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B.Com.102 22

HUMAN RESOURCE MANAGEMENTII - Semester

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KARAIKUDI – 630 003 DIRECTORATE OF DISTANCE EDUCATION







B.Com. 102 22














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B.Com.II - Semester

102 22

Directorate of Distance Education

HUMAN RESOURCE MANAGEMENT

ALAGAPPA UNIVERSITY[Accredited with ‘A+’ Grade by NAAC (CGPA:3.64) in the Third Cycle


(A State University Established by the Government of Tamil Nadu)

KARAIKUDI – 630 003

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SYLLABI-BOOK MAPPING TABLE Human Resource Management

BLOCK I: BASICS OF HUMAN RESOURCE MANAGEMENT UNIT – I: Human Resource Management - Definition and Concept – Features – Objectives – Functions - Scope and Development of Human Resource Management - Importance of Human Resource Management - Human Resource Practices. UNIT – II: HRM and Personnel Management – Concept of Personnel Management - Personnel Management in India - Functions of the Labour Welfare Officer - Difference Between Personnel Management and HRM. UNIT – III: Human Resource Planning - Concept of Human Resource Planning (HRP) - Factors in HRP - Process of HRP. UNIT – IV: Job Analysis and Design - Job Analysis - Job Description - Writing a Job Description - Job Specification - Job Design.

BLOCK II: EMPLOYEE SELECTION AND TRAINING UNIT – V: Recruitment – Concept of Recruitment - Factors Affecting Recruitment - Types of Recruitment. UNIT – VI: Selection: Concept of Selection - Process of Selection - Selection Tests - Barriers in Selection. UNIT – VII: Induction - Meaning and Definition of Induction - Need for Induction - Problems Faced during Induction - Induction Programme Planning UNIT – VIII: Training - Concept and Significance of Training - Training Needs - Training Methods - Types of Training.

BLOCK III: PERFORMANCE AND BENEFITS OF EMPLOYEES UNIT – IX: Performance Appraisal - Concept of Performance Appraisal - Purpose of performance appraisal – Process - Methods of Performance Appraisal - Major Issues in Performance Appraisal. UNIT – X: Wages and Salary – Nature and Significance of Wage and Salary Administration - Theories of Wages - Methods of Wage Fixation. UNIT – XI: Incentives: Concept of Incentives - Effective Incentive System - Types of Incentive Scheme.

BLOCK IV: DEVELOPMENT & GROWTH UNIT – XII: Employee Relations - Concept of Employee Relations - Managing Discipline - Managing Grievance - Employee Counseling. UNIT – XIII: Employee Empowerment – Concept of Employee Empowerment - Process of Empowerment - Empowerment in Indian Scenario - Empowerment in Global Scenario. UNIT – XIV: International HRM – Comparison of Domestic and International HRM - Challenges in International HRM.

Syllabi Mapping in Book

Unit 1: Introduction to Human Resource Management

(Pages 1-14);Unit 2: HRM and Personnel

Management (Pages 15-35);

Unit 3: Human Resource Planning (Pages 36-54);

Unit 4: Job Analysis and Design (Pages 55-67)

Unit 5: Recruitment (Pages 68-82);

Unit 6: Selection(Pages 83-104);

Unit 7: Induction (Pages 105-113);Unit 8: Training (Pages 114-134)

Unit 9: Performance Appraisal (Pages 135-161);

Unit 10: Wages and Salary (Pages 162-179);

Unit 11: Incentives (Pages 180-201)

Unit 12: Employee Relations (Pages 202-223);

Unit 13: Employee Empowerment (Pages 224-246);

Unit 14: International HRM (Pages 247-264)

CONTENTSINTRODUCTION

BLOCK I: BASICS OF HUMAN RESOURCE MANAGEMENTUNIT 1 INTRODUCTION TO HUMAN RESOURCE MANAGEMENT 1-14 1.0 Introduction 1.1 Objectives 1.2 Human Resource Management: Features, Scope and Development

1.2.1 Definition, Importance and Objectives of HRM 1.2.2 HRM Functions 1.2.3 HRM Challenges

1.3 Human Resource Practices 1.4 Answers to Check Your Progress Questions 1.5 Summary 1.6 Key Words 1.7 Self Assessment Questions and Exercises 1.8 Further Readings

UNIT 2 HRM AND PERSONNEL MANAGEMENT 15-35 2.0 Introduction 2.1 Objectives 2.2 Concept of Personnel Management 2.3 Personnel Management in India 2.4 Functions of the Labour Welfare Officer 2.5 Difference Between Personnel Management and HRM 2.6 Answers to Check Your Progress Questions 2.7 Summary 2.8 Key Words 2.9 Self Assessment Questions and Exercises 2.10 Further Readings

UNIT 3 HUMAN RESOURCE PLANNING 36-54 3.0 Introduction 3.1 Objectives 3.2 Concept and Process of Human Resource Planning (HRP) 3.3 Factors in Human Resource Planning 3.4 Answers to Check Your Progress Questions 3.5 Summary 3.6 Key Words 3.7 Self Assessment Questions and Exercises 3.8 Further Readings

UNIT 4 JOB ANALYSIS AND DESIGN 55-67 4.0 Introduction 4.1 Objectives 4.2 Job Analysis and Job Design 4.3 Job Description 4.4 Job Specification

4.5 Answers to Check Your Progress Questions 4.6 Summary 4.7 Key Words 4.8 Self Assessment Questions and Exercises 4.9 Further Readings

BLOCK II: EMPLOYEE SELECTION AND TRAINING

UNIT 5 RECRUITMENT 68-82 5.0 Introduction 5.1 Objectives 5.2 Recruitment: Concept, Factors and Types 5.3 Answers to Check Your Progress Questions 5.4 Summary 5.5 Key Words 5.6 Self Assessment Questions and Exercises 5.7 Further Readings

UNIT 6 SELECTION 83-104 6.0 Introduction 6.1 Objectives 6.2 Concept of Selection: Process and Selection Tests

6.2.1 Objectives of Selection 6.2.2 Methods of Selection

6.3 Barriers in Selection 6.4 Answers to Check Your Progress Questions 6.5 Summary 6.6 Key Words 6.7 Self Assessment Questions and Exercises 6.8 Further Readings

UNIT 7 INDUCTION 105-113 7.0 Introduction 7.1 Objectives 7.2 Meaning, Definition and Need for Induction 7.3 Problems Faced during Induction 7.4 Induction Programme Planning 7.5 Answers to Check Your Progress Questions 7.6 Summary 7.7 Key Words 7.8 Self Assessment Questions and Exercises 7.9 Further Readings

UNIT 8 TRAINING 114-134 8.0 Introduction 8.1 Objectives 8.2 Training: Concept, Significance and Needs 8.3 Types of Training 8.4 Answers to Check Your Progress Questions 8.5 Summary 8.6 Key Words

8.7 Self Assessment Questions and Exercises 8.8 Further Readings

BLOCK III: PERFORMANCE AND BENEFITS OF EMPLOYEESUNIT 9 PERFORMANCE APPRAISAL 135-161 9.0 Introduction 9.1 Objectives 9.2 Performance Appraisal: Process and Techniques

9.2.1 Purpose of Performance Appraisal 9.2.2 Need of Performance Appraisal 9.2.3 Process of Performance Appraisal 9.2.4 Methods or Techniques of Performance Appraisal


UNIT 10 WAGES AND SALARY 162-179 10.0 Introduction 10.1 Objectives 10.2 Wage and Salary Administration

10.2.1 Nature and Significance of Wage and Salary Administration 10.2.2 Theories of Wages 10.2.3 Methods of Wage Fixation


UNIT 11 INCENTIVES 180-201 11.0 Introduction 11.1 Objectives 11.2 Concept of Incentives

11.2.1 Effective Incentive System 11.2.2 Types of Incentive Schemes


BLOCK IV: DEVELOPMENT & GROWTHUNIT 12 EMPLOYEE RELATIONS 202-223 12.0 Introduction 12.1 Objectives 12.2 Concept of Employee Relations

12.3 Managing Discipline 12.3.1 Aspects and Objectives of Discipline 12.3.2 Causes of Indiscipline 12.3.3 Disciplinary Procedure 12.3.4 Code of Discipline

12.4 Employee Counselling 12.5 Managing Grievance 12.6 Answers to Check Your Progress Questions 12.7 Summary 12.8 Key Words 12.9 Self Assessment Questions and Exercises 12.10 Further Readings

UNIT 13 EMPLOYEE EMPOWERMENT 224-246 13.0 Introduction 13.1 Objectives 13.2 Concept and Process of Employee Empowerment 13.3 Empowerment in Indian Scenario 13.4 Empowerment in Global Scenario 13.5 Answers to Check Your Progress Questions 13.6 Summary 13.7 Key Words 13.8 Self Assessment Questions and Exercises 13.9 Further Readings

UNIT 14 INTERNATIONAL HRM 247-264 14.0 Introduction 14.1 Objectives 14.2 International HRM: An Introduction 14.3 Comparison of Domestic and International HRM 14.4 Challenges in International HRM 14.5 Answers to Check Your Progress Questions 14.6 Summary 14.7 Key Words 14.8 Self Assessment Questions and Exercises 14.9 Further Readings

Introduction

NOTES

Self-Instructional Material

INTRODUCTION

In all organizations today, there is a separate department that takes care of the welfare and performance of all those who are part of the organizations’ operations. Depending on the size of the organization, there is usually an individual or a team of people involved in organizing programmes, putting processes in place and setting policies that directly affect all those working with or associated with the organization. Such a team is said to be in charge of Human Resource Management. The Human Resource Management team is involved in a lot of activities including setting rules, establishing operation policies and processes, outlining disciplinary procedures, recruiting new employees, organizing training and educational programmes for the existing employees and deciding on the compensation.

With increasing globalization of economy, the marketplace has become increasingly complex, highly uncertain, competitive and transformational. What makes the ultimate difference is whether an organization is able to develop and establish competitive differentiation or not. It is here that people provide organizations with a sustained competitive advantage. Organizations are required to adopt proactive development programmes towards the attainment of corporate objectives by nurturing a development oriented culture. Human Resource Management deals with creating conditions that enable people to get the best out of themselves and their lives.

