy by the subsidiaries in HRM issues.

Thus, international businesses have choices of hiring three categories of employees – parent country

nationals (PCNs), host country nationals (HCNs) and third country nationals (TCNs).

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Advantages and Disadvantages of Using PCNs, TCNs and HCNs

Parent Country Nationals

Advantages

◆ Familiarity with the home office, goals, objectives, policies and practices.

◆ Easy organisational control and coordination.

◆ Promising managers are given international exposure.

◆ PCNs are the best people for assignment because of special skills and experiences.

Disadvantages

◆ Difficulty in adapting to the foreign language and the socio-economic, political, cultural and legal

environment.

◆ Excessive cost of selecting, training and maintaining expatriate managers and their families abroad.

Host Country Nationals

Advantages of HCN

◆ Familiarity with the socio-economic, political and legal environment and with business practices in

the host country.

◆ Lower cost incurred in hiring as com pared to PCNs and TCNs’

◆ Promotional opportunities to locals and consequently their motivation and commitment.

◆ Responds effectively to the host country’s demands for localisation of the subsidiary’s operations.

◆ Languages and other barriers are eliminated.

◆ Continuity of management improves, since HCNs stay longer in positions,

Disadvantages

◆ Promotional opportunities for HCNs are limited.

◆ PCNs may impose an inappropriate HQ style.

◆ Compensation for PCNs and HCNs may differ.

◆ Family adjustment problems, especially concerning the unemployed spouses.

◆ Difficulty in exercising effective control over the subsidiary’s operations.

◆ Communication difficulties in dealing with home office personnel.

◆ Lack of opportunity for the home country’s nationals to gain international and cross- cultural

experience.

◆ HCNs have limited career opportunity out- side the subsidiary.

◆ Hiring HCNs may encourage a federation of nationals rather than global units

Third Country Nationals

Advantages

◆ Salary and benefit requirements may be lower than for PCNs.

◆ TCNs may be better informed than PCNs about host country environment.

◆ TCNs are truly international managers.

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Disadvantages

◆ Host country government may resent hiring TCNs.

◆ TCNs may not want to return to their own countries after assignment.

◆ Host country’s sensitivity with respect to nationals of specific countries.

◆ HCNs are impeded in their efforts to upgrade their own ranks and assure responsible positions in the

multinational subsidiaries.

Keeping aside the TCNs, the choice between HCNs and PCNs for heading subsidiaries in foreign

locations is influenced by many factors which can be grouped into four categories: Parent country, industry

characteristics, subsidiary performance and host country variables.

With regard to parent country characteristics, MNCs prefer home country nationals to head

subsidiaries where culture distance is high. This is necessary to maintain unified corporate culture. Size is

positively related to the preference of PCNs. Larger MNCs have more PCNs as heads of subsidiaries since

they have managerial resources and are more likely to have a formal management development prograrnme

around the world. Similarly, MNCs that are more research intensive tend to deploy talent from head office to

subsidiaries so that locals may be trained.

With regard to industry characteristics, the tendency is to have more PCNs as heads of subsidiaries

in banking, security brokering and publishing and printing industries. The need to exercise greater control and

the need to understand local needs force the dominance of PCNs in banking and their low presence in

advertising industries, respectively. Subsidiary characteristics too influence the choice of PCNs or HCNs. A

newly set up subsidiary tends to attract PCNs to establish systems and procedures. Where a subsidiary is

acquired, tendency is to have more of HCNs.

PCNs tend to dominate, if a subsidiary occupies a strategic role. Fully owned subsidiary occupies

strategic importance and hence tends to attract more PCNs.

Where subsidiary performance is slackening, headquarter’s intervention through PCNs becomes

a necessity. PCNs need to be expatriated to staff subsidiary if education level in the host country is low and

skilled people are not available.

Besides, a high level of political risk in the host country is likely to make direct control through

PCNs more important. Where cost of living in the host country is lower, it is advantageous to employ HCNs

for top positions in subsidiaries.

