B.B.A. II Sem. Subject: Human Resource Management Unit-I HR: "The Most Vibrant and Dynamic Resource" - Pulapa Subba Rao Introduction

B.B.A. II Sem.
Subject: Human Resource Management
UNIT-I
HR: “THE MOST VIBRANT AND DYNAMIC RESOURCE” – PULAPA SUBBA RAO
Introduction:-
Henry Fayol the pioneer in the field of management state “Take out my building take out my machines and all
capital but leave my men with me, I will become Henry Fayol again”. This statement of Henry Fayol highlights
that human resources in an organization plays a crucial role.
The human resource refers to the knowledge, skills, abilities, values, aptitude & beliefs possessed by the
workforce in organization.
Human Resource Management:-
Meaning:
HRM is a process of bringing people & organization together so that the goals of each are met. It is the part of
the management process which is concerned with the management of human resources in an organization &
tries to secure best from the people by winning their wholehearted co-operation. In short, it may be defines
as the art of procurement, developing and maintaining competent workforce to achieve the goals of an
organization in an effective and efficient manner.
Definitions:
1.According to Edwin Flippo: HRM is planning, organizing, directing, controlling of procurement,
development, compensation, integration, maintenance & separation of human resources to the end so that
individual, organizational & social objectives are achieved.
2. HRM is the organizational function that deals with issues related to people such as compensation, hiring,
performance management, organization development, safety, wellness benefits, employee motivation,
communication, administration &training.
3. HRM is the process of attracting developing & maintaining a talented & energetic workforce to support
organizational mission, objectives & strategies.
Nature of HRM:
1. Pervasive function: HRM is present in all the enterprises.
2. Action oriented: Scope of HRM is not only limited to record keeping.
3. Individually oriented
4. People oriented
5. Future oriented
6. Development oriented
7. Integrated Function
8. Comprehensive function: It covers all the type of personnel.
9. Auxiliary service: It is a staff function(Advice)
10. Inter disciplinary function
11. Continuous function
12. Involves team sprit & team work
13. Management function
14. Helps in achieving goals i.e. individual, organizational & social objectives.
15. Involves procurement, development & maintenance of human resource.
Scope of HRM:
1. HR planning: HRP refers to a process by which the company identifies the no. of jobs vacant, whether
the company has excess staff or shortage of staff & to deal with this excess or shortage of staff.
2. Job analysis design: It gives a detailed explanation about each & every job in the company.
3. Recruitment & Selection: Recruitment is searching for the prospective employee & selection is process
used to identify & hire individual.
4. Orientation & induction: once a employee is being selected an induction program is conducted.
45, Anurag Nagar, Behind Press Complex, Indore (M.P.) Ph.: 4262100, www.rccmindore.com
2
B.B.A. II Sem. Subject: Human Resource Management
5. Training & development: Every employee goes under training program which helps him to put up a
better performance on the job.
6. Performance Appraisal: HR department conducts appraisal programs & based on that appraisals
decide future promotions, incentives, increments in salary etc.
7. Compensation Planning & Remuneration: Compensation Planning ensures that jobs are fairly
compensated and more difficult jobs are paid more. It ensures equal pay or equal work.
8. Motivation, Welfare, Health & Safety: It deals with working condition and amenities such as canteens,
crèches, rest and lunch rooms, medical assistance, education, health and safety, recreation facilities.
9. Industry Relations: It includes maintaining relation with the union members, settlement of disputes,
grievances handling.
Functions of HRM:
The functions of HRM can be broadly classified into two categories:
1. Managerial Functions 2. Operative Functions
(I). MANAGERIAL FUNCTIONS:

i. Planning: In the area of human resource management planning involves deciding human resource goals,
planning human resources, requirements, recruitment, selection, training etc.
ii. Organising: It is concerned with proper grouping of personnel activities, assignment of duties and
delegation of authority.
iii. Directing: It involves the process of motivating, leading, supervising, activating and guiding the personnel
as and when necessary.
iv. Controlling: It involves measurement of employees performance & taking corrective action.
(II). OPERATIVE FUNCTIONS:

Operative functions are related to specific activities of personnel management through:
1. Procurement or Employment function
2. Development function
3. Compensation Function
4. Maintenance or Human Relation
5. Integration Function
1) Procurement or employment function:

Employment is concerned with securing & employing the right kind and proper number of people
required to accomplish the organizational objective. It consists of the following activities:
a. Job Analysis: It is the process of studying in detail the operations and responsibilities involved
in a job.
b. HR Planning
c. Recruitment
d. Selection
e. Placement
f. Induction or orientation
2) Development Function: It is the process of improving, molding & changing the skill knowledge,
creativity, attitude, values, commitments etc. of employees so that they can permorm the present and
future jobs more effectively. It includes:
a. Performance appraisal
b. Training
c. Management Development: It is the process of developing managerial talent through
appropriate programmes.
d. Career Planning and Development: It involves planning the career of employees and
implementing career plans so as to fulfil the career aspiration of employees.
3
3) Compensation Function: It is the process of providing adequate equitable & fair remuneration to the
employees. It includes:
a. Job Evaluation: It is the process of determining the relative worth of a job.
b. Wage & salary administration: It implies developing and operating a suitable wage and salary
programme.
c. Bonus
d. Fringe Benefits: These are the various extra benefits provided to employees in addition to the
compensation paid in the form of salary or wage. Ex .Recreation facilities, Education facility to
children etc.
e. Social Security Measures: Ex. Medical benefits, sick benefits, maternity benefits etc.
4) Human Relations: It is the process of interaction among human beings. It includes:
a. Motivation
b. Employee Morale
c. Communication Skills
d. Leadership skills
e. Redressing Employee Grievances
f. Counseling the employees
g. Improving quality of work life of employees
5) Integration Function: It is the process of integrating the goals of an organization with employees
goals through various employee oriented programmes such as grievances handling, Instituting proper
disciplinary measures, employee participation etc.
ROLE OF PERSONNEL MANAGER:

HR managers perform different type of roles. They are as follows:
1. Administrative role
2. Operational role
3. Strategic role
1. Administrative role: It includes:

 Policy Maker: Hr manager helps management in the formation of policies governing talent
acquisition and retention, wage and salary administration, welfare activities etc.
 Administrative Expert: Here the role of HR manager is heavily oriented to processing and record
keeping.
 Advisor: Personnel management is not a line responsibility but a staff function. Staff function
advices, suggests, counsel and help the line managers in discharging their responsibility.
 Housekeeper: It includes recruiting, pre-employment testing, refrence checking, employee
surveys, wage and salary administration etc.
 Counselor: The personnel manager discusses various problems of the employees relating to work,
career, their supervisors, colleagues, health, family, financial, social etc and advises them on
minimizing and overcoming problems, if any.
 Welfare Officer: As a welfare officer he provides and maintains canteens, hospitals, crèches,
clubs, libraries etc.
 Legal Consultant: Personnel manager plays a role of grievance handling, settling of disputes,
handling disciplinary cases, doing collective bargaining etc.
2. Operational roles:
 Recruiter
 Trainer, developer, motivator
4
 Coordinator/Linking pin
 Mediator
3. Strategic Roles: The strategic role of HR management focuses attention on how to enable ordinary
employees to turn out extra ordinary performance, taking care of their ever changing expectations.
 Change Agent: HR’s role as a change agent is to replace resistance with resolve, planning with
results and fear of change with excitement about its possibilities.
 Hr helps an organization identify the key success factors for change and assess organization’s
strength and weaknesses.
 Strategic Partner: Hr role is to deliver strategic services cost effectively by building a competent,
consumer oriented workforce. It must assume important roles in strategy formulation as well as
strategy implementation.
5
UNIT-II
JOB ANALYSIS
Job analysis is a formal and detailed examination of jobs. It is systematic investigation of the tasks, duties,
responsibilities necessary to do a job. A task is an identifiable work activity carried out for a specific
purpose. For example, typing a letter. A duty is a larger segment consisting of several tasks that are
performed by an individual, or example pick up, sort out and deliver incoming mail. Job responsibilities are
obligations to perform certain tasks and duties.
Nature of Job Analysis –
Job Tasks
Job Analysis Job Duties
Job Responsibilities
Uses of Job Analysis –