This book, Human Resource Management, is divided into fourteen units that follow the self-instruction mode with each unit beginning with an Introduction to the unit, followed by an outline of the Objectives. The detailed content is then presented in a simple but structured manner interspersed with Check Your Progress Questions to test the student’s understanding of the topic. A Summary along with a list of Key Words and a set of Self-Assessment Questions and Exercises is also provided at the end of each unit for recapitulation.

NOTES

Self-InstructionalMaterial 1

Introduction to Human Resource ManagementBLOCK - I

BASICS OF HUMAN RESOURCE MANAGEMENT

UNIT 1 INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

Structure 1.0 Introduction 1.1 Objectives 1.2 Human Resource Management: Features, Scope and Development

1.2.1 Definition,ImportanceandObjectivesofHRM 1.2.2 HRM Functions 1.2.3 HRM Challenges

1.3 Human Resource Practices 1.4 Answers to Check Your Progress Questions 1.5 Summary 1.6 Key Words 1.7 SelfAssessmentQuestionsandExercises 1.8 Further Readings

1.0 INTRODUCTION

Humanresourcemanagement(HRM)isthemanagementofanorganization’sworkforceorhumanresources.Itisresponsiblefortheselection,training,assessment,rewardingandretainingofemployees.Itisalsoresponsibleforoverseeingorganizationalleadershipandculture,andensuringcompliancewith employment and labour laws.

In this unit, youwill study the objectives and functions ofHRMin organizations.Organizational objectives, individuals and social goalsinfluence theobjectivesofHRM. Integrationof the interests of both theemployer and the employees is important in order to attain these objectives. Furthermore,youwilllearnthatthebasicfunctionsofHRMinvolveoperativeandmanagerialfunctions,eachofwhichcannotfunctionwithouttheother.

TheunitwillalsodiscusstheroleandstructureofHRMinorganizations.Theroleofpersonnelmanagersisinfluencedbyfactorssuchassize,natureandlocationofthebusinessorindustry.Intermsofthechangingenvironment,someoftheimportantrolesofHRmanagersare: · Reactive/proactive roles · Business partner role

Introduction to Human Resource Management

NOTES

Self-Instructional 2 Material

· Strategist’srole · Interventionist’srole · Innovation role · Internal consultancy role · Monitoring role

Youwill also learn that the organizational structure of theHumanResources Department (HRD) has a pyramid-like shape with the HRD Manager or HRD Director at the head. Right below the HRD Manager, there is anotherlevelwithpersonnelofficerswhoreportdirectlytotheHRDManager.

Theunitwill also explain the challenges inHRM, someofwhicharemanagingglobalization,developingleadershipskills,developingworkethics,retainingtalent,managingworkforcestressandemploymentrelations,managingworkforcediversity,etc.

The unit will conclude by discussing the approaches to HRM, with a focusonthesignificanceofHRM.

1.1 OBJECTIVES

Aftergoingthroughthisunit,youwillbeableto: ·Discuss thedefinitionandconceptofhumanresourcemanagement

(HRM) ·Explainthefeatures,objectivesandfunctionsofHRM ·DiscussthescopeanddevelopmentofHRM ·AnalysetheimportanceofHRMandhumanresourcepractices

1.2 HUMAN RESOURCE MANAGEMENT: FEATURES, SCOPE AND DEVELOPMENT

Different experts in thefield have defined it differently. It is a task thatfacilitates themost effectiveuseofpeople to achieveorganizational andindividual goals. Human Resource Management (HRM) seeks to bring togetheranddevelopaneffectiveorganizationenablingtheemployeestodotheirbestbothasanindividualandasamemberofaworkinggroup.ThescopeofHRM,ontheotherhand,isvast.Itembracesawiderangeofactivities.TheimportanceofHRMliesinthefactthatalongwithfinancialandmaterialresources,itcontributestotheproductionofgoodsandservicesinanorganization.Thefunctionsofhumanresourcemanagementincludeoperative andmanagerial functions, personnelmanagement policies andstrategicchallengesforHR.

NOTES



1.2.1 Definition, ImportanceandObjectives ofHRM

DefinitionsofHRM:According to Ivancevich and Gluck, ‘Human resource managementisthefunctionperformedinorganizationsthatfacilitatesthemost effective use of people (employees) to achieve organizational andindividualgoals.’

Byars and Rue say: ‘Human resource management encompasses those activitiesdesignedtoprovideforandcoordinatethehumanresourcesofanorganization.’

According toDaleYoder, ‘Themanagementofhumanresources isviewed as a system in which participants seeks to attain both individual and groupgoals.’

AccordingtoFlippo,HRMis‘theplanning,organizing,directingandcontrolling of the procurement, development, compensation, integration,maintenanceandreproductionofhumanresourcestotheendthatindividual,organizationalandsocietalobjectivesareaccomplished.’

In thewords ofMichael J. Jucious, human resourcemanagement‘maybedefinedasthatfieldofmanagementwhichhastodowithplanning,organizingandcontrollingthefunctionsofprocuring,developing,maintainingandutilizingalabourforce,suchthatthe(i)objectivesforwhichthecompanyisestablishedareattainedeconomicallyandeffectively,(ii)objectivesofalllevelsofpersonnelareservedtothehighestpossibledegree;(iii)objectivesofsocietyaredulyconsideredandserved.’ObjectivesofHRM:Objectives are preset goals towards which all individuals orgroupsdirecttheiractivitiesinanorganization.TheobjectivesofHRMareaffectedbynotonlyorganizationalobjectivesbutalsoindividualandsocialgoals.Everyorganizationhascertainobjectivesandeachpartof itmakesome contribution, whether direct or indirect, to achieve these predetermined objectives.Thecharacterofanorganizationcanbejudgedbyitsobjectives.Theseobjectivesformthebasisforvoluntarycooperationandcoordinationamongallemployees.Objectivesalsoformthebasesfordecidingbenchmarksorstandardsforperformanceevaluation.TheprimaryaimofHRMisthepromotionofeffectivenessoftheemployeesinperformanceofthedutiesassigned to them. This can be done by substituting cooperation instead of the hostility characteristic employer-employee relations.According toIndianInstituteofPersonnelManagement,‘Personnelmanagement(HumanResourceManagement)aimstoachievebothefficiencyandjustice,neitherofwhichcanbepursuedsuccessfullywithout theother. Itseeks tobringtogetheranddevelopaneffectiveorganization,enablingmenandwomenwhomake up an enterprise to make their best contribution to its success both as an individualandasamemberofaworkinggroup.Itseekstoprovidefairtermsandconditionsofemploymentandsatisfyingworkforallthoseemployed.’


NOTES


Objectivesofhumanresourcemanagementarederivedfromthebasicobjectivesofanorganization.Inordertoachieveorganizationalobjectives,integration of the employer’s and employees’ interests is necessary.Theobjectivesofhumanresourcemanagementmaybesummarizedasfollows: 1. To improve the services rendered by the enterprise by building better

employeemoralewhichleadstomoreefficientindividualandgroupperformance.Thus,HRM seeks tomanage change to themutualadvantageofindividuals,groups,organizationandsociety.

2.Toestablish in themindsof thoseassociatedwith theenterprise—employees,shareholders,creditors,customersandthepublicatlarge—thefactthattheenterpriseisrenderingthebestserviceitiscapableofanddistributingthebenefitsderivedfromthefairlyandcontributingsuccessoftheenterprise.

3.Tocreateandutilizeanableandmotivatedworkforceforaccomplishingthebasicorganizationalgoals.

4.Tounderstandandsatisfyindividualandgroupneedsbyprovidingadequateandequitablewages,employeebenefits,status,socialsecurity,incentives, prestige, recognition, challenging work and security. Thus, anorganizationcanlookintoandrealizetheindividualandgroupgoalsbyofferingappropriatemonetaryandnon-monetaryincentives.

5.To employ the skills and knowledge of employees efficiently andeffectively,i.e.,toutilizehumanresourceseffectivelyinachievingtheorganizationalgoals.

6.Tofortifyandacknowledgethehumanassetscontinuouslybyprovidingtraining and developmental programmes. These programmes help the organizationinattainingitsgoalsbyprovidingwell-trainedandwell-motivated employees.

7.Tokeepthemoraloftheemployeeshighandmaintainsoundhumanrelations by sustaining and improving the various conditions and facilities.

8.To increase job satisfaction and self-actualizationof employeesbyencouragingandassistingeveryemployeetorealizehisfullpotential.

9.Tomake available good facilities andworking environment andgenerate a favourable atmosphere formaintaining the stability ofemployment.

10.Toidentifyandsatisfyindividualneedsandgroupgoalsbyofferingappropriate monetary and non-monetary incentives.

11.To create and enforce a quality ofwork life (QWL) thatmakesemploymentinorganizationcomfortable.Maximumdevelopment of individual, goodworking relationship

andoptimumutilizationofhumanresourcesaretheprimaryaimsofHRM.

NOTES



Management has to create a comfortable and suitable environment andprovidenecessarypreconditionsfortheattainmentoftheobjectivesScopeofHRM:Thescopeofpersonnelmanagement is indeedvast.Allthemajoractivitiesintheworkinglifeofanemployeefromthetimeofhisjoininganorganization till he leaves comeunder the scopeofpersonnelmanagement (Figure 1.1).

Natureofuman h resource management

Employee

education Employee

selection

PERSONNELMANAGEMENT

Industrial relations

Employeehealth and safety

Employeemotivation

Employeeremuneration

Fig. 1.1 Scope of Personnel Management

HRMembracesaverywidefieldofactivities. Itsscope issowideandvariedthattheHRdepartmentandthepersonnelexecutivesperformavarietyofrolesinaccordancewiththeneedsofasituation.TheHRmanagerplaysmultipleroleslikethatofaresearcher,counsellor,bargainer,mediator,peacemaker,problemsolver,andsoon.ThefunctionalareasofHRMasoutlined by Northcott are: (i) employment (ii) selection and training (iii) employee services (iv) wages (v) industrial relations (vi) healthandsafety (vii) education

Ithas,therefore,beenrightlyobservedbyPeterDruckerthat‘man-agementisamultipurposeorgan,whichhasthreejobs, twoofwhicharedirectlyrelatedtopersonnel:managingabusiness;managingmanagers;andmanagingworkersandthework.’Thepersonnelexecutivesplayanimportantroleinabusinessorganization.Theynotonlyhelpindeterminingtherulesoftheorganization,butalsoplayasignificantroleininterpretingandapply-


NOTES


ingtherulesofthesystemitself.Theyareexpectedtoenjoytheconfidenceofthemanagementwhichiscrucialtotheefficientandeffectiveoperationofthebusinessorganization.Thefocusofhumanresourcemanagementisonpeopleatwork.Itisindeedawideareaandcoversabroadspectrumofactivities.Amanager,whetherheisinchargeofproductionormarketingfunction,dealswithhumanbeingsandgetshisjobdonethroughpeople.

