Human Resource Management

MADE BY: TARUN KUMAR
Human Resource Management: Meaning,

Objectives, Scope and Functions
In simple words, HRM is a process of making the efficient and effective use
of human resources so that the set goals are achieved. Let us also
consider some important definitions of HRM.
Human Resource Management is the process of recruiting, selecting,

inducting employees, providing orientation, imparting training and
development, appraising the performance of employees, deciding
compensation and providing benefits, motivating employees, maintaining
proper relations with employees and their trade unions, ensuring
employees safety, welfare and healthy measures in compliance with labour
laws of the land.
Human Resource Management involves management functions like

planning, organizing, directing and controlling
 It involves procurement, development, maintenance of human

resource
 It helps to achieve individual, organizational and social objectives
 Human Resource Management is a multidisciplinary subject. It
includes the study of management, psychology, communication,
economics and sociology.
 It involves team spirit and team work.
 It is a continuous process
Human resource management as a department in an organisation

handles all aspects of employees and has various functions like human
resource planning, Conducting Job analysis, recruitment and conducting
job interviews, selection of human resources, Orienting , training,
compensating,Providing benefits and incentives, appraising,
retaining,Career planning, Quality of Work Life, Employee Discipline, black
out Sexual Harassments, human resource auditing, maintenance of
industrial relationship, looking after welfare of employees and safety
issues , communicating with all employees at all levels and maintaining
awareness of and compliance with local, state and federal labor laws.
The historical rule of thumb for Human Resource staffing requirements is

one full-time professional Human Resource person should be hired for
every 100 employees. The actual ratio for a business can vary depending
upon factors such as the degree of HR centralization, the geographic
distribution of the employees served, the sophistication level of the
employees, and the relative complexity of the organization.
Human: refers to the skilled workforce in an organization.

Resource: refers to limited availability or scarce.
Management: refers how to optimize and make best use of such limited
or scarce resource so as to meet the organization goals and objectives.
Therefore, human resource management is meant for proper utilisation of

available skilled workforce and also to make efficient use of existing human
resource in the organisation. The best example in present situation is,
construction industry has been facing serious shortage of skilled workforce.
It is expected to triple in the next decade from the present 30 per cent, will
negatively impact the overall productivity of the sector, warn industry
experts.
Human: refers to the skilled workforce in an organization.
Resource: refers to limited availability or scarce.
Management: refers how to optimize and make best use of such limited
or scarce resource so as to meet the organization goals and objectives.
Therefore, human resource management is meant for proper utilisation of

available skilled workforce and also to make efficient use of existing human
resource in the organisation. The best example in present situation is,
construction industry has been facing serious shortage of skilled workforce.
It is expected to triple in the next decade from the present 30 per cent, will
negatively impact the overall productivity of the sector, warn industry
experts.
Human resource management means management of people at
work. HRM is the process which binds people with organizations and helps
both people and organization to achieve each others goal. Various policies,
processes and practices are designed to help both employees and
organization's to achieve their goal.
Human Resource Management is a management function concerned

with hiring, motivating, and maintaining workforce in an
organisation. Human resource management deals with issues related to
employees such as hiring, training, development, compensation,
motivation, communication, and administration.
Human Resource Management: Nature
Human Resource Management is a process of bringing people and

organizations together so that the goals of each are met. The various
features of HRM include:
 It is pervasive in nature as it is present in all enterprises.
 Its focus is on results rather than on rules.
 It tries to help employees develop their potential fully.
 It encourages employees to give their best to the organization.
 It is all about people at work, both as individuals and groups.
 It tries to put people on assigned jobs in order to produce good

results.
 It helps an organization meet its goals in the future by providing for

competent and well-motivated employees.
 It tries to build and maintain cordial relations between people working

at various levels in the organization.
 It is a multi-disciplinary activity, utilizing knowledge and inputs drawn

from psychology, economics, etc.
Scope of Human Resource Management.
The scope of Human Resource Management is extremely wide, However,

for the sake of convenience and developing an understanding of the
subject, it is elaborated as follows.
1. Human resources planning
Human Resource Planning refers to a process by which the company to

try to find the number of jobs vacancy in which particular department
The number of staff required with the necessary qualification and
experience.
2. Job analysis design
Another important area of Human Resource Management

is job analysis. Job analysis gives detailed information about the job
description and employee specification in the company.
3 Recruitment and selection
Based on information collected from job analysis the company

prepares advertisements and publishes them in the newspapers,
Employment sites, etc. This is recruitment. A number of applications are
gathered after the advertisement is
published, interviews are conducted and the right employee is selected
for the right post and right time thus recruitment and selection are yet
another important area of Human Resource Management.
4. Orientation and induction
Once the employees have been selected an induction or orientation

program is conducted. The employees are informed about companies
background, products, different subsidiaries organizational culture and
values and work ethics and introduce to the new employee to other
employees.
5. Training and development
Every employee goes into a training program which helps him to put up a

better performance on the job. The training program is also conducted for
existing staff that have a lot of experience. This is called refresher
training. Training and development is one area where the company
spends a huge amount.
6.Performance appraisal
Once the employee has put on the job performance appraisal is conducted

that is the Human Resource department checks the performance of the
employee. Which helps appraisal future promotions, incentives,
increments in salary, etc
7.Compensation planning and remuneration
There are various rules regarding compensation and other benefits. It

is the job of the Human Resource department to look into remuneration and
compensation planning.
8. Motivation, welfare, health, and safety
Motivation becomes important to sustain the number of employees in

the company. It is the job of the Human Resource department to look into
the different methods of motivating & encourage the employee. Apart
from this certain health and safety regulations have to be followed for
the benefits of the employees.
9.Industrial relations
Another important area of Human Resource Management is maintaining

co-ordinal relations with the union members.with employer-employee,
employee- employee This will help the organization to coordinate with
one another for smooth working.
Objectives Of Strategic Human Resource Management

1. Define an organizational structure which drives productivity
Hiring the right talent for the task is only a small part of the challenge. Once
an organization has captured the talent it then needs organizational
structures and practices in place to nurture staff skills and maximize the
return on investment in human capital. The kind of structures required for a
highly technical manufacturing unit will necessarily be very different from
the structure of an academic institution, or a hospital, or retail consumer-
facing unit. It’s thus the job of HR to recognize the optimal structures
that need to be in place for a wide range of work environments.
2. Developing effective coordination and communication within the

organization
The 16th-century poet John Donne is possibly best known today for the
phrase ‘No Man is an Island’. It alludes to the idea that people do pretty
badly when isolated from others. They need to be part of a community in
order to survive. We are, after all, the most social of animals.
Thus, in isolation from fellow staff, it is fairly obvious that many people
would struggle. It, therefore, falls to Human Resources to ensure that staff
hired for their skills to aid in achieving wider corporate objectives, must be
given a framework that helps them succeed. HR must foster a hierarchy
which achieves the best communication within and between
the departments that make up any business.
3. Dedicate time to finding the right staff and developing their skills
base
We definitely live in some of the most fluid and dynamic times for
employers and employees. People increasingly expect to acquire new skills
to remain relevant in the employment market, whilst employers are
constantly looking to staff as a key part of the business’s competitive
advantage.
HR, then, must not only find the right staff to mesh with the strategic
course the business is taking, but then ensure that these employees are
given the skills to remain valued and valuable to companies seeking to
compete in an ever-more competitive landscape.
Employees find themselves operating in ‘knowledge economies’ where

lifelong learning has become the norm and HR, to be effective, must be
matching, if not exceeding, their competitive counterparts.
4. Embracing wider societal and ethical developments
HR, more so than at any time in the evolution of employment practices,

should not only be inward-looking at the structure, communication, and
training of staff but also be conscious of the rapid cultural and societal
changes affecting the work environment.
HR needs to understand how demographic, technological and other

important societal changes, including a potential workforce living longer
than ever before, affect business. It means a constant state of disruption
and reinvention as HR explores new ways of working. For example, the rise
of expert systems and AI may mean a radical change in employment
practices, both releasing human capital to focus on tasks that smart
systems cannot perform, whilst rationalizing roles and potentially reducing

headcount.
Such changes inevitably hit on important ethical and societal questions

which will increasingly require strategic thought and practical
implementation as technologies revolutionize the world of work.
Line And Staff Responsibilities of Hr Manager
First-line managers operate their departments. They assign tasks,

manage work flow, monitor the quality of work, deal with employee
problems, and keep the middle managers and
executive managers informed of problems and successes at ground level
in the company.
Employee Relations and Labor Relations
Depending on staff qualifications and HR department size, the employee

relations and labor relations functions might be combined, because the skill
sets required to work in these areas are similar. For example, employee
relations specialists handle workplace complaints, ranging from an
employee who believes she has been the subject of disparate treatment to
a supervisor who is having challenges resolving conflict among her team
members. Labor relations specialists, on the other hand, traditionally work
for companies with a union workforce. They are responsible for
administering the labor union contract (called the collective bargaining
agreement), interpreting clauses in the agreement, participating in contract
negotiations and managing the union grievance process.
The line manager for employee relations and labor relations usually reports
complaints and grievances on the aggregate level to the HR department
manager, and participates in strategic planning to improve employee and
labor relations. In addition, the line manager may be the point person who
interacts with legal counsel when the company receives complaints from
government enforcement agencies, such as the U.S. Equal Employment
Opportunity Commission or the U.S. National Labor Relations Board.
Compensation and Benefits
Compensation and benefits specialists establish wage and salary rates and
ensure the wages and salaries are equitable; they also administer company
benefits such as health insurance coverage, retirement plan options and
employee short- and long-term disability. They are typically involved in
managing the Family and Medical Leave Act (FMLA) process, and
providing guidance to department managers about employee rights under
FMLA. The compensation and benefits line manager has a dual
responsibility to oversee pay and benefits issues, including resolving
vacation and sick leave issues.
Line managers in this functional area report to the HR manager or director,

and depending on their qualifications, may be responsible for determining
the strategic direction of the company's current and future compensation
structure based on their knowledge of labor market trends and the
organization's plan for growth.
Employee Training and Development
Specialists in this area often are responsible for developing curriculum,

delivering new-hire orientation and providing developmental training, such
as training for newly promoted supervisors. In addition, they might be

responsible for researching off-site training options and processing
requests for employee attendance at workshops and trade conferences.
The training and development line manager is responsible for high-level
duties in addition to supervising the specialists. He may be involved in
conducting needs assessments and skills gap analyses to determine
whether workforce planning efforts are effective, whether job classifications
are accurate and if employees are in the right jobs to match their skills.
In addition, training and development line managers may be responsible for

determining the strategic direction for overall workforce development that
should align with the company's goals.
Recruiting and Talent Acquisition
Line managers for this functional area are likely to be more involved in the
strategic brand of recruitment and employment, which is talent acquisition.
Talent acquisition focuses on long-term workforce planning – determining
how to align the workforce with the organization's needs, whether those are
simply sustaining operations or planning for business growth. These line
managers are forward-thinking supervisors who also look at labor market
trends and availability of workers.
Their direct reports are recruiting specialists who post online ads, screen
applicants, conduct preliminary interviews, distinguish between applicants
and qualified candidates, and interact with department hiring managers
concerning their staffing needs.
Employee Health and Safety
In some organizations, employee health and safety is a separate

department; however, because it falls under the purview of employee
welfare, it makes sense for it to be part of HR. Employee safety specialists
perform workplace inspections to ensure employees aren't exposed to
hazardous materials and that employees are safely using equipment and
machinery. They may also interact with the Occupational Safety and Health
Administration (OSHA) to correct workplace issues concerning safe use of
materials and equipment.
The line manager for health and safety oversees inspections and reports to
the HR manager or director. In addition, the line manager may approach
employee health and safety from a strategic vantage point by incorporating
employee wellness as a part of the overall mission to ensure a safe work
environment.
Staff managers include people who lead revenue consuming departments,

for example, accounting, customer service, or human resources. They
serve the line managers of the organization in an advisory or support
capacity by providing them with information and advice.
Responsibilities Of Staff Managers Staff managers
assist and advise line managers in accomplishing these basic goals. They
do, however, need to work in partnership with each other to be successful.
Some examples of the HR responsibilities of staff managers include
assistance in hiring, training, evaluating, rewarding, counseling, promoting,
and firing of employees, and the administering of various benefits
programs.
Challenges To Hr Proffesionals
Compliance with Laws and Regulation
Keeping up with changing employment laws is a struggle for business

owners. Many choose to ignore employment laws, believing they don’t
apply to their business. But doing so could mean audits, lawsuits, and
possibly even the demise of your company.
Management Changes
As a business grows, its strategies, structure, and internal processes grow

with it. Some employees have a hard time coping with these changes. A lot
of companies experience decreased productivity and morale during periods
of change.
Leadership Development
A recent study showed more than a third of companies are doing an

average job, at best, at implementing leadership development programs.
Thirty-six percent of companies surveyed in Brandon Hall Group’s State of
Leadership Development Study admitted that their leadership development
practices are below average.
Workforce Training and Development
Investing in the training and development of lower-level employees is

another common HR problem. Some businesses have trouble finding the
resources to do so. Employees on the front lines are some of your hardest
workers, and may not have the time to take a training course.
Adapting to Innovation
Technology is constantly changing. Businesses must be quick to adapt, or

risk being left in the dust by their competitors. The challenge for small
business owners is getting employees to embrace innovation and learn
new technology.
Understanding Benefits Packages
The Affordable Care Act has been a pain point for many small businesses
in the past few years. Rising healthcare costs mean companies must either
pass these costs on to employees, or take a hit to their bottom line. Since
good benefits packages can be a deciding factor for potential hires,
understanding them is key.
Recruiting Talented Employees
Attracting talent is a huge investment of time and money. It’s difficult for
entrepreneurs to balance between keeping a business running, and hiring
the right people at the right time. In addition, it’s impossible to know
whether a candidate will actually be a good fit until they’ve worked for you
for a period of time.
Retaining Talented Employees
Competition for talented employees is fierce. Startups and small companies

don’t have big budgets for retirement plans, expensive insurance plans,
and other costly items that their larger competitors do—at least, not yet.
Employee turnover is expensive and can negatively impact business

growth.
Workplace Diversity
Multiple generations. Ethnic and cultural differences. These are just a few
of the many factors that make workplace diversity a continual challenge for
small businesses. The risk of lawsuits for failing to protect employees from
harassment is real.
Human Resource Planning And Forecasting
Human resource planning is a process that identifies current and

future human resources needs for an organization to achieve its
goals. Human resource planning should serve as a link between human
resource management and the overall strategic plan of an organization.
Human Resource Planning – Need and Importance:

The following points highlight the need and importance of HRP in the
organizations:
I. Assessing Future Personnel Needs:
Whether it is surplus labour or labour shortage, it gives a picture of
defective planning or absence of planning in an organization. A number of
organizations, especially public sector units (PSUs) in India are facing the
problem of surplus labour.
It is the result of surplus labour that the companies later on offer schemes
like Voluntary Retirement Scheme (VRS) to eliminate surplus staff. Thus, it
is better to plan well about employees in advance. Through HRP, one can
ensure the employment of proper number and type of personnel.
II. Foundation for Other HRM Functions:

HRP is the first step in all HRM functions. So, HRP provides the essential
information needed for the other HRM functions like recruitment, selection,
training and development, promotion, etc.
III. Coping with Change:
Changes in the business environment like competition, technology,
government guidelines, global market, etc. bring changes in the nature of
the job. This means changes in the demand of personnel, content of job,
qualification and experience needed. HRP helps the organization in
adjusting to new changes.
IV. Investment Perspective:
As a result of change in the mindset of management, investment in human
resources is viewed as a better concept in the long run success of the
enterprise. Human assets can increase in value as opposed to physical
assets. Thus, HRP is considered important for the proper planning of future
employees.
V. Expansion and Diversification Plans:
During the expansion and diversification drives, more employees at various
levels are needed. Through proper HRP, an organization comes to know
about the exact requirement of personnel in future plans.
VI. Employee Turnover:
Every organization suffers from the small turnover of labour, sometime or

the other. This is high among young graduates in the private sector. This
necessitates again doing manpower planning for further recruiting and
hiring.
VII. Conformity with Government Guidelines:
In order to protect the weaker sections of the society, the Indian

Government has prescribed some norms for organizations to follow. For
example, reservations for SC/ST, BC, physically handicapped, ex-
servicemen, etc. in the jobs. While planning for fresh candidates, HR
manager takes into consideration all the Government guidelines.
VIII. International Expansion Strategies:
International expansion strategies of an organization depend upon HRP.
Under International Human Resource Management (IHRM), HRP becomes
more challenging. An organization may want to fill the foreign subsidiary’s
key positions from its home country employees or from host-country or
from a third country. All this demands very effective HRP.
IX. Having Highly Talented Manpower Inventory:
Due to changing business environment, jobs have become more
challenging and there is an increasing need for dynamic and ambitious
employees to fill the positions. Efficient HRP is needed for attracting and
retaining well qualified, highly skilled and talented employees.
The main objectives of HRP are:
(i) Proper assessment of human resources needs in future.
(ii) Anticipation of deficient or surplus manpower and taking the corrective
action.
(iii) To create a highly talented workforce in the organization.
(iv) To protect the weaker sections of the society.
(v) To manage the challenges in the organization due to modernization,
restructuring and re-engineering.
(vi) To facilitate the realization of the organization’s objectives by providing
right number and types of personnel.
(vii) To reduce the costs associated with personnel by proper planning.
(viii) To determine the future skill requirements of the organization.