*****

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LESSON-18

EXPATRIATION AND REPATRIATION IN IHRM

Learning Objectives:

1. To make students conversant with the concept, meaning and definition of international HRM.

2. To highlight various issues pertaining to expatriation that the organisation encounters in international

IHRM.

3. To study the meaning and process of repatriation.

CONTENTS

MEANING

EXPATRIATE PROBLEMS

EXPATRIATE ASSIGNMENT LIFE CYCLE

FACTORS IN EXPATRIATE SELECTION

ALTERNATIVE MODEL OF EXPATRIATE SELECTION

EXPATRIATE’S PERFORMANCE

REPATRIATION

PROCESS OF REPATRIATION

MEANING

An expatriate is an employee sent by his or her employer to work in a foreign country. The firm is

normally referred to as the parent company, while the country of employment is known as the host country.

Many corporations are sending expatriates to their overseas operations. In fact, expatriates have and the

need for internationally competent managers is expected to rise as more and more firms face global competition.

Expatriates provide a number of benefits for companies, including greater parent control and particular

expertise. Expatriates are very expensive, however, and this can discourage extensive use of expatriates. Of

the three staffing policies , two of them, namely, ethnocentric and geocentric approaches and two categories

of employees, viz., PCNs and TCNs, rely on extensive use of expatriate employees working outside their

home country with a planned return to that or a third country. As expatriates play a major role in international

businesses, MNCs take great care in their selection process. Figure 3 is a model of the life-cycle of an

expatriate assignment. It involves a process of determining the need for an expatriate assignment, identifying

and then selecting likely candidates, pre-assignment training, departure, post arrival orientation and training,

crisis and adjustment of crisis and failure, reassignment aboard, and/or repatriation and adjustment.

FIGURE 1: THE EXPATRIATE ASSIGNMENT LIFE CYCLE

Crisis and Reassignment

Adjustment Abroad

Determining

the Need of an Post-arrival Repatriation

Expatriate Departure Orientation and and Adjustment

Training

The Selection Pre-assignment Crisis and

Process Training Failure

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A major problem connected with expatriates is their premature return to their home country. Popularly

called expatriate failure, the subject has assumed considerable importance in the literature on international

business. The expatriate failure results in considerable losses to MNCs. Several reasons have been assigned

to explain why people return home before the assignment period expires.

One of the reasons for expatriate failure is his or her inability to adjust to host country culture.

Expatriate’s cultural adjustment typically comprises three stages.

Initially, the expatriate enjoys a great deal of excitement, as he/she discovers the new culture. This

stage is called the tourist stage. Business travellers, as compared with expatriates, often have the luxury of

remaining at this stage. This initial phase is followed by a period of disillusionment (second stage) in which the

expatriates mood descends as the difficulties with the new culture become clear. These difficulties typically

include an inability to converse well in the local language, problems in obtaining certain products and food

supplies of personal preference, home sickness and so on. This stage is characterised by what is called

culture shock.

If culture shock is handled successfully, the expatriate enters the third stage, which may be called the

adapting or adjustment phase. He/she begins to feel more positive, works more effectively and lives a more

satisfying life. Neither the highs of tourist stage nor the lows of culture shock phase usually mark this

adaptive phase. If culture shock is not handled successfully, the expatriate’s work performance deteriorates

and he/she will eventually return home having not really done the job well or enjoyed the time spent abroad.

International businesses use a combination of selection methods to identify people with the appropriate talent

for overseas posting. Some popular techniques include interviews, standardized tests of intelligence or technical

knowledge, assessment centres, biographical data, work samples and references.

Selecting Staff for International Assignments

Selecting staff for internationals assignments is a complex undertaking for several reasons including:

◆ Identifying a suitable person for the assignment.

◆ Predicting his performance in a new culturally very different environment.

◆ Dealing with personal and family related issues and problems.