1) Human Resource Planning – Job analysis helps in forecasting human resource requirements in terms
of knowledge and skills. It also helps in determining quality of human resources needed in an
organization.
2) Recruitment – Job analysis is used to find out how and when to hire people for future job openings.
For ex: company might be traditionally hiring MBA students for marketing purpose but through job
analysis showed that the position can be filed by hiring a graduate with marketing skills.
3) Selection – Without a proper understanding of what is to be done on job, it is not possible to select
the right person.
4) Placement and orientation – After selection people, we have to place them on jobs best suited to
their interest, activities, and aptitude, if we are not sure about what is to be done on a job, it is not
possible to teach a new employee how to handle a job.
5) Training – If there is confusion about what the job is and what is supposed to be done, proper
training efforts cannot be initiated.
6) Counseling – Managers can properly counsel the employees about their careers when they
understand the different jobs in the organization.
7) Employee Safety – A thorough job analysis reveals unsafe conditions associated conditions
associated with the job.
8) Performance Appraisal – In performance appraisal we compare the work of an employee what he
has to do and what he is actually doing. What the employee is supposed to do is based on job
analysis.
9) Job design and redesign – Jobs are understood more properly through job analysis. It is easy to
locate the weak points in any and take remedial steps.
10) Job Evaluation – Job evaluation is finding the worth of any job i.e. how much is to be paid for any
particular job. This can be done through job analysis as it tells the degree of difficulty in any job, type
of work done, skills and knowledge needed etc which is the basis on evaluating the job worth.
Process of Job analysis

The major steps involved in job analysis are as follows –
6
1) Organisational Analysis – Firstly we need to obtain an overall picture of the various jobs in an
organization.
2) Selection of representative positions – It is not possible to analyse all jobs. A representative sample
of jobs to be analyzed is decided keeping the cost and time constraints in mind.
3) Collection of Job analysis data – This step involves the collection of data on the characteristics of the
job, the required behaviour and personal qualification needed to carry out the job effectively.
4) Preparation of Job description – This step involves describing the contents of the job in terms of
functions, duties responsibilities operation etc.
5) Preparation of job specification – This step involves conversion of job description statements into
job specification.
Job Description –
A job description (JD) is a written statement of what the job holder does, how it is done, under what
conditions it is done and why it is done.
Contents –
 Job title
 Job summary
 Job activities
 Working conditions
 Social environment
Job specification
Job specification summaries the human characteristics needed for satisfaction needed for satisfactory job
completion. It tires to describe the key qualifications someone needs to perfrom the job successfullt. It spells
out the important attributes of a person in terms of education, experience, skills, knowledge and abilities
(SKAs) to perform a particular job.
Job Analysis
Job Description Job Specification Role Analysis
Recruitment
Recruitment is defined as “a process of searching for prospective employees & stimulating them to apply for
jobs in the organization.
The function of recruitment precedes the selection function & its includes only finding, developing, the
sources of prospective employees & attracting them to apply for jobs in an organization, whereas the
selection is the process of finding out the most suitable candidate to the job out of the candidates attracted
(i.e. recruited)
Sources of Recruitment –
The sources of recruitment are broadly divided into –
a. Internal sources
b. External source
Internal sources –
Internal sources are the sources within an organizational pursuit, internal sources included –
1) Present permanent employees – Organization considers the candidates from this sources for higher
level jobs for ex. Promotion, transfers.
7
 Promotions – Most of the internal candidates would be submitted to take up higher

responsibilities & express their willingness to be engaged in the higher level jobs if management
gives them assurance that they will be promoted to the next higher level.
 Transfers – Employees will be stimulated to work in new sections or places if management
wishes to transfer to the places of their choice.
2) Retrenched or Retired Employees – Organization retrenches the employees due to layoff. The
organization takes the candidates for employment from the retrenched employee due to obligation
trade union pressure etc. sometimes the organization prefer to reemploy their retires employees as
a token of layoff to the organization.
3) Dependants of deceased, disabled, retire & present employee – Some organization with a view to
developing the commitment & loyalty of not only the employees but also his family members & to
build up image provide employment to the dependant(s) of deceased, disabled & present employees.
4) Employee Referrals – Employee referrals are the candidates recommended by the current
employees. Current employees recommend these candidates whose performances & behavious are
known to them as well as suitable to the job & organization needs.
External Sources
External sources are the sources which are outside the organization pursuit –
External sources include –

a. Campus recruitment
b. Private Employment Agencies/ Consultants
c. Public employment Exchanges
d. Professional Associations
e. Data banks
f. Casual applicants
g. Similar organization
h. Trade unions
HR Planning
Planning for human resources is more important than planning for any other resources as demand for the
latter depends upon the size & structure of the former.
EW Vetter viewed HR planning as “a process by which an organization should move from its current
manpower position to its desired manpower position. Through planning, management strives to have the
right number & right kind of people at right place at the time, doing things which result in both the
organizations the individual receiving maximum long run benefit.”
Factors affecting HR plan –

Several factors affect HRP. These factors can be classified into external factors & internal factors.
External factors –
 Government policies – Policies of government like labour policy; industrial relation policy affects the
HRP.
8
Organizational Objectives &
HR Need HR
Forecast Supply
HR Programming
HR Implementation
Control & Evaluation

of Programmine
Surplus Restricted Shortage

hiring, reduced Recruitment &
hours, VRS, lay off Selection
Retrenchment etc.
 Level of Economic development – Level of Economic development determiner the level of HRD in the
country & there by the supply of human resources in the future in the country.
 Business Environment – External business environment factors influencing the volume & mix of
production & there by the future demands for human resources.
 Level of Technology – Determines the kind of human resources required.
 International Factors – Like the demand for resources & supply of HR in various countries.
 Outsourcing – Availability of outstanding facilities with required skills & knowledge of people
reduces the dependency of HRP & vice versa.
Internal factors –
Company Policies & Strategies – Company policies & strategies relating to expansion, diversification,
allowances etc determines the HR demand in terms of quality & quantity.
HR Policies – HR policies of the company regarding quality of HR, compensation level etc influences HR plan.
Job analysis – Fundamentally HR plan is based on job analysis. Job description & job specification
determines the kind of employees required.
Time Horizons – Companies with stable competitive environment can plan for the long run & vice versa.
Company’s production operations policy; Company’s policy regarding how much to produce & how much to
buy from outside to prepare a final product influence the number & kind of people required.
Trade unions – Influence of trade unions regarding number of working hours/week, requirement sources
9
etc affect the HRP.
Process of HR Planning
Following are the steps
1) Analyzing the organizational plans – The process of HR planning should start with analyzing the
organizational plan into production plan, technological plan for diversification etc, marketing plan,
sales plan, and financial plan. Analysis of organizational plans & programmes help in forecasting the
demand for human resources as it provides the scope of future work activity.
2) Demand Forecasting – Forecasting the overall human resource requirement in accordance with
organizational plan. The jobs generally should be designed & analysed reflecting the future human
resources & based on organizational plans.
3) Supply forecasting – Now, here there is a need to analysis from which sources we can fulfill our
demand. It can be filed by
a. Internal labour supply
b. External labour supply
4) Determining Manpower Gaps – The existing number of personnel and their skills (from human
resource inventory) are compared with the forecasting manpower needs (demand forecasting) to
determine the quantitative and qualitative gaps in the workface. A reconciliation of demand and
supply forecasts will give us number of people to be recruited or made redundant as the case may
be.
5) Formulating HR Plans – Organizations operate in a changing environment. Here organizations make
strategies for recruitment, selections, training, promotion, retirement, replacement etc.
SELECTION
Definition – Selection is the process of picking individuals who relevant qualifications to fill job in an
organization. The basic purpose is to choose the individual who can most successfully perform the job, from
the pool of qualified candidates.
The process
1) Reception – A company is known by the people it employs. In order to attract people with talent,
skills and experience a company has to create a favourable impression on the applicants right from
the stage of reception.
2) Screening Interview – A preliminary interview is generally planned by large organizations to cut the
cost of selection by allowing only eligible to go through the further stages in selection. A junior
executive from the HR Department may conduct the interview & take responses from applicants on
important items determining the suitability of an applicant for a job such as age, education,
experience etc.
Hiring Decision Step 8