(ix) To plan careers for individual employee.
(x) Providing a better view of HR dimensions to top management.
(xi) Determining the training and development needs of employees.
Human Resource Planning Process
HUMAN RESOURCE FORECASTING
Human resource forecasting is a process that helps an organization

determine how many employees it will need in the future to meet its
strategic goals. HR forecasting involves establishing what jobs the
company will need to fill, what types of skills employees must have to do
those jobs and what challenges the company will face as it works to meet
its staffing needs. Human resource planning has become an essential
component in identifying and planning for a company's changing personnel

needs.
Scrutinize the Current Job Market
One of the first steps in forecasting workforce availability is to take a closer

look at the economic and population issues that affect employment.
Uncertainty in the economy and labor market can make forecasting more
difficult. Human resource professionals must consider factors such as the
current unemployment rate and demographic composition of the local job
market. For example, trends such as a significant number of young
graduates entering the workforce at the same time increases the potential
for filling some job positions at lower wages and salaries. Age, training and
level of education are other factors that affect the talent available in the job
market.
Evaluate Organizational Needs
Learning more about the available workforce is just one element of the HR
forecasting process. Organizations must examine their own human
resource needs, which are dependent, in part, on the size and type of
organization. Many organizations begin by collecting data from all
departments. The next step is to assess the existing job positions within the
organization. HR managers must take into account the types of jobs and
number of employees performing in each class. After establishing what
knowledge and abilities employees should possess to achieve the
company’s long-term strategic goals, HR is responsible for evaluating the
current skills of employees. This step helps determine if employees have
the qualifications and expertise to satisfy the company’s future needs.
Anticipate Employee Turnover
HR must understand an organization’s present and future objectives in

order to successfully forecast workforce demand that will support
organizational strategies. In addition, human resources must anticipate the
need for creating new positions and modifying current positions. Employee
turnover rates place demands on organizations to improve employee
retention and recruitment strategies. Knowing what kinds of labor are
available in the job market is critical when it comes to filling vacant
positions when employees retire; some are promoted to higher positions;
and others leave to go work elsewhere.
Estimate Future HR Needs
Once an organization has identified what resources are available in the

workforce and has defined its organizational needs, it can plan for future
labor needs. Factors to consider include evaluating current employee
potential, determining training needs and putting succession plans in place.
A primary question managers should consider is whether employees are
working in positions that fully utilize their strengths, abilities and
experience. Recognizing talent and potential and focusing on employee
strengths can prompt promotions or other shifts in job roles. Matching
employees’ skills to an organization’s goals improves employee job
satisfaction as well as helps a company to achieve its strategic objectives.
Human Resources Information System (HRIS)
A Human Resources Information System (HRIS) is a software or online

solution that is used for data entry, data tracking and the data information
requirements of an organization's human resources (HR) management,
payroll and bookkeeping operations. A HRIS is usually offered as a
database.
HRIS is geared toward enhancing the capacity of HR management to:
 Absorb new and promising technologies

 Simplify workflow
 Optimize precision, stability and credibility of workforce data
 Simplify the deployment and collection of data
An efficient HRIS provides:
Administration of all staff data
 Reporting and evaluation of staff data

 Company-related records, including staff handbooks, disaster
evacuation methods and security recommendations
 Rewards management, such as enrollment, status modifications and
updating of personal data
 Comprehensive integration with payroll, in addition to other

accounting systems and financial software
 Applicant monitoring and resume administration
An efficient HRIS helps an organization track:
 Paid time off (PTO) and attendance

 Pay scale history
 Positions and pay grades
 Overall performance development strategies
 Coaching obtained
 Disciplinary actions
 Personal staff data
 Key staff succession plans
 Identification of prospective staff
 Applicant administration, including interview process and selection
An organization can select and customize a HRIS it to meet its

requirements. An efficient HRIS provides an organization with information
on virtually anything required to monitor and examine staff/applicant data. A
customized HRIS helps HR train staff to execute administrative tasks,
allowing HR to focus on other strategic functions.
In addition, information required for knowledge development, equal

treatment, staff management and career growth is provided. Also,
managers can gain access to the information required to efficiently and

legally assist the success of their direct reports.
UNIT -2
HR Sourcing And Recruitment
Sourcing / Researching
Researchers find candidates who qualify for the existing job openings. Their primary
function of a sourcer is to conduct complex searches within the industry and to compile
the list of the best candidates for a certain position.
Researchers work with job boards, specialised websites, and professional social
networks such as LinkedIn to do their job. Often sourcing is one of the duties of a
recruiting professional. Still, good sourcers should be masters of boolean search
and talent mining.
Sourcing is the process of short listing correct candidates within the recruitment
process. Recruiters need to find qualified and unique candidates for job orders who can
be job fit. Sourcing refers to the initial part of recruiting where candidates are found
through a variety of methods. Some recruiters do sourcing function through agencies
who specialize in sourcing and are called sourcers. Many larger companies and firms
employ teams of sourcing professionals that concentrate only on the initial pool of
candidates. The sourcers then “hand off” the candidates to a different department of
team of recruiters which handle qualification, interview, and placement.
Example: A company might be looking for an individual with a background in computer

engineering who also have an experience of more than 5 years. Recruiting and sourcing
professionals have a understanding of how to source this specialized talent through a
variety of means. Sourcing professionals will often have a comprehensive
understanding of Internet sourcing tactics. They will filter candidate lists from the
Internet and also source talent from competing companies.
Recruitment
The process of finding and hiring the best-qualified candidate (from within or outside of
an organization) for a job opening, in a timely and cost effective manner. The
recruitment process includes analyzing the requirements of a job, attracting employees

to that job, screening and selecting applicants, hiring, and integrating the new employee
to the organization.
It is a process of searching for prospective employees and stimulating and encouraging

them to apply for jobs in an organisation.” He further elaborates it, terming it both
negative and positive.
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. In simple words, the term recruitment refers to discovering the
source from where potential employees may be selected. The scientific recruitment
process leads to higher productivity, better wages, high morale, reduction in labour
turnover and enhanced reputation. It stimulates people to apply for jobs; hence it is a
positive process.
Recruitment is concerned with reaching out, attracting, and ensuring a supply of

qualified personnel and making out selection of requisite manpower both in their
quantitative and qualitative aspect. It is the development and maintenance of adequate
manpower resources. This is the first stage of the process of selection and is
completed with placement.
Process of Recruitment:
Selection Process
The selection process can be defined as the process of selection and shortlisting 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.
Every organisation creates a selection process because they have their own requirements.
Although, the main steps remain the same. So, let’s understand in brief how the selection
process works.
Preliminary Interview
This is a very general and basic interview conducted so as to eliminate the candidates

who are completely unfit to work in the organisation. This leaves the organisation with a
pool of potentially fit employees to fill their vacancies.
Receiving Applications
Potential employees apply for a job by sending applications to the organisation. The
application gives the interviewers information about the candidates like their bio-data,
work experience, hobbies and interests.
Screening Applications
Once the applications are received, they are screened by a special screening
committee who choose candidates from the applications to call for an interview.
Applicants may be selected on special criteria like qualifications, work experience
etc.
Employment Tests
Before an organisation decides a suitable job for any individual, they have to gauge
their talents and skills. This is done through various employment tests like
intelligence tests, aptitude tests, proficiency tests, personality tests etc.
Employment Interview
The next step in the selection process is the employee interview. Employment
interviews are done to identify a candidate’s skill set and ability to work in an
organisation in detail. Purpose of an employment interview is to find out the suitability
of the candidate and to give him an idea about the work profile and what is expected
of the potential employee. An employment interview is critical for the selection of the
right people for the right jobs.
Checking References
The person who gives the reference of a potential employee is also a very important
source of information. The referee can provide info about the person’s capabilities,
experience in the previous companies and leadership and managerial skills. The
information provided by the referee is meant to kept confidential with the HR
department.
Medical Examination
The medical exam is also a very important step in the selection process. Medical
exams help the employers know if any of the potential candidates are physically and
mentally fit to perform their duties in their jobs. A good system of medical checkups
ensures that the employee standards of health are higher and there are fewer cases
of absenteeism, accidents and employee turnover.
Final Selection and Appointment Letter
This is the final step in the selection process. After the candidate has successfully
passed all written tests, interviews and medical examination, the employee is sent or
emailed an appointment letter, confirming his selection to the job. The appointment
letter contains all the details of the job like working hours, salary, leave allowance
etc. Often, employees are hired on a conditional basis where they are hired
permanently after the employees are satisfied with their performance.
Job Analysis
Job Analysis is a primary tool to collect job-related data. The process results in
collecting and recording two data sets including job description and job specification.
Any job vacancy can not be filled until and unless HR manager has these two sets of
data. It is necessary to define them accurately in order to fit the right person at the right
place and at the right time. This helps both employer and employee understand what
exactly needs to be delivered and how.
Both job description and job specification are essential parts of job analysis information.
Writing them clearly and accurately helps organization and workers cope with many
challenges while onboard.
Job analysis is a procedure through which you determine the duties and responsibilities,
nature of the jobs and finally to decide qualifications, skills and knowledge to be
required for an employee to perform particular job. Job analysis helps to understand
what tasks are important and how they are carried on. Job analysis forms basis for later
HR activities such as developing effective training program, selection of employees,
setting up of performance standards and assessment of employees ( performance
appraisal)and employee remuneration system or compensation plan.
Harry L. Wylie. "Job analysis deals with the anatomy of the job.....This is the complete
study of the job embodying every known and determinable factor, including the duties
and responsibilities involved in its performance; the conditions under which performance
is carried on; the nature of the task; the qualifications required in the worker; and the
conditions of employment such as pay, hours, opportunities and privileges"
In the words of Dale Yoder. "A Job is a collection of duties, tasks and responsibilities
which are assigned to an individual and which is different from other assignment"
According to Michael J. Jucius, "Job analysis refers to the process of studying the
operations, duties and organisational aspects of jobs in order to derive specification or,
as they are called by some job description
Job analysis refers to the process of systematically identifying, obtaining and

recording all the facts and details concerning the job through various methods. It
encompasses gathering information related to the knowledge, skills and
abilities (KSA) which the job holder must have, to perform the job satisfactorily.
Here knowledge implies the degree to which the incumbent is accustomed to the

job. Skills can be understood as the candidate’s capability to run the system/machine
or use the tools. Abilities specify the physical and mental attributes required to perform
the tasks.
Job analysis involves identifying and ascertaining all the duties and responsibilities of
the concerned job, along with the prior requirements, and its relative importance with
respect to the other jobs in the organization. It serves as a guide in the preparation of
Job Description and Job Specification.
Job analysis helps in placing the right person in the right job. For this purpose, the
analyst must identify the activities involved, tasks to be performed, the way tasks are
accomplished and the essential qualities possessed by the incumbent for the
completion of the tasks effectively.
Process of job Analysis

1. Strategic Choices: Firstly, an organisation needs to make strategic choices,

concerning the job analysis. These choices are related to:
 Degree to which an employee is involved in the process.
 Sources of collecting information.
 When and How often analysis is conducted.
 Level to which details are to be collected.
 Orientation, i.e. past and future.
2. Collection of Information: In the next step data is gathered, which mainly deals with
three aspects:
 Type of data to be obtained: It focuses on the basic job needs
 Person who collects the data: He/She may be the job analyst,
supervisor or incumbent.
 Methods applied in collecting data: A number of techniques can be

applied which may be an interview, checklists, questionnaire, diary method,
observation and so forth.
3.Process Information: Once the information is collected by the concerned individual,

it is then transformed in a way, so that it helps in job documentation.
4.Job Description: The processed data will result in job description which describes
the entire job profile to the management and the incumbent as well. It lists out the job
title, duties, responsibilities, tasks, activities, scope of work, objectives, authority limits,
etc.
5.Job Specification: Job specification specifies all the employee qualifications, in the

sense of physical, mental, emotional and behavioural abilities.
It highlights the educational qualification, experience, knowledge, skills mental abilities,

age, gender, aptitude, reasoning, etc. possessed by the incumbent to perform the job
and the duties related to it satisfactorily.
The data gathered through job analysis is useful for various human resource functions
such as Human resource planning, recruitment and selection, induction, training, job
evaluation, remuneration, performance appraisal, health and safety, promotion and
transfer, career planning, and so on.
An ideal job analysis covers all the important aspects such as tasks and duties, work
environment, superiors and subordinates, KSAs required, etc.
Job description and job specification are two integral parts of job analysis. They define a
job fully and guide both employer and employee on how to go about the whole process
of recruitment and selection. Both data sets are extremely relevant for creating a right fit
between job and talent, evaluate performance and analyze training needs and
measuring the worth of a particular job.
job description
A job description is an internal document that clearly states the essential job
requirements, job duties, job responsibilities, and skills required to perform a specific
role. A more detailed job description will cover how success is measured in the role so it
can be used during performance evaluations.
They are also known as a job specification, job profiles, JD, and position description (job
PD).
Our job description directory contains job description examples covering all the most
popular roles. We have examples of job descriptions you can quickly download and
modify to suit your unique business requirements. You'll find a job description example
for most common jobs.
Starting with a sample job description will make sure you do not miss any of the key
requirements for a role and new hires will have a better understanding of what their role
is.
A job description or JD is a written narrative that describes the general tasks, or other
related duties, and responsibilities of a position. ... The analysis considers the areas
of knowledge, skills and abilities needed to perform the job
A job description summarizes the essential responsibilities, activities, qualifications and

skills for a role. Also know as a JD, this document describes the type of work performed.
A job description should include important company details — company mission, culture
and any benefits it provides to employees. It may also specify to whom the position
reports and salary range.
An effective job description will provide enough detail for candidates to determine if
they’re qualified for the position.
Job Description
Job description includes basic job-related data that is useful to advertise a specific job
and attract a pool of talent. It includes information such as job title, job location,
reporting to and of employees, job summary, nature and objectives of a job, tasks and
duties to be performed, working conditions, machines, tools and equipments to be used
by a prospective worker and hazards involved in it.
Purpose of Job Description
 The main purpose of job description is to collect job-related data in order to

advertise for a particular job. It helps in attracting, targeting, recruiting and
selecting the right candidate for the right job.
 It is done to determine what needs to be delivered in a particular job. It clarifies
what employees are supposed to do if selected for that particular job opening.
 It gives recruiting staff a clear view what kind of candidate is required by a
particular department or division to perform a specific task or job.
 It also clarifies who will report to whom.
Why is a Job Description Important?

A job description is an essential part of the job application process as, with the right
information, it should help applicants to determine whether the role is in line with their
skill set and whether it is a job they actually want to do.
From the organisation’s perspective, the job description is vital in ensuring that the
applications received for the position closely match the needs of the role itself.
It helps HR departments and external recruiters to streamline the selection process and
receive a high concentration of candidates who are suitable for interview or further
selection.
What are the Main Uses of a Job Description?

There are many benefits to an effective job description. Here are just some of its key
uses:
 To provide the employee with the expectations that are required of them in the
role
 To provide enough detail to help the candidate assess if they are suitable for the
position
 To support the recruitment team during the selection process
 To help formulate questions for the interview process
 To allow the prospective employee to determine their role or standing within the
structure of the organisation
 To assist in forming a legally binding contract of employment
 To help set goals and target for the employee upon joining
 To aid in the evaluation of the employee’s job performance
 To help formulate training and development plans
What is Typically Included in a Job Description?

A well rounded job description should clearly identify the purpose of the role as well as
the key tasks to be performed and the main accountabilities of the position.
The document will also usually also include a brief background and overview of the
organisation, as well as the name or position of the employee the successful candidate
will be reporting to.
In addition, you can also expect to find an explanation of the kind of candidate the
organisation is looking for. This might include their professional experience and
achievements, skill set, educational background and qualifications, as well as any

desired personality traits.
The description will also include practical information, such as where the job is based,
whether it’s full or part-time and, in most cases, the intended salary.
The key points that would normally be included in a job description include:
 Title and summary of the role

 List of duties
 Desired professional experience
 Education level and desired qualifications
 Core skills required for the position
 Necessary certificates, licences and registrations
 Who the prospective employee will directly report to
 Whether the employee has any subordinates reporting to them
 Physical requirements (if needed)
 Work environment
 Employment conditions
What is the Typical Structure of a Job Description?

A job description should follow a simply laid out, accurate format that clearly defines the
needs of the role. While the actual structure will typically vary between roles and
organisations, a well-rounded job description will normally be loosely structured as
follows:
1. Job Title
2. Location
3. Reports to
4. Job Purpose (a brief line or two)
5. Responsibilities/duties (detailed)
6. Essential and desirable criteria
7. Company/ team overview

8. Application information
Job Specification
Also known as employee specifications, a job specification is a written statement of

educational qualifications, specific qualities, level of experience, physical, emotional,
technical and communication skills required to perform a job, responsibilities involved in
a job and other unusual sensory demands. It also includes general health, mental
health, intelligence, aptitude, memory, judgment, leadership skills, emotional ability,
adaptability, flexibility, values and ethics, manners and creativity, etc.
Purpose of Job Specification
 Described on the basis of job description, job specification helps candidates

analyze whether are eligible to apply for a particular job vacancy or not.
 It helps recruiting team of an organization understand what level of qualifications,
qualities and set of characteristics should be present in a candidate to make him
or her eligible for the job opening.
 Job Specification gives detailed information about any job including job
responsibilities, desired technical and physical skills, conversational ability and
much more.
 It helps in selecting the most appropriate candidate for a particular job.
A job specification defines the knowledge, skills and abilities that are required to
perform a job in an organization. Job specification covers aspects like education, work-
experience, managerial experience etc which can help accomplish the goals related to
the job. Job specification helps in the recruitment & selection process, evaluating the
performance of employees and in their appraisal & promotion. Job specification, along
with job description, is actually derived from job analysis. Collectively, job
specification and job description help in giving a overview of the job in terms of its title,
position, roles, responsibilities, education, experience, workplace etc.
Importance of Job Specification
The importance and purpose of job specification is a thoroughly understand the specific
details of a job. Jobs can be of different types and can require a different skill sets to get
the maximum output from a particular. Job specification gives important details related
to the job like education & skills, prior work experience, managerial experience,
personality traits etc which would help an employee accomplish the objectives of a job.
For a recruiter, job specification lays down the guidelines basis of which the company
can recruit and select the best possible candidate who would be best suited for the job.
Apart from actually finding the right candidate or employee, job specification can be
used for screening of resumes & shortlist only those candidates who are the closest fit
to the job. Hence, a job specification gives specific details about a job and what kind of
skill sets are required to complete the job.
Components of Job Specification
There are many parameters which are considered while giving the job specification for a
certain profile.
1. Educational Qualification: This parameter gives an insight on how qualified a

certain individual is. It covers their basic school education, graduation, masters degree,
other certifications etc
2. Experience: Job specification clearly highlights the experience required in a

particular domain for completing a specific job. It includes work experience which can
be from a specific industry, position, duration or in a particular domain. Managerial
experience in handling and managing a team can also be a job specification criteria
required for a particular position
3. Skills & Knowledge: This is an important parameter in job specification especially

with knowledge and skill based profiles. The higher the position in a company, the more
niche the skills become and more is the knowledge required to perform the job. Skills
like leadership, communication management, time management, team
management etc are mentioned.
4. Personality traits and characteristics: The way in which a person behaves in a

particular situation, handles complex problems, generic behaviour etc are all covered in
the characteristics of a job description. It also covers the emotional intelligence of a
person i.e how strong or weak a person is emotionally
Job Specification Example
Here is a sample job specification, which is prepared for a marketing manager in a

telecom company.
The above table is a sample of job specification. More specific details can also be put to
give a better understanding about the job.
Advantages of Job Specification
There are several benefits of having a comprehensive job specification. Some

advantages are listed below:
1. Job specification highlights all the specific details required to perform the job at its
best
2. It gives the HR managers a threshold and a framework on the basis on which they
can identify the best prospects
3. Helps in screening of resumes and saves time when there are multiple applications
by choosing those who are closest to the job specification
4. HR managers can used job specification as a benchmark to evaluate employees and

give them required trainings
5. It also helps companies during performance appraisal and promotions