◆ Devising an appropriate compensation package.

◆ Complying with host country rules and regulations.

Figure 4 illustrates the criteria for selecting staff for international assignments.

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FIGURE 2: FACTORS IN EXPATRIATE SELECTION

Cross Cultural Suitability

Family Requirements

Individual Situation

Organisation Specific

Requirement

SELECTION DECISION

Language

Country Cultural

Requirement

Technical Ability

These criteria are discussed in detail as follows :

1. Technical ability

• Technical and managerial competencies of the person to perform the required tasks.

• Research studies indicate that technical ability is the most important selection criteria for organisations.

• Technical ability is usually easy to evaluate on the basis of past performance.

2. Cross Cultural Suitability

• Certain individual traits and characteristics can have an impact on the success or failure of an international

assignment-cultural empathy, adaptability, diplomacy, language ability, positive attitude, emotional stability

and maturity are a few examples.

• Cross cultural suitability is the ability to implement technical and managerial skills and feel reasonably

comfortable in a foreign environment.

• This suitability is sometimes difficult to determine.

3. Family Requirement

• Spouse and other family members may not adjust to a foreign environment.

• Adjustment level of spouse depends on several factors, such as the adjustment of the expatriate and

the spouse’s own opinion of the international assignment.

• A higher level of organizational support in the early stages of expatriation usually correlates with a

higher level of adjustment by the spouse.

4. Country-Cultural Requirements

• Hardship postings (remoteness of job location, social upheavals, safety risks, very low standard of

living and lack of recreational opportunities etc.).

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• Pressure of living in repressive cultures and countries e.g. China, Saudi Arabia.

• Denial of work permits to female expatriates.

5. Organization Specific Requirements

• Organisational staffing approach may require sending more expatriates to work in certain regions and

locations than otherwise.

• Partner organisations may be involved in the selection of expatriate staff for example in international

joint ventures.

• Certain specific skills e.g. training may be used as a selection criteria.

6. Language

• Knowledge of the host country’s language is considered critical for many senior level positions alongwith

the ability to communicate effectively.

• Knowledge of the host country’s language helps expatriates and their families feel more comfortable in

the new environment.

7. Other Considerations

(i) Time: Unexpected international vacancies may arise for which positions have to be quickly filled by

expatriates and which may preclude the use of screening tests.

(ii) Family: A potential expatriate may refuse the international assignment due to family considerations

e.g. children education, parental care, single parents etc.

(iii) Dual Career Couples: Research studies indicate that many potential expatriates are reluctant or

unwilling to take an international assignment because of the career implications of their spouses e.g.

loss of jobs and career opportunities, difficulty in finding employment in the expatriate’s host country.

Some companies all now offering assistance programmes for the benefits of their expatriates spouses

(e.g. employment hunting, intra-company employment on assignment career support etc.)

(iv) Female Managers: Studies indicate the female expatriates make up a very small proportion of the

total expatriate population. Possible reasons are:

• Females are less desirous than males of international assignments.

• Females are less likely to be offered international assignments.

• There are a comparatively smaller number of females with the requisite skills to be sent on international

assignments.

• Many repressive cultures discourage the sending of female expatriates on foreign assignments.

• In many repressive cultures males donot like reporting to females.

ALTERNATIVE MODEL OF EXPATRIATE SELECTION

Mendenhall and Oddou propose a four dimensional approach linking specific behavioural tendencies

to probable international performance:

(i) Self-Orientedness: Adaptive concern for self-preservation, self enjoyment and mental hygiene.

(ii) Perceptual: Expertise in accurately understanding the behaviour of host country nationals.

(iii) Others-Orientedness: Degree of concern about the host country nationals and the expatriate’s

desire to affiliate with them.

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(iv) Cultural Toughness: Difference between the expatriates’ country and the host country’s cultural,

social, political, economic etc. environment and its implications for the expatriate.