Inthepast,alotofattentionhasbeenpaidtothesignificanceofHRMinestablishingafirm’scompetitiveadvantage.RandallSchulerhaveidentifiedthe factors that have causedbusinesses to focus increased attendanceonHRM.Thesefactorswereasfollows:

· Rapid change· Highlevelsofuncertaintyaboutbasicbusinessconditions· Rising costs· Rapid technological changes· Changing demographics· Morelimitedsuppliesofhighlytrainedlabour· Rapidly changing government legislation and regulations· IncreasedglobalizationofindustriesThesetransformationsinthebusinessenvironmentpresentanumberof

competitivetrialsthatdifferfromthoseconfrontedbyfirmsinearliertimes.Several researches have shown that there is a strong connection between the mannerinwhichfirmsmanagetheirpeopleandtheeconomicresultsachievedbythem.Followinghigh-performanceworkpracticescansignificantlyaffectafirm’s economics.High-performanceworkpractices provide importantbasisforincreasedorganizationalperformance.Peopleworkmorebecausetheyareincreasinglyinvolvedandcommitted.Thiscommitmentcomesfromhavingmorecontrolontheirwork.Theyaresmarteratworkbecauseoftheencouragement they receive to build skills and competence. HR systems have animportantpracticaleffectontheexistenceandeconomicperformanceofthefirmsandontheproductivityandqualityofworkofitsemployees.Importance of HRM:Human resources, along with financial andmaterial resources, contribute to theproductionofgoodsand services inanorganization.Physicalandmonetary resources,by themselves,cannotimproveefficiencyorcontributetoanincreasedrateofreturnoninvestment.Itisthroughthecombinedandconcertedeffortsofpeoplethatmonetaryandmaterialresourcesareharnessedtoachieveorganizationalgoals.However,theseefforts,attitudesandskillshavetobesharpenedfromtimetotimetooptimizetheeffectivenessofhumanresourcesandtoenablethemtomeetgreaterchallenges.ThisiswhereHRMplaysacrucialrole.ThesignificanceofHRMcanbediscussedatfourlevels:

NOTES



1.Corporate:Good human resource practices help to attract and retain thebestpeople in theorganization.Planningalerts thecompanytothetypesofpeopleitwillneedinshort,mediumandlongrun.HRMcanaidanenterprisetoattainitsgoalsinamorewell-organizedandeffectivewayby:· Inviting and keeping talent through effective human resource

planning, employment, selection, compensation and promotion policies:

· Developing the necessary talent and right outlook among the employees through training

· Securingcooperationofemployeesthroughmotivation· Effectivelyutilizingtheavailablehumanresources

2. Professional: Optimummanagement of human resource helpstofurtherimprovethequalityofworklife.Itplaysanimportantroleintheprofessionalgrowthinthefollowingwaysby:· Makingavailableadequateopportunitiesforpersonaldevelopment

ofeachemployee· Allocatingworkproperlyandscientifically· Maintaining healthy relationships between individuals and groups

intheorganization 3. Social: Sound human resource management has a great

significanceforsociety.Society,asawholeisthemajorbeneficiaryofgoodhumanresourcepracticesinthefollowingways:· Employmentopportunitiesmultiply.· Scarce talents are put to best use.· Organizationsthatpayandtreatpeoplewellarealwaysaheadof

othersanddeliverexcellentresults.· Maintain an equilibrium between the jobs available and job seekers

intermsofnumbers,qualifications,needsandaptitudes.· Provides appropriate employment that ensures social and

psychological contentment to people. 4.National:Humanresourcesandtheirorganizationplaysanimportant

role in the development of a nation.There is awide disparity indevelopment among countries with similar resources due to qualitative differencesamongtheirpeoples.Developmentofacountrydependsprimarilyon the talent,mental framework andhabits of its humanresources.Efficientmanagementofhumanresourceshelpstofastentheprocessofeconomicdevelopment,whichinturnleadstohigherstandardsoflivingandfulleremployment.


NOTES


1.2.2 HRMFunctions

ThebasicfunctionsofHRMorpersonnelmanagementinvolvetwocategoriesoffunctions:operativeandmanagerial. 1.Operativefunctions:Theoperativefunctionsessentiallybelongto

activities concerned with procurement, development, compensation, utilizationandmaintenanceofanefficientworkforce.

(i) Procurement: Theterm‘procurement’meansrecruitmentoftherequirednumberofemployeespossessingtherightqualificationsand experience, keeping inmind the importance of achievingthe established objectives of the organization. It is primarilyconcernedwithrecruitingthemostsuitablepeopletofillpositions,at the right time. Procurement involves activities such as plan ning, selecting and placing manpower.

(ii) Development: Thistermreferstoactivitiesaimedatincreasingtheefficiencyandskillsoftheworkersbyeducatingandtrainingthe employees. Development-related activities include conducting workshops, training sessions, seminars, group discussions and educational programmes.

(iii) Compensation: This includes activities dealing with the technique andstandardofremunerationandtermsofemployment.

(iv) Utilizing: Thistermreferstotheuseofemployees’servicestothemaximumandinthebestpossiblemanner.Thisincludesnotonlyincentiveschemesbutalsoschemestosharetheprofitsfromhigher productivity.

(v) Maintaining:Thisisallaboutmaintaininggood,comfortableandamicableworkingconditionsfortheemployees.Thismeansnotjustpreparingbutalsoimplementinghealthandsafetyschemes,etc.

2.Managerial functions:These functions include activities such asplanning, organizing, coordinating, directing and controlling theemployees.Thesefunctionsareperformedbyallmanagers.Therefore,thesecommonfunctionsarereferredtoasmanagerialfunctions.Inotherwords,theyareperformedbyalltypesofmanagersincludingpersonnel managers.

(i) Planning:Whentheprocessofmanagementisreviewed,theveryfirstfunctionthatamanagerperformsisplanning.Apersonnelmanagerisresponsibleforbeginningaprogrammefordevelopingpersonnel. This can only be done through planning. A plan is a predeterminedcourseofactionfortheachievementofestablishedobjectives.Planningleadstospecificationofthewhatsandhowsfortheperformanceofthepersonnelfunctions.

NOTES



(ii) Organizing: You already know that planning helps the management decidewhat to do and how.Organizing is an effective tooltoachievetheplans.Organizingrequiresgroupingofpersonnelactivitiesandassigningthemtodifferentindividuals.

(iii) Coordinating: Coordination is concerned with action directed towardsacommongoalinaharmoniousandunifiedeffort/action.Coordination makes sure that all groups and persons work in an efficient, economical and harmoniousmanner. Inter-personalcommunicationisveryeffectiveinachievingcoordination.

(iv) Directing:Directingisafunctioninvolvingthemanagementofmanagers, workers as well as the work by motivating, leading, communicatingeffectivelyandcoordinating.Apersonnelmanagerisexpectedtodevelopthecapabilitytocommandaswellasdirectothers.

(v) Motivating:Motivationisamanagerialfunctiontoinspireandencourage people to take required action. Motivation involves guiding and supervising the personnel. Motivation can help manageanyenterprisesuccessfullyandsmoothly.Apersonnelmanager should be able to not only inspire but also persuade workerstoappreciatethepoliciesoftheorganizationandseethepositivesideofeverything.Motivationcanhelpanindividualtoperformcertaintasksproperly.Apersonnelmanagershouldguideemployeestowardsimprovingperformanceandmotivatingtheteamtoperformwithenthusiasmandconfidence.

(vi) Controlling: Control is the process ofmeasurement of actualresults with certain standards of performance. It involvesinvestigationwhy there are deviations of actual results fromdesired ones and taking corrective action whenever neces sary. Therefore,controllingfacilitatestherealizationofplans.

Thesetwofunctionsaresignificantbecauseonecannotworkwithouttheother.Thepersonnelmanagerhastomixbothtoanextentdesired.

Personnelmanagementpolicies

Apolicyisastatementorageneralguidelineforemployeestomakedecisionwithrespecttoanycourseofaction.Personnelpoliciesprovideguidelinesfor avarietyof employment relationshipsand identify theorganization’sintentions in recruitment, selection, development, promotion, compensation, motivation, and so on. According to Armstrong, ‘personnel policies are continuing guidelines on the approach the organization intends to adoptinmanaging its people.They define the philosophies and values of theorganizationonhowpeopleshouldbetreatedandfromthesearederived


NOTES


principles uponwhichmanagers are expected to actwhen dealingwithpersonnelmatters.’

The objectives ofHRor personnel policies is described byPeterDruckerinthefollowingwords:‘Themanagementmustgearitspoliciesandobjectivesinsuchafashionthattheemployeesperformtheirworkanddotheirassigned tasks.… It also means a acknowledgement that human resources, unlikeanyotherresources,haveattributeslikepersonality,citizenship,controlover where they work, how much and how well. … And it is the management alone,thatcansatisfytheserequirements.’

HRorpersonnelpoliciesarerequiredinthefollowingareas:· Acquisitionofpersonnel· Training and development· Appraisalandcompensationofhumanresources· Human resource mobility· Working conditions and work schedules· Industrial relations

1.2.3 HRMChallenges

Humanresourceelementworks towards thevision,missionandgoalsofan organization.The threemajor roles ofHRM in any organization aretransactional, transformational and transitional.The challenges facedbyhumanresourcemanagersinanorganizationarenaturallyevolvingwiththeever-transformingscenariointhecorporateworld.