Approaches to Job Design
Human Approach.
Engineering Approach.
Job Characteristics Approach.
The important ones are discussed below;
Human Approach
The human approach of job design laid emphasis on designing a job around the people
or employees and not around the organizational processes.
In other words, it recognizes the need for designing jobs that are rewarding (financially
and otherwise) and interesting at the same time.
According to this approach, jobs should gratify an individual’s need for recognition,
respect, growth, and responsibility. Job enrichment as popularized by Herzberg’s
research is one of the ways in the human approach of job design.
Herzberg classified these factors into two categories – the hygiene factors and the
motivators.
Engineering Approach
The engineering approach was devised by FW Taylors et al. They introduced the idea
of the task that gained prominence in due course of time.
According to this approach, the work or task of each employee is planned by the
management a day in advance.
The instructions for the same are sent to each employee describing the tasks to be
undertaken in detail. The details include things like what, how and when of the task
along with the time deadlines. The approach is based on the application of scientific
principles to job design.
Job Characteristics Approach
The job characteristics approach was popularized by Hackman and Oldham. According
to this approach, there is a direct relationship between job satisfaction and rewards.
They said that employees will be their productive best and committed when they are
rewarded appropriately for their work. They laid down five core dimensions that can be
used to describe any job – skill variety, task identity, task significance, autonomy, and
feedback.
 Skill variety: The employees must be able to utilize all their skills and develop
new skills while dealing with a job.
 Task Identity: The extent to which an identifiable task or piece of work is

required to be done for the completion of the job.
 Task Significance: How important is the job to the other people, what impact
does it create on their lives?
 Autonomy: Does the job offer freedom and independence to the individual

performing the same.
 Feedback: Is feedback necessary for improving performance.
These are different approaches but all of them point to more or less the same factors
that need to be taken into consideration like interest, efficiency, productivity, motivation,
etc. All these are crucial to effective job desi
JOB Evaluation
Job evaluation is the process of analyzing and assessing various jobs systematically

to ascertain their relative worth in an organization. Job evaluation is
an assessment of the relative worth of various jobs on the basis of a consistent set
of job and personal factors, such as qualifications and skills required
Objectives of job evaluation

The main objective of job evaluation is to determine relative worth of different jobs in an
organisation to serve as a basis for developing equitable salary structure. States an ILO
Report the aim of the majority of systems of job evaluation is to establish, on agreed
logical basis, the relative values of different jobs in a given plant or machinery i.e. it
aims at determining the relative worth of a job. The principle upon which all job
evaluation schemes are based is that of describing and assessing the value of all jobs
in the firms in terms of a number of factors, the relative importance of which varies from
job to job.
The objectives of job evaluation, to put in a more orderly manner are to:
1. Provide a standard procedure for determining the relative worth of each job in a plant.
2. Determine equitable wage differentials between different jobs in the organisation.
3. Eliminate wage inequalities.
4. Ensure that like wages are paid to all qualified employees for like work.
 To determine equitable wage differentials between different jobs in the

organization.
 It aims at developing a systematic and rational wage structure
 To eliminate wage inequities. It aims at establishing consistency between the

wage and salary structure adopted by the firm and that of the other firms.
 To establish a rational basis for incentive and bonus schemes.
 Proper job evaluation helps to settle disputes relating to salaries between the
employers and employees and thus helps to promote industrial peace and
harmony.
 To provide a framework for periodic review and revision of wage rates.
 To provide a basis for wage negotiation with Trade Unions.
 To minimize wage discrimination on the basis of age, sex, caste, region etc.
 To enable management to gauge and control the payroll costs.
 It discloses characteristics and conditions relating to different jobs which are very
helpful at the time of recruitment.
 It also helps in eliminating discrepancies among employees of a group of the
organization in any particular industry.
 Maintenance of a consistent career and employee growth policy/ guidelines.

Methods of Job Evaluation

There are many methods by which job evaluation is done.
1. Ranking / Grading Method: Under ranking method, jobs are organized in

descending order of importance with the help of job description and job
specification. The ranking of job is done by a committee of experts called raters.
The ranking is done at departmental level, for every department the job is ranked
in order of importance. The main benefits of this method are that it is simple,
easily understood by all concerned and easy to operate, inexpensive and can be
used conveniently in small establishments. The limitations include the degree of
differences in the jobs. Sometimes it is based on the rater's general knowledge of
the jobs. It is inappropriate for big company with a complex organisational
structure.
2. Factor Comparison / Weight-in-Money Method: In this type of procedure, the jobs
are ranked in the following way: Common key elements of different jobs are
selected. These selected key elements are weighted and ranked. A monetary
value is assigned to each element of all jobs. Then these monetary values of
individual jobs are weighted. Then total value of each job is available. The major
benefits if this methods are that it is more accurate and systematic as compared
to simple ranking method. Different jobs also can be rated on the basis of
common factors. The drawbacks of this method comprise that it is complicated,
not easily explainable and expensive. Application of weightage and monetary
values may involve bias of rankers. It is difficult to install hence not used
extensively.
3. . Point Rating Method: In this method, each job is appraised separately,
considering each of the job factors such as skill, effort, responsibility and working
conditions and combining them into a single point score for each job. Main
advantages are that it is analytical in its approach, it gives a quantitative value for
each job. Basis and guidelines of valuation are standardized and codified in a
user manual. Disadvantages include, manual used for rating the jobs needs
periodical revision and update. It is difficult for application and unintelligible for
workers.
Emplooyee Compensation Managgement
Compensation includes payments like bonuses, profit sharing, overtime pay,

recognition rewards and sales commission, etc.
Compensation can also include non-monetary perks like a company-paid car,

company-paid housing and stock opportunities. Compensation is a vital part of human
resource management, which helps in encouraging the employees and improving
organizational effectiveness.
From a manager's point of view, the compensation package offered to a company's

employees is essential not only because it costs money, but because it is likely to be
the primary reason the employees work for the firm.
Compensation packages with good pay and advantages can help attract and retain the
best employees. A quick survey of employees about compensation is likely to expose
an expectation that wages are fair and cover basic living expenses, keep up with
inflation, leave some money for savings (perhaps for retirement) and leisure, increment
over time.
A company's compensation scheme also informs a great deal about the firm's values
and cultures. Employees often look at what a company pays rather than what it
says. In many aspects, people behave as they are rewarded.
A compensation scheme projects what the company expects of its employees. For
example, if quality is an essential value, then it should be implemented through some
element of the total compensation system.
Compensation management is the practice of the organization that involves giving

monetary as well as non-monetary rewards to the employees, in order to compensate
for the time they allocate to their job. The use of compensation management is
increasing as organizations have started to realize the need for leveraging its human
capital in order to gain a competitive edge in the industry. Compensation management

involves “maximizing the return on human capital.”
Compensation management, also known as wage and salary administration,

remuneration management, or reward management, is concerned with designing and
implementing total compensation package.
Compensation is the human resource management function that deals with every type

of reward individuals receive in exchange for performing an organizational task.
Compensation is what employees receive in exchange for their work. It is a particular

kind of price, that is, the price of labor. Like any other price, remuneration is set at the
point where the demand curve for labor crosses the supply curve of labor.
Different Types of Compensation
There are different types of compensation. Schuler identified three major types of
compensation, which are mentioned below;
1. Non-monetary Compensation.
2. Direct Compensation.
3. Indirect Compensation.
Non-monetary Compensation
It includes any benefit that an employee receives from an employer or a job that does
not involve tangible value. Examples are career development and advancement
opportunities, opportunities for recognition, as well as work environment and conditions.
Direct Compensation
Direct Compensation comprises of the salary that is paid to the employees along with
the other health benefits.
Money is included under direct compensation. It is an employee’s base wage which can
be an annual salary or hourly wage and any performance-based pay that an employee
receives.
Direct compensation consisting of pay received in the form of wages, salaries, bonuses,
and commissions provided at regular and consistent intervals.
These include the basic salary, house rent allowances, medical benefits, city
allowances, conveyance, provident funds, etc. It also includes bonuses, payments for
holidays, etc.
Indirect Compensation
Indirect compensation can be thought of as the nonmonetary benefits an employee gets

from the organization.
It includes everything from legally required public protection programs such as Social
Security to health insurance, retirement programs, paid leave, childcare or moving
expenses.
While benefits come under indirect compensation and may consist of life, accident,
health insurance, the employer’s contribution to retirement, pay for a vacation,
employer’s required payment for employee welfare as social security.
Rewards and recognitions, promotions, responsibility, etc., are some factors that induce
confidence in the employees and motivate them to perform better. It also instills the faith
in them that their good work is being recognized and they can boost their career
opportunities if they continue to work harder.
Objectives of Compensation Management
The basic objective of compensation management can be briefly termed as meeting the
needs of both employees and the organization.
Employers want to pay as little as possible to keep their costs low. Employees want to
get as high as possible.
Objectives of compensation management are;
1. Acquire qualified personnel.
2. Retain current employees.
3. Ensure equity.
4. Reward desired behavior.
5. Control costs.
6. Comply with legal regulations.
7. Facilitate understanding.
8. Further administrative efficiency.
9. Motivating Personnel.
10. Consistency in Compensation.

Benefits of Compensation Management for your Organization
 One of the most significant benefits associated with compensation management

is that it helps the organization achieve employee satisfaction. A happy employee
will be more productive, while contributing to the overall profit of the business.
This makes employees realize that they are getting equal returns for the time and
effort they are dedicating to the organization. The practice of compensation
management exerts a positive impact in the employees by influencing them to
perform better and increasing their overall efficiency.
 This stabilizes the labor turnover rate as employees get compensated for their
work at a competitive market rate. They do not feel the need of leaving the
organization. It can then be concluded that compensation management helps
increase the loyalty of the employees towards the organization.
 Compensation management is an important aspect of the job evaluation process.
It augments the whole process by setting up standards for the company that are
realistic as well as achievable, as far as the compensation practices of the
organization are concerned.
 It is a practice which helps to improve the relationship of the company with the
labor union, as it allows the compliance of different labor laws and acts. If the
organization is following the compensation practices same as that of the market,
there will be no dispute to settle between them and the labor union.
 It helps the professional growth of employees, as their efficiency increases, when
there is a reward present for achieving a certain level of production. This also
means that the deserving employees are fairly compensated for the efforts they
are putting into their work, thus helping the organization to retain the best talent.
 Compensation Management is the practice that if followed properly, will turn the
organization into a hub of talent. This means that more human capital will get
attracted to the company, when they will view the compensation package that it
will be offering. Also, the organization must keep in mind that monetary rewards
are not something that only derives the motivation of the workforce. The overall
compensation package must also include the non-monetary rewards, where the
employees should be appreciated for the effort they are putting in their work.
Therefore, the organization must ensure that its compensation package is based
on monetary as well as non-monetary rewar
Determinants of wage | salary fixation
The following factors should be taken into consideration in determining wage and
salary structure of workers:
(i) Labour Unions:
The labour unions attempt to work and influence the wages primarily by regulating or
affecting the supply of labour. The unions exert their influence for a higher wage and
allowances through collective bargaining with the representatives of the management.
If they fail in their attempt to raise the wage and other allowances through collective
bargaining, they resort to strike and other methods where by the supply of labour is
restricted. This exerts a kind of influence on the employees to concerned test partially
the demands of the labour unions.
(ii) Personal perception of wage:

Whether the wage is adequate and equitable depends not only upon the amount that is
paid but also upon the perceptions and the views of the recipients of the wage. Even
though the wage is above the going wage rate in the community if it is lower than that of
fellow worker deemed inferior, it will be regarded as inequitable in the eyes of the
recipients of the wage. A man’s perception of the equity of his wage will undoubtedly
affect his behaviour in joining and continuing in the organisation
(iii) Cost of living:
Another important factor affecting the wage is the cost of living adjustments of wages.
This approach tends to vary money wage depending upon the variations in the cost of
living index following rise or fall in the general price level and consumer price index. It is
an essential ingredient of long term labour contracts unless provision is made to reopen
the wage clause periodically.
There are measurement problems both in ascertaining productivity and cost of living
increases. This problem may lead to lack of understanding and unanimity on the part of
the management and the workers.
(iv) Government legislation:
Increasingly there is a trend towards gearing wage increases to productivity increases.
Productivity is the key factor in the operations of a company. High wages and low costs
are possible only when productivity increases appreciably. The above factors exercise a
kind of general influence on wage rates. In addition, there are several factors which do
affect the individual difference in wage rates.
The most important factors which affect the individual differences in wage rates
are:
(a) Worker’s capacity and age;
(b) Educational qualifications
(c) Worker experience;
(d) Hazards involved in work;
(e) Promotion possibilities;
(f) The prevailing wage in the community
(g) Stability of employment;
(h) Demand for the product; and
(i) Profits or surplus earned by the organisation

INCENTIVES
Anything that can attract an employee’s attention and motivate them to work can
be called as incentive. An incentive aims at improving the overall performance of
an organization. Incentives can be classified as direct and indirect compensation.
They can be prepared as individual plans, group plans and organizational plans.
Types of incentives:
Incentives can be classified into three categories:
1. Financial incentives:
Some extra cash is offered for extra efficiency. For example, profit sharing plan and
group incentive plans.
2. Non-financial incentives:
When rewards or prizes are provided by the organization to motivate the employees it is
known as non-financial incentives.
3. Monetary and non-monetary incentives:

Many times, employees are rewarded with monetary and non-monetary incentives that
include promotion, seniority, recognition for merits, or even designation as permanent
employee.
Advantages of incentive Plan:

1. Incentive plans motivate workers for higher efficiency and productivity.
2. It can improve the work-flow and work methods.
3. Incentive plans make employees hardworking and innovative.
4. When employees are dedicated, supervision costs can be reduced.
5. The National Commission on Labour says that under our conditions, wage incentives
are the cheapest, quickest, and sure means of increasing productivity.
6. Incentive plans help establish positive response in an organization.
7. It helps workers improve their standard of living.
8. The other benefits offered by incentive plans are reduced turnover, reduced
absenteeism, and reduced lost time.
Disadvantages of Incentive Plan

1. Incentive plans can lead to disputes among workers, since some earn more than
others.
2. Hunger for money among the workers forces them to overwork, which may affect
their heath.
3. Some workers may involve in malpractices in order to earn more money.
4. For enhanced incentives, they may sacrifice quality.
5. It also leads to corruption by falsifying the production records.
6. Incentive plans can create tensions among different personnel.
Bonus Definition, Importance, Example, Types,

Components & Overview
Definition: Bonus
Bonus is the extra payment or financial component which is received as a reward for
doing one’s job well. Bonus usually comes along with salary of the employee. It is the
gesture of appreciation from the organization towards their employees. Bonus is given
globally in most of the organization across different nations. It is not only given for the
job well done but also to keep the employees motivated and focused. This is either
given during the festivals as well such as Diwali, Christmas, etc or is part of the salary
structure of the employee. The distribution of the bonus completely depends upon the
policies of the organization. The amount of the bonus depends upon the profitability of
the organization.
Examples of Bonus
For example 1, if an employee is working in an organization and has performed really

good over the months. The organization wants to acknowledge the efforts of that
employee , so they give him an amount in addition to his salary which is known as the
bonus.
Example 2, If a worker is working in a plant, the production plant is running in good

profits and it’s the Diwali time. They want to give their workers an additional amount
along with the current wages to meet the upcoming extra expenses due to the festival
which again is known as bonus.
Types of Bonus Components
1. Performance Bonus: This kind of bonus is given to employees based on their

performance in a given period e.g. year or quarter
2. Festival Bonus: This type of bonus is linked to some occasion or festival in the local
location of operations of the company e.g. New Year
3. Referral Bonus: If a company has a referral program, then on a successful referral

the existing employee can be given bonus.
4. Joining Bonus: When a new employee joins a company, he or she can be offered a
one time joining bonus
5. Retention Bonus: This bonus is given as a one time payment to retain the employee
in the organization
6. Miscellaneous Bonus: This can be given on some special event e.g. on 25th
anniversary of the company, every employee gets a smartphone
Merits of Bonus
1. Bonus components keep the employees motivated.
2. It bridges the gap between the ideal of a living wage and the wages paid.
3. The gesture shows that the organization values and acknowledges good work.
Demerits of Bonus
1. Bonus adds to the extra cost incurred by the organization.
2. It decreases the profits.
3. It increases the expectation of the workers for bonus on every accomplishment.
ESOP – The employer perspective
How ESOPs work?
An organization grants ESOPs to its employees for buying a specified number of shares
of the company at a defined price after the option period (a certain number of years).
Before an employee could exercise his option, he needs to go through the pre-defined
vesting period which implies that the employee has to work for the organization until a
part or the entire stock options could be exercised.
Why Company offers ESOPs to their employees?
Organizations often use Employee stock ownership plans as a tool for attracting and
retaining high-quality employees. Organizations usually distribute the stocks in a
phased manner. For instance, a company might grant its employees the stocks at the
close of the financial year, thereby offering its employees an incentive for remaining with
the organization for receiving that grant.
Companies offering ESOPs have long-term objectives. Not only companies wish to
retain employees for a long-term, but also intend making them the stakeholders of their
company. Most of the IT companies have alarming attrition rates, and ESOPs could
help them bring down such heavy attrition Start-ups offer stocks for attracting talent.
Often such organizations are cash-strapped and are unable to offer handsome salaries.
But by offering a stake in their organization, they make their compensation package
competitive.
ESOPs from an employee’s perspective
With ESOPs, an employee gets the benefit of acquiring the shares of the company at
the nominal rate, and sell them (after a defined tenure set by his employer) and make a
profit. There are several success stories of an employee raking in the riches together
with founders of the companies. A very notable example is of Google when it went
public. Its founders Sergey Brin and Larry Page became the richest persons in the
world, even the stock-holder employees earned millions too.
Tax Implication of ESOPs
Employee stock ownership plans is considered as perquisites with respect to taxation..