Reference Checks Step 7
Medical Examination Step 6
Selection Interview Step 5
Selection Tests Step 4
Application Step 3
Screening Interview Step 2
Reception Step 1
10
3. Application Blank – application blank or form is one of the most common methods used to
collect information on various aspects of the applicants’ academic, social demographic, work
related background and references.
4. Selection Testing – Another important decision in the selection process involves applicant
testing and the kinds of tests to use.
a. Intelligence Tests.
b. Aptitude Tests
c. Personality Tests
d. Achievement Tests
e. Simulation Tests
Selection Interview – Interview is the oral examination of candidates for employment.
Types of Interviews
1) The non-directive interview – The recruiter asks question as they come to mind.
2) The directive or structured interview – The recruiter uses a predetermined set of questions that are
clearly job related.
3) The situational interview – The interviewer attempts find how applicants would respond to
aggressive, embarrassing and insulting questions.
4) Stress interview – The interviewer attempts find how applicants would respond to aggressive,
embarrassing and insulting questions.
5) Panel Interview – The applicant meets with three to five interviewers who take turns asking
questions.
6) Medical Examination – Certain jobs require physical qualities like clear vision, acute hearing,
unusually high stamina, tolerance level etc.
7) Reference checks – Candidates are required to give the names of two or three references in their
application forms.
8) Hiring Decision – The line Manager concerned has to make the final decision-whether to select or
reject a candidate. After taking the final decision the organization sends the appointment letter to
the successful candidates.
11
UNIT-III
TRAINING & DEVELOPMENT
INTRODUCTION
Training is a specialized function of human resource management. Every organization needs to have well
defined trained people to perform the activities. As job have become more complex it s necessary to raise the
skills level of employees.
MEANING & DEFINITION OF TRAINING:-

It is true in many organizations that before an employee is fitted into a harmonious working relationship with
other employees, he is given adequate training. Training is the act of increasing the knowledge & skills of an
employee for performing a particular job. A trainee learns new habits, refined skills and useful knowledge
during the training that helps him improve performance. It is a systematic procedure for transferring
technical knowhow to the employees.
According to Edwin B. Flippo. “Training is the act of increasing the knowledge & skills of an employee for
doing particular job.”
According to deal B. Beach “the organized procedure by which people learn knowledge and skill for a definite
purpose”.
Thus training refers to the teaching and learning activities directed at helping employees acquire & apply the
knowledge skills, abilities & attitudes needed by a particular job & organization.
CHARACTERISTICS or NATURE OF TRAINING

1. Training is an act of increasing the knowledge, skills of an employee for doing a particular job.
2. Training is a continuous process.
3. It involves changing of skills, knowledge, attitudes or social behavior.
4. It is learning process & experience.
5. It seeks relatively permanent change in an individual that will improve.
6. Training is an aid to self development.
7. Essential part of management development.
8. Focus attention on the current job and it is job specific & addresses particular performance defeats or
problems.
9. Concentrates on individual employees.
10. Training complement selection if well qualified candidates are selected, there will be less need of
training inside the organization.
NEEDS & OBJECTS OF TRAINING

Training is needed to serve the following purpose
1. Job requirements–Newly recruited employee require training so as to perform their tasks effectively.
2. Promotion- Training is necessary to prepare existing employees for higher level jobs.
3. Transfers-Training is necessary to when a person moves from one job to another job. After training
the employee can change job quickly, improve his performance levels & achieve career goals
compatibly.
4. Technological changes-Technology is chaining very fast. New jobs require new skills. No
organization can miss the advantages of latest technology without well trained employees.
5. Increasing competition-Due to economic liberalization & globalization the firms are experiencing &
expansion & diversification of business & products. The kin competition has increased uncertainties
& complexities in the market. Thus, in order to face such challenges the firms has to improve their
capabilities.
TYPES OF TRAINING OR APPROACHES OF TRAINING

1. Orientation Training – It is also known as pre job induction training. This training provides new
employees with information about company policies, history, procedure pay & benefits, conditions of
employment etc. This training adjusts newly appointed employees to the work environment.
12
2. Skills training – This type of training is most common in organizations. The need for training in basic
skills such as reading, writing, computing, peaking, listing problem solving, leading etc. is identified
through assessment.
3. Refresher Training – Rapid changes in technology may force companies to go in for this king of
training organizing short term courses which incorporate the latest knowledge developments in a
particular field, the company may keep its employee up to date and ready to take emerging challenges.
4. Cross functional training- Involves training employees to perform operations in areas other than
their assigned jobs. There are many approaches to cross functional training job rotation can be used
to provide a manager in one functional area with a broader perspective than they would otherwise
have departments can exchange personnel for a certain period so that each employee how other
departments are functioning.
5. Training for promotion- employees of high potential are selected & they are given training before
promotion. This training is provided when vacant posts are filled up by internal recruitment i.e. by
promotion.
6. Safety Training- This training is being provided to minimize accidents & damage to machinery. It
involves instruction in use of machinery & safety devices.
7. Apprentice Training- It is used to prepare employees for a variety of skilled occupations & crafts for
examples it is provided to tailor electrotyper, machinist, printing pressman, designer etc.
8. Internship training- It refers to joint programme of training educational institutions & business
corporate selected students carry on regular school studies for period ranging from 3 to 12 months &
then work in the factory or office for a designed period of time.
9. Remedial Training- This training has the object to overcome he short coming in the behavior and
performance of old employees. Such employees are indentified and correct work methods and
procedures are taught to them.
10. Diversity Training- Considers all of the diverse dimension in the work place, such gender, age,
disability, lifestyle, culture education, idea etc. while designing a training programme. It concentrates
on awareness building & skills building.
11. Job Training- This training is a conducted with a well increase the knowledge & skills of an employee
for improving job performance.
12. Creative Training- Involves employees to ink unconventionally, go out of the box & levies unexpected
solutions.
Difference between Training & Development
Learning Dimension Training Development
Meant for Operatives
Focus Current job Current and future job
Scope Individual employee Work group or organization
Goal Fix current skill deficit Prepare for future work
demands
Initiated by Management The individual
Content Specific job related General knowledge
information
Time-frame Immediate Long term
The Training Process:-

In order to achieve the objectives, an approximate training programme is necessary
The process is as follows-
1. Organizational objectives: - An organization first assesses its objective. What business are use in
what product do we wish to provide to customers? These questions will decide what skills, knowledge,
attitudes & other personnel attributes are necessary for employees.
2. Training Policy: - A training policy presents the commitment of top management to employee
training. It consists of rules & procedures concerning training. A training policy is required to guide
the design & implementation of training programme.
13
3. Responsibility of training:- Training is a joint process. It responsibility has to be shared among the
top management, personal department, the line supervisor & the employees.
4. Training needs assessment:- It is the most important step in the process. It is from this needs
assessment not the entire training process will flow.
5. Selection of trainees: - It is necessary to decide who are to be trained new or old employees.
6. Training goals: - The Training goals should ensure that the assessed needs will be served.
7. Prepare the trainees: - The source of training depends to a great extent upon the instructors or the
resource persons.
8. Developing Training Package: - It involves deciding the content of training, designing support
materials & choosing appropriate training techniques.
9. Presenting the operation: - This is action phase of training. The instructor uses explanation &
demonstration for training.
10. Performance Tryout:- The trainee is asked questions in order to endure that he really knows &
understands the job. He is also asked to do the job several times.
11. Overall evaluation: - At the end of training, formal evaluation of the training programme is
necessary. This evaluation must be directly related.
PHASE OF TRAINING OR SYSTEMATIC APPROACH TO TRAINING
1. Training needs Assessment – Training efforts must aim at meeting the requirement of the
organization & the individual employees. The goal of assessment phase is to collect information to
determine if training is needed in the organization. If it is needed then it is important to determine
where in the organization it is needed, what kind of training is needed what specific knowledge, skills,
abilities should be taught. It includes:-
(a) Organizational analysis:- It involves a study of entire organization in kermes of its various objectives
&. Its integration patterns with environments.
(b) Task or Role analysis:- This is a detailed examination of a job, its components its various operations &
conditions under which it has to be performed.
(c) Person analysis:- Here the focus is on the individual in a given job.
2. Implementation phase:-
Implementation of training programme includes
1. Selecting training methods – Whether on the job training or of the job training.
14
2. Conduct training
3. Arrange physical environment.
Training Cycle
1 3 4 6
Identify Plan the Impleme Analysis

training training nt the and
needs 2 training review
Set 5
training Evaluate
objective
course
The Systematic Training Cycle