Organizationsfaceseveralchallengesinhumanresourcemanagement,someofwhicharelistedasfollows:

· StrategicchallengesforHR· ChallengesfororganizationsandHRMprofessionals

oChangingworkforcedemographics o ImplicationsforHRMprofessionals oTheneedforlifelonglearning o Competing in a global economy oFacilitatingorganizationallearning oEliminatingtheskillsgap

1.3 HUMAN RESOURCE PRACTICES

HRpractices are significantly different fromhuman resources functions.Functions are comprised of transactional activities that can be handledwithintheorganizationoreasilyoutsourced.Practicesarepartconceptual,

NOTES



partimplementationofanHRstrategy,comprisedofsystemsthatfollowthenormalorcustomarywayofdoingbusiness.Theterm“bestpractices”refersto the HR systems that have the highest impact on the employees and the organization.Generally,HRrecruitmentandselectionpracticesarebasedontheworkplacecultureandtheorganization’smission.Forexample,employersthatrecognizeandacknowledgethevalueofworkplacediversity,embracerecruitment practices designed to attract diverse applicants. Recruitment practicesunderlierecruitingactivitiesandfunctionssuchassponsoringcareerfairsatcollegesanduniversitieswithdiversestudentpopulations,advertisingjob vacancies across several venues to reach a broad audience.

CheckYourProgress

1.Definehumanresourcemanagement. 2. What are objectives? 3.Whatallcomeunderthescopeofpersonnelmanagement? 4. What do you understand by procurement?

1.4 ANSWERS TO CHECK YOUR PROGRESS QUESTIONS

1. Human resource management encompasses those activities designed toprovideforandcoordinatethehumanresourcesofanorganization.

2. Objectives are preset goals towards which all individuals or groups directtheiractivitiesinanorganization.

3.Allthemajoractivitiesintheworkinglifeofanemployeefromthetimeofhisjoininganorganizationtillheleavescomeunderthescopeofpersonnelmanagement.

4.Theterm‘procurement’meansrecruitmentoftherequirednumberofemployeespossessingtherightqualificationsandexperience,keepinginmindtheimportanceofachievingtheestablishedobjectivesoftheorganization.

1.5 SUMMARY

· According to Ivancevich and Gluck, ‘Human resource management is the functionperformed in organizations that facilitates themosteffective use of people (employees) to achieve organizational andindividualgoals.’


NOTES


·AccordingtoDaleYoder, ‘Themanagementofhumanresources isviewed as a system in which participants seeks to attain both individual andgroupgoals.’

· Objectives are preset goals towards which all individuals or groups directtheiractivitiesinanorganization.TheobjectivesofHRMareaffectedbynotonlyorganizationalobjectivesbutalsoindividualandsocial goals.

·These objectives form the basis for voluntary cooperation andcoordination among all employees.

·Objectivesofhumanresourcemanagementarederivedfromthebasicobjectivesofanorganization.

·The scopeof personnelmanagement is indeedvast.All themajoractivities in theworking life of an employee from the timeof hisjoininganorganizationtillheleavescomeunderthescopeofpersonnelmanagement.

·TheHRmanager playsmultiple roles like that of a researcher,counsellor, bargainer, mediator, peacemaker, problem solver, and so on.

· Ithas,therefore,beenrightlyobservedbyPeterDruckerthat‘man-agementisamultipurposeorgan,whichhasthreejobs,twoofwhichare directly related to personnel:managing a business;managingmanagers;andmanagingworkersandthework.’

·RandallSchulerhaveidentifiedthefactorsthathavecausedbusinessestofocusincreasedattendanceonHRM.

·Human resources, alongwith financial andmaterial resources,contributetotheproductionofgoodsandservicesinanorganization.

· Good human resource practices help to attract and retain the best people intheorganization.

·HRMcanaidanenterprisetoattainitsgoalsinamorewell-organizedand effectivewayby inviting andkeeping talent through effectivehuman resource planning, employment, selection, compensation and promotion policies.

·Optimummanagementofhumanresourcehelpstofurther improvethequalityofworklife.

·Humanresourcesandtheirorganizationplaysanimportantroleinthedevelopmentofanation.

· There is a wide disparity in development among countries with similar resourcesduetoqualitativedifferencesamongtheirpeoples.

·ThebasicfunctionsofHRMorpersonnelmanagementinvolvetwocategoriesoffunctions:operativeandmanagerial.

NOTES



·Theoperativefunctionsessentiallybelongtoactivitiesconcernedwithprocurement,development,compensation,utilizationandmaintenanceofanefficientworkforce.

·Theterm‘procurement’meansrecruitmentoftherequirednumberofemployeespossessingtherightqualificationsandexperience,keepinginmindtheimportanceofachievingtheestablishedobjectivesoftheorganization.

·Apolicyisastatementorageneralguidelineforemployeestomakedecisionwithrespecttoanycourseofaction.

·Personnel policies provide guidelines for a variety of employmentrelationshipsandidentifytheorganization’sintentionsinrecruitment,selection, development, promotion, compensation, motivation, and so on.

· According to Armstrong, ‘personnel policies are continuing guidelines on the approach the organization intends to adopt inmanaging itspeople.

·HRpracticesaresignificantlydifferentfromhumanresourcesfunctions.Functionsarecomprisedoftransactionalactivitiesthatcanbehandledwithintheorganizationoreasilyoutsourced.

1.6 KEY WORDS

·Management:Itreferstotheprocessofdealingwithorcontrollingthings or people.

·Corporate:It means relating to a large company or group. ·Organization:Anorganizationororganizationisanentitycomprising

multiple people, such as an institution or an association, that has a collectivegoalandislinkedtoanexternalenvironment.

1.7 SELF ASSESSMENT QUESTIONS AND EXERCISES

ShortAnswerQuestions

1.BrieflyexplainthescopeofHRM. 2.WhyisHRMimportant?Discussitssignificanceatvariouslevels. 3. Write a short note on personnel management policies. 4.Brieflydescribehumanresourcepractices.


NOTES


LongAnswerQuestions

1.Discuss themeaning, purpose and objectives of human resourcemanagement.

2.ExplaintheoperativeandmanagerialfunctionsofHRMindetail. 3.Organizationsfaceseveralchallengesinhumanresourcemanagement.

Critically comment.

1.8 FURTHER READINGS

Venkataraman, C.S. & B. K. Srivastava. 1991. Personnel Management and Human Resources. Tata McGraw Hill.

Yoder, Dale & Paul D Standohar. 1990. Personnel Management and Industrial Relations. Sterling Publications.

Well, IanBeard and LenHolden.Human Resource Management - A contemporary perspectives. Macmillan.

Aquinas, P. G. 2005. Human Resources Management – Principles and Practice.NewDelhi:VikasPublishingHousePvtLtd.

Decenco, David A. and Stephen P. Robbins. 1989. Personnel/HRM, 3rd Edition.NewDelhi:Prentice-HallofIndia.

Flippo,EdwinB.1984.Personnel Management, 4thEdition.NewYork:McGraw Hill.

Bernardin, John. 2004.Human Resource Management–An Experimental Approach. NewDelhi:TataMcGrawHillLtd.

Beardwell, Ian andLenHolden. 1995.Human Resource Management. London:Macmillan.

Byars,LoydL.andLeaslieW.Rue.1997.Human Resource Management. Chicago: Irwin.

Werther Jr,WilliamB. andKeithDavis. 1993.Human Resources and Personnel Management,4thEdition.NewYork:Macmillan.

NOTES


HRM and Personnel ManagementUNIT 2 HRM AND PERSONNEL

MANAGEMENTStructure 2.0 Introduction 2.1 Objectives 2.2 ConceptofPersonnelManagement 2.3 Personnel Management in India 2.4 FunctionsoftheLabourWelfareOfficer 2.5 DifferenceBetweenPersonnelManagementandHRM 2.6 Answers to Check Your Progress Questions 2.7 Summary 2.8 Key Words 2.9 SelfAssessmentQuestionsandExercises 2.10 Further Readings

2.0 INTRODUCTION

Inthisunit,youwillgetanoverviewofpersonnelmanagement.Asitsnamesuggests,theconcernofpersonnelmanagementisthe‘people’dimension.It refers to the philosophy, policies and programmeswith regard to themanagementofpeople inanenterprise.Sinceallorganizationscomprisepeople, acquisition of their services and development of their skills areimportant.Theyshouldbemotivatedtoachievehigherperformancelevels.Besides,howcommittedpeoplearetotheirorganizationisequallyimportantforachievingorganizationalobjectives.Itisawell-establishedfactthattheorganizationsaremoreeffectiveandefficientiftheysucceedinacquiring,developing,stimulatingandkeepingmotivatedworkers.Organizationsthatfailtoachievethis,lagbehind.Hence,itisthemanagementofhumanassetsthatmakesorbreaksanorganization.Ifhumanresourcesareneglectedormismanaged,theorganizationisunlikelytodowell.

2.1 OBJECTIVES

Aftergoingthroughthisunit,youwillbeableto: ·Discusstheconceptofpersonnelmanagement · Analyse personnel management in India ·DescribethefunctionsoftheLabourWelfareOfficer ·ExplainthedifferencebetweenpersonnelmanagementandHRM.

HRM and Personnel Management

NOTES


2.2 CONCEPT OF PERSONNEL MANAGEMENT

Personnel management has evolved due to enlightened employers trying hard, overtheyears,toimprovethelotoftheirworkers.AccordingtoKautilya,asystematicmanagementofhumanassetswasverymuchinexistenceinthefourthcenturybc.Mosesoriginatedtheprincipleofdivisionoflabourin400bc.TheBabylonianshadacodeforincentivewageplansin1800bc.Thus,personnelmanagementinsomeformortheotherhasbeenpractisedinvariouspartsoftheworldsincethedawnofcivilization.WiththeonsetoftheIndustrialRevolution,thepositionunderwentaradicalchange.

IndustrialRevolutionreferstochangesthatoccurredinEnglandduring1760–1850.Itbroughtaboutfarreachingchangesintheeconomiclifeofpeople. Numerous inventions took place during that period which changed the entiresystemofproductionanddistribution.Theuseofmachinesinvolvedachangeinthemethodsofindustrialorganizationandbroughtaboutachangefromthedomesticsystemtothefactorysystemofproductioninvolvingalargescaleandcomplexdivisionoflabour.Thediscoveryofsteamasanimportantsourceofpowerhelped to increase theproductionmany timesover.Theuseofmachinesnecessitatedlargeamountofcapital,whichledtoconcentrationofeconomicpowerandgrowthoflargeenterprises.