On the other hand, for an employee, ESOPs are taxed at two below-mentioned
instances –
While exercising – in form of a prerequisite. When an employee exercises his option,
the difference between Fair Market Value (FMV) as on date of exercise and the
exercise price is taxed as a perquisite.
While selling – in the form of capital gain. An employee might sell his shares after
buying them. In case he sells these shares at a price higher than FMV on the exercise
date, he would be liable for capital gains tax.
The capital gains would be taxed depending on the period of holding. This period is
calculated from the date of exercise up to the date of sale. Equity shares which are
listed on the recognized stock exchange are considered as long-term capital if they’re
held for more than 12 months i.e. 1 year. In case the shares are sold within 12 months,
these are then considered as short term. Presently, long-term capital gains (LTCG) on
the listed equity shares are exempt from tax. However as per the recent amendments in
Budget 2018, Sale of equity shares that are held for more than a year on or after 1st
April 1, 2018 would attract tax at the rate of 10% and cess of 4%. Short-term capital
gains (STCG) are taxed at a rate of 15%.
Benefits of ESOPs for the employers
Stock options are provided by an organization as a motivation to its employees. As the

employees would benefit when the company’s share prices soar, it would be an
incentive for the employee put in his 100 percent. Although motivation, employee
retention and awarding hard work are the key benefits which ESOP brings to the
employers, there are several other noteworthy advantages too.
With the help of ESOP options, organizations could avoid the cash compensations as a
reward, thus saving on immediate cash outflow. For organizations which are starting
their business operations on a bigger scale or expanding their business, awarding their
employees with ESOPs would work out to be the most feasible option than the cash
rewards.
Fringe Benefits in HRM: Meaning, Objectives, Importance

and Types
Fringe benefits are supplementary compensation made in addition to wages, the object
being to stimulate the interest of the workers and to make the job more attractive and
conducive. They are, as a matter of fact, indirect benefits.
Cockman defines employee benefits as “those benefits supplied by an employer, to or

for, the benefit of an employee which are not in the form of wages, salaries and time-
related payments”. According to him, benefits are basically of two types – fringe and
key.
Fringe benefits include status (cars, entertainment facilities, holidays, foreign travel,
telephone); security (insurance, medical facilities, children’s education), and work
benefits (office accommodation, secretarial services, management training, company
scholarships etc.). Key benefits are benefits such as share schemes, profit sharing, and
retirement counselling house purchase
Fringe benefits afford better living standard to the employees and offer opportunities to
the employer to have more productivity and production. So, they are relevant and useful
for an organisation provided it can afford to extend fringe benefits. In term, of cost,
these benefits constitute “the real total cost to the company of employing the employee”
(Beath & Rands). It cannot be denied that fringe benefits are regarded as a “bonus”
and, as such, they create a favourable attitude towards the particular job and company.
Fringe Benefits in HRM – Objectives and Special Characteristics

Many years ago, benefits and services were labeled “fringe” benefits because they were
relatively insignificant or fringe components of compensation. However, the situation
now is different, as these have, more or less, become important part of a
comprehensive compensation package offered by employers to employees.
The main purpose of fringe benefits is to increase the financial position of the
employees. They include items which are over and above the normal earnings.
important objectives of fringe benefits are:

1. To recruit and retain the talented personnel in the organisation.
2. To maintain sound industrial relations and avoid unrest in the organisation.
3. To identify unsatisfied needs of the employees and convert those into satisfying
needs by utilizing appropriate steps.
4. To protect social security of the employees during old age by providing provident
fund, gratuity and pension.
As per Article 43 of the constitution of India, “All workers should be given a living wage
conditions of work ensuring decent standard of life and fuller enjoyment to ensure social
and cultural opportunities.” Therefore fringe benefits act as a social level to the
employees because worker is not a commodity. He is an active participant in
programme of economic development and social reconstruction.
5. To develop a sense of belongingness among employees of the organisation.
6. To comply various legislations related with fringe benefits which are formulated by
central and state Government.
7. To ensure cooperation, loyalty and faithfulness among employees of the
organisation.
8. To develop Brand Image of the organisation in the eyes of public.
Insurance Coverage
The most common fringe benefits offered to employees include combinations
of insurance coverage. Typically, employers offer up to $50,000 of group term life
insurance, short- and long-term disability coverage, and health insurance options.
Employers commonly share the cost of premiums with employees in an effort to offset
the total cost to the employee.
Education Assistance
Another common fringe benefit is education assistance or tuition reimbursement for
college courses or the completion of an advanced degree program. Employers offering
education assistance may allow employees to work flexible schedules so they can
balance their education and work obligations. Employees may also be provided tuition
reimbursement for all or part of the expense
Fitness Assistance/Access
For larger employers with ample space, access to an on-site fitness center is a common
fringe benefit to employees. Smaller employers may also offer gym memberships at a
discount or a fitness equipment reimbursement up to a certain limit each year.
Meals and Cafeteria Plans

Meals or discounted cafeteria plans may also be offered to employees as fringe
benefits. Employers recognize that the cost of lunch or dinners when employees work
late can add up quickly and, as such, meals are provided by some employers at no cost
to the employee.
Dependent Assistance
Childcare assistance is another benefit offered through some employers, as working
full-time with children can present scheduling conflicts and prohibitive daycare costs.
Some larger employers offer employees dependent care on-site, either at a discount or
for no cost. Smaller companies may provide a monthly bonus to employees for the
specific purpose of paying for dependent care.
Retirement Plan Contributions

One of the most important fringe benefits an employer can offer is contributions to an
employee’s retirement plan. Some companies offer matches on employee 401(k)
paycheck deferrals, while others make qualified contributions to retirement plans without
requiring employees to make contributions themselves. These plans can be powerful
tools in saving for the long-term and provide compensation to employees above and
beyond their salaries.
Most employers offer some variation of fringe-benefits to employees to make the overall
work environment pleasant to current workers and more attractive to prospective
employees. The combination of any of the nontaxable compensation listed above can
be a valuable bonus to employees and a retention planning tool for employers.
Performance Appraisal
A performance appraisal is a regular review of an employee's job performance and

overall contribution to a company.
Performance Appraisal is the systematic evaluation of the performance of employees

and to understand the abilities of a person for further growth and development.
Performance appraisal is generally done in systematic ways which are as follows:
1. The supervisors measure the pay of employees and compare it with targets and
plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance.
Objectives of Performance Appraisal
Performance Appraisal can be done with following objectives in mind:
1. To maintain records in order to determine compensation packages, wage

structure, salaries raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on
right job.
3. To maintain and assess the potential present in a person for further growth and
development.
4. To provide a feedback to employees regarding their performance and related
status.
5. To provide a feedback to employees regarding their performance and related
status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programmes.
Advantages of Performance Appraisal
It is said that performance appraisal is an investment for the company which can be
justified by following advantages:
1. Promotion: Performance Appraisal helps the supervisors to chalk out the

promotion programmes for efficient employees. In this regards, inefficient
workers can be dismissed or demoted in case.
2. Compensation: Performance Appraisal helps in chalking out compensation
packages for employees. Merit rating is possible through performance appraisal.
Performance Appraisal tries to give worth to a performance. Compensation
packages which includes bonus, high salary rates, extra benefits, allowances and
pre-requisites are dependent on performance appraisal. The criteria should be
merit rather than seniority.
3. Employees Development: The systematic procedure of performance appraisal
helps the supervisors to frame training policies and programmes. It helps to
analyse strengths and weaknesses of employees so that new jobs can be
designed for efficient employees. It also helps in framing future development
programmes.
4. Selection Validation: Performance Appraisal helps the supervisors to
understand the validity and importance of the selection procedure. The
supervisors come to know the validity and thereby the strengths and weaknesses
of selection procedure. Future changes in selection methods can be made in this
regard.
5. Communication: For an organization, effective communication between
employees and employers is very important. Through performance appraisal,
communication can be sought for in the following ways:
a. Through performance appraisal, the employers can understand and
accept skills of subordinates.
b. The subordinates can also understand and create a trust and confidence
in superiors.
c. It also helps in maintaining cordial and congenial labour management

relationship.
d. It develops the spirit of work and boosts the morale of employees.
All the above factors ensure effective communication.
6. Motivation: Performance appraisal serves as a motivation tool. Through

evaluating performance of employees, a person’s efficiency can be determined if
the targets are achieved. This very well motivates a person for better job and
helps him to improve his performance in the future.
Advantages of Performance Appraisal
1. A systematic performance appraisal system helps the managers to properly

identify the performance of employees in a systematic manner and their areas of
talent and areas where they are lacking.
2. It helps the management to place the right employees for the perfect jobs
depending on their skills in particular areas.
3. Performance appraisal helps employees identify the areas in which they need to
improve. The managers can also use this information to provide constructive
criticism of the way employees perform their work.
4. Potential employees are often given promotions on the basis of or the results of
performance appraisals. People who have high ratings get promotions. They can
also transfer or demote employees if they not performing up to the expectations of
the managers.
5. An appraisal is also useful in determining the effectiveness and results of training

programmes. It can show managers how much employees have improved after
taking the training programmes. This will give managers data on how to change
and evolve the training programmes.
6. It creates healthy competition among employees as they will try to improve their
performance and score better than their colleagues.
7. Managers use appraisal programmes to identify the grievances of employees and

act upon them.
8. Keeping extensive records of performance appraisal will give managers will give
managers a very good idea of which employees have the highest growth rate and
are which ones have a declining rate of performance.
Limitations of Performance Appraisal
1. If the factors being used in the performance appraisal are incorrect or not
relevant, the appraisal will fail to provide any useful or effective data.
2. Sometimes, equal weightage is not given to important factors when performing an

appraisal.
3. Some objective factors are very vague and difficult to gauge like attitude and
initiative. There is no scientific method to measure these factors.
4. Managers are sometimes not qualified enough to correctly assess the employees
and their abilities. Thus, these mistakes can be very detrimental to the growth of
the company.
Performance Appraisal Methods: Traditional and Modern Methods!
Companies have been practicing various methods of appraising employee performance,

among which some popular ones are described below.
1. Essay method
2. Comparative evaluation
3. Rating
4. Forced distribution method
5. Forced choice method
6. Graphic rating scale method

7. Field review method
8. Checklist
9. Confidential report
10. Critical incident method
11. Management by objectives (MBO)
12. Behaviorally anchored rating scales (BARS)
13. Cost accounting method
14. 360-degree appraisal
Essay method
It is a traditional and judgmental approach under which employee is evaluated and a
descriptive essay is written on him/her. The essay describes in detail about the
strengths, weaknesses, potential, nature, etc.
Essay method helps in collecting a lot of information about the employees as the
evaluators are not confined to appraise the employees in rigidly defined criteria. The
process is unrestricted and flexible, permitting the employers to emphasize on any
issues or traits that they feel relevant.
However, this method is tedious and difficult to manage as it demands more description
than other methods of appraisal. The reports being descriptive in nature, it is difficult to
compare and contrast them or withdraw any conclusion. Besides, the evaluator must
have good writing skills, or else the whole process is distorted.
Comparative evaluation
Comparative evaluation is a technique of appraising employees by comparing and
contrasting issues and traits of an employee with another. There are basically two ways
to conduct comparative evaluation; they are:
 Paired comparison
Under this method, the pairs of employees of same job post or level are formed,
following which they are evaluated on the basis of performance of each other. Subjects
like skills, experience, team player, behavior, etc. are evaluated by the raters and picks
the best performing employee.
To be precise, the raters are provided with a bunch of slips, each containing a pair of
names of employees. The employee whom raters consider to be the best is given a tick
mark and the process is repeated for all pairs. At the end, the employee who succeeds
to get the most tick is considered to be the best while the employee getting least ticks is
comparatively considered poor.
Paired comparison is a good method for evaluating employee performance. However, it

becomes very difficult for companies with large number of employees to form pairs as
the pairs are formed by applying the formula:
N (N-1) ÷ 2, where N = No. of employees
For an example, if there are four employees, the number of pairs formed will be six.
 Ranking
Ranking is one of the simplest methods of performance appraisal. Under this method,
employees are ranked from the best to the worst according to their performance level.
The best performing employees are ranked #1 and the least performing one is ranked
the last. Based on these rankings, the companies may take any actions, from promotion
to termination.
Although ranking method of performance appraisal is considered to be an easier

approach, it becomes problematic and full of issues when conducted in a large scale.
Also, this method of performance appraisal is criticized because it is unsystematic and
results are often drawn on the basis of snap judgment.
Rating
Rating is a commonly used traditional method of performance appraisal. Under this
approach, an employee is numerically rated from 1 to 10 on various job performance
criterions like attendance, attitude, performance, output, sincerity, dependability,
initiative, etc.The employee may be rated by his/her superiors, colleagues or even
customers, depending upon the nature of job. Scores of all criterions are finally
calculated, and results are withdrawn.
Rating method of performance appraisal is commonly used because it is economic in

nature and raters do not require to have high skills to use it. Also, it is applicable in
almost all types of job and even with large workforce.
Cite this article as: Shraddha Bajracharya, "Performance Appraisal Methods,"

in Businesstopia, January 11, 2018, https://www.businesstopia.net/human-
resource/performance-appraisal-methods.
There is, however, a drawback of this method, i.e. employees might be incorrectly rated
due to rater’s biasedness.
Forced distribution method
Employers or raters are found to have tendency to rate their employees near average or
above average performing categories. In around late 90s, Tiffen introduced a new
method of performance appraisal call forced distribution, in an attempt to eliminate the
flaws of the raters.
Under this method, raters are forced to divide his employees evenly into certain
categories which vary from organization to organization. The categories can be poor,
average, good and excellent or percentile based like 10% poor, 40% fairly good, 40%
good and 10% excellent.

This method is widely applied and has been considered effective in service-driven
companies. However, the method also has some drawbacks. They are:
 It creates false competition between employees.
 All employees might not fit neatly into a category, leading to their placement in
such a category that does not reflect their true image.
 Raters may end up placing more visible employees in superior categories and
less visible ones in poor category, irrespective of their job performance.
Forced choice method
Forced choice method of performance appraisal was introduced by J.P. Guilford. It is
one of the most systematic and reliable approach to evaluate employees accurately.
Under this approach, the HR manager, at first, prepares a set of positive as well as
negative statements. The statements are then forwarded to the rater, following which
the rater indicates which of the given statements suits the employee. Once the rater
finishes evaluating all employees, the report is sent to the HR manager for final
assessment.
Some examples of positive and negative statements are
Positive statements
 Communicates well with superiors.

 Plays active role in meetings and other office events.
Negative statements
 Consistently over-promises and under-delivers.

 Isn’t punctual, often comes late to the office.
Each of such statements, both positive as well as negative, carries certain score set by
the HR manager, which is not even revealed to the rater. It makes the process more
objective. The scores are at last summed up and conclusion is withdrawn. The
employees with high scores are ranked at the top while least scoring employees are
ranked at the bottom.
Some critics have, however, noted that this method is time consuming and it is very
challenging to construct pertinent evaluative statements.
Graphic rating scale method

Graphic rating scale is one of the oldest and commonly used methods of performance
appraisal. Under this approach, the employees are evaluated on the basis of various job
performance criterions, such that each criterion is categorically divided into poor, fairly
poor, fairly good, good and excellent. Also, these criterions carry certain score weight.
The rater ticks the category that best describes the employee and finally the score is
totaled.
Graphic rating scale is an easy and simple method of performance appraisal as it does
not require any writing skills. However, the rater’s capricious mood may result in
ineffective evaluation.

Field review method
Field review method of performance appraisal is conducted by the rater who does not
belong to the employees’ department. The rater is someone from the corporate,
especially from HR department.
Use of this technique to evaluate employees’ performance is helpful in completely
eliminating issues that arise due to rater’s biasedness. However, this method is not
widely used because of the drawbacks. They are
 The rater is not familiar with employees, making it impossible for him to observe
their actual behavior.
 The rater might feel aggrieved in cases when employees try to clarify any matter.
Checklist
Checklist method is another of the easiest methods of appraising employee’s
performance. Under this method, a checklist is prepared by the HR manager and is
forwarded to the rater. The checklist may include list of questions (depicting behavior
and job performance of employee) and the rater has to answer them in just ‘YES’ or
‘NO’ form.
The rater analyzes the question and the employee, and based on his views, he answers
them. Such questions also carry some scores (equal or different), depending upon the
nature or importance, which is totaled at the end of the procedure by the HR manager.
This method is helpful not only in evaluating employee’s job performance but also in
evaluating degree of uniformity of the rater by giving him two similar questions in
different manner. In the given figure, question no. 3 and 6 are differently asked same
questions
Confidential report
Confidential report is the method of evaluating employee’s performance and taking
necessary actions without giving any feedbacks to the employees. Confidential report
should only be viewed by authorized personnel. Therefore, it is not send openly but in
sealed envelope. Generally, such method of performance appraisal is conducted yearly
and employees are appraised on the following traits:
 Attendance
 Team work
 Dependability
 Leadership
 Behavior with superior, colleagues and junior workers
 Discipline
 Integrity and honesty
 Quality and quantity of output, etc.
Confidential report usually highlights the strengths and weaknesses of the employees.
Despite the fact, it is used only in government organizations and not in other forms of
organization as it does not provide any feedback to the employees. Employees are
deprived of information such as how is he evaluated, why his ratings have fallen, why
he is underrated, what mistakes are to rectify, how to improve his performance, etc.
Employees have to directly face the consequence (either positive or negative) of the
appraisal.
Critical incident method

Generally, all employees perform alike during normal situations but there are very few
who can maintain their performance during unfavorable time as well. Critical incident
method is used to evaluate the ability of employees to work during such situation.
Under this method, the rater keeps record of effective as well as ineffective behaviors of
individual employee at the workplace.Such appraisal is conducted periodically. And at
the end of every assessment, the HR manager or some experts evaluate the behavior
and score them, depending upon which the best scoring employees and poor scoring
employees are identified.
An example of effective behavior: A customer angrily stormed into the shop,

complaining that the product he ordered was damaged. The sales executive patiently
listened to the complaint and promptly replaced it, apologizing for the customer’s
inconvenience.
An example of ineffective behavior: The sales clerk went on a leave during the festive
season, during which 80% of the sales happened. He provided no logical reason for the
leave and stopped responding to the phone calls.
Maintaining logs of employee’s critical incident behavior helps in preparing checklist too.
The group of experts evaluates the behaviors of employees collectively and they
prepare checklist, whenever necessary.Critical incident method evaluates job
performance of an employee, rather than his personality. However, this method has
some drawbacks. They are:
 Ineffective behavior or negative response of employees is easily noticed than

positive ones
 It is time consuming
 It requires very close supervision which is disliked by the employees
 Recording detailed information about every employee is problematic
 Raters may forget to mention any important incidents
Management by objectives (MBO)

Management by objectives (MBO) is a modern and systematic method of appraising
employee’s performance which was jointly founded by some experts of management
science like Drucker, McGregor and Odiorne.
Managers of present generation are aware of the fact that results of traditional methods
of performance appraisal were majorly based on the perspective or opinion of the
raters. They have realized that it is essential to know what achievement from an
employee’s point of view is.
MBO is employer-employee driven approach of performance appraisal which involves

superior and subordinates in setting goals. The employees work upon achieving their
set goals and employers keep a record of how close they are to accomplishment of the
goals. This way, employees become clear about which path to walk on to get the goals,
subsequently increasing and improving his performance level.
MBO, at this point, does not only work as a tool for evaluating performance but also as
a motivation factor which allows the company to extract maximum output from available
human resource, permitting employees adequate space for self-development and
growth.
Behaviorally anchored rating scales (BARS)

Behaviorally anchored rating scales (BARS) is the combination of critical incident and
rating scale methods of performance appraisal. Under this method, the scale points are
defined by critical (effective or ineffective) behaviors of the employee.
BARS usually consists of scale ranging from 5 to 9 points, each representing continuum
of statements that describes behavior of employees ranging from unacceptable to most
effective.
A BARS can be developed in following steps.
1. Collecting samples of effective and ineffective job behavior from the experts by
analyzing the critical incident method
2. Converting these samples into performance dimension
3. Relocating the performance dimension (from unacceptable to outstanding)
4. Rating the performance dimension accordingly, starting from 1
5. Finally, using the scale anchor to evaluate employee’s performance
Cost accounting method

Cost accounting method of performance appraisal is the process of evaluating monetary
benefits yield to the organization from the job performance of an employee. In other
words, this method is used to analyze the cost of keeping the employee and the
benefits the company derives from his/her presence and / or absence.
There are some major points which are considered while evaluating employee under
this approach. They are:
 Average value of unit cost of production of goods and services

 Quality of the goods and services produced
 Overhead cost incurred (lighting, electricity, equipment, etc.)
 Extra-expenses (accident, error, damage, wear and tear of tools and equipment)
 Relationship with customers and clients
 Cost of the time spent by the supervisor in appraising the employee
360-degree appraisal
360-degree appraisal is a modern technique to evaluate employee’s performance which
was developed in the early 90s in the U.S.A.
Under this method, an employee’s job performance is appraised by the help of the
factors that are present around him at the workplace. Such factors may be superiors,
colleagues, subordinates and even clients, customer or spouse.
An evaluator asks various questions to these factors and collects their feedback. The
gathered information is then assembled through computerized system and individual
reports are prepared. Such reports are finally distributed to the employees, following
which they can communicate with their appraiser in regards with their opinion about how
to improve his performance.
360-degree method is considered to be the most effective way of appraising employee’s

performance as information and feedback is collected from all around.
UNIT-3
Human Resource Development

Human Resource Development is primarily concerned with developing the skill,
knowledge and competencies of people.
Human Resource Development is the part of human resource management that

specifically deals with training and development of the employees in the organization.
Human resource development includes training a person after he or she is first hired,
providing opportunities to learn new skills, distributing resources that are beneficial for
the employee's tasks, and any other developmental activities.
Human Resource Development (HRD) is the framework for helping employees develop
their personal and organizational skills, knowledge, and abilities. Human Resource
Development includes such opportunities as employee training, employee career
development, performance management and development,
coaching, mentoring, succession planning, key employee identification, tuition
assistance, and organization development.
The focus of all aspects of Human Resource Development is on developing the most
superior workforce so that the organization and individual employees can accomplish
their work goals in service to customers.
Human Resource Development can be formal such as in classroom training, a college

course, or an organizational planned change effort. Or, Human Resource Development
can be informal as in employee coaching by a manager. Healthy organizations believe
in Human Resource Development and cover all of these bases.
Features of Human Resource development
The essential features of human resource development can be listed as follows:
 Human resource development is a process in which employees of the

organisations are recognized as its human resource. It believes that human
resource is most valuable asset of the organisation.
 It stresses on development of human resources of the organisation. It helps the

employees of the organisation to develop their general capabilities in relation to
their present jobs and expected future role.
 It emphasise on the development and best utilization of the capabilities of

individuals in the interest of the employees and organisation.
 It helps is establishing/developing better inter-personal relations. It stresses on

developing relationship based on help, trust and confidence.
 It promotes team spirit among employees.
 It tries to develop competencies at the organisation level. It stresses on providing

healthy climate for development in the organisation.
 HRD is a system. It has several sub-systems. All these sub-systems are inter-
related and interwoven. It stresses on collaboration among all the sub-systems.
 It aims to develop an organisational culture in which there is good senior-

subordinate relations, motivation, quality and sense of belonging.
 It tries to develop competence at individual, inter-personal, group and

organisational level to meet organisational goal.
 It is an inter-disciplinary concept. It is based on the concepts, ideas and

principles of sociology, psychology, economics etc.
 It form on employee welfare and quality of work life. It tries to examine/identify

employee needs and meeting them to the best possible extent.
 It is a continuous and systematic learning process. Development is a life long

process, which never ends.
Goals of the HRD systems are to develop:
1. The capabilities of each employee as an individual.