3. Evaluate phase- The goal of evaluation phase is to examine whether the training programme has been
effective in meeting the stated objectives.
IMPORTANCE
Training offers innumerable benefits to both employees and employers. It makes the employee more
productive and more useful to an organization. The importance of training can be studied under the following
heads:
Benefits to the business:

Rained workers can work more efficiently. They use machines, tools and materials in a proper way. Wastage
is thus eliminated to a large extent.
There will be fewer accidents. Training improves the knowledge of employees regarding the use of machines
and equipment. Hence, trained workers need not be put under close supervision, as they know how to handle
operations properly.
Trained workers can show superior performance. They can turn out better performance. They can turn our
better quality goods by putting the materials, tools and equipment to good use.
Training makes employees more loyal to an organization. They will be less inclined to leave the unit where
there are growth opportunities.
Benefits to the employees:

Training makes an employee ore useful firm. Hence, he will find employment more easily.
Training makes employees more efficient and effective. By combining materials, tools and equipment in a
right way, they can produce more with minimum effort.
Training enables employees to secure promotions easily. They can realize their career goals comfortably.
Training helps an employee to move from one organization to another easily. He can be more mobile and
pursue career goals actively.
Employees can avoid mistakes, accidents on the jo. They can handle jobs with confidence. They will be more
satisfied on their jobs. Their morale would be high.
Thus, training can contribute to higher production, fewer mistakes, greater job satisfaction and lower labour
15
turnover.
AREAS OF TRAINING
The area of Training in which training is offered may be classified into the following categories.
1. Knowledge
Here the trainee learns about a set of rules and regulations about the job, the staff and the products or
services offered by the company. The aim is to make the employee fully aware of what goes on inside and
outside the company.
2. Technical Skills
The employee is taught a specific skill (e.g., operating a machine, handling computer etc.) so that he can
acquire that skill and contribute meaningfully.
3. Social Skills
The employee is made to learn about himself and others, and to develop a right mental attitude towards the
job, colleagues and the company. The principal focus is on teaching the employee how to be a team
member and get ahead.
TRAINING METHODS
Training methods are usually classified by the location of instruction. On the job training is provided when the
workers are taught relevant knowledge, skills and abilities at the actual workplace; off-the-job training, on the
other hand, requires that trainees learn at a location other the real work sot. Some of the widely used training
methods are listed below.
ON THE JOB TRAINING METHODS:

1. Job instruction Training (JIT)
The JIT method (developed during World War II) is a four-step instructional process involving
preparation, presentation, performance try out and follow up. It is used primarily to teach workers how
to do their current jobs. A trainer, supervisor or co-worker acts as the coach. The four steps followed in
the JIT methods are:
1. The trainee receives an overview of the job, its purpose and its desired outcomes, with a clear
focus on the relevance of training.
2. The trainer demonstrates the job in order to give the employee a model to copy. The trainer shows
a right way to handle the job.
3. Next, the employee is permitted to copy the trainer’s way. Demonstrations by the trainer and
practice by the trainee are repeated until the trainee masters the right way to handle the job.
4. Finally, the employee does the job independently without supervision.
Merits:
 Trainee learns fast through practice and observation.
 It I economical as it does not require any special settings. Also mistakes can be corrected immediately.
 The trainee gains confidence quickly as he does the work himself in actual setting with help from
supervisor.
 It is most suitable for unskilled and semi-skilled jobs where the job operations are simple; easy to
explain and demonstrate within a short span of time.
Demerits:
 The trainee should be as good as the trainer if the trainer is not good, transference of knowledge and
skills will be poor.
 While learning, trainee may damage equipment, waste materials and cause accidents frequently,
 Experienced workers cannot use the machinery while it is being used for training.
2. Coaching
Coaching is a kind of daily training and feedback given to employees by immediate supervisors. It
involves a continuous process of learning by doing. It may be defined as an informal, unplanned training
16
and development activity provided by supervisors and peers. In coaching, the supervisor explains things
and answer questions; he throws light on why things are done the way they are; he offers a model for
trainees o copy; conducts lot of decision making meetings with trainees; procedures are agreed upon and
the trainee is given enough authority to make decisions and even commit mistakes. Of course, coaching
can be a taxing job in that the coach may not possess requisite skills to guide the learner in a systematic
way. Sometimes, doing a full day’s work may be more important than putting the learner on track.
3. Mentoring:
Mentoring is a relationship in which a senior manager in an organization assumes the responsibility for
grooming a junior person. Technical, interpersonal and political skills are generally conveyed in such a
relationship from the more experienced person. A mentor I a teacher, spouse, counselor, developer of
skills and intellect, host, guide, exemplar and most importantly, supporter and facilitator in the realization
of the vision the young person (protégé) has about the kind of life he wants a an adult.
The main objective is to help employees attain physiological maturity and effectiveness and get integrated
with the organization. In a work situation, such mentoring can take place at both formal and informal
levels, depending on the prevailing work culture and the commitment from the top management. Formal
mentoring can be very faithful, if management invests tie and money in such relationship building
experiences.
4. Job Rotation:
This kind of training involves the moment of trainee from one job to another. This helps him to have a
general understanding of how the organization functions. The purpose of the job rotation is to provide
trainees with a larger organizational perspective and a greater understanding of different functional area
as well as a better sense of their own career objectives and interest. Apart from relieving boredom, job
rotation allows trainees to build rapport with a wide range of individuals within the organization,
facilitating future cooperation among departments. The cross-trained personnel offer a great amount of
flexibility for organizations when transfers, promotions or replacements become inevitable.
5. Apprenticeship Training
Most craft workers such as plumbers and carpenters are trained through formal apprenticeship
programmes. Apprentices are trainees who spend a prescribed amount of time working with an
experienced guide, coach or trainer. Assistantship and internships are similar to apprenticeships because
they also demand high levels of participation from the trainee. An internship is a kind of on-the job
training that usually combines job training with classroom instruction in trade schools, colleges or
universities. Coaching, as explained above, is similar to apprenticeship because the coach attempts to
provide a model for the trainee to copy. One important disadvantage of the apprenticeship methods is the
uniform period of training offered to trainees. People have different abilities and learn at varied rates.
Those who learn fast may quite the programme in frustration. Slow learners may need additional training
time. It is also likely that in these days of rapid changes in technology, old skills may get outdated quickly.
Trainees who spend years learning specific skills may find, upon completion of their programmes, that
the job skills they acquired are no longer appropriate.
6. Committee Assignments
In this method, trainees are asked to solve an actual organizational problem. The trainees have to work
together and offer solution to the problem. Assigning talented employees to important committees can
give these employees a broadening experience and can help them to understand the personalities, issues
and processes governing the organization. It helps them to develop team spirit and work with unity
toward common goals. However, managers should very well understand that committee assignments
could become notorious time wasting activities. The above on-the-job methods are cost effective. Workers
actually produce while they learn. Since immediate feedback is available, they motivate trainees to observe
and learn the right way of doing things. Very few problems arise in the case of transfer of training because
the employees learn in the actual work environment where the skills that are learnt are actually used. On-
the-job methods may cause disruptions in production schedules. Experienced workers cannot use the
facilities that are used in training. Poor learners may damage machinery and equipment. Finally, if the
trainer does not possess teaching skills, there is very little benefits to the trainee.
17
OFF-THE-JOB METHODS
Under this method of training, the trainee is separated from the job situation and his attention is focused
upon learning the material related to his future job performance. Since the trainee is not distracted by job
requirements, he can focus his entire concentration on learning the job rather than spending his tie in
performing it. There is an opportunity for freedom of expression for the trainees. Off-the-job training
methods are as follows:
a. Vestibule training:
In this method, actual work conditions are simulated in a classroom. Material, fifes and equipment – those
that are used in actual job performance are also used in the training. This type of training s commonly
used for training personnel for clerical and semi-skilled jobs. The duration of this training ranges from a
few days to a few weeks. Theory can be related to practice in this method.
b. Role playing: It is defined as a method of human interaction that involves realistic behavior in
imaginary situations. This method of training involves action, doing and practice. The participants
play the role of certain characters, such as the production manager, mechanical engineer,
superintendents, maintenance engineers, quality control inspectors, foreman, workers and the like.
Method is mostly used for developing interpersonal interactions and relations.
c. Lecture method: The lecture is a traditional and direct method of instruction. The instructor
organizes the material and gives in to a group of trainees in the form of a talk. To be effective, the
lecture must motivate and create interest among the trainees. An advantage of lecture method is that
it is direct and can be used for a large group of trainees. Thus, costs and time involved are reduced.
The major limitation of the lecture method is that it does not provide for transfer of training effectively.
d. Conference/discussion approach: In this method, the trainer delivers a lecture and involves the
trainee in a discussion so that his doubt the job gets clarified. When big organizations use this method,
the trainees uses audio-visual aids such as black boards, mockups and slides; in some cases the
lectures are videotaped or audio taped. Even the trainee’s presentation can be taped for self
confrontation and self assessment.
The conference is thus, group-centered approach where there is a classification of ideas,
communication of procedures and standards to the trainees. Those individuals who have a general
educational background and whatever specific skills are required such as typing, shorthand, office
equipment operation, filing, indexing, recording etc. may ne provided with specific instructions to
handle their respective jobs.
e. Programmed instruction: This method has become popular in recent years. The subject matter to
be learned is presented in a series of carefully planned sequential units. These units are arranged
from simple to more complex levels of instruction. The trainee goes through these units by answering
questions or filing the blanks. This method is thus, expensive and time-consuming.
EVALUATION OF A TRAINING PROGRAMME