It is against this background thatwe trace the origin ofmodernpersonnel management. Figure 2.1 mentions the various stages in the evolutionofpersonnelmanagement.

Industrial Revolution

Era

ScientificManagement

Era

Paternalistic Era

Industrial Psychology

Era

WelfareEraPersonnel Specialists

Era

BehaviouralScienceEra

Human Relations

Era

Fig. 2.1 Stages in the Evolution of Personnel Management

1. Industrial revolution era

The industrial revolution consisted essentially of the development ofmachinery.This brought aboutmass production of goods. Large-scaleproductionbroughtaboutincreasedoutputandtheaccumulationofcapital.Business and commercewere greatly accelerated, and the owners ofbusinesses and entrepreneurs didwell.But labour fared poorly andwasconsidered a commodity to be bought and sold.

NOTES



Buttheconsequenceofgroupingworkersintoshopsandfactories,andofthespecializationoflabour,wasagradualemergenceofmoresystematicattention to the design of jobs, to the choice ofworkers for those jobs(selection),totheprovisionofpayandbenefits(compensation)andtothewelfareofemployeesbothonandoffthejob.Inthelate1800swhenunionswerebattlingforrecognitionandviolentstrikesbecomeasignificantconcern,these developments in management practices accelerated. By the early 1900s, the foundationof several featuresofmodernpersonnelmanagementhadbeen laid.

2.Scientificmanagement era

Thescientificmanagementofthelate1800sandearly1900sconcentratedparticularly on job design, selection and compensation. The name most closely associated with this movement is Fredrick W Taylor who worked in the steel industry in the late 1870s. Taylor believed in the same techniques usedbyscientist in thelaboratory—experimentation,formingandtestinghypothesesandproposingtheoriesbasedonresearchandtesting—couldbeusedbymanagementtoincreaseefficiencyintheworkplace.

ThescientificmanagementmovementowesitsorigintoFrederickWTaylor,thefatherofscientificmanagement.Hewasthefirsttorecognizeandemphasizetheneedforadoptingascientificapproachtothetaskofmanaginganenterprise.HestartedhisexperimentsinthesteelindustryintheMidvaleand Bethelem plants.

According toTaylor, ‘Planning shouldbe the result of cooperationbetweenthemanagementandworkersandthataprovisionshouldexistforcompensatingthepersonnelwithfinancialincentives’.TheideasofTaylorledtoaseparatedisciplinecalled‘HumanEngineering’.

Contributionsof scientificmanagement

Thechiefcontributionsofscientificmanagementare: ·Emphasisonrationalthinkingonthepartofmanagement · Focus on the need for bettermethods of industrialwork through

systematic study and research ·Emphasisonplanningandcontrolofproduction ·Developmentofcostaccounting ·Developmentofincentiveplansofwagepaymentbasedonsystematic

studyofwork · Focusontheproblemoffatigueandrestinindustrialwork · Focusontheneedforaseparatepersonneldepartment


NOTES


Butafterthirtyyears,thisapproachbegantoloseitspopularity.ManymanagementthinkersweretemptedtomodifytheviewsofTaylor.ThemostimportantamongthemareHenryGantt,FrankandLilianGilbreth.TheymadescientificmanagementmorehumanizedandmeaningfultofollowersofTaylor.HenryGanttpropoundedthe‘GanttChartandtheTaskandBonusWageSystem’.FrankGilbrethformulatedthe‘LawsofEfficientMotion’.Hiswife,LilianGilbreth,iscreditedwithapplyingtheprinciplesofpsychologyinthescientificmanagementofhumanassets.

3.Paternalistic era

RobertOwen,aBritishindustrialist,isconsideredtobeagreatscholarofmanagementthought.Hewasthemanagerofdifferentcottontextilemillsbetween1800and1828.Hebroughtmanysocialchangesandwasthefirstpersonwhogavedueemphasistolabourwelfare.RobertOwen,thefatherofpersonnelmanagement,emphasizedanddevelopedthespiritofcooperationbetween employees and employers. He advocated that the investment in developinghumanresourceswasmuchmoreprofitablethaninmachineryandequipment.Heworkedforthebettermentofworkersandtriedtoimprovetheir working conditions.

4. Industrialpsychology era

Applicationsofpsychologytobusinessandindustry(industrialpsychology)began to emerge in the 1890s and 1900s as psychologists studied selling techniquesandwaysoftestingjobcandidates.Themostnotableindustrialpsychologist was Hugo Munsterberg, whose major contributions were: ·Theanalysisofjobsintermsoftheirphysical,mentalandemotional

requirements ·Thedevelopmentoftestingdevicesforselectingworkers.

In the industrial psychology era, greater emphasis was given to individualandgrouprelationshipsintheworkplace.Theroleofpsychologyand sociology in the understanding of individual and group behaviourin an organizationwas emphasized.German-American psychologist,HugoMunsterberg,isregardedasthefatherofindustrialpsychology.Hiscontributions to industrial management were particularly notable in the field of emotional requirements ofworkers.Topmanagement personnelbegantorealizethat‘humanresourcesarethemostvaluableassetsthatanyorganizationpossessesandthatwithoutthese,otherresourcesareuseless’.

5.Humanrelations era

Whatcametobecalledthehumanrelations’movementhasbeenamajorinfluenceonmodernpersonnelmanagement.Thismovementischaracterizedby its focus on groupbehaviour andworkers’ feelings as they relate toproductivity andmorale. Experimentswere conducted byEltonMayo

NOTES



andCo.oftheHarvardGraduateSchoolofBusinessAdministrationattheHawthorneplantoftheWesternElectricCompany.TheimportantfeaturesoftheHawthorneexperimentare: ·Abusinessorganizationisprimarilyasocialsystem.Itisnotjusta

techno-economic system. · An employee can be motivated by psychological and social wants

becausehisbehaviour is also influencedby feelings, emotionsandattitudes. Thus, economic incentives are not the only method to motivate people.

·Managementshouldnotjustdependoncommand;itshoulddevelopcooperative attitudes.

· Participation becomes an important instrument in human relations’movement. In order to achieve participation, an effective two-waycommunication network is essential.

· Productivity is linked with employee satisfaction in businessorganizations.Therefore,managementmust takegreater interest inemployeesatisfaction.

·Grouppsychologyplaysanimportantroleinanybusinessorganization.Wemustthereforerelymoreoninformalgroupeffort.

· The industrial psychological era emphasises that man is a living machineandhe is farmore important than the inanimatemachine.Hence, the key to higher productivity lies in employee morale. High morale results in higher output.The findings of theHawthorneExperiment put emphasis on the

importance of understanding the needs of both themanagement and theworkers. The basic conclusion was that sociological and psychological phenomenaoftenexertedevengreaterinfluencesonoutputthanthephysicalconditionsofwork.Therefore,managementmustbemainlyconcernedwiththeinformalandspontaneousbehaviourofworkgroupsandthesentimentsandattitudesofemployees.

6.Thebehavioural science era

Furtheronthebasisoffurtherenquiriesandexperiments,ItwasconcludedthatEmployees’teamspiritandcooperativeattitudehadagreatbearingontheproductivity.Therewereseveralfactorswhichdeterminedthecooperationandenthusiasmofworkers,suchassupervisors’andexperimenters’positiveattitudetowardsworkers,theavoidanceofforceandcoercionagainstworkersandtheworkers’participationindecision-makinginareasaffectingthem.

Humanrelationistsmadeverysignificantcontributiontomanagementthoughtbybringingintolimelighthumanandsocialfactorsinorganization.Thebehaviouralsciencemovementwasabyproductofthehumanrelations


NOTES


studies.Thebehaviouralscienceeraextensivelyuseddataobtainedfromexperiments,observationsandsurveysdoneinthevariousfields,suchassociology,anthropologyandpsychology.Thevarioustheoriesformulatedin the behavioural science era are:

(i)Maslow’sNeedHierarchyTheoryorDeficitTheoryofMotivation

According to Abraham Maslow, who propounded the need hierarchy theory, ‘Thereisaseriesofneedssomeofwhicharelowerinthescaleorsystemofvalues,inindividualorsocialcontextandsomearehigher.Higherneedscannot be satisfiedor even felt if the lower needs remain unsatisfied.Asatisfiedneedisnotamotivator’.

Thefeaturesofhistheoryareasfollows:· Peoplehaveavarietyofneeds,whichworkasastrongmotivation

forthem.· There arefive types of humanneeds: physical needs, safety or

securityneeds,affiliationorsocialneeds,esteemneedsandself-actualizationneeds.

· It is not impossible to arrange human requirements into a hierarchy. In this hierarchy, the needs that are physical in nature occupy the base.Self-actualizationneeds,ontheotherhand,occupythetop.

· Itisobservedthatpeoplefirstsatisfytheirphysicalneeds.Whentheseneedsaresatisfied, theystrivefor thenexthigher levelofneeds.

· Inordertorealizethehigherlevelofneeds,itisessentialthatthelowerlevelneedsaresatisfied.

· Peoplearenotmotivatedbythesatisfactionofaneed;asatisfiedneedonlygeneratesthedesiretofulfilthenexthigherlevelofneeds.

(ii)Herzberg’sTwoFactorsTheoryofMotivation

Herzberg propounded the two-factor theory ofmotivation.According tothistheory,motivationanddissatisfactionofworkersaretheresultsoftwoseparatesetsofconditions.Satisfiersormotivationalfactorshaveadirectbearingonthejobcontentitself.Motivationalfactorsincludeachievement,recognition,theworkitself,advancement,etc.Thedissatisfiers,maintenanceandhygienefactorsdonotprovidemotivation.Theyavoidunpleasantnessandarenecessarytomaintaincurrentstatusofsatisfaction.Ofallthemaintenancefactors identifiedbyHerzberg, significant ones include the interpersonalrelationshipamong themanagement, supervisorsandsubordinates;wageandsecurityofjob;statusintheorganizationandworkingconditions.

NOTES



(iii)McGregor’sTheoryXandTheoryY

McGregorpropoundedtwomanagementviewswithregardtothenatureofman.Thesetwoviewswereofcontrastingnatureandwereclassifiedintohardandsoftapproaches.ThehardapproachiscalledMcGregor’s‘TheoryX’,whilethesoftorpermissiveapproachiscalledMcGregor‘TheoryY’.