2. The capabilities of each individual in relation to his or her present role.
3. The capabilities of each employee in relation to his or her expected future role(s).
4. The dyadic relationship between each employee and his or her supervisor.
5. The team spirit and functioning in every organisational unit (department, group,
etc.).
6. Collaboration among different units of the organisation.
7. The organisation’s overall health and self-renewing capabilities which, in turn,
increase the enabling capabilities of individuals, dyads, teams, and the entire
organisation
Training: Meaning, Definition and Types of Training

Training constitutes a basic concept in human resource development. It is concerned
with developing a particular skill to a desired standard by instruction and practice.
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 refers to the teaching and learning activities carried on for the primary purpose
of helping members of an organization acquire and apply the knowledge, skills, abilities,
and attitudes needed by a particular job and organization.
Need for Training:

Every organization should provide training to all the employees irrespective of their
qualifications and skills.
1.Environmental changes:
Mechanization, computerization, and automation have resulted in many changes that

require trained staff possessing enough skills. The organization should train the
employees to enrich them with the latest technology and knowledge.
2. Organizational complexity:
With modern inventions, technological upgradation, and diversification most of the
organizations have become very complex. This has aggravated the problems of
coordination. So, in order to cope up with the complexities, training has become
mandatory.
3. Human relations:
Every management has to maintain very good human relations, and this has made
training as one of the basic conditions to deal with human problems.
4. To match employee specifications with the job requirements and organizational

needs:
An employee’s specification may not exactly suit to the requirements of the job and the
organization, irrespective of past experience and skills. There is always a gap between
an employee’s present specifications and the organization’s requirements. For filling this
gap training is required.
5. Change in the job assignment:

Training is also necessary when the existing employee is promoted to the higher level
or transferred to another department. Training is also required to equip the old
employees with new techniques and technologies.
Types of Training:
Various types of training can be given to the employees such as induction training,
refresher training, on the job training, vestibule training, and training for promotions.
1. Quality Training
2. Skills Training
3. Professional Training and Legal Training
4. Technical or Technology Training
5. Soft Skills Training
6. Safety Training
7. Managerial Training
8. Team Training:
Some of the commonly used training programs are listed below:

1. Induction training:
Also known as orientation training given for the new recruits in order to make them
familiarize with the internal environment of an organization. It helps the employees to
understand the procedures, code of conduct, policies existing in that organization.
2. Job instruction training:

This training provides an overview about the job and experienced trainers demonstrates
the entire job. Addition training is offered to employees after evaluating their
performance if necessary.
3. Vestibule training:
It is the training on actual work to be done by an employee but conducted away from the
work place.
4. Refresher training:
This type of training is offered in order to incorporate the latest development in a
particular field. This training is imparted to upgrade the skills of employees. This training
can also be used for promoting an employee.
5. Apprenticeship training:
Apprentice is a worker who spends a prescribed period of time under a
Training Process
The 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.
1. Needs assessment: The first step in the training process is to assess the need
for training the employees. The need for training could be identified through a diagnosis
of present and future challenges and through a gap between the employee’s actual
performance and the standard performance.
The needs assessment can be studied from two perspectives: Individual and group. The
individual training is designed to enhance the individual’s efficiency when not performing
adequately. And whereas the group training is intended to inculcate the new changes in
the employees due to a change in the organization’s strategy.
2. Deriving Instructional Objectives: Once the needs are identified, the objectives

for which the training is to be conducted are established. The objectives could be based
on the gaps seen in the training programmes conducted earlier and the skill sets
developed by the employees.
3. Designing Training Programme: The next step is to design the training
programme in line with the set objectives. Every training programme encompasses
certain issues such as: Who are the trainees? Who are the trainers? What methods are
to be used for the training? What will be the level of training? etc.Also, the
comprehensive action plan is designed that includes the training content, material,
learning theories, instructional design, and the other training requisites.
4. Implementation of the Training Programme: Once the designing of the
training programme is completed, the next step is to put it into the action. The foremost
decision that needs to be made is where the training will be conducted either in-house
or outside the organization.
Once it is decided, the time for the training is set along with the trainer who will be
conducting the training session. Also, the trainees are monitored continuously
throughout the training programme to see if it’s effective and is able to retain the
employee’s interest.
5. Evaluation of the Training Programme: After the training is done, the

employees are asked to give their feedback on the training session and whether they
felt useful or not. Through feedback, an organization can determine the weak spots if
any, and can rectify it in the next session.The evaluation of the training programme is a
must because companies invest huge amounts in these sessions and must know it’s
effectiveness in terms of money.
Thus, every firm follows the series of steps to design an effective training programme
that serves the purpose for which it was intended.
Training Needs Analysis
Training Needs Analysis (TNA) is the process in which the company identifies training
and development needs of its employees so that they can do their job effectively. It
involves a complete analysis of training needs required at various levels of the
organisation.
Technology is changing at a very fast pace and so are the training and development
needs of employees. It helps in grooming employees for the next level. It helps the
manager to identify key development areas of his/her employees. With proper training
and development, the productivity increases manifold.
Various companies have in-house experts who can train employees on various aspects
of the business. Normally, a calendar is worked out in advance in which various
sessions are listed out and which employees can pick their business requirement to
enhance personal development needs.
1. Decide On Skill Sets

The first stage is to decide on the skill sets that you require all your team
members to have in order to do their jobs properly. This means looking at
every job role within your business separately and considering things like the
different departments or levels of seniority which will affect this as well.
2. Evaluate The Skills Of Staff

The second stage is to look at all your team members and evaluate their
current skill levels in relation to the skills you have laid out in the first stage of
this process. This will allow you to see who is meeting your expectations, and
who needs to complete further training in order to meet the expected skill
level.
3. Highlight The Skills Gap

Now that you know where you want your team to be and the level they are
currently at, you will easily be able to see the gap (if any) that has appeared
between the two. Now you know what the gap is, you need to use training to
help close that gap and ensure your team is at the level you expect them to
be.
Benefits For Your Business

1. Identify Knowledge Gaps Before They Become A Problem
One huge benefit of conducting training needs analysis is the fact it can help you
identify any knowledge gaps your employees may have before it becomes an
issue. It’s better to highlight a potential problem and tackle it head-on, rather than
becoming aware of the skills gap when an issue arises because of it.
The training needs analysis will allow you to take a proactive approach rather than
waiting for something to go wrong before you realise there is a problem.
2. Helps You To Plan Your Training For The Year
Another huge benefit of training needs analysis is that it makes it much easier for you to
plan your training for the upcoming year (or whatever block of time you work with). Once
you have identified the skills gaps that exist in your business, and then all the staff
members who need additional training in certain areas, it’s easy to pull together a
training plan which will cover all these skills gaps.
Rather than trying to guess the type of training that will be most useful to your
organisation, or who needs to complete the training, your training needs analysis will
make the whole task much easier, and you can be confident that the training you have
selected will make a direct impact on your business!
3. Highlights Training You May Not Have Considered
It can be hard to sit down and plan out a training schedule for a large organisation
without completing some sort of background research first. You may think that you know
the type of training your team should be completing, but training needs analysis could
actually highlight a whole load of areas that your team needs training on that you never
even considered before.
That’s why training needs analysis is so useful because it can highlight training needs
you may not have considered before and show that you need to start offering training in
different areas to ensure your staff are performing at their best.
Without the use of training needs analysis, you may never have considered a particular
area of training, which could have severely hindered your business.
4. Ensures Your Training Is Focussing On The Right Areas
As we said above, it’s important to have concrete reasons for adding training to your
training schedule, as you can’t just assume what is and isn’t important for your team to
learn. Completing a training needs analysis will allow you to see exactly what you need
to focus on, but it will also highlight the areas your team really don’t need any further
training on for the moment.
If there are no apparent gaps in knowledge in a particular area, then running further
training on it could be a waste of time and money!
5. Helps To Decide Who Should Attend Which Training Sessions
Another important step in planning training is to ensure the right people are in the right
training sessions. There is no point in making everyone in your organisation attend
every training session you run. It’s a massive waste of time and money for your
business, and staff won’t be engaged with training sessions if they are frequently
attending training which is of no use to them.
A training needs analysis will enable you to target the correct people for each training
session, ensuring everyone is following a personalised training plan, so they get the
most benefit possible.
6. Helps You To Prioritise Training Needs
When it comes to planning out your training, it can be hard to decide which training
sessions are the most important. However, training needs analysis can help you
pinpoint the training which needs to be completed ASAP, and which training can be left
till later down the line.
When you think about the skills that each team member needs to have, you may want
to prioritise these regarding how key they are. For example, if you have a customer-
facing team, ensuring they have top-notch customer relations skills may be top of the
list.
Training Methods and Techniques
Training methods pertain to the types of training that can be provided to employees to
sharpen their existing skills and learn new skills. The skills that they learn can be
technical or soft skills and for all categories of skills, some training methods are
suggested here.
In a firm or an organization, employers provide different training methods for employees

in order to improve their functioning in the workplace.
For a person who is a training manager, it is their responsibility to see that the
employees in the workplace have the necessary skills and knowledge to work so
that there can be an increase in productivity.
Knowing that the employee is the most valuable asset they should be trained well
enough as eventually, it will be benefiting the organization as a whole. So, there are few
training methods for employees, some of them are:
On the job training:
In this type of method, a new or less experienced employee is given some kind of
instructions or advice from a more experienced employee who may be a supervisor or
some kind of a special instructor.
The success of how much the person can learn depends on, how the experienced
employee teaches them.
Most of the training includes certain crafts, any technical areas or trades etc. And for
guidance as well as support some skilled or semi-skilled workers are kept to observe
and help them.
A) Advantages:
1. The job is learnt by the workers in actual conditions and in a physical environment
other than learning the job in artificial conditions. This helps the employees to bring
motivation within them and learn their job well.
2. This type of training is not very expensive in comparison to other training and it
consumes less amount of time in learning.
3. This type of training program is under certain supervision of the supervisors to really
see whether or not everything is happening in a proper way as they are keenly
interested in the training program.
4. Any kind of production isn’t affected or isn’t suffered when such a training method is
adopted.
5. The person or the trainee learns the maximum amount of rules and regulations when
they are learning about the job.
6. This takes less amount of time when it comes to learning a special skill as a person
can acquire a certain skill even in a short period of time.
B) Limitations:
1. This kind of training is mainly disorganized in a big way and things are at times done
in a very haphazard way.
2. At times the person supervising the training may not be ready to willingly give their
time and this may lead to training not taking place in the appropriate way it needs to be
carried out in.
3. Sometimes certainly experienced trainers may not be available at all times.
4. At times when things are not happening in the appropriate way, it leads to the trainee
getting a lack of motivation when they are receiving the training.
II. Off the job training:
This type of method involves a trainee leaving their work for the time being and they
need to give or devote their entire work time for getting the necessary training required.
At this time the person does not contribute to any of the production activities that the
company does in that time. This kind of training is mainly provided or arranged by the
company itself or they may use special institutes for this purpose who provide this kind
of training.
Large companies make it a point to provide such training to their employees and have
different departments or institutes in the workplace in comparison to smaller companies
who do not provide such training. The different kind of methods under this training are
as follows:
1. Lectures or Class Room Method:
In this method, the different aspects of the ongoing program are explained by a single
individual to the others. This is convenient enough as the facts and details as well as a
special type of information is provided to the people by means of a lecture.
To make the lecture more interesting and understanding, audio as well as video is
added to it to make it more appealing to the people present and a large number of
people are trained at a time to provide more advantages.
2. The Conference Method:
For conveying this type of training, a conference also known as a meeting is carried out
where a certain plan is spoken about to the people and they get their training and
knowledge through it.
It explains all the necessary facts as well as important principles and concepts needed
to be known. Then, later on, all the knowledge is known and shared by all the trainees
present, so that a solution is found out soon as different views help in finding the
solution soon.
3. Team Discussion or seminar:
In a seminar-type method, the trainees present are made to write papers regarding the
topics focused on. After that, the papers are read at a time and a discussion takes place
where all the people or trainees present, participate in it.
Later on after all the views are discussed then the chairman present will take all the
views together and make a decision.
At times the material regarding the topic to be discussed may already be provided to the
trainees along with the necessary information so that they are ready in advance before
the actual discussion takes place.
4. Programmed instructions:
This type of method involves providing the necessary knowledge to the trainees in the
form of a printed textbook or with printed notes or some kind of teaching machine.
The process of breaking down all the information into different categories making it
meaningful and proper arrangement of it is done. At times asking or presenting certain
questions or problems are given to the trainee and certain feedback is got back by the
trainer, in that way the person responds back to them.
III. Apprenticeship Training:
This method is mainly used in industries and can go on for a long time at times for a
duration of about 4-5 years.
After the training is over the worker obtains all the necessary information and then
carries on their work. Knowledge both in the form of practical knowledge while they do
their job and theoretical knowledge from the lectures is obtained by them.
It is one of the oldest and most traditional methods when it comes to training the
people of the organization.
A) Advantages:
1. Stipend which is also known as a fixed amount of salary is received by the trainees to
some extent during this training.
2. Trainees acquire valuable skills which is highly regarded and valuable and
demanding in the market.
3. When talking about the employer, it is a way of obtaining cheap labor with a needed
skilled workforce still being maintained.
4. This method helps in reducing the cost of labor and production cost.
5. There is ensured loyalty of the employees of the company.
B) Limitations:
1. The length or the period of the training is very long and at all times the trainees need
regular supervision which can be difficult as the company is at a large scale.
2. This method is unsatisfactory if the standards are rigid.
3. At times if the person or the worker getting this training fails to learn it completely
after a long duration, then they may not be considered for working in the company
which may lead to labor problems.
4. This method is very expensive in nature.
IV. Vestibule or Training Center Training:
A vestibule is a place or passage or also a room situated between the outside door and
inside of the building. So under vestibule type training, the trainers train the workers on
certain special machines in a different location like classrooms and this is known as
a ‘vestibule school’ which the Personnel Department of the firm runs.
The training is provided in certain conditions which are artificial but make it like real
conditions and the remaining theoretical training is given in the classroom.
A) Advantages:
1. The person who is training the trainees is a special person and has certain
specialization in training to be provided.
2. As the training which is provided isn’t present when the actual job takes place, the
trainees mainly can focus on learning the job.
3. As the instructor or the trainer has no work assigned to them, they can provide
certain attention individually to the trainees.
4. The job is learned by the employee in a short time.
B) Limitations:
1. As the training is provided in an artificial work environment the worker may not adjust
to certain machines when they are actually doing the job in reality.
2. It is expensive in nature as the same duplicate equipment is needed and small firms
cannot afford to provide such training to their employees.
3. If the demand for workers in the firm isn’t continuous then at times the vestibule can
stay unused for a lengthy amount of time.
4. If the responsibilities are split then there can be further problems in the organization.
V. Training Via Internship:
There is a lot of advantage of getting trained in internship. Internship practically is like

working but not for full-term purpose and salary basically is low and they are called
stipend. So training will actually inculcate the skill of time management and will balance
between the theory part of the studies and also the practical part of the subject.
The drawbacks behind this idea is that it can only be used for skilled and works more of
practically oriented goal instead of just sitting and studying. The time usually depends
on the people. Some want to keep the contract for 6 months or some want to keep it for
2 months only. Therefore, the timing also is not frigid, they are flexible.
VI. Beginners 1st Level Training:
Such training is given to the individuals who don’t have an advanced level of knowledge
about the work. This system actually helps in training such individuals who are not done
a full formal study needed for a position. Such training helps in at least giving job
security instead of no work at hand.
The individuals are trained and then after successfully completing the period the
employer or the agents will fix them with job which is secured. Workshops, Seminars,
guest lectures are conducted for them so that they can acquire adequate knowledge.
VII. Training Institute:
The training institutes are actually built to give vocational training and etc so that they
can shape up the personality of the one.
Basically, when an employer hires individual he thinks that it is necessary to send such
individual to such training institutes.
The training institutes generally provide soft skills, personality development, IQ level
classes, etc so that the person may not only increase by knowledge but also
emotionally and mentally strong. There are many institutes all over the world who give
such training to the employees.
VIII. Role-Playing:
This is one of the best and effective way for training employees. It is a form in which a
realistic role will be played by a particular person in an imaginary situation.
Here the person gets into the skin of the role and portrays it creating a realistic
environment. The main advantage of this role-playing method is to help develop
interpersonal relations and attitudinal improvisations.
IX. Simulation:
This is another form of training in which the equipment or things needed will be
duplicated to create a realistic environment.
One of the best examples is pilot training, where the trainees will be given an aircraft
like an environment so that they get the feel of flying a real aircraft.
This method helps in developing a better decision-making process for the trainees.
Though this type of training method is expensive but ensures to provide a better
understanding of how to perform the tasks and duties efficiently.
Designing a Training Program
Designing a training programme is very important part of human resource management
1) Identification of training needs: the main cause of identification of training

needs is the technological changes that are taking place. For example computers are
now days are used in all the offices which require training the employees. Except
technological changes poor performance of workers which result in low production
requires systematic training. Training needs can be identified through following types of
analysis.
a) Organizational analysis: it is the systematic study of organization al objectives,

resources, its utilization, growth potential and climate. It involves following elements:
i) Analysis of objectives: all the objectives of the organization whether long-term or

short-term should be analyzed properly. It is the responsibility of the management to
check which kind of training programme is required to achieve these objectives.
ii) Climate analysis: organizational climate shows the attitude of organizational

members. It helps in checking whether the environment in different departments is
conducive or not and where there is the need of training programme to improve the
climate of the organization.
iii) Resource utilization analysis: it should be checked that whether the physical and
human resources have been utilized properly or not otherwise there is the need of
training to utilize them properly.
b) Task analysis: it is analyzing the job systematically. To identify the job contents,
knowledge, skill, aptitude required to perform the job. In task analysis focus is on the
job. It basically studies the various types of skills and training required to perform the
job.
c)Manpower analysis: the quality or type of manpower the firm required should be

checked properly. To achieve the proper quality standards specific training needs
should be determined on the basis of capability of present workers to learn the new
skills.
2) Setting the training objectives: after identification of training needs the next step is
setting the training objectives. The aim of any training programme is to increase the
organizational effectiveness. As each training programme must have specific objective
like increase productivity, improved quality, higher the morale of employees, growth of
employees, better human resource planning etc.
3) Organization of training programme: as every training programme include the

trainees, trainers, training period, training material so all these should be organized
properly.
i) Selection of the trainees: it is the first step of organization of training programme.