PERFORMANCE MANAGEMENT IN EXPATRIATION

Linking with Organisational Strategy: Performance management becomes an integral part of

corporate strategy. Besides contributing to enhanced performance, performance management helps identify

employees with high potentials, facilitates establishing performance-reward linking and delineates employee

needs for development. All these offer vital inputs for formulation and execution of strategies.

FIGURE 3: EXPATRIATE’S PERFORMANCE

Setting Individual Performance Goals: It is critical, in the international context, to closely link unit

goals to individual/team goals, especially at the top and senior management levels. Goals are the future

outcomes that individuals and organisations desire and strive to achieve. Popularly, goals seek to serve three

specific purposes:

- guide and direct behaviour in the direction of the goal.

- offer benchmarks for employees to strive towards excellence.

- reflect what the employees and managers consider as important.

In order to serve the above purposes, goals must be specific, measurable, accurate, realistic and

timely (SMART). In a wide range of occupations, people who set specific and challenging goals consistently

outperform those who have easy or unspecified goals. Similarly, quantitative goals render themselves easy

for measurement and time bound goals enhance measurability. Measurability and timeliness add to performance

enhancement.

Variables impacting Performance: Performance of an expatriate depends on several variables

which are distinct from the performance of an employee working in his or her home country. Performance of

the non-expatriate is influenced by job extrinsic factors (for example, working conditions, company policy)

and job intrinsicfactors (example, challenging job, career prospects). An expatriate’s performance depends

on several other variables in addition to job extrinsic and job intrinsic factors.

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Compensation packages contribute to performance considerably whether an employee is working

in the home country or is an expatriate posted in a foreign location. Expatriate’s performance is influenced by

the type of task too.

Appraising the Performance: Appraising performance is a routine job but involves three key

decisions areas. Specification on performance criteria, identifying the appraisers and deciding on the frequency

of appraisal. Generally , performance criteria in any organisation include outcomes and behaviours. Appraisers

in an MNC include immediate managers/supervisors, team members and clients. Self appraisal is also in

place.With regard to frequency of performance, MNC’s have almost the same periodicity as domestic firms.

Frequency shall be once in three months, six months or once in a year.

Providing Feedback: Feedback refers to the information provided to the assessee about work

behavior and outcomes. It helps control the work behaviour of employees by directing their behaviour through

the provision of necessary feedback for corrective action. The task of assessing performance and providing

feedback in MNCs is compounded by time and distance. Physical distance between headquarters and subsidiary

is long and time zones are different. But technological advancements have helped ease the difficulty to some

extent. International managers do travel long distances and spend considerable time with subsidiary heads

and employees, as part of assessment and feedback.

Opportunities for Improvement: Performance feedback also helps in highlighting the need for

training and development. Conducting appraisal, offering feedback and organising training and developmental

programmes are all parts of performance management. These activities seek to provide opportunities to

expatriates to improve, socialise, and adjust to local environment ably.

Linking Rewards and Results: The final activity in expatriate performance management relates

to establishing linkages between performance and compensation. Rewards must follow performance. Only

then there is positive reinforcement to repeat performance.

REPATRIATION

In the previous sections, the expatriate selection, training, remuneration, and performance appraisal

were discussed. Any discussion on expatriates should include their repatriation-the activity of bringing the

expatriate back to the home country. It has been the knowledge of practitioners and academics that re-entry

into the home country presents new challenges as the repatriate (returning person) copes with what has been

termed re-entry shock, or reverse culture shock. While people expect life in a new country to be different,

they may be less prepared for a possible problem of adjustment upon home-coming. As a consequence, it can

be a traumatic experience for some, even more than what was encountered in a foreign location. An MNC

may think that repatriation is the final phase in the expatriation process, but its ability to attract future expatriates

depends on how well the firm handles its repatriation programmes.