TheoryX

Itisthetraditionaltheoryofhumanbehaviour.AccordingtoMcGregor’stheory,managementisaccountablefororganizingtheelementsofproductiveenterprises, such as money, material, equipment and people, to meet economic ends. Theory X makes certain assumptions about human nature, such as: ·Withreferencetopeople,managementreferstoaprocessofdirecting

their efforts,motivating them, controlling their actions,modifyingtheir behaviour in order to be in conformitywith the needs of theorganization.

· If thereisnointerventionbythemanagement,peopleareboundtobepassive.Theycanevenberesistantorindifferenttoorganizationalneeds.Thus,themanagementneedstopersuade,reward,punish(ifnecessary) and direct workers.

·Theaveragehumanbeingdislikesworkandtendstoavoiditifhecan. · The average human being is not ambitious, dislikes responsibility and

opts to be led. ·The average human being is inherently self-centered and is not

interestedinorganizationalneeds. · The average human being is by nature resistant to change. · The average human being is innocent.

TheoryY

AccordingtoMcGregor,theoryYmakesthefollowingassumptions: · ‘Workisasnaturalasplayorrestiftheconditionsarefavourable.It

is not true that the average human being inherently dislikes work. · Externalcontrolandthethreatofpunishmentarenottheonlytools

formakingpeopleworktowardsorganizationalobjectives.Mancanexercise self-control and self-direction tomeet theobjectiveshe iscommitted to.

·The rewardsassociatedwith theachievementofobjectivesbringasenseofcommitmentamongpeople.Peoplesetgoalsforthemselvesinthehopeofsomereward,materialorevenpsychological.

·The average human beings, in favourable circumstances, acceptresponsibilityandevenlookforit.


NOTES


·The capacity to exercise a relatively high degree of imagination,ingenuityandcreativitytosolveorganizationalproblemsisuniversallydistributedinthepopulation.’

Table 2.1 Comparison between Theory X and Theory Y

TheoryX TheoryY1. Theory X assumes human beings to be

inherently opposed to work.1. Theory Y assumes that work is

as natural as play or rest.2. TheoryX emphasizes that people do

not have ambitions and they shirk responsibility.

2. Theory Y assumes just the reverse.

3. Theory X assumes that people in general havelittlecapacityforcreativity.

3. According to Theory Y, the capacityforcreativityiswidelydistributed in the population.

4.While inTheoryX, people lack self-motivation and need to be externallycontrolled and closely supervised in ordertogetmaximumoutput.

4. According to Theory Y, people are self directed, creative andpreferself-control

5. Theory X emphasises upon the centralizationofauthority.

5. T h e o r y Y e m p h a s i s e s decentralization and greaterparticipation in decision making process.

McGregor suggested advocating the carrot and stick approach to motivate people in the workplace.

7.Personnel specialist eraandwelfare era

Withtheintroductionofthefactorysystem,alargenumberofpersonswereemployedby anorganization.These employeeswere to be controlled ifthegoalsofthatorganizationweretobeachieved.Withtheincreaseinthenumberofemployees,aseparatepersonnelspecialisthadtobeappointed.Apersonnelspecialisthasthefollowingthreeresponsibilities: (i)Heshouldassistthelinemanagerssothattheoptimumefficiencyof

theworkforceismaintained. (ii)Heshouldhelpmanagement in its efforts tomaintaingoodhuman

relations and labour–management relations. Developing a sound and just personnel policies and procedures is also his responsibility.

(iii)Heshouldmanageallwelfareservicesmeantforemployees.

2.3 PERSONNEL MANAGEMENT IN INDIA

The history of the evolution and growth of personnelmanagement inIndia is not very old. As compared to the developed nations, the personnel

NOTES



management system developed late in India.The growth of personnelmanagementinIndiamaybedividedintothefollowingstages:

1. Report of theRoyalCommissiononLabour in India

Personnelmanagement in India dates back to theReport of theRoyalCommissiononLabourinIndia(1929–31).TheCommissionmadeseveralimportant recommendations,which included the appointment of labourofficers to keep a checkon corrupt practices in recruitment of industrialworkers. (i)Thejobbershouldbeexcludedfromtheengagementanddismissalof

labourandthat,instead,alabourofficershouldbeappointedforthepurpose.

(ii)The qualities required of the labour officer should be integrity,personality, energy and the ability to understand individuals and he shouldhavealinguisticskill.Ifheisarightperson,theworkerswillhaveconfidenceinhimandregardhimastheirfriend.

(iii) All labourers should be engaged by him, and none should be dismissed without consulting him.

(iv)Thelabourofficershouldfulfilmanydutiesandshouldparticularlyinitiateandadministerwelfaremeasures.

2.AppointmentofLabourOfficers

FollowingtherecommendationoftheRoyalcommissionofLabour,labourofficerswereappointedbymanyindustries.Labourofficerswereentrustedwiththeresponsibilityofpromotingwelfareactivities.Theyfunctionedasindustrialrelationsofficerstohandlegrievances.TheBombayMillOwnersAssociation,forexample,appointedlabourofficerstosettlegrievancesanddisputes.

3. TheSecondWorldWar

DuringtheSecondWorldWar,theneedforenlistinglaboursupportforthewareffortswasconsideredimperative.Thisledtotheappointmentofwelfareofficers,whowere generally entrustedwith the handlingofwelfare andlabour administration. They were to deal with working conditions, canteens, rationshops,recreationfacilities,medicalfacilities,housingfacilities,etc.TheSecondWorldWarresultedinwelfareofficersbeingappointedbythegovernmentaswellasindustries.Thefunctionofthewelfareofficersincludedwelfareactivities,personnelactivitiesandindustrialrelations.

4.Enactmentof the IndustrialDisputesAct

The enactment of the IndustrialDisputesAct, 1947made adjudicationcompulsory.Thismadethewelfareofficershandledisputesandadjudication


NOTES


relatingtoconditionsofservice,wages,benefits,etc.Thewelfareofficersthusbecameindustrialrelationsofficers.Asaresult,employershiredwelfareofficerswithalegalbackground.

5.Enactmentof theFactoriesAct

Section 49 of the FactoriesAct, 1948made it obligatory for factoriesemploying500ormoreworkerstoappointwelfareofficers.Awelfareofficerhadalistofdutieslaiddownforhim.Hehadtoperformactivitiesconcernedwithwelfare,personneladministrationandindustrialrelations.

6. 1960andafter

Till1960,recruitmentoflabourwasnotgovernedbyanylaw.However,therapidgrowthofindustryandtheconsequentdemandforskilledandsemi-skilledworkers led to theenactmentsof theEmploymentExchangeAct,1959toregulatetherecruitmentofworkersandtheApprenticeAct,1961toregulatethetrainingofworkerstosomeextent.

Thus, later, personnel officerswere appointed as ‘labourwelfareofficers’tosatisfystatutoryrequirements.Next,theroleofapersonnelofficerwasconvertedintothatofan‘industrialrelationsofficer’.Todayhisroleisthatofa‘humanresourcemanager’.Hehastoworksinthreeareasoflabour:welfare,industrialrelationsandpersonneladministration.

ProfessionalizationofPersonnelManagement

Aprofessionalsubscribestocertainethicalstandards.Heismoreloyaltotheprofession than to the employer.With the emergenceofprofessionalpersonnelmanagers,thegrowthofpersonnelmanagementhasaccelerated.A professional has knowledge and judgement,which he uses tomakehis decision. He is not controlled or directed by his employer. Thus, professionalizationmakesabusinessenterprisemoreefficient,dynamicandsociallyresponsible.ThegrowthofpersonnelmanagementeducationinIndiahascontributedtoprofessionalizationofpersonnelmanagement.

SocialResponsibilities ofBusiness

Employeesshouldbetreatedashumanbeingsandtheircooperationmustbeachievedfortherealizationoforganizationalgoals.Thebusinessshouldfulfilthefollowingobligationstowardstheiremployees: (i)Fairwages: Business should pay reasonable salaries so that their

employee’smayleadagoodlifeandsatisfytheirneeds. (ii)Adequate benefits: Employees should be provided benefits like

housing,insurancecover,medicalfacilitiesandretirementbenefits. (iii)Goodworkingconditions: Good working conditions are necessary

tomaintainthehealthoftheworkers.

NOTES



(iv)Opportunity for growth: Business should give the employees opportunity to develop their capabilities through training and education.

(v)Recognition ofworker’s rights:The business should recognizetheworker’sright tofairwages, toformtradeunions, tocollectivebargaining, etc.

(vi)Cooperation:Thebusinessmustwinthecooperationofworkersbycreatingtheconditionsinwhichworkersarewillingtoputforwardtheirbesteffortstowardsthecommongoalsofthebusiness.Therefore,businessorganizationshavemadeaconsciousattemptby

contributingtothewell-beingandupliftmentofthecommunityinwhichitis situated.

ChangeofGovernmentAttitude

The relationship between the state and the economy has a chequered history sincethedaysoftheplannereconomistAdamSmith.DuringthetimeofAdamSmith, the doctrine ofLaissezFairewaswidely accepted as theguidingprincipleofeconomicactivity.TheStatewasexpectedtoconcernitselfonlywithproblemsrelatingtolawandorder.Itscrupulouslyavoidedanyinterferenceintheworkingofprivatebusiness.Laissezfairewastheeraoffreeenterprises.Thedoctrineoflaissezfairewasbasedontheassumption‘that every individual acting as a rational being tries to get the greatest satisfactionfromlifeforhimselfandintheprocesscontributestowardsthegreatestpossiblesatisfactiontosociety’.Thus,theclassicaleconomistfondlybelievedthattheprincipleofnon-interferencewiththeeconomicandbusinessmattersledto‘thegreatestgoodofthegreatestnumbers’.

Prior to Independence, theBritishGovernment followed a laissez-faireattitudetolabour–managementrelations.ButafterIndependencetheNationalGovernmenttookuponitselfthepledgetoestablishawelfarestate.TheGovernmentthereforeenactedmanylawsforthebenefitoftheworkers.