The trainee should be selected properly. They should be trained for the kind of the job
they like. Careful selection of the trainees helps in effectiveness of training programme.
ii) Preparation of instructor: instructor I the important person in the training

programme. Qualified instructor may be obtained from inside the organization or from
the outside. He must have all the qualities of good trainer because he has to give
training to other people.
iii) Determination of training period: the time duration of training depends upon the
type of skill required. For the training of clerk training of a week is enough while for any
other position it may require more or less training time.
iv) Training methods: the on the job training and off the job training has been already
discussed. So the choice of training methods depends upon the objective of the training
programme.
4) Evaluation of training: at the end it is very important to evaluate the effectiveness of

training programme. As how much the employees have learnt from the training
programme. It will help in modifying the future training programme.
Training Delievery Methodology
Many methods of training are available- each has certain advantages and
disadvantages. Here we list the different methods of training...you can comment on the
pros and cons and make the examples concrete by imagining how they could be
applied in training truck drivers.
1. Technology-Based Learning
Common methods of learning via technology include:
 Basic PC-based programs

 Interactive multimedia - using a PC-based CD-ROM
 Interactive video - using a computer in conjunction with a VCR
 Web-based training programs
The forms of training with technology are almost unlimited. A trainer also gets more of
the learner''s involvement than in any other environment and trainees have the benefit
of learning at their own pace.
Example: In the trucking industry one can imagine interactive multimedia training on
tractor-trailers followed by a proficiency test to see how well the employee knows the
truck.
2. Simulators
Simulators are used to imitate real work experiences.
Most simulators are very expensive but for certain jobs, like learning to fly a 747, they
are indispensable. Astronauts also train extensively using simulators to imitate the
challenges and micro-gravity experienced on a space mission. The military also uses
video games (similar to the "shoot-em-up" ones your 14-year old plays) to train soldiers.
Example: Truck drivers could use simulators to practice responding to dangerous

driving situations.
3. On-The-Job Training
Jumping right into work from day one can sometimes be the most effective type of
training.
Here are a few examples of on-the-job training:
 Read the manual - a rather boring, but thorough way of gaining knowledge of
about a task.
 A combination of observation, explanation and practice.
 Trainers go through the job description to explain duties and answer questions.
 Use the intranet so trainees can post questions concerning their jobs and experts
within the company can answer them.
On-the-job training gives employees motivation to start the job. Some reports indicate
that people learn more efficiently if they learn hands-on, rather than listening to an
instructor. However, this method might not be for everyone, as it could be very stressful.
Example: New trucking employees could ride with experienced drivers. They could ask
questions about truck weigh stations, proper highway speeds, picking up hitchhikers, or
any other issues that may arise.
4. Coaching/Mentoring
Coaching/mentoring gives employees a chance to receive training one-on-one from an
experienced professional. This usually takes place after another more formal process
has taken place to expand on what trainees have already learned.
Here are three examples of coaching/mentoring:
 Hire professional coaches for managers (see our HR.com article

on Understanding Executive Coaching)
 Set up a formal mentoring program between senior and junior managers
 Implement less formal coaching/mentoring to encourage the more experienced

employees to coach the less experienced.
Coaching/mentoring gives trainees the chance to ask questions and receive thorough
and honest answers - something they might not receive in a classroom with a group of
people.
Example: Again, truck drivers could gain valuable knowledge from more experienced
drivers using this method.
5. Lectures
Lectures usually take place in a classroom-format.
It seems the only advantage to a lecture is the ability to get a huge amount of
information to a lot of people in a short amount of time. It has been said to be the least
effective of all training methods. In many cases, lectures contain no form of interaction
from the trainer to the trainee and can be quite boring. Studies show that people only
retain 20 percent of what they are taught in a lecture.
Example: Truck drivers could receive lectures on issues such as company policies and
safety.
6. Group Discussions & Tutorials

These most likely take place in a classroom where a group of people discuss issues.
For example, if an unfamiliar program is to be implemented, a group discussion on the

new program would allow employees to ask questions and provide ideas on how the
program would work best.
A better form of training than lectures, it allows all trainees to discuss issues concerning
the new program. It also enables every attendee to voice different ideas and bounce
them off one another.
Example: Truck drivers could have group discussions and tutorials on safety issues
they face on the road. This is a good way to gain feedback and suggestions from other
drivers.
7. Role Playing
Role playing allows employees to act out issues that could occur in the workplace. Key
skills often touched upon are negotiating and teamwork.
A role play could take place between two people simulating an issue that could arise in
the workplace. This could occur with a group of people split into pairs, or whereby two
people role play in front of the classroom.
Role playing can be effective in connecting theory and practice, but may not be popular
with people who don´t feel comfortable performing in front of a group of people.
Example: Truck drivers could role play an issue such as a large line-up of trucks is
found at the weighing station and one driver tells another that he might as well go ahead
and skip the whole thing. Or role play a driver who gets pulled over by a police officer
and doesn´t agree with the speeding charge.
8. Management Games
Management games simulate real-life issues faced in the workplace. They attract all
types of trainees including active, practical and reflective employees.
Some examples of management games could include:
 Computer simulations of business situations that managers ´play´.

 Board games that simulate a business situation.
 Games surrounding thought and creativity - to help managers find creative ways
to solve problems in the workplace, or to implement innovative ideas.
Example: In a trucking business, managers could create games that teach truckers the
impact of late deliveries, poor customer service or unsafe driving.
9. Outdoor Training
A nice break from regular classroom or computer-based training, the usual purpose of
outdoor training is to develop teamwork skills.
Some examples include:

 Wilderness or adventure training - participants live outdoors and engage in

activities like whitewater rafting, sailing, and mountain climbing.
 Low-impact programming - equipment can include simple props or a permanently
installed "low ropes" course.
 High-impact programming - Could include navigating a 40-foot "high ropes"
course, rock climbing, or rappelling.
Outgoing and active participants may get the most out of this form of training. One risk
trainers might encounter is distraction, or people who don´t like outdoor activities.
Example: As truck drivers are often on the road alone, they could participate in a
nature-training course along with depot personnel to build esprit de corps.
10. Films & Videos

Films and videos can be used on their own or in conjunction with other training
methods.
To be truly effective, training films and videos should be geared towards a specific
objective. Only if they are produced effectively, will they keep the trainees attention.
They are also effective in stimulating discussion on specific issues after the film or video
is finished.
Films and videos are good training tools, but have some of the same disadvantages as
a lecture - i.e., no interaction from the trainees.
A few risks to think about - showing a film or video from an outside source may not
touch on issues directly affecting a specific company. Trainees may find the information
very interesting but irrelevant to their position in the company.
Some trainers like to show videos as a break from another training method, i.e. as a
break from a lecture instead of a coffee break.
This is not a good idea for two reasons. One: after a long lecture, trainees will usually
want a break from any training material, so a training film wouldn´t be too popular. Two:
using films and videos solely for the purpose of a break could get expensive.
Example: Videos for truckers could show the proper way to interact with customers or
illustrate preventive maintenance techniques.
11. Case Studies

Case studies provide trainees with a chance to analyze and discuss real workplace
issues. They develop analytical and problem-solving skills, and provide practical
illustrations of principle or theory. They can also build a strong sense of teamwork as
teams struggle together to make sense of a case.
All types of issues could be covered - i.e. how to handle a new product launch.
Example: Truck drivers could use case studies to learn what issues have been faced in
the trucking industry in the past and what they could do if a similar situation were to
occur.
12. Planned Reading

Basically planned reading is pre-stage preparation to more formal methods of training.
Some trainees need to grasp specific issues before heading into the classroom or the
team-building session.
Planned reading will provide employees with a better idea of what the issues are, giving
them a chance to think of any questions beforehand.
Example: Here we may be stretching if we think that truckers are going to read through
a lot of material the training department sends them.
Capacity Building
Capacity building has been traditionally used to mean the act of expanding the
organization or changing its direction. These activities might be at the organizational
level, the level of managers and at the individual level.
Capacity building (or capacity development) is the process by which individuals and

organizations obtain, improve, and retain the skills, knowledge, tools, equipment and
other resources needed to do their jobs competently or to a greater capacity (larger
scale, larger audience, larger impact, etc).
Community capacity building is a conceptual approach to social, behavioral change and

leads to infrastructure development. It simultaneously focuses on understanding the
obstacles that inhibit people, governments, international organizations and non-
governmental organizations (NGOs) from realizing their development goals and
enhancing the abilities that will allow them to achieve measurable and sustainable
results.
Community capacity building often refers to strengthening the skills, competencies and
abilities of people and communities in small businesses and local grassroots
movements so they can achieve their goals and potentially overcome the causes of
their exclusion and suffering. Organizational capacity building is used by NGOs &
Governments to guide their internal development and activities.
Capacity Building: An organizational goal that HR facilitates. Capacity

building has been traditionally used to mean the act of expanding the
organization or changing its direction. ... Capacity building has been
traditionally used to mean the act of expanding the organization or
changing its direction.
Capacity building has been traditionally used to mean the

act of expanding the organization or changing its direction.
These activities might be at the organizational level, the

level of managers and at the individual level.
Capacity building is whatever is needed to bring a nonprofit

to the next level of operational, programmatic, financial, or
organizational maturity, so it may more effectively and
efficiently advance its mission into the future. Capacity
building is not a one-time effort to improve short-term
effectiveness, but a continuous improvement strategy
toward the creation of a sustainable and effective
organization.
Capacity building is not just about the capacity of a

nonprofit today -- it's about the nonprofit’s ability to deliver
its mission effectively now, and in the future. Capacity
building is an investment in the effectiveness and future
sustainability of a nonprofit.
Distinct capacity building projects, such as identifying a

communications strategy, improving volunteer recruitment,
ensuring thoughtful leadership succession, updating a
nonprofit’s technology, and improving how it measures its
outcomes, all build the capacity of a charitable nonprofit to
effectively deliver its mission. When capacity building is
successful, it strengthens a nonprofit’s ability to fulfill its mission
over time, thereby enhancing the nonprofit’s ability to have a
positive impact on lives and communities.
Why is capacity building important?

While frequently invisible, and often overlooked, capacity
building is the all-important “infrastructure” that supports
and shapes charitable nonprofits into forces for good.

Capacity building enables nonprofit organizations and their
leaders to develop competencies and skills that can make
them more effective and sustainable, thus increasing the
potential for charitable nonprofits to enrich lives and solve
society’s most intractable problems.
PRACTICE POINTERS
 There are many sources for capacity building assistance.
Consultants are just one avenue. Web-based education, in-person
training, peer-to-peer cohorts, communities of practice, and even
pro bono skilled volunteers can offer your nonprofit and its
board/staff excellent opportunities to build the capacity of the
organization.
 Because the core focus of state associations of nonprofits is

helping to build the capacity of other charitable nonprofits in the
state, joining your state association of nonprofits is one of the
most effective ways to learn about the spectrum of capacity
building opportunities available locally. State Associations often
offer workshops and training opportunities for board and staff,
whether in-person or via the internet, as well as the ability for
nonprofit leaders to learn peer-to-peer, collaborate, and stay up-
to-date with recommended practices and new trends.
 Conducting an organizational self-assessment is one way to

learn which core capacity areas may require more attention.
Career Planning: Definition, Features, Objectives and

Benefits
Career planning is a process of systematically matching career goals and individual
capabilities with opportunities for their fulfillment’.
Career planning encourages individuals to explore and gather information, which

enables them to synthesize, gain competencies, make decisions, set goals and take
action. It is a crucial phase of human resource development that helps the employees in
making strategy for work-life balance.
Features of Career Planning and Career Development:

1. It is an ongoing process.
2. It helps individuals develop skills required to fulfill different career roles.
3. It strengthens work-related activities in the organization.
4. It defines life, career, abilities, and interests of the employees.
5. It can also give professional directions, as they relate to career goals.
Objectives of Career Planning:

The major objectives of career planning are as follows:
1. To identify positive characteristics of the employees.
2. To develop awareness about each employee’s uniqueness.
3. To respect feelings of other employees.
.4.To attract talented employees to the organization.
5. To train employees towards team-building skills.
6. To create healthy ways of dealing with conflicts, emotions, and stress.
Benefits of Career Planning:

1. Career planning ensures a constant supply of promotable employees
2. It helps in improving the loyalty of employees.
3. Career planning encourages an employee’s growth and development.

4. It discourages the negative attitude of superiors who are interested in suppressing

the growth of the subordinates.
5. It ensures that senior management knows about the calibre and capacity of the
employees who can move upwards.
6. It can always create a team of employees prepared enough to meet any contingency.
7. Career planning reduces labour turnover.
8. Every organization prepares succession planning towards which career planning is

the first step
Career Development
Career development is the series of activities or the on-going/lifelong process of

developing one’s career. Career development usually refers to managing one’s career
in an intra-organizational or inter-organizational scenario. It involves training on new
skills, moving to higher job responsibilities, making a career change within the same
organization, moving to a different organization or starting one’s own business.
Career development is directly linked to the goals and objectives set by an individual. It
starts with self-actualization and self-assessment of one’s interests and capabilities. The
interests are then matched with the available options.
The individual needs to train himself to acquire the skills needed for the option or career
path chosen by him. Finally, after acquiring the desired competency, he has to perform
to achieve the goals and targets set by him.
Caree
r development is directly linked to an individual’s growth and satisfaction and hence
should be managed by the individual and not left to the employer. Career development
helps an individual grow not only professionally but also personally. Learning new skills
like leadership, time management, good governance, communication
management, team management etc also help an employee develop and shape
their career.
Importance of Career Development
Every employee working in an organization is looking for a career development which

moves in the right direction. Career path taken by an employee determines the growth.
Career should be planned in a way that it moves forward.
Career development provides the framework with skills, goals, awareness, assessment
and performance which helps an individual to move in the right direction and achieve
the goals one has in one's career. Careful career planning is always useful for
individuals to succeed professionally and also helps to boost employee motivation in
the organization.
Career Development Strategies
The development of an individual's career is driven by several factors. Strategies to

improve someone's career can be driven either by the company through organization
development or by the individual himself or herself. Some strategies of career
development are as following.
1. By Companies
Training and development by companies can help in employees learn new skills.
Companies help in providing leadership development, management
development etc. This is all done through employee training sessions
or developmental counselling. Employee development in the long run helps in
career development.
2. By Employees
Individuals can themselves boost their own career. This is done through constant
evaluation of their skills using techniques like continuing professional development.
Potential Appraisal: Objectives, Purpose, Advantage, Steps

Potential appraisal is a part of performance appraisal that helps to identify the hidden
talents and potential of the individuals. Identifying these potential talents helps in
preparing the individuals for higher responsibilities and positions in the future. It focuses
primarily on identifying the employee’s likely future roles within the organization.
What is Potential
Potential can be defined as ‘a latent but unrealised ability’. Potential includes the
possible knowledge, skills, and attitudes the employee may possess for better
performance There are many people who have the desire and potential to advance
through the job they are in and wanting the opportunity to operate at a higher level of
competence in the same type of work. The potential is the one that the appraiser should
be able to identify and develop because of the knowledge of the job. This requires an in-
depth study of the positions which may become vacant, looking carefully at the specific
skills that the new position may demand and also taking into consideration the more
subjective areas like ‘qualities’ required. There may be areas where the employee has
not had a real opportunity to demonstrate the potential ability and there may be areas
with which you, as the appraisers are not familiar.
Indicators of Potential
 A sense of reality: This is the extent to which a person thinks and acts
objectively, resisting purely emotional pressures but pursuing realistic projects
with enthusiasm.
 Imagination: The ability to let the mind range over a wide variety of possible
causes of action, going beyond conventional approaches to situations and not
being confined to ‘This is the way it is always being done!’
 Power of analysis: The capacity to break down, reformulate or transform a
complicated situation into manageable terms.
 Breadth of vision: The ability to examine a problem in the context of a much
broader framework of reference; being able to detect, within a specific situation,
relationships with those aspects which could be affecting the situation.
 Persuasiveness: The ability to sell ideas to other people and gain a continuing
commitment, particularly when the individual is using personal influence rather
than ‘management authority’.
Purpose of Potential Appraisal
The purposes of a potential appraisal are:
 to inform employees of their future prospects

 to enable the organisation to draft a management succession programme;
 to update training and recruitment activities;
 to advise employees about the work to be done to enhance their career