The specification of value forms a basis for evaluation. The basis of evaluation and the mode of collection of
information necessary for evaluation should be determined at the planning stage.
The process of training evaluation has been defined as any attempt to obtain information on the effects of
training performance and to assess the value of training in the light of that information. Evaluation helps in
controlling and correcting the training programme. Hamblin suggested five levels at which evaluation of
training can take place, viz, reactions, learning, job behavior, organization and ultimate value
1. Reactions: Trainee’s reactions to the overall usefulness of the training including the coverage of the
topics, the method of presentation the techniques used to clarify things, often throw light on the
effectiveness of the programme. Potential questions to trainees might include:
i. What were your learning goals for the programme.
ii. Did you achieve them?
iii. Did you like this programme?
iv. Would you recommend it to others who have similar learning goals?
v. What suggestions do you have for improving the programme?
vi. Should the organization continue to offer it?
18
2. Learning: Training programme, trainer’s ability and trainee’s ability are evaluated on the basis of
quantity of content learned and time in which it is learned and learner’s ability to use or apply the
content learned.
3. Job behavior: This evaluation includes the manner and extent to which the trainee has applied his
learning to his job.
4. Organization: This evaluation measures the use of training, learning and change in the job behavior
of the department/organization in the form of increased productivity, quality, morale, sales turnover
and the like.
5. Ultimate value: It is the measurement of ultimate result of the contributions of the training
programme to the company goals like survival, growth, profitability etc. and to the individual goals
like development of personality and social goals like maximizing social benefit.
Methods of Evaluation
Various methods can be used to collect data on the outcomes of training. Some of these are:
 Questionnaires: Comprehensive questionnaires could be used to obtain opinions, reactions, and
views of trainees.
 Tests: Standard tests could be used find out whether trainees have learnt anything during and after
the training.
 Interviews: Interviews could be conducted to find the usefulness of training offered to operatives.
 Studies: Comprehensive studies could be carried out eliciting the opinions and judgments of trainers,
superiors and peer groups about the training.
 Human resource factors: Training can also be evaluated on the basis of employee satisfaction, which
in turn can be examined on the basis of decrease in employee turnover, absenteeism, accidents,
grievances, discharges, dismissals, etc.
 Cost benefit analysis: The cost of training (cost of hiring trainers, tools to learn, training centre,
wastage, production stoppage, opportunity cost of trainers and trainees) could be compared with its
value (in terms of reduced learning time, improved learning superior performance) I order to evaluate
a training programme.
Feedback: After the evaluation, the situation should be examined to identify the probable causes for gaps in
performance. The training evaluation information (about costs, time spent, outcomes etc) should be provided
to the instructors, trainees and other parties concerned for control, correction and improvement of trainees
activities. The training evaluator should follow it up sincerely so as to ensure effective implementation of the
feedback report at every stage.
CAREER PLANNING
Concept of career:
According to E.H. Schein, “A career is a sequence of positions held by a person during the course of a lifetime.
It comprise of a series of activities that provide continuity, order and meaning to a person’s life.”
Features:
1. It is a proper sequence of job related activities.
2. It may be individual centered or organization centered.
3. It is a sequence of career progression within an occupation.
4. It is a lateral movement in an occupation of an individual over his employment span.
5. It is a sum total of all the jobs occupied by a person during his working life.
6. A career develops overtime
7. The important element in one’s career is experiencing psychological success which is feeling a sense
of personal accomplishment and fulfillment.
8. It is the individual who ultimately must judge the success of his career.
19
Meaning of Career Planning:

Career planning is the process by which one selects career goals and the path to reach goals. The major focus
of career planning is on assisting the employees achieve a better match between personal goals and the
opportunities that are realistically available in the organization. Career programs should not concentrate only
on career growth opportunities. Hence, career planning efforts need to pinpoint and highlight those areas
that offer psychological success instead of vertical growth.
According to Schermerbon, hunt and osborm, “Career planning is a process of systematically matching career
goals and individual capabilities with opportunities for their fulfillments.
Objectives of career planning:

1. Attract and retain talent by offering careers not jobs.
2. Use human resources effectively and achieve greater productivity.
3. Improve employee morale and motivation.
4. To encourage individuals to explore and gather information, which enables them to gain
competencies. Make decisions, set goals and take action.
5. To increase employee productivity.
6. To prevent job obsolescence.
7. To improve the quality of employee work life.
8. To help companies meet internal staffing requirements and reduce turnover.
9. To help companies meet their need for challenge and achievements of career goals.
10. To develop an awareness of each employee uniqueness.
Advantages
 Benefits to employee: The employee has advance knowledge of career opportunities within the
company. He knows where he stands, where he wants to go, who is ahead of him, how to scale the
corporate ladder. This helps him set his career goals more realistically and take appropriate steps to
realize them.
 Benefits to organization: Organization can base their decisions more systematically. Fast tracks for
stars could be arranged, training to slow movers can be provided, replacements can be planned in
advance, hard hard-working, talented people can be retained through offering attractive career
options and compensation plans: job assignments can be made based on merit etc.
 Relations: Relations between the employer and the employee would become more cordial; employee
skills could be used properly; valued employees could be retained, there will be an expanded image of
the company as a people developer.
Limitations
 For small units (where there are very few opportunities for the vertical growth of employees) it is not
suitable.
 Several environmental factors such as government policy, laws of the land, reservation based on
castes, regional pressures, union demands may upset career planning and development efforts.
 In the organization fails to focus on any of the career related issue clearly, problems may crop up (eg.,
early career issues, mind career issues, late career issues, minority group, dual career couples, failure
to match task and emotional needs, post retirement issues, forced lay-off issues etc.).
Process of Career Planning:

The career planning process involves the following steps:
a. Identifying individual needs and aspirations:
The basic purpose of such an exercise is to an employee form a clear view about what he should do to
build his career within the company. Workshops and seminars increase employee’s interest by
showing the value of career planning. They help employees set career goals, identify career paths and
uncover specific career developments activities.
b. Analyzing career opportunities:
20
Once career need and aspirations of employees are known the organization has to provide career
paths for each position. Career paths show career progressions, possibilities clearly. They indicate the
various positions that one should hold over a period of time, if one is able to perform well.
c. Aligning needs and opportunities:
This process consists of two steps: identify the potential of employees and then undertake career
developments programs with a view to align employee need and organizational opportunities.
d. Action plans and periodic reviews:
The action plans of individual career development are made. This will be helpful for the employee to
know in which direction he is moving.
INTERNAL MOBILITY:
“The lateral or vertical movement of an employee within an organization is called internal mobility.” It may
take place between jobs in various departments or divisions. Some employees may leave the organization for
reasons such as better prospects, retirements, terminations etc. Such movements are known as internal
mobility’s.
Purpose of Internal Mobility:

1. Improve organizational effectiveness
2. Improve employee effectiveness
3. Adjust to changing business operations
4. Ensure discipline
Internal mobility can take place in any of the following manner:

1. Promotion
2. Demotion
3. Transfer
Internal
Mobility
Promotion Demotion Transfer
PROMOTION:
Promotion is an upward movement of employee in the organization to another job, higher in organization
hierarchy. In the new job the employee finds a change in salary, status, responsibilities and grade of job or
designation.
Types of Promotion:
Vertical promotion:
Under vertical promotion the employees are promoted, from one rank to next higher rank in the same
department.
Horizontal promotion:
Under such promotion, employee may be promoted to higher ranks in other departments as well.
Base of promotion:
Seniority based promotion:
If sonority is the basis for promotion, an employee with the longest period of service will get promoted,
irresponsive of whether he is competent to occupy the higher post or not.
21
Merits of seniority based promotion:

1. It is fairly objective
2. It is easy to measure the length of service and judge the seniority.
3. By seniority, everyone is sure of getting the promotion one day.
4. It I easy to administer.
5. Labour unions welcome seniority based promotions.
6. Loyalty is rewarded.
7. Seniority and experience goes hand in hand.
Demerits of seniority based promotion:
1. The learning capabilities of senior people may diminish (reduce).
2. It demotivates the young and ore competent employees.
3. It skills the zeal and interest as everybody will be promoted without showing any all round growth or
promise.
4. Promotion by seniority frustrates really talents employees.
5. It destroys initiative of people.
Merit based promotion

Merit based promotion occur when an employee is promoted because of superior performance in the
current job.
Merits:
1. Promotion by merit is a reward to encourage those employees who make a successful effort to
increase their knowledge or skills and who maintain a high level of productivity.
2. It motivates employee to work hard.
3. It helps employee to improve their knowledge, acquire new skill and contribute to organizational
efficiency.
4. Efficiency is encouraged, recognized and rewarded.
5. Productivity increases.
6. Organization goals can be attained effectively.
Types of employee separation:
22
Voluntary Separations:
1. Quits: W.H. Mobley says that the decision to quit depends on:
(i) The employees level of dissatisfaction with the job and
(ii) The number of attractive alternatives the employee has outside the organization.
2. Voluntary Retirements or resignations: An employee may decide to resign voluntary on personal or
professional reasons. Sometimes employee may be forced to resign from the job compulsorily in the
grounds of duty, misuse of funds etc.
Involuntarily Separations
1. Mandatory Retirements: Retirements has been characterized by some as a role less role. It is a
compulsory retirement of the employee from his services.
2. Discharge and Dismissal: Discharge is the most drastic disciplinary step that manager can take.
Dismissal is the termination of the services of an employee as punitive measure for some misconduct.
Discharge also means termination of the service of an employee, but not necessary as a punishment.
Discharge is serious because it impairs earning and image of the employees.
3. Layoffs: A layoff is a temporary separation of the employee from his employer at the instance of the
latter without any prejudice to the farmer. Layoff is the failure, refusal or inability of an employer to
give employment to a worker whose name is present join the rolls but who has not been retrenched.
4. Retirement: Retrenchment is the permanent termination of employee’s services due to economic
reasons. These include
a) Replacement of labour by machines
b) Closure of plant
c) Surplus staff
5. Suspension of an employee: Suspension means prohibiting an employee from attending workplace
and reforming normal duties assigned to him. Till the enquiry and investigation in case of misconduct
is completed, the employee is kept suspended.
23
UNIT-IV
JOB EVALUATION
Wage or salary is the most important factor in maintaining and developing good employer employee
relations. Job evaluation is the process which establishes a consistent and systematic relationship among
compensation rates for all jobs within the organization. Determining of base compensation is also important
for the employee become it determines the status of employee in the society. Employee should be
compensated on the basis of –
1) The nature of the job
2) The present relative worth of the job.
3) The defectiveness with which the individual performs the job.
According to Flippo, “Job evaluation is systematic and orderly process of determining the worth of a job in
relation to other jobs”.
According to Kimball & Kimbal, “Job evaluation is an effort to determine the relative value of every job in a
plant to determine what the fair basic wage for such a job should be.”
Objectives of Job Evaluation-

1) To maintain complete and accurate description of each job or occupation.
2) To provide a standard procedure to determine the relative worth of each job.
3) To ensure that fair wages is paid to all qualifies employees.
4) To provide an accurate and fair consideration of all employees for advancement and transfer.
5) To provide information for selection, placement and training of employees.
Factors in Job Evaluation –

1) Training level or qualifications requirements
2) Knowledge and skills requirements
3) Complexity of tasks
4) Interaction with various level of the organization.
5) Problem solving and independent judgment
6) Accountability and responsibility
7) Decision – making authority
8) Degree of suppression required
9) Cross-training requirements
10) Working conditions.
11) Degree of difficulty in filling job.
Procedure of Job Evaluation –

1) Job analysis – collection of data
2) Job description – to give the detailed account of the job
3) Selection and preparation of job evaluation plan
4) Job grading or classification
5) Pricing the jobs
6) Installation of programme
Principles of J.E. Programme –

1) Job should be rated not the job holder.
2) Elements for rating should be easily explainable.
3) Elements should be clearly defined and properly selected
4) Evaluation plan should be communicated to workers and supervisors.
5) Foreman should participate in the rating of the jobs in their own departments.
24
6) Cooperation should be achieved from workers.
Methods of Job Evaluation –