Factors Impeding theGrowthofHRM in India

ThevariousfactorswhichhaveimpededthegrowthandprogressofPersonnelManagement in India, are:

1. LateArrival of theFactorySystem

Personnel management is conditioned by industrial development. In India, modernindustrystartedwiththedevelopmentoftherailways.Evenaftertheprogressofindustry,personnelmanagementwasunheardof.ItwastheRoyalCommissionofLabourwhichrecommendedin1931theappointmentoflabourofficerstodealwiththerecruitmentoflabourandtosettletheirgrievances.Thus,theslowgrowthofpersonnelmanagementinIndiacanbelinkedtothelatearrivaloflarge-scaleindustry.


NOTES


2. AbundanceofCheapLabour

InIndia,themainsourceoflaboursupplyhasbeenthegrowthofpopulation.ModernindustrialsectorinIndiaattractslabourfromtheagriculturalsector.Industrialcentresdrawontheirsurroundingruralareasforrecruitmentofworkers.Therapidincreaseofpopulation,lowdegreeofindustrializationandwidespread unemployment, both in rural and urban areas, have resulted in anabundantsupplyoflabourtotheindustries.Sincelabourisinabundance,good human relations are not necessary in India and there are arbitrary dismissalsandlayoffs.

3. WeakLabourMovement

The Indian working class is generally passive and depends on outside politiciansforleadership.Thisoutsideleadershiphasfailedtounderstandtheneedsoftheworkingclass.Insteadofawakeningsocialconsciousnessamongtheworkers,thepoliticiansinfactusetheworkerstoachievetheirpolitical ends.

ThemigratorycharacterofIndianlabourleadstounhealthygrowthoftradeunions.Manyworkersdonottakeanactivepartintheformationofunions and do not like to pay their subscriptions because they do not come to the cities to live permanently.

No trade union will be strong unless it gets legal recognition. The recommendation of the Royal Commission on Labour favoured therecognitiontoatradeunionevenifitrepresentedonlyahandfulofemployees.Itsaidthat‘thefactthatunionsconsistofonlyaminorityofemployeesisnotadequatereasonforwithholdingrecognition’.Inviewofthis,theTradeUnions ACT, 1926 was amended in 1947.The amendment made it obligatory onthepartoftheemployertorecognizeaunionundercertainconditions.However,theamendmentcouldnotbeimplemented.Thus,thelackoflegalrecognitiontosmalltradeunionshamperedthegrowthoflabourmovementin India.

4. HighlyAuthoritarianCulture

The Indian society has a highly authoritarian culture. This makes the worker depend on his superiors. Freedom is not a value in India. This culture thus discouragesparticipativestyleofmanagementandfreecommunication.Thesetwoconditionsarethebasesforidealhumanrelations,whichislackinginthe Indian conditions.

5.TechnologicalBackwardness

Technologicalenvironment influencesbusiness in termsof investment intechnology,consistentapplicationoftechnologyandtheeffectsoftechnologyon markets. The immense technological progress in the West has raised the standardoflivingoftheirworkers.ThisisnotsowiththeIndianworkers

NOTES



becauseoftheirtechnologicalbackwardness.Technologicalprogresshasanimportantroletoplayintheeconomicdevelopmentofacountry.Nobackwardcountry canhope tomarch aheadon the roadof economicdevelopmentwithoutadoptingnewertechniquesofproduction.

6. Instability inEmployment

TheIndianworkersareattractedtothecitiesbythelureofhigherwagesbuttheinstabilityoftheiremployment,chronichousingshortageandhighhouserentspreventthemfromsettlingdowninthecitieswiththeirfamilies.Thus,anindustrialworkerwouldnotremaininindustryifhecouldsecuresufficientfoodandclothinginthevillage.‘Itistrulysaidthatindustrialworkersarepushed,notpulledtothecity’.

FutureofPersonnelManagement in India

Thepersonnelprofessional’sroleshouldbetoaidandassistthelinemanagersin such a way that the human resource is put to its optimum use. Areas like wagenegotiations,collectivebargaining,recruitmentandsocialwelfareneedtheprofessionalskillandstrategyofapersonnelprofessional.Byvirtueoftheir education and training, personnel professionals are themost suitedpersons tohandle thesedelicatematters.AccordingtoProf.Manoria, ‘Inafast-changingsocietyasourown,self-developmentinprofessionalfieldisacontinuingfeaturewhichmustbekeptupatalllevelslestobsolescentwouldeatourvitalities’.

Thefunctionofapersonnelmanagerhasundergonemanychanges.FollowingtherecommendationsoftheRoyalCommissiononLabour,thejobofawelfareofficerwas‘dealingwithemploymentmattersandlabourgrievances’.After theenactmentof theFactoriesAct,1948 (sec49), thepersonnelmanagerwasidentifiedwiththepaternalisticlabourwelfareofficer.However, his role remained very much within the legalistic boundaries, as heowedhisorigintolabourlegislation.Sincegoodlabourwelfareisnotasubstituteforpoormanagement,organizationswereforcedtodevelopaninterestinthesocialwellbeingoftheworkers.Asaresult,thescopeofthepersonnelfunctionsexpanded;newdimensionswereadded,andtheemphasiswasshifted.Withthesechanges,rolemodificationofthepersonnelmanageralso became necessary. Thus, cultural, social and economic changes have madeinroadsintothepersonnelmanagementfield.Thegreateremphasisonhuman dignity and a stronger and more enlightened labour movement have createdafavourableclimateforthedevelopmentofpersonnelmanagementinIndia.Theconsequencesofthesechangesarediscussedbelow:

1.Greaterdemand for jointdecision-making

The paternalistic efforts to help needy employees solve their personalproblems.IndustrialorganizationsinIndiahavemovedtoajointconsultative


NOTES


process of decision-makingwhich influences employees.This has beenbrought about by voluntary acceptance by the employers, strong trade unions and governmental legislation.The attitude of employers and thetradeunionstowardseachotherhasgraduallyimproved.TheprofileoftheIndianworkforceischangingwitheducationandanincreasingawarenessofitsrights.Thisgreaterawarenessofitsrightswillresultinagreaterdemandforjointparticipationinmanagement.

2.Greater emphasis onhumanresourcedevelopment

A personnel manager is likely to be more concerned about the development ofhumanresourcesthantheadministrationofpersonnelservice.Hewilladvice management on the relationship between individual development and theachievementoforganizationgoals.Hewillengagehimselfinplanningmeaningful personnel researchwith a view to assist the linemanagersregarding the current management practices.

3.Change in theprofileofworkers

Educatedworkforceshoulddemandgreaterautonomyanddiscretionintheworkplace.Theneedsandaspirationsoftheeducatedpeoplearedifferentfrom those of uneducatedpeople.Therefore, the challenge facedby thepersonnelmanagerisvaried.Similarly,theemploymentofwomeninlargenumbershaschangedthesexcompositionoftheworkforce.Thesewomenworkershavebeguntoassertthemselvesandresist‘discrimination’againstthem.Thesefactorshaveresultedinchangingtheexistingpersonnelpolicies.

4.Change inattitudeof topmanagement

Thescopeofpersonnelmanagementfunctiondepends,toalargeextent,onitsimportanceintheorganizationandtheattitudeofthetopmanagement.

5. Increasing roleof government

Changes in thepersonnel functiondepend toa largeextenton theneedsdictatedbythesocio-economicandlegalchangesinthecountry.Enactmentofvariouslabourlawshasmadeitnecessarytoappointapersonnelmanagerwho is a specialist in law to advice the management on the changing legal obligationsonthepartoftheorganizations.

6.Bettermethodofperformanceappraisal

Performanceappraisalormeritratingisoneoftheoldestandmoreuniversalpracticesofmanagement.Itreferstoalltheformalproceduresusedinworkingorganizations to evaluatepersonalities andcontributions andpotential ofgroupmembers.Permanent performance appraisal records of employeeshelpthemanagementtogiveupsolerelianceuponpersonalknowledgeof

NOTES



supervisors.Performanceappraisalthusservesasameansforevaluatingtheeffectivenessofworkers.Workerswouldvalueacloserconnectionbetweenpay andperformance andwould certainlyworkharder to achieve bettercompensationfortheworkdone.

7.More importance tomotivation

Motivationconcernitselfwiththewilltowork.Itseekstoknowtheincentivesforworkandtriestofindoutthewaysandmeanswherebytheirrealizationcanbehelpedandencouraged.AccordingtoM.J.Jucious,motivationis‘theactofstimulatingsomeoneoroneselftogetadesiredcourseofaction’.Thetraditionalsystemofmotivation,the‘carrotandstick’policy,isnolongereffective,astheelementoffearisnolongeraspotentasitwasinthepast.Today, many positive and psychological rewards, such as better wages, interesting and challenging work and participative management, act as better motivators.

8.Changingwork ethics

Apersonnelmanager’sactionoftenrepresentsthepositionheholdsortheofficeheoccupiesratherthanhispersonalbeliefs.Apersonnelmanager,beingaprofessional, shoulddependoncertain rulesofconductandbehaviour.Thedecisionsandactionsofaprofessionalareguidedbycertainethicalconsiderations.Therefore,personnelmanagerwouldbecalledupontosetupandenforcegoodqualitystandards.Heshouldbecommittedtotheworkers,changing needs.

WecanconcludeonthefutureroleofpersonnelmanagementinIndiabyusingthewordsofS.N.Pandeywhoobservedthat:

Justasthebusinessoffinancemenistomanagethefinancesoftheorganizationtogettheoptimumreturnoninvestment,justasitisthebusinessofproductionmentoutilizethevariousresourcesattheirdisposalinsuchmannerthatoptimumoutputisobtained,soisthebusinessofpersonnelmentomanagehumanresourceensuringharmony,motivation,satisfactionandcommitment.

Thus,thefuturetrendsofpersonnelmanagementinIndianindustrieswillmodifytheroleofthepersonnelmanager.Hisfunctionswilldefinitelybeenlargedfromtraditionalareassuchasmanagementofmanpowerplanning,selection,recruitment,training,andwelfare.Withgrowingpersonnelneeds,new dimensions will be added.

CheckYourProgress

1.Whatdoesindustrialrevolutionreferto? 2.Whatishumanrelations’movement? 3.Whatistwo-factortheoryofmotivation?