Opportunities
Objectives of Potential Appraisal
One of the important objectives of potential appraisal is to help employees to move

upwards in the organization
Advantages of Potential Appraisal
The advantages of a thoroughly carried out potential appraisal are:
 The organizations are able to identify individuals who can take higher
responsibilities.
 It also conveys the message that people are not working in dead-end jobs in the
organization
 The identification of employee potential to ensure the availability of people to do

different jobs helps to motivate employees in addition to serving organisational
needs.
Steps of Potential Appraisal System
1. Role Description: A good potential appraisal system would be based on clarity

of roles and functions associated with the different roles in an organisation. This
requires extensive job descriptions to be made available for each job. These job
descriptions should spell out the various functions involved in performing the job.
2. Qualities Required: Besides job descriptions, it is necessary to have a detailed
list of qualities required to perform each of these functions. These qualities may
be broadly divided into four categories:
1. technical knowledge and skills
2. managerial capabilities and qualities
3. Behavioural capabilities
4. Conceptual capabilities.
3. Indicators of Qualities: A good potential appraisal system besides listing down
the functions and qualities would also have various mechanisms for judging
these qualities in a given individual. Some of the mechanisms for judging these
qualities are:
1. Rating by others
2. Psychological tests
3. Simulation games and exercises
4. Performance appraisal records.
4. Organising the System: Once the functions, the qualities required performing
these functions, indicators of these qualities, and mechanisms for generating
these indicators are clear, the organisation is in a sound position to establish and
operate the potential appraisal system. Such establishment requires clarity in
organisational policies and systematisation of its efforts.
5. Feedback: If the organisation believes in the development of human resources it
should attempt to generate a climate of openness. Such a climate is required for
helping the employees to understand their strengths and weaknesses and to
create opportunities for development. A good potential appraisal system should
provide an opportunity for every employee to know the results of assessment. He
should be helped to understand the qualities actually required for performing the
role for which he thinks he has the potential, the mechanisms used by the
organisation to appraise his potential, and the results of such an appraisal.
A good potential appraisal system provides opportunities continuously for the employee
to know his strengths and weaknesses. These are done through periodic counseling
and guidance sessions by either the personnel department or the managers concerned.
This should enable the employee to develop realistic self-perceptions and plan his own
career and development.
Succession Planning
Succession Planning is defined as the systematic process of recognizing and creating
future leaders who are able to take the position of the old ones when they leave the
organization due to retirement, resignation, termination, transfer, promotion or death.
In finer terms, it is a modern technique followed by many companies, that concentrates

on identifying the prospects, out of many employees in the organisation, who might be
possible successors, for the key positions.
Succession planning is a specific strategy, which spells out the particular steps to be
followed to achieve the mission, goals, and initiatives identified in workforce planning. It
is a plan that managers can follow, implement, and customize to meet the needs of their
organisation, division, and/or department.
Succession planning establishes a process to recruit employees, develop their skills,

and prepare them for advancement, all while retaining them to ensure a return on the
organization's training investment. Succession planning involves understanding the
organization's long-term goals and objectives, identifying employee development needs,
and determining trends.
Need for Succession Planning
Succession Planning is a part and parcel of the Human Resource Planning, which

acknowledges that the employees may or may not work with the organization in the
future. And so to be at the safer side, a succession plan is developed to analyse the
vacancies which might take place when an employee leaves the organization, the
business areas which might be affected, job requirements and the skills of the existing
incumbent.
Hence, there is a need for strategic planning, to determine where and how viable
employees can fill the vacant positions.\
Process of Succession Planning

1. Identifying Key Business Areas and Positions: First and foremost, the key
business areas are identified, i.e. the areas which are significant with respect to the
operational activities and strategic objectives. After that, those positions are identified
which if vacant can cause difficulty in achieving business objectives.
2. Ascertaining Competencies for Key areas and positions: Next, you need to
determine the required competencies for key business areas and position, in order to
create the selection criteria, establish performance standards and fill the difference
between what the viable successors know and what they need to know, through
the training and development process.It determines the knowledge, skills, ability and
experience required to achieve business goals.
3. Find out the interested and potential candidates and assess them as per
the competencies: After competency is analysed, the next step is to identify among
various employees working in the organization, who are interested as well as they have
the capability to fill key business areas and positions.The Human Resource Manager
discusses future career plans and interests with the candidates and identifies the
potential successors who are ready to replace the old ones and can be trained and
developed for future contingencies.
4. Develop and Implement Succession Strategies: Strategies for learning,
training, development, knowledge transfer, experience sharing is developed and
implemented for potential successors.
5. Evaluate Effectiveness: The last step to the succession planning process is to
evaluate the succession planning and management, to ensure that all the key business
areas and positions are covered under the succession planning.Further, it also ensures
that in case of any sudden vacancies in future, key positions can be filled as soon as
possible and the successors perform effectively when they hold the position.
Therefore, Succession Planning is all about developing a leadership substitute, for

a perpetual succession of the organization without any kind of disturbance, when there
are changes in the top management.
An ideal Succession Planning is one that involves the participation of the top
management, a thorough review of the plan developed, evaluation of the performance
and capability of the candidates and each candidate is provided with the written
development plan.
It is a rational decision of the management to promote the regular development of the

workforce, to make sure that the top managerial positions have some sort of stability,
thus ensuring an organization to attain its ultimate objectives.
UNIT-4
Grievance Handling: Definition, Features Causes, and Effects

A grievance is any dissatisfaction or feeling of injustice having connection with one’s

employment situation which is brought to the attention of management. Speaking
broadly, a grievance is any dissatisfaction that adversely affects organizational relations
and productivity. To understand what a grievance is, it is necessary to distinguish
between dissatisfaction, complaint, and grievance.
1. Dissatisfaction is anything that disturbs an employee, whether or not the unrest is

expressed in words.
2. Complaint is a spoken or written dissatisfaction brought to the attention of the

supervisor or the shop steward.
3. Grievance is a complaint that has been formally presented to a management

representative or to a union official.
According to Michael Jucious, ‘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 short, grievance is a state of dissatisfaction, expressed or unexpressed, written or

unwritten, justified or unjustified, having connection with employment situation.
Features of Grievance:
1. A grievance refers to any form of discontent or dissatisfaction with any aspect of the
organization.
2. The dissatisfaction must arise out of employment and not due to personal or family
problems.
3. The discontent can arise out of real or imaginary reasons. When employees feel that
injustice has been done to them, they have a grievance. The reason for such a feeling
may be valid or invalid, legitimate or irrational, justifiable or ridiculous.
4. The discontent may be voiced or unvoiced, but it must find expression in some form.
However, discontent per se is not a grievance. Initially, the employee may complain
orally or in writing. If this is not looked into promptly, the employee feels a sense of lack
of justice. Now, the discontent grows and takes the shape of a grievance.
Causes of Grievances:
Grievances may occur due to a number of reasons:
1. Economic:
Employees may demand for individual wage adjustments. They may feel that they are
paid less when compared to others. For example, late bonus, payments, adjustments to
overtime pay, perceived inequalities in treatment, claims for equal pay, and appeals
against performance- related pay awards
2. Work environment:
It may be undesirable or unsatisfactory conditions of work. For example, light, space,
heat, or poor physical conditions of workplace, defective tools and equipment, poor
quality of material, unfair rules, and lack of recognition.
3. Supervision:
It may be objections to the general methods of supervision related to the attitudes of the
supervisor towards the employee such as perceived notions of bias, favouritism,
nepotism, caste affiliations and regional feelings.
4. Organizational change:
Any change in the organizational policies can result in grievances. For example, the
implementation of revised company policies or new working practices.
5. Employee relations:
Employees are unable to adjust with their colleagues, suffer from feelings of neglect and
victimization and become an object of ridicule and humiliation, or other inter- employee
disputes.
6. Miscellaneous:
These may be issues relating to certain violations in respect of promotions, safety
methods, transfer, disciplinary rules, fines, granting leaves, medical facilities, etc.
Need for a Formal Procedure to Handle Grievances:

A grievance handling system serves as an outlet for employee frustrations, discontents,
and gripes like a pressure release value on a steam boiler. Employees do not have to
keep their frustrations bottled up until eventually discontent causes explosion.
The existence of an effective grievance procedure reduces the need of arbitrary action
by supervisors because supervisors know that the employees are able to protect such
behavior and make protests to be heard by higher management. The very fact that
employees have a right to be heard and are actually heard helps to improve morale. In
view of all these, every organization should have a clear-cut procedure for grievance
handling.
Grievance Handling
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. You also create a channel to explain your policies and rationale for actions or
decisions.
Employee welfare
Maintaining a healthy and safe work environment and improving staff motivation and
productivity are critical issues for every workplace. Significant social, economic and
demographic changes have led organisations to review how they manage and support
individuals and the level of flexibility that they can make available.
Welfare includes anything that is done for the comfort and improvement of employees
and is provided over and above the wages. Welfare helps in keeping the morale
and motivation of the employees high so as to retain the employees for longer duration.
The welfare measures need not be in monetary terms only but in any
kind/forms. Employee welfare includes monitoring of working conditions, creation of
industrial harmony through infrastructure for health, industrial relations and insurance
against disease, accident and unemployment for the workers and their families.
Employee welfare defines as “efforts to make life worth living for workmen”. “Employee
welfare is a comprehensive term including various services, benefits and facilities
offered to employees & by the employers. Through such generous fringe benefits the
employer makes life worth living for employees.”
Welfare includes anything that is done for the comfort and improvement of employees
and is provided over and above the wages. Welfare helps in keeping the morale and
motivation of the employees high so as to retain the employees for longer duration. The
welfare measures need not be in monetary terms only but in any kind/forms. Employee
welfare includes monitoring of working conditions, creation of industrial harmony
through infrastructure for health, industrial relations and insurance against disease,
accident and unemployment for the workers and their families.
Employee welfare entails all those activities of employer which are directed towards
providing the employees with certain facilities and services in addition to wages or
salaries.
The very logic behind providing welfare schemes is to create efficient, healthy, loyal and
satisfied labor force for the organization. The purpose of providing such facilities is to
make their work life better and also to raise their standard of living.
These efforts have their origin either in some statute formed by the state or in some
local custom or in collective agreement or in the employer’s own initiative:
 To give expression to philanthropic and paternalistic feelings.

 To win over employee’s loyalty and increase their morale.

 To combat trade unionism and socialist ideas.
 To build up stable labour force, to reduce labour turnover and absenteeism.
 To develop efficiency and productivity among workers.
 To save oneself from heavy taxes on surplus profits.
 To earn goodwill and enhance public image.
 To reduce the threat of further government intervention.
 To make recruitment more effective (because these benefits add to job appeal).
The important benefits of welfare measures can be summarized as follows:
 They provide better physical and mental health to workers and thus promote a
healthy work environment
 Facilities like housing schemes, medical benefits, and education and recreation
facilities for workers’ families help in raising their standards of living. This makes
workers to pay more attention towards work and thus increases their productivity.
 Employers get stable labor force by providing welfare facilities. Workers take
active interest in their jobs and work with a feeling of involvement and participation.
 Employee welfare measures increase the productivity of organization and
promote healthy industrial relations thereby maintaining industrial peace.
 The social evils prevalent among the labors such as substance abuse, etc are
reduced to a greater extent by the welfare policies.
Principles of Employee Welfare Service
Following are generally given as the principles to be followed in setting up a employee

welfare service:
 The service should satisfy real needs of the workers. This means that the
manager must first determine what the employee’s real needs are with the active
participation of workers.
 The service should such as can be handled by cafeteria approach. Due to the
difference in Sex, age, marital status, number of children, type of job and the
income level of employees there are large differences in their choice of a particular
benefit. This is known as the cafeteria approach. Such an approach individualises
the benefit system though it may be difficult to operate and administer.
 The employer should not assume a benevolent posture.
 The cost of the service should be calculate and its financing established on a
sound basis.
 There should be periodical assessment or evaluation of the service and
necessary timely on the basis of feedback.
Employee separations
Separation is a situation when the service agreement of an employee with his/her

organisation comes to an end and employee leaves the organization.
Employee Separation is the process of ensuring that an employee who quits the
company is exited in a structured and orderly manner. The process of employee
separation is taken quite seriously by many firms and there is a dedicated department to
handle employee exits from the company. In this article we discuss the process of
employee separation and the differences between voluntary and involuntary exits.
Reasons for Separation of Employees

Employee separation constitutes the final stage in the staffing process of an
organization.An employee can leave the organization for any reason which he deems fit
for seeking separation. However, separation is classified basically into two types. These
are: voluntary separation and involuntary separation. Voluntary separation refers to the
separation of employees on their own request, while involuntary separation means the
separation of employees for organizational reasons which are beyond the control of the
employees. We shall now discuss the causes of these separations in detail.
 Voluntary Separation Voluntary separation, which normally begins after a

request is placed in this regard by the employee, can happen due to two
reasons: professional reason and personal reason. We shall now discuss these
reasons in detail.
 Professional reasons Employees may seek separation when they decide to
seek better positions, responsibilities and status outside the present organization.
Efficient employees would seek to expand their realm of knowledge and skills
continuously by working in different capacities/positions in various organizations.
In their quest for greater responsibility, power and status, they may seek
separation from the organization.
 Personal reasons The important personal reasons for voluntary separation are

relocation for family reasons like marriage of the employees and health crisis of
family members, maternity and child-rearing. For instance, when working women
get married, they often prefer to settle in the partners place of occupation.
Similarly, an employee may seek voluntary separation to look after the child or
parent.
 Involuntary Separation As mentioned earlier, an involuntary separation is
caused by the factors which remain beyond the purview of the employees.
However, these factors may be classified broadly into health problems,
behavioural problems and organizational problems. We shall now discuss these
factors in detail
 Health problems Major health problems crippling the employees may make
them invalid or unfit to continue in the profession. For instance, accidents
causing permanent disabilities and illness of the employees like brain stroke and
other terminal illnesses can lead to their involuntary separation. Death of
employees is another factor which results in their involuntary separation.
 Behavioural problems An employee's objectionable and unruly behaviour within
the organization may also lead to his involuntary separation from the
organization. When the employees behaviour is unethical or violates the code of
conduct in force, the organization may initiate disciplinary actions, which may
eventually result in his termination. This may constitute an act of involuntary
separation. Consistent failure to reach performance goals by an employee can
also result in his involuntary separation.
 Organizational problems Organizational problems are another important factor
that contributes to the involuntary separation of employees. The poor financial
performance of an organization may cause it to terminate the services of some of
its employees as part of cost control measure. Such terminations are also
classified as involuntary separation. Similarly, automation, organizational
restructuring and rationalization can also result in employee termination,
discharge or layoff, broadly called involuntary separation
Downsizing And Outplacement
Downsizing
When layoffs are necessary to maintain operations and achieve business objectives, it
is important that the process is executed in a fashion that supports employees who are
both exiting and remaining with the organization. Successful downsizing ensures
departing staff are treated with dignity, while maintaining the morale and motivation of
employees who are identified as being critical for the company’s continued success.
Upholding organizational values and approaching layoffs with compassion and genuine
care for the professional success of all your people can actually result in team growth
despite a reduction in employee count.
Terminations & Outplacement

Determining when to let someone go and effectively managing the process such that
the employee leaves with dignity is one of your most challenging and dreaded jobs as a
manager. Ensuring that the employee who is leaving the organization is properly
supported will not only be appreciated by the employee but will also help mitigate the
risk of the termination being legally challenged. We can support you with:
 Evaluating employees who are not performing and need to be terminated.

 Preparing termination letters, releases and termination check-lists.
 Supporting the manager on the day of termination.
 Providing Career Transition Support to the exiting employee.
Dispute Resolution
Dispute Resolution refers to a technique of settling the conflicts or claims between two
parties, i.e. employer and employees. The technique aims at achieving fairness for both
the groups and arriving at an agreement between by consensus, often initiated by a
third party. These disputes are caused by wage demands, unfair labour practices,
political interferences, union rivalry, etc.
There are seven methods of resolving industrial disputes which can be adopted as per
the different situational requirements.
Methods of Dispute Resolution
1. Collective Bargaining: A process in which the representatives of employees or

say labour unions and employers meet and discuss various matters relating to wage
and benefits to arrive at a mutual agreement.
2. Code of Discipline: In this method, the duties and responsibilities of both the
parties are defined. When these norms are strictly followed, the probability of disputes
can be reduced. The Ministry of Labour of India has released a code of conduct for
industries.
3. Grievance Procedure: Grievance takes place when there is a violation of the

provision of law or breach of terms and conditions of employment by the management.
The redressal can be sought by the aggrieved employee through defined grievance
procedure.
4. Arbitration: A process wherein, an independent party intervenes and studies the
bargaining situation, hears both the parties and collects necessary data. After that, the
recommendations are made by the arbitrator which are binding on the warring groups.
5. Conciliation: Under this process, the representatives of both management and
labour union are brought together before the conciliator to persuade them to reach a
consensus. The conciliator may be an individual or a group of people. The conciliator
cannot enforce his decision on the parties concerned.
6. Adjudication: When the dispute is not settled through conciliation, recourse to
adjudication is taken, only on the recommendation of the conciliation officer. The
process is an obligatory resolution of the industrial dispute by labour court or tribunal,
wherein the verdict of the labour court is binding on the groups.
7. Consultative Machinery: To settle industrial conflicts, bipartite or tripartite
bodies are set by the government at the plant, industry, state and national levels, with a
view to bringing parties together for mutual discussion and settlement of disputes.
The consequences of industrial disputes have an adverse effect on all stakeholders like
employees, society, management, government, investors and so on. The company’s
management has to bear the loss of production, revenue and profit as well. Even
employees have to face hardships due to lockouts and strikes, which may result in loss
of wages and even jobs. So, the industrial disputes should be resolved as soon as
possible.
International Human Resource Management

international Human Resource Management (IHRM) as ‘concerned with the human
resource problems of multinational firms in foreign subsidiaries
Broadly defined, International human resource management is the study and application
of all human resource management activities as they impact the process of managing
human resources in enterprises in the global environment. IHRM can be explained as

"The set of distinct activities, functions and processes that are directed at attracting,
developing and maintaining an MNC's human resources. It is the aggregate of the
various HRM systems used to manage people in the MNC, both at home and overseas"
(Taylor, Beechler et al. 1996). An international organization or firm is one in which
operations take place in subsidiaries overseas, which rely on the business expertise or
manufacturing capacity of the parent company. Such companies or organizations bring
with them their own management attitudes and business styles.
Human resource managers of such organizations cannot afford to ignore the

international influences on their work. International human resource management
play significant role in providing solution to global business issues. Theorists
explained that International HR management denotes to an extension of HR that
relates to having people working abroad. These can be either expatriate staff,
those who are recruited from or work within their own home countries (locally
recruited staff), or even third country nationals (individuals from neither the
'parent' nor 'home' country, but rather a third country. The kinds of organizations
in which this is the case can range from those with a small office or subsidiary
based abroad, to major multinational corporations, international public-sector
organizations, or international NGOs (charities) with sites all over the world. It
can also encompass an organization working in a joint partnership with another
organization overseas. Alternatively it could be a home based organization with
overseas offices or a company with selected departments which are offshore. The
differences between IHRM and HRM is that IHRM is being unpredictable and
influenced more by external factors, requiring more functions, having
continuously changing perspectives, requiring more intervention in employees'
personal lives, and being more risky
Boxall, P. (1992) defined International Human Resource Management (IHRM) as

‘concerned with the human resource problems of multinational firms in foreign
subsidiaries (such as expatriate management) or more broadly, with the unfolding HRM
issues that are associated with the various stages of the internationalisation process.
International human resource management bears both functional and strategic

resemblance to human resource management. Functionally it performs almost the same
set of activities as human resource management – recruitment, selection, performance
management, compensation, training, industrial relations, career management etc.
Strategically international HRM is closely linked to the business strategy of the
organization.
Hence international human resource management can be defined as the set of activities
involved in hiring, managing performance, compensation, training and relations with
employees hired to manage internal operations of a company, with a view to ensure the
success of their international business and strategies.
International human resource management differs from domestic human resource

management primarily in terms of the complexity associated with managing people
across national boundaries.
Mark Mendenhall (2000) sought to be more specific by outlining a number

of criteria relevant to a definition of IHRM:
1. IHRM is concerned with HRM issues that cross national boundaries or are
conducted in locations other than the home country headquarters.
2. IHRM is concerned with the relationships between the HRM activities of
organisations and the foreign environments in which the organisations operate.
3. IHRM includes comparative HRM studies; e.g. differences in how companies in
Japan, Thailand, Austria and Switzerland plan for upgrading of employee skills
and so on.
IHRM and organisational structure
The type of international organisational structure adopted by the MNE will

provide the context for many of the IHRM issues faced by the company. • The
five readily identified ‘types’ of organisational structure include: –
International division structure .