A. Non-Quantitative Methods –
a. Ranking Method: Under this system, all the job are arranged or ranked in the order of
importance from the simplest to the hardest or in the reverse in, order each successive job
higher or lower than the previous one in the sequence.
b. Job classification or grading system: Job grading refers to the classification and analysis of
jobs which are performed in an organization and to their relative levels. The jobs may be
graded as skilled, unskilled, routine, administrative, shop jobs, clerical jobs, sales jobs and so
on.
B. Quantitative Methods –
a. Factors comparison method: This method is an application of the person to person system of
merit rating to job evaluation. In fact, this method is a combination of point method and rank
method. The steps in this method are as follows:
i. Select key factors.
ii. Select key jobs
iii. Determine correct rates of key jobs
iv. Rank key jobs under each job factor
v. Allocate the correct rate of each key job among the job factor.
vi. Evaluation all other jobs in terms of these factors yardistics
vii. Design, adjust and operate wage structure
b. Point-Method – This method is most widely used system of job evaluation. It involves a more
detailed advantages of job evaluations.
i. Job evaluation is a logical and objective method of ranking and grading jobs.
ii. Data or information generated during job evaluation can be used for decisions
related to selection placement, training transfer and promotion of employees etc.
iii. It is helpful in constructing an appropriate policy for payments of wages which helps
in attracting better works.
iv. It helps to fit the newly created jobs.
v. Job evaluation also helps to redesign the jobs by reallocating the easy and difficult
tasks equally among various jobs.
Disadvantages –
1) Statutory and other factors
2) Highly subjective
3) Cyclist effect
4) Promotes grievances
5) Conflict between worker and management
6) Inflexibility
7) Require time and finance
Merit Rating –
MR is the comparative evaluation and analysis of the individual merit of the employees. It analyzes the
differences in performance between employees who are working on similar jobs and would therefore earn
the same wages. MR is also known as ‘performance appraisal’, ‘employee rating’, ‘efficiency rating’,
‘performance evaluation’, ‘performance review’, ‘personnel rating’ or employee evaluation.
Acc. To Scott, Clotheir and Spriegel:

“Performance appraisal (or merit rating) is the process of evaluating the employees performance on the job
in terms of requirements of the job.”
25
Characteristics of Merit Rating –

1) It is a means of self-control, judgement and evaluating “Potentiality”.
2) Merit rating evaluates the relative merit of workers.
3) It is a scientific study in which formal procedures and actual data are used in this study.
4) Co-operation
5) Quality of work done
6) Attendance and regularity
7) Education, skill, experience
Objectives of Merit rating –

Merit rating has the following objectives –
1) To evaluate the merit of an employee for the purpose of promotion, increment, reward and other
benefits.
2) To established and develop a wage system and incentive scheme.
3) To determine the suitability of an employee for a particular job.
4) To analyze the merits (or demerits) of a worker and help him in developing his capability and
competence for the job.
5) Help in executive decisions related to human resource department (HRD).
6) Appraisal of workers.
7) Continuous record for the worth of a worker.
8) Tool for decisions related to training, placement, promotion, confirmation, increment, transfer and
counseling of workers.
9) Useful for understanding areas of improvement in a worker.
10) Helps in discovering special talents in a worker.
11) Useful in personal research, validation of training objectives and training methodology.
Advantages of Merit rating –

1) Systematic evaluation of employees.
2) Facilitates matching of job with individual
3) Facilitates promotion related decisions
4) Facilitates training related decisions
5) Helpful indentifying weakness of the employees which may systematically be removed
6) Provides base for guidance & counseling for the employees.
7) Develops healthy competition among workers improve performance
8) Serve as motivational tool for employees.
9) Provides objectives basis for bonus, incentive wage salary related decisions.
10) Improves employee-employer relationship due to increased trust and confidence.
11) Sound base for negotiation with trade union
Disadvantages of merit rating –

1) The rating of employees may be subjective and this creates dissatisfaction among them.
2) Evaluators or rates tend to give much premium to …………. ratings o an employee who might have
improved himself in the course of time.
3) Rates may be influenced by raters own attitude and self-made rating factors which are not
consistent with the merit, rating process. Incentives schemes may not be introduced advantageously
if merit rating is inaccurate, unreliable and subjective.
Methods of wage payment

The wage – policy of an organization is determined by keeping in view the principles on wage-determination
and taking into account the various factors affecting wages. It is not only the concern of the organization.
The four important constituents of wage policy are:
I. The level of wages: An average of the rates of wages paid for the organization is called wage level.
26
Example:
1. The ‘minimum wages Act’ prescribing minimum rates of wages.
2. The ‘payment of wages Act’ regulating payment of wages.
3. The ‘payment of Bonus Act’, “The Equal Remuneration Act” etc. have been framed and
brought into force.
II. Methods of wage payment:- Different methods or systems of wage payments are prevalent in
different countries. An organization usually adopts the following methods:
1. Time wage system:-under this system, the time is made a basis for determining wages of a person. The
formulas used for calculating wages under this system are:
Earning = T x R
Where T=Time Spent
R=Rate of pay
Merits
1. Simplicity.
2. Sense of security.
3. Quality of product is more important.
4. Equitable from of wage payment.
5. Trade unions accept this form of wage payment quite willingly.
Demerits
1. It does not provide any incentive to greater effort or hard worker.
2. The superior workers are repressed under this system.
3. It leads to a reduced quantum of work unless a strict and close supervision is arranged.
4. Difficulty to determine labour cost.
5. Low production.
II Piece Wage Systems:-

According to the piece rate system, a worker is paid for the amount of work performed rather than on tie
basis. The wages payable to a worker under this system is calculated by the formula.
Where. N, R
N= Number of units produced
R= Wage rate per unit of product
Merits:
1. It helps in speediating production
2. In the case of excessive work, the ‘work load’ can be distributed among other workers.
3. Less time consumption is left.
4. Less supervision is required.
5. Employers are protected against lazy and idlers through this system.
6. It avoids frequent industrial disputes.
Demerits
1. Payment under this system is irregular and uncertain for workers point of view
2. During the periods of illness, or disability, the worker is not paid any amount.
3. The system consumers enough time & space.
4. Too much emphasis on the quantity of production may lower the quality of products.
5. It becomes the source of grievances
III Balance method: This method is a combination of time wage and piece wage methods. In this method a
worker is paid a fixed wage based on the time rate with a provision of piece wage method. This is just like
minimum rent with provision of short working recoupment in case of royalty.
This method is also known as debt method, if the wage calculated at piece rate exceed time rate the worker
gets credit. On the other hand, if time wages exceed piece wages, the worker is paid time wage and the deficit
is carried forward as debt to be reconserved in future.
27
This method provides a sense of security to the employees. it is suitable in industries, where the flow of work
is minimum. But rates in this method have to be fixed on the most scientific basis.
Some of the modern approaches to wage determination are-
a. Skill based pay- in this system employees are compensated for their job – related skills. This is also
known as knowledge based pay.
b. Competency based pay: - Act the knowledge, skills and behavior of an individual that contribute to a
workers performance is called competency.
c. Broad handing:- this technique reduce the number of salary levels into broad salary bends. These
bends normally, have a fixed minimum and maximum, which over plan with other bands.
types of piece Rate system:
1. Straight piece Rate:- in this method one piece rate is fixed and whole production is paid basis. The
rate of payment remains the same irrespective of level of output.
2. Increasing piece rate: - in this method different rates are fixed for different levels of production.
Higher rates are given when production increases beyond a certain level.
3. Decreasing piece rate:- in this method the rate per unit decreases with increase in output. Re 1 per
unit may be allowed up to a production of hundred units, 0.9p per unit for production between 101-
150 units, 0.85p per unit for an output beyond 150 units and so on This method discourage workers
from rising their output because netter efforts are rewarded at lower piece rates.
Meaning
Wages: payment to labour engaged directly in production is called wages.
Salaries: Is the remuneration for the quantum of services rendered by person whose our out is difficult to be
measured such as, remuneration paid to clerical or managerial or supervisory staff.
Types of wages-
1. Living wages- According to Justice Higgins “ during wage is a wage sufficient to ensure the workman
food, shelter, clothing frugal comfort, provision for evil days etc. as regard for the skill of an artisan if
he is one”.
2. Minimum wages- Means the payment to a workman which is first sufficient to cover the bare
necessities of food, shelter & clothing for himself and his family and to maintain his work efficiency.
Minimum wage in a country is fixed by the government in consultation with business organization
and trade unions.
3. Fair wage- A fair wage is something more than the minimum wages. Fair wage is a mean between
the living wage & the minimum wage. The lower limit of fair wage must obviously be the minimum
wage.
The fair wages depends upon the following factors-
1. Minimum wages
2. Capacity of the industry to pay
3. Prevailing rates of wages in the same similar occupation in the same or neighboring localities.
4. productivity of labour
5. Level of national income and its distribution
6. The place of the industry in the economy of the country.
Objectives- The wage and salary administration tries to achieve following objectives-
1. To establish a fair remuneration
2. To attract competent personnel.
3. To retain the present employees
4. To improve productivity
5. To control costs
6. Job sequences and lines
7. To improve union management relations
8. To improve public image of the company.
Factors Influencing wage & salary structure and Administration:
A sound wage policy must be adopted to establish a fair differential in wages based upon differences in job
28
contents.
1. Supply and Demand
2. Prevailing market rates
3. Organizations capacity to pay
4. Productivity
5. Job requirements
6. Bargaining power of trade union
7. Other factors.
Principles of wage & salary Administration-
1. There should be a definite plan for determination of wage & salary.
2. Variation in wage rate should be justified according to job requirements.
3. There should principle of equal pay for equal work.
4. The general level of wages and salary should be according to the prevailing rates in market.
5. Every worker should be well informed about his position his job requirements and wage structure.
6. The wage should be sufficient enough to ensure a reasonable standard of living.
7. There should be flexibility in wage & salary structure.
INCENTIVE COMPENSATION SYSTEM