There are several reasons for repatriation. The most common reason for returning is that the period

of contractual posting got over . A second common reason is that expatriates want their children in a home-

country school, and the longer they are away, less likely it is that this will happen. The third reason can be that

the assignees are not happy in their overseas assignments. Unhappiness can stem from one’s inability to

adjust to host country environment, spouse’s or children’s unwillingness to stay and moral support from

headquarters did not come when there was a crisis.

Finally, expatriates return because of failure to do a good job. Such failure often spells trouble for the

assignees and may result in demotion and termination.

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Benefits from Returnees: Repatrees offer several advantages to the company. Coke, Cisco,

Ford, Whirlpool and Britannia are increasingly hiring foreign returned Indian executives. The reasons given

are twofold: such returnees have imbibed global culture and also have understood local culture. Secondly,

having extensive understanding of how the company is perceived in other countries and being part of the

global social network that can advance company’s business around the world, repatriates are an important

element in expanding the international operations of the company. Third, repatriates understand both the

operations of corporate headquarters and of overseas operations. They can also transfer important technology

or information from foreign subsidiaries back to the home country, or provide critical coordination and control

functions from the home office to local operations.

Repatrees too have added value to their personal and professional life. During their stay overseas,

the returnees gain exposure and expertise. Their outlook is global, their vision is borderless, their skills are

sharpened – in all they come back fully groomed to take on any challenges of domestic as well as global

business. Their status in society is enhanced. Others view the repatriates with awe and respect.

Repatriation Process: The following figure shows the repatriation process. Beforeelaborating on

the stages in the repatriation process, it is useful to understand that on completion of the overseas assignment.

The MNC brings the expatriate back to the home country, although not all foreign assignments end with a

transfer to home – rather the expatriate is re-assigned to another international assignment. Some employees

are made to travel around the globe frequently in which case they form part of the MNC’s international cadre

of managers. Even with such managers, repatriation is essential, particularly at retirement.

FIGURE 4: THE REPATRIATION PROCESS

Preparation Physical Transition Readjustment

relocation

Repatriation

Process

1. Preparation involves developing plans for the future and gathering information about the new position.

The firm may provide a checklist of items to be considered before the return to home (e.g. closure

of bank accounts and settling bills) or a thorough preparation of the employee and his or her family

for the transfer to home.

2. Physical relocation refers to saying good bye to colleagues and friends, and travelling to the next

posting, usually the home country. Personalised relocation assistance reduces the amount of uncertainty,

stress and disruptions experienced by the repatriate and the family.

3. Transition means settling into temporary accommodation, which involves making necessary

arrangements for housing and schooling, and carrying out other administrative tasks such as renewing

driving licence and opening bank account.

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4. Readjustment involves coping with reverse culture shock and career demands. Of all the steps in the

repatriation process, re-adjustment is the most difficult one. The re-entry adjustment is a tough task

because of multiple factors. First, there is anxiety experienced by the expatriate when he or she

returns home, the apprehension being accentuated by the uncertainty about the placement in the

firm, career prospects, and a sense of isolation, feeling of ‘devaluing’ the international experience,

coping with new role demands, and probable loss of status and pay.

MNCs respond to the repatriation problem in several ways. Many firms have formal repatriation

programmes. Some companies assign the expatriate to a mentor, popularly called as the ‘godfather’.

The mentor is usually in a more senior position than the expatriate and knows him or her personally.

The purpose behind the use of a mentor is to remove the sense of alienation through the provision of

information (e.g. workplace changes) on a regular basis, so that the expatriate is better prepared for

the conditions he or she is likely to face upon re-entry. The mentor should also ensure that the

expatriate is not sidelined when important decisions are made regarding positions and promotions.

Challenges of Re-entry: Repatriation poses certain problems more intense than those encountered

at expatriation. Infact, assignee views expatriation as sort of reward for impressed performance but repatriation

is perceived as the end of a ‘honeymoon’ in his or her career. Challenges of re-entry relate to the individual

assignee as well as the MNC.

Individual Perspectives: Challenges from the assignee perspective include personal and professional.