International geographic/regional structure .
International product structure .
International functional structure .
Matrix or mixed structure.
Advantages and disadvantages
Advantages
 Groups within the subsidiary can gain in status .

 Groups within the subsidiary become more cohesive, fostering group
 IHRM takes place within a culture appropriate to the local workforce and
customers
Disadvantages
 Tendency to become ‘exclusive’

 Loss of central control, higher administrative costs as HRM function is
sent ‘down the line
 Loss of organisational control and organisational identity
IHRM and training and development
In a global company, the training may well be centralised so that suppliers,

employees and distributors are aware of the brand image that needs to be
communicated.
• E.g. in Ford training programmes are set up centrally, and then translated and
delivered to all main suppliers, subsidiaries and distributors.
• If, however, a more polycentric approach is taken, then the training may well be
far more local, and more in line with the local culture.
Major functions of International Human Resource Management
In International human resource management, there are five functional areas that
include recruitment and selection, development and training, performance
evaluation, remuneration and labor relations.
In the first function of IHRM, Recruitment and selection, company employs new
qualified candidates for international operations. Selection requires choosing
from this pool the candidate whose qualifications most closely match the job
requirements. Staffing is a complex function of international human resource
management. In an global firms, the managing and staffing approach strongly
affects the type of employee the company prefers. In a company with an
ethnocentric approach, parent country nationals usually staff important positions
at headquarters and subsidiaries. In recruitment and selection methods, firms
consider both headquarters' practices and those widespread in the countries of
its subsidiaries. Local culture also have great impact on recruitment and selection
practices, and in some countries, local laws require a specific approach. In
choosing the suitable candidate, it is needed to make balance between internal
corporate consistency and sensitivity to local labor practices.
Another significant function of IHRM is Development and training which is aimed to offer
sufficient training to personnel in a company and enable them to fulfil their goals, as well
as show better performance and growth with their work. At global level, human resource
development experts must have responsibility for training and development of
employees located in subsidiaries around the world, specialized training to prepare
expatriates for assignments abroad, and lastly development of a special group of
worldwide minded managers. International human resource development programs may
be done in two ways such as centralized and decentralized. In a centralized approach,
training originates at the headquarters and corporate trainers travel to subsidiaries,
often adapting to local situations. This fits the ethnocentric model. A geocentric
approach is also centralized, and trainers could be sent from various positions in either
the headquarters or subsidiaries to any other location in the company. In a
decentralized approach, training is given locally, following a polycentric model. When
training is decentralized, the cultural backgrounds of the trainers and trainees are
usually similar. Local people develop training materials and techniques for use in their
own area. It is important that trainer must be qualified.
Performance evaluation is the effective function of international human resource

management. In companies, the performance evaluation is regularly performed for
administration or development intentions. Usually, administration conduct evaluation
when there is doubt of performance of candidate and there is a need of performance
evaluation on work conditions of employees, promotions, rewards and/or layoffs. In
multinational companies, performance appraisals are usually done annually and use a
standardized evaluation form. Performance evaluation is complex task for International
HR managers because the organization must evaluate employees from different
countries working in different subsidiaries. Performance evaluation depends on the
organization's overall human resource management strategy.
Remuneration and benefits is other functional approach of IHRM. Remuneration of

employees plays an important role in hiring new employees because pay is the major
source of people to live in the world. To develop an international system of
compensation and benefits, firms have two primary concerns. The first is comparability.
A good compensation system disperses salaries to employees that are internally
equivalent and competitive within the marketplace. The international organization must
also consider the salaries of people who may transfer from other locations. The second
major concern is cost. Organizations struggle to reduce all expenses, and payroll is one
of the largest.
Lastly, the labor relations function of IHRM which describes the role of management
and workers in the workplace. In many countries, the government regulates labor
relations practices.
Contemporary Issues and Challenges in Human

Resource Management
Contemporary Issues in Human Resource Management is uniquely holistic in

its approach to advanced HRM and takes the reader logically through a wide
variety of practical issues and functions that affect HR practitioners. Topics
addressed include competition and choice, people and skills, regulation and
public policy, social trends, engaging people, managing an international
workforce, and developing and implementing HR strategies. It is an essential
one-stop resource that clearly evaluates the issues surrounding the way people
are managed, offers insight into the future development of HRM, and provides
the theoretical framework that will enable success in practice.
Contemporary Issues in Human Resource Management is packed full of

engaging features, such as chapter-by-chapter learning outcomes, case studies,
critical reflections, questions and activities designed to actively engage you with
the material addressed and summaries of key points to aid learning. Taking you
step-by-step through the aspects of HR management so vital for the practice of
HR within an organisation, Stephen Taylor's innovative textbook is ideal for
students taking an HRM module at undergraduate or Master's level, as well as
students taking other modules that explore people management in relation to the
wider business context. Online resources are offered to complement the material
and include annotated web links, for a wealth of useful sources and information
to develop your understanding, multiple choice questionnaires, PowerPoint slides
for tutors to design their programmes, along with Lecturer's guides.
ssues such as cash flow, competition, and revenue growth are top of mind for small
business owners and their teams. Along with these challenges comes another area
many companies struggle with: human resource management.
Human resource management (HRM) includes:
 Job design and analysis

 Workforce planning
 Training and development
 Performance management
 Compensation and benefits
 Legal issues
HRM can be a challenge for small businesses especially, which typically don’t have an
HR department to rely on. They may be limited to one HR person, or this responsibility
may still belong to the CEO. Regardless, small business owners need to understand the
challenges facing them so they’re prepared to tackle HR issues as their company, and
workforce, grows.
Here are 10 of today’s most common human resource challenges along with solutions
you can quickly implement in your business.
#1 Compliance with Laws and Regulation
Keeping up with changing employment laws is a struggle for business owners. Many
choose to ignore employment laws, believing they don’t apply to their business. But
doing so could mean audits, lawsuits, and possibly even the demise of your company.
Solution:
No matter how large or small your business, it’s important to make sure you’re in
compliance with local, state, and federal labor laws. There are regulations on everything
from hiring practices, to wage payment, to workplace safety. Take a few minutes to read
through the U.S. Department of Labor’s Employment Law Guide.
#2 Management Changes
As a business grows, its strategies, structure, and internal processes grow with it. Some
employees have a hard time coping with these changes. A lot of companies experience
decreased productivity and morale during periods of change.
Solution:
Business owners should focus on communicating the benefits of the change for
everyone. Regular staff meetings are a good place to start. When your team
understands the why, how, and when of the change, they’ll be more likely to get on
board.
#3 Leadership Development
A recent study showed more than a third of companies are doing an average job, at
best, at implementing leadership development programs. Thirty-six percent of
companies surveyed in Brandon Hall Group’s State of Leadership Development Study
admitted that their leadership development practices are below average.
Solution:
Leadership development is critical in keeping your management team engaged and

motivated, and prepares them to take on more responsibilities in the future. Make it part
of the culture. Create opportunities for them to use their strengths every day.
Accomplishing goals will motivate them and give them a chance to develop their skills.
#4 Workforce Training and Development
Investing in the training and development of lower-level employees is another common

HR problem. Some businesses have trouble finding the resources to do so. Employees
on the front lines are some of your hardest workers, and may not have the time to take
a training course.
Solution:
Training and development doesn’t have to take a lot of time or money. Recruit
managers and senior leadership in mentoring their subordinate employees. You could
also provide online training courses so people can go at their own pace. Invest in your
workforce and you will have a loyal, productive team.
#5 Adapting to Innovation
Technology is constantly changing. Businesses must be quick to adapt, or risk being left
in the dust by their competitors. The challenge for small business owners is getting
employees to embrace innovation and learn new technology.
Solution:
Communication is critical. With any change, make sure your team understands the why,
when, and how. Set clear goals for the adoption of initiatives, and provide employees
with the training they need to get comfortable with it.
#6 Compensation
Many companies are struggling with how best to structure employee compensation.
Small businesses have to compete not only with businesses of a similar size, but also
with corporations with big payroll budgets. Plus, you have to factor in the cost of
benefits, training, taxes, and other expenses, which can range from 1.5 to 3 times the
employee’s salary.
Solution:
Even though salary is important, it isn’t always the most important factor for job
candidates. Creating a system to reward employees for excellent performance is one
way to make up for a lower salary. In addition, consider offering incentive programs
such as profit sharing or bonuses, which can be a win-win for the employee and the
company.
#7 Understanding Benefits Packages
The Affordable Care Act has been a pain point for many small businesses in the past
few years. Rising healthcare costs mean companies must either pass these costs on to
employees, or take a hit to their bottom line. Since good benefits packages can be a
deciding factor for potential hires, understanding them is key.
Solution:
For small business with fewer than 50 employees, there are many options for offering
healthcare benefits. One option is purchasing a plan through the Small Business Health
Options Program (SHOP) marketplace. Doing this gives you the opportunity to take a
tax credit, which can help offset costs.
And don’t forget about benefits such as:
 Unlimited vacation time

 Flex time
 Free snacks
 Wellness programs
 Commuter benefits
These benefits are affordable ways to offer extra perks—and they’re extremely popular
with today’s workforce!
#8 Recruiting Talented Employees
Attracting talent is a huge investment of time and money. It’s difficult for entrepreneurs
to balance between keeping a business running, and hiring the right people at the right
time. In addition, it’s impossible to know whether a candidate will actually be a good fit
until they’ve worked for you for a period of time.
Solution:
One of the best ways to find the right people for your business is to use a staffing
company. They provide temp-to-hire solutions that allow you to try out new employees
with little to no risk. You’ll save time, money, and frustration, and maybe even find a
future executive or business partner.
#9 Retaining Talented Employees
Competition for talented employees is fierce. Startups and small companies don’t have
big budgets for retirement plans, expensive insurance plans, and other costly items that
their larger competitors do—at least, not yet. Employee turnover is expensive and can
negatively impact business growth.
Solution:
Onboarding is highly effective for employee. Research shows having a structured

onboarding process means employees are 58 percent more likely to stay with a
company for three years or more. Read our article on 5 Employee Onboarding
Technology Solutions Your Company Needs to Be Using to learn about your options.
#10 Workplace Diversity
Multiple generations. Ethnic and cultural differences. These are just a few of the many
factors that make workplace diversity a continual challenge for small businesses. The
risk of lawsuits for failing to protect employees from harassment is real.
Solution:
Creating a culture of teamwork and respect will keep the work environment positive and
productive. In addition, implementing a diversity training program is a must. Employers
are responsible for setting standards of behavior in the workplace. Standards and a
system of accountability should be set up early on.
Knowledge Management
Knowledge Management (KM) refers to a multi-disciplined approach to achieving
organizational objectives by making the best use of knowledge.
Knowledge management is the deliberate and systematic coordination of an

organization’s people, technology, processes, and organizational structure in order to
add value through reuse and innovation. This is achieved through the promotion of
creating, sharing, and applying knowledge as well as through the feeding of valuable
lessons learned and best practices into corporate memory in order to foster continued
organizational learning.
Knowledge management is the systematic capture of insights and experiences to

enable an organization to identify, create, represent, and distribute knowledge. The
insights and the experiences of individuals in the organization comprise the knowledge
that is created in the organization and is embedded in the form of practices and
processes.
Knowledge Management is an organizational function that concerns itself with

the capture, storage, and dissemination of the knowledge that is inherent in the
organization by using software or a Processual tool to capture, store, and
disseminate knowledge. The objective of knowledge management is to enhance
organizational competitiveness, improve performance, the sharing of lessons learnt, and
the continuous improvement of the organizational processes. Typically, organizations
have well-established tools and software to capture, store, and disseminate the
learning’s that accrue because of the organizational processes.
The Practice of Knowledge Management
Companies like 3M, Pfizer, and Infosys are thought to the world leaders in KM. This is
because they have a clear set of guidelines for capturing knowledge after every project
or product that they rolled out. For instance, these companies have guidelines for
project managers to publish the learning’s that have accrued after a project and upload
them into the KM system. Further, the bottom line imperative for a successful KM
system is that employees should have a sharing mindset instead of an exclusivity
mindset. What this means is that the employees must be willing to share their insight
and knowledge with the other employees.
Apart from this, to actualize a successful KM system, hierarchy and barriers to sharing
of knowledge must be eliminated. What this means is that a culture of openness must
pervade the organization with no impediments to the flow of knowledge through the
organizational arteries.
Strategies for Knowledge Management
As discussed above, many organizations consider KM integral to their core processes.

Indeed, KM has become so widely prevalent in organizational discourse that it is rare to
find a large organization without a KM system in place. Further, the existence of a KM
system has become necessary for organizations to achieve the SEI-CMM certification.
Moreover, there is recognition that a KM system is necessary in order not to “reinvent
the wheel”. What this means is that learning’s can be used to avoid duplication of work,
and eliminate redundancies in the organizational processes. Apart from this, a KM
system improves organizational communication and loosens up the rigid walls between
different functions in the organization. Finally, a KM system is needed to ensure that
past mistakes form the stepping-stones for future success.
Closing Thoughts
As Francis Bacon said, Knowledge is Power. Hence, the sharing of knowledge is

integral to an organizations’ success and this is the rationale and driving force behind
having a well functioning KM system. In conclusion, this article has set the context for
the subsequent exploration into the various dimensions and aspects of KM across the
world and the resultant increase in competitiveness and strategic advantage.
What is a Knowledge Management Framework?

A Knowledge Management framework is a complete system of People, Process,
Technology and Governance, which ensures that Knowledge management is applied
systematically and effectively to improve business results.
 People; knowledge management roles have to be established in the business,
communities need to be set up to share and reuse tacit knowledge, behaviors such as
seeking for and sharing knowledge need to be incentivised, and to become 'the way we
work'
 KM Processes; there has to be a tried-and-tested process for capturing, distilling,
validating, storing, applying and reusing knowledge, and also for innovating.
 KM Technologies; the people and the process need to be supported by enabling
technology, which allows knowledge to be found and accessed wherever it resides (in
databases, on the Intranet, in people's heads). IT plays an important role in KM, by
providing the technology to allow people to communicate.
 KM Governance; without a governance system that promotes and recognizes
sharing and the re-use of knowledge, any attempts to introduce KM are going to be a
hard struggle.
What are the biggest barriers to Knowledge Management?
 Knowledge is power. Too often people see knowledge hoarding as a way to
personal power. However by the same argument, knowledge sharing is empowerment.
 People need to move from Building empires to building new relationships.
 The Individual work bias of the past ("I have to solve this all by myself") is
shifting to a teamwork and a collaborative bias.
 Local focus is often a perceived barrier to knowledge management, which can
be converted to a network focus by the establishment of communities of practice.
 "Not invented here" can be a real barrier to the import of knowledge, if the
relationship of trust is missing. Trust will grow with face-to-face knowledge sharing, and
few people resist a request for help.
 People are often afraid that Errors will be Penalized, and are therefore unwilling
to share what they may see as failures. That is why techniques such as Retrospects
accentuate learning from success
 People feel they are Not paid to share. Knowledge management is often seen
as not part of normal business. Preserving the value of our knowledge assets is not
seen as core business.
 People feel they have No time to share. This is a very real barrier; most people
are 'maxed out' at the moment. So we need to make knowledge sharing as quick and
efficient as we can, because really we have no time NOT to share.
Human Resource Management in Virtual Organisation
Planning, recruitment, development, maintenance, retention, and socialisation are the

common HR issues that ensure right HR tor right job. These also control and regulate
the antecedent conditions of performance. Virtual organisations are staffed by highly
proficient workers who are left to do their own things and produce highly competitive
products or services.
Jobs in virtual organisations being knowledge-based are assumed to require greater

skills, have greater variety and offer better quality of working life (QWL). From HR point
of view, virtual organisation has both sides of the coin. The one (positive) side is greater
job autonomy and more financial stability, which are the most sought after things by the
workers in any organisation. This is so because of the reduced commuting, lunches and
the clothing costs.
The major HR issues involved in a virtual organisation are:

1. Recruitment is conducted under time pressure and requires high performance
expectations.
2. Both human capital i.e., knowing one’s job and social capital i.e., knowing each other
become extricably linked.
3.Stability in social relationship is not very much required.


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MADE BY: TARUN KUMAR

Human Resource Management: Meaning,

Human Resource Management is the process of recruiting, selecting,

Human Resource Management involves management functions like

 It involves procurement, development, maintenance of human

Human resource management as a department in an organisation

The historical rule of thumb for Human Resource staffing requirements is

Human: refers to the skilled workforce in an organization.

Therefore, human resource management is meant for proper utilisation of

Therefore, human resource management is meant for proper utilisation of

Human Resource Management is a management function concerned

Human Resource Management: Nature

Human Resource Management is a process of bringing people and

 It is pervasive in nature as it is present in all enterprises.

 Its focus is on results rather than on rules.

 It tries to help employees develop their potential fully.

 It encourages employees to give their best to the organization.

 It is all about people at work, both as individuals and groups.

 It tries to put people on assigned jobs in order to produce good

 It helps an organization meet its goals in the future by providing for

 It tries to build and maintain cordial relations between people working

 It is a multi-disciplinary activity, utilizing knowledge and inputs drawn

Scope of Human Resource Management.

The scope of Human Resource Management is extremely wide, However,

1. Human resources planning

Human Resource Planning refers to a process by which the company to

2. Job analysis design

Another important area of Human Resource Management

3 Recruitment and selection

Based on information collected from job analysis the company

4. Orientation and induction

Once the employees have been selected an induction or orientation

5. Training and development

Every employee goes into a training program which helps him to put up a

Once the employee has put on the job performance appraisal is conducted

7.Compensation planning and remuneration

There are various rules regarding compensation and other benefits. It

8. Motivation, welfare, health, and safety

Motivation becomes important to sustain the number of employees in

Another important area of Human Resource Management is maintaining

Objectives Of Strategic Human Resource Management

2. Developing effective coordination and communication within the

Employees find themselves operating in ‘knowledge economies’ where

4. Embracing wider societal and ethical developments

HR, more so than at any time in the evolution of employment practices,

HR needs to understand how demographic, technological and other

systems cannot perform, whilst rationalizing roles and potentially reducing

Such changes inevitably hit on important ethical and societal questions

Line And Staff Responsibilities of Hr Manager

First-line managers operate their departments. They assign tasks,

Employee Relations and Labor Relations

Depending on staff qualifications and HR department size, the employee

Compensation and Benefits

Line managers in this functional area report to the HR manager or director,

Employee Training and Development

Specialists in this area often are responsible for developing curriculum,

as training for newly promoted supervisors. In addition, they might be

In addition, training and development line managers may be responsible for

Recruiting and Talent Acquisition