NOTES


2.4 FUNCTIONS OF THE LABOUR WELFARE OFFICER

ThissectiondiscussesthefunctionsoftheLabourWelfareOfficer.Oneofthemajoraspectsofnationalprogrammestowardsbetterment

of themajorityof labourcreatingpopulation is labourwelfare.The term‘labourwelfare’isverydynamic,flexibleaswellascomprehensive.Welfareworkaimsatprovidingtheworkerswithbasicfacilitiesandamenitiesoflifewhich they themselves cannot provide thus enabling them to enjoy a richer andfullerlife.Labourwelfareimprovesthemoralityandefficiencyofworkerandultimatelytheproductivityofindustrialworkerandorganization.

TheLabourWelfareOfficerlooksaftertheimplementationoflabourlawsandthemaintenanceofproperworkingconditions.Theofficerconcernshimselfwithmattersrelatingtotheworkers’well-being;withindustrialpeaceand harmonious labour relations.

ThemainobjectivesofaLabourWelfareOfficeraretoeliminatetheevilsofthejobbersystemintherecruitmentoflabourandtodevelopandimprovethelabouradministrationinmillsandfactories.TheroleofaLabourWelfareOfficeristoserveasaliaisonwiththeStateLabourCommissioner.TheMalaviyaCommittee’sReportonLabourWelfarein1969,followingthemodelrulesframedundertheFactoriesActof1948,hasspecifiedthefollowingdutiesofwelfareofficers: (a) Supervision (b) Advice (c)Liaison (d) Counselling

2.5 DIFFERENCE BETWEEN PERSONNEL MANAGEMENT AND HRM

Sincethe1980sthenatureofpersonnelmanagementisundergoingchangeandpersonnelfunctionisshiftingthelocusofitsfocus.Amongstpersonnelspecialists,theterm,‘PersonnelManagement’isbeingsubstitutedbythatof‘HumanResourcesManagement’.ItisfeltthatPersonnelManagementis being directed mainly at company employees and is not being completely identifiedwithmanagerialneeds.

Personnel men have all along been mediating in between the managementand theemployeescommunicating theneedsofeach to theother. To maintain credibility with employees mediating personnel men have tolookaftertheirwelfare.Atthesametimetojustifytheirexistencewith

NOTES



management,theymustshowtotheirmanagers,aconcernfortheefficiencyoflabourutilizationaswellasensurethatstaffinterestsarealwayssubservienttothoseoforganizationaleffectiveness.

Human Resources Management, by contrast, is directed mainly towardsmanagerialneedsforpeopleresourcesinorganizations,withgreateremphasis being placed on planning, monitoring and control rather than on problem solving and mediation. Whereas traditional Personnel Management iscommittedtotheideathatemployees’needsshouldbelookedafter,sinceemployeesareeffectiveonlywhentheirneedsaresatisfied,HumanResourcesManagementreflectsadifferentsetofbeliefs.Thesearethatdeployingofhuman resources in correct numbers with the right skills at the right price is moreimportantthanapatronizinginvolvementwithpeople’spersonalaffairs.

HRM(HumanResourcesManagement)issignificantlydifferentfromPersonnel Management. HRM is proactive rather than reactive, is system-wide rather than piecemeal, treats labour as social capital rather than as a variable cost, is goal-oriented rather than relationship-oriented and is ultimately based on commitment rather than compliance.

Torrington has argued that Personnel Management has grown through assimilating a number of additional emphases to produce an ever-richercombinationofexpertise.HRMisnorevolutionbutafurtherdimensiontoamulti-facedrole.WhilePersonnelManagementissupply-driven,HRMisdemand-driven.

PersonnelManagement is directedmainly at the employees of theorganization—findingandtrainingthem,arrangingtheirpayandcontractsofemployment,explainingwhat isexpectedof them, justifyingwhat themanagementisdoingandtryingtomodifyanymanagementactionthatcouldproduceanunwelcomeresponsefromtheemployees.Incontrast,thehumanresourcemanagerstartsnotfromtheorganization’semployees,butfromtheorganization’sneedforhumanresources;withdemandratherthanthesupply.

At first sight, a revolution seems to be taking place in PersonnelManagement all over the world. Not only are there major changes in practice whichgofarbeyondthechoiceofthisorthattechnique,thereisalsosaidtobeaparadigmshiftoccurringinthethinkingonPersonnelManagementwhich shows a new theoretical sophistication. The new paradigm seems capableofbothdescribingandexplaining thechanges inpracticeandofprovidingtherationaleforelevatingPersonnelManagementortousethemoremodernterm,HRMtostrategicimportanceintherunningoforganizations.Basically,itseesmanagement,facedwitheverincreasingcompetitioninthecontextoftheglobalizationoftheeconomy,forcedtorethinkthesourcesofcompetitiveadvantageandtomakestrategicchoicesaboutfuturedirections.NoeconomycancompetewithJapan;theywouldhavetolowerwagesandlivingstandardsoftheworkerstosociallyandpoliticallyunacceptablelevels


NOTES


which would not be possible. Instead, they should place emphasis on the qualityofgoodsandservices.Qualitygoodsandservicesrequireaqualityworkforce.Fromthisitfollowsthatpeopleandthewaytheyaremanaged,arethemajorsourcesofcompetitiveadvantage.

ThechallengeofHRmanagerstodayistorecognizetalentandnurturethesamecarefullyandachievesignificantproductivitygainsoveraperiodoftime.Theenterpriseisnothingbutpeople.Somewillbeintelligent,othersnot so intelligent; somearecommitted to jobs,othersarenot; somewillbeoutgoing,othersreservedandsoon.‘Thepointisthatthesedifferencesdemandattentionsothateachpersoncanmaximizehiseffectivenesssothatthesocietyasawholecanmakethewisestuseofitshumanresources.’

TheroleofanHRmanager isshiftingfromoneofaprotectorandscreenertothatofaplannerandchangeagent.Inthepresent-daycompetitiveworld,highlytrainedandcommittedemployeesareoftenafirm’sbestbet.HRprofessionalscanhelpanorganizationselectandtrainemployeesforemerging roles. Only people who are involved and intelligent can make adifference.CharlesCreerhaspointedout that ‘inagrowingnumberoforganizationshumanresourcesarenowviewedasasourceofcompetitiveadvantage…Increasinglyitisbeingrecognizedthatcompetitiveadvantagecanbeobtainedwithahigh-qualityworkforcethatenablesorganizationstocompeteonthelinesofmarketresponsiveness,productandservicequality,differentiatedproductsandtechnologicalinnovations.’

In the future, the principal issueswill be how theHRM functioncantransformitsoutlookfromatraditionaltoamodernone:frombeingfunctionally-orientedinternallyfocused,reactive,activity-driven,centralizedandcontrol-orientedtobeingbusiness-oriented,customer-focused,proactive,effectiveness-driven,decentralizedandempowerment-oriented.

Moreover,organizationswillneedtobeconcernedwithextendingtheir recruiting efforts, developing careful screeningprocedures, trainingemployees to adapt to change, providing appropriate and sufficienteducationalprogrammesandaccountingfortheirinvestmentinrecruiting,selectingand trainingemployees.Thenewgenerationofemployeeswillweighsalaryandbenefitspackagesagainsttheirpersonalneedsandvalues.Therefore,compensationandbenefitspackageswilloffergreaterflexibilityin order to meet individual needs.

CheckYourProgress

4.WhatistheroleofaLabourWelfareOfficer? 5.StateonechallengefacedbyHRmanagerstoday.

NOTES


HRM and Personnel Management2.6 ANSWERS TO CHECK YOUR PROGRESS

QUESTIONS

1. IndustrialRevolutionreferstochangesthatoccurredinEnglandduring1760–1850.

2.Human relations’movement is characterizedby its focusongroupbehaviour andworkers’ feelings as they relate to productivity andmorale.

3.According to the two-factor theory ofmotivation,motivation anddissatisfaction ofworkers are the results of two separate sets ofconditions.

4.TheLabourWelfareOfficerlooksaftertheimplementationoflabourlawsandthemaintenanceofproperworkingconditions.

5.ThechallengeforHRmanagerstodayistorecognizetalentandnurturethesamecarefullyandachievesignificantproductivitygainsoveraperiodoftime.

2.7 SUMMARY

· Personnel management has evolved due to enlightened employers tryinghard,overtheyears,toimprovethelotoftheirworkers.

· IndustrialRevolutionreferstochangesthatoccurredinEnglandduring1760–1850.Itbroughtaboutfarreachingchangesintheeconomiclifeofpeople.

·Theuseofmachinesnecessitatedlargeamountofcapital,whichledtoconcentrationofeconomicpowerandgrowthoflargeenterprises.

·The scientific management of the late 1800s and early 1900sconcentrated particularly on job design, selection and compensation.

·ThescientificmanagementmovementowesitsorigintoFrederickWTaylor,thefatherofscientificmanagement.

·According toTaylor, ‘Planning shouldbe the resultof cooperationbetweenthemanagementandworkersandthataprovisionshouldexistforcompensatingthepersonnelwithfinancialincentives’.

· Robert Owen, a British industrialist, is considered to be a great scholar ofmanagementthought.Hewasthemanagerofdifferentcottontextilemills between 1800 and 1828.

·Humanrelationistsmadeverysignificantcontributiontomanagementthought by bringing into limelight human and social factors inorganization.

·Herzbergpropoundedthetwo-factortheoryofmotivation.


NOTES


·According toMcGregor’s theory,management is accountable fororganizing the elements of productive enterprises, such asmoney,material, equipment and people, to meet economic ends.

·PersonnelmanagementinIndiadatesbacktotheReportoftheRoyalCommissiononLabourinIndia(1929–31).

· The Commission made several important recommendations, which includedtheappointmentoflabourofficerstokeepacheckoncorruptpracticesinrecruitmentofindustrialworkers.

·FollowingtherecommendationoftheRoyalcommissionofLabour,labourofficerswereappointedbymanyindustries.

·TheenactmentoftheIndustrialDisputesAct,1947madeadjudicationcompulsory.

·HRM(HumanResourcesManagement)issignificantlydifferentfromPersonnel Management.

· HRM is proactive rather than reactive, is system-wide rather than piecemeal, treats labour as social capital rather than as a variable cost, is goal-oriented rather than relationship-oriented and is ultimately based on commitment rather than compliance.

·ThechallengeofHRmanagerstodayistorecognizetalentandnurturethesamecarefullyandachievesignificantproductivitygainsoveraperiodoftime.

2.8 KEY WORDS

·Personnel:Itreferstothepeopleemployedinanorganization. ·