Meaning of incentive Plans: Incentives are monetary benefits paid to workers in recogritiori of their
outstanding performance.
According to the National commission on labour “Wage incentives are extra financial motivation. They are
designed to stimulate human effort by rewarding the person over and above the time rated remuneration for
improvements in present or targeted results.
Objectives:
Wages incentive scheme aim at the fulfillment of following objectives.
1. To improve the profit of a firm through a reduction in the unit costs of labour and materials or both.
2. To avoid or minimize additional capital investment for the expansion of production capacity.
3. To increase a worker’s earning without dragging the firm into a higher wage rate structure regardless
of productivity.
4. To use wage incentives as a useful tool for securing a better utilization of manpower.
Characteristics
1. Minimum wages are guaranteed to all workers.
2. An incentive plan may consist of both monetary and non monetary elements.
3. For successful incentives plan, the essentials are tinning, recuracy and frequency of incentives.
4. The incentive plan requires that it should be properly communicated to the workers to encourage
individual performance.
Merits of the Incentive system:-
1. Incentive system is a healthy way to strengthen the productive front of the industry.
2. Employers as well as workers, both are at advantage.
3. Incentive system reduces the burden of heavy supervisory costs.
4. It has been found that the cases of absenteeism are comparatively lower than in other system of wage
payment.
5. It develops healthy industrial relations and reduces chances of disputes between the workers and the
employers.
6. Incentives system provides better scope for developing human ingenuity.
7. Incentive system develops the feeling co-operation among the workers.
Demerits
1. If there is no ceiling on incentive earnings, some workers may work overtime and spoil their health.
2. For maximizing the output, quantity may be scarified unless a strict check is maintained.
3. Once an incentive plan is introduced, management may face still resistance from workers while
revising standards and rates due to changes in technology, methods, machinery and materials.
4. Workers may disregard safely regulations in orders to produce more.
29
5. Introduction and administration of incentive plans requires additional cost and time of clerical staff.
6. Sometimes, production flow may be disrupted due to the fault of management. In that case, workers,
ay insist on compensation.
7. Peer jealousy and conflicts may arise if some workers earn more than other.
Essential of a good Incentive Plan:-

1. Suitable climate
2. Workers Participation
3. Simplicity
4. Just and Equitable
5. Organization and method studies
6. Scientifically set standards.
7. Minimum guaranteed wages.
8. No upper limit
9. Economical.
10. Stability
11. Comprehensive coverage
12. Conductive to workers health & welfare.
13. Prompt payment
14. Grievance Machinery
15. Follow up
Types of Incentive payments

Organization can opt for an effective incentive plan from the various alternatives available.
1. piece rate:- This incentive is given to the employees based on the number of units produced.
2. Commission: It is given to employees on a pre-established goal or criterion.
3. Bonuses: Bonuses are given to employees on a pre-established goal or criterion.
4. Merit Rises:-Merit rises are given on the basis of predetermined policies.
5. Standard hour pay: - Provides incentives to employees based on the time saved by them during the job
course.
6. Maturity Curves:- Considers the experience and performance of an employee for giving out the
incentives.
7. Gain sharing: - Plans undertake those employees who give outstanding performance and provide for
cost saving measures.
8. Profit sharing: - Incentive plans are practiced in retail and FMCG sectors. If refers to giving out the
share of profits, the organization earned to all the employees.
PERQUISITES
The term “perquisites” is often colloquially to refer to those benefits of a more discretionary nature.
Perquisites are also called ‘perk’. These are those benefits that are provided to executives above and beyond
the benefits provided to all other employees. Generally executive perquisites include office space, parking \,
cell phones, annual medical checking, company car, club membership, first class air travel, employment
contracts, legal and financial services, change in control agreements, special.
List of perquisites
1. Employment contracts
2. Retirement plans
3. Control-agreements: Change-in-control agreement also known as “Golden Parachutes”, provide the
executive with protection against the risk of losing their employment if the company is acquired.
4. Life-insurance plans: Companies offer executive additional life insurance coverage as a perquisite,
beyond the company group plan.
5. relocation packages
30
6. make whole or leave behind payments

7. leave travel concession (LIC)
8. Free medical facilities etc.
31

B.B.A. II Sem. Subject: Human Resource Management Unit-I HR: "The Most Vibrant and Dynamic Resource" - Pulapa Subba Rao Introduction

Uploaded by

Copyright:

Available Formats

B.B.A. II Sem. Subject: Human Resource Management Unit-I HR: "The Most Vibrant and Dynamic Resource" - Pulapa Subba Rao Introduction

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

B.B.A. II Sem. Subject: Human Resource Management Unit-I HR: "The Most Vibrant and Dynamic Resource" - Pulapa Subba Rao Introduction

Uploaded by

Copyright:

Available Formats

B.B.A. II Sem.

Subject: Human Resource Management

(I). MANAGERIAL FUNCTIONS:

(II). OPERATIVE FUNCTIONS:

1) Procurement or employment function:

ROLE OF PERSONNEL MANAGER:

1. Administrative role: It includes:

Nature of Job Analysis –

Job Analysis Job Duties

Uses of Job Analysis –

Process of Job analysis

Job Description Job Specification Role Analysis

 Promotions – Most of the internal candidates would be submitted to take up higher

External sources include –

Factors affecting HR plan –

Organizational Objectives &

Control & Evaluation

Surplus Restricted Shortage

etc affect the HRP.

Hiring Decision Step 8

MEANING & DEFINITION OF TRAINING:-

CHARACTERISTICS or NATURE OF TRAINING

NEEDS & OBJECTS OF TRAINING

TYPES OF TRAINING OR APPROACHES OF TRAINING

The Training Process:-

PHASE OF TRAINING OR SYSTEMATIC APPROACH TO TRAINING

Identify Plan the Impleme Analysis

The Systematic Training Cycle

Benefits to the business:

Benefits to the employees:

ON THE JOB TRAINING METHODS:

EVALUATION OF A TRAINING PROGRAMME

Meaning of Career Planning:

Objectives of career planning:

Process of Career Planning:

Purpose of Internal Mobility:

Internal mobility can take place in any of the following manner:

Promotion Demotion Transfer

Merits of seniority based promotion:

Merit based promotion

Types of employee separation:

Objectives of Job Evaluation-

Factors in Job Evaluation –

Procedure of Job Evaluation –

Principles of J.E. Programme –

6) Cooperation should be achieved from workers.

Methods of Job Evaluation –

Acc. To Scott, Clotheir and Spriegel:

Characteristics of Merit Rating –

Objectives of Merit rating –

Advantages of Merit rating –

Disadvantages of merit rating –

Methods of wage payment

II Piece Wage Systems:-

INCENTIVE COMPENSATION SYSTEM

Essential of a good Incentive Plan:-

Types of Incentive payments

6. make whole or leave behind payments

You might also like