From a personal perspective, the assignee experiences ‘reverse culture shock.’ The returnee expects that

the home country would remain the same when he or she had left. But after repatriation, the assignee finds

that things are not the same. Political, economic, social and cultural climate has changed.

Moreover, the returnees themselves are not the same old individuals. The ‘stay abroad’ brings changes

in their perception, attitudes, habits and practices. These changes create high expectations about the home

country but the hopes do not match with reality. It is not the assignee alone facing the adjustment problem.

Even the spouse has the same problem. Children too find re-entry difficult. Coming back to school, attempting

to regain acceptance into peer groups and being out-of-touch with current slang, sports and fashion do cause

problems.

Lowered social status, depleted spendable income, housing problem, problem of children’s school,

difficulty of club membership and the like add to the re-entrant’s problems. Professional disappointments add

to the returnee’s woes. The repatree feels that his or her skills acquired while on foreign service are no more

in use. The repatriate is of the opinion that job at home is lacking an autonomy, authority and significance,

compared to his or her global assignment. He or she feels that the organisation is unfairly ignoring the global

competence acquired by the returnee.

Worst, organisations may not guarantee jobs to the returnees. Often, due to poor career planning,

repatriates are placed in a ‘holding pattern’ being assigned jobs that are available, without regard to the

individual’s abilities, capabilities and needs.

Many returnees complain that, upon return, they are offered a limited number of career choices and

are rarely considered for promotions.

Challenges from Organisation Perspective: As is too well known, majority of the returnees

consider quitting the organisation. Considering the investment made on training, posting, and maintaining the

assignee, while on assignment, his or her quitting will adversely affect the MNC’s bottom line. Often, loss of

the multinational becomes gain for a rival. When an experienced assignee quits and joins a rival organisation,

the latter tends to gain competitive advantage. In addition, high withdrawals by returnees may affect the

company’s ability to hire bright individuals in future.

*****

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ASSIGNMENT

Note: Attempt any four questions (Compulsory Assignments)

Q.1 Define Human resource Management. Discuss significance and objectives.

Q.2 Discuss features, objectives and types of training.

Q.3 What factors affect the Wage Rate? Discuss.

Q.4 Define the features and objective of discipline.

Q.5 What do you mean by HP Planning? Discuss the process of HR Planning.

*****

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MBA Examination

Human Resource Management

Paper 203

Note: The candidates shall limit their answers precisely with the answer book (400 pages) issued

to them and no supplementary/continuation sheet will be issued.

Attempt any Five Questions in all selecting one question from each unit. All questions carry equal

marks.

UNIT-I

1. Write a comprehensive essay on the changing roles of human resource managers in India in view

of the changing business scene in this globalized world.

2. Discuss the Following:

a) Objectives of Human Resource Management.

b) Evolution of the concept of HRM.

UNIT-II

3. Describe briefly the concept of selection what are the different techniques that are followed by

HR Managers while selecting first line executives in an organization?

4. Discuss any two of the following

a) Approaches to HR Planning

b) Contemporary challenges in HR Planning

c) Features of a good promotion policy

UNIT-III

5. Write a comprehensive note on the ‘performance appraisal in India Industry. What are the limitation

of appraisal methods as they obtain? How you can make it more effective.

6. How will you determine the training need of an industrial organization? Also explain whether and

how the effectiveness of a training programme can be evaluated.

UNIT-IV

7. Distinguish between wages and salaries. Sate the various factors which a wage administrator has

to keep in mind while deciding pay and perks policies in an organization.

8. Discuss the following:

a) Elements of wage and salary administrator

b) Concept of Minimum wage.

UNIT-V

9. Bring out the difference between positive and negative discipline. State the essentials of a good

disciplinary system.

10. Discuss any two of the following:

a) Modern managerial practices pertaining to health and safety of employees in India.

b) Open door policy in Grievances.

c) Pre-requisite of an effective grievance procedure.

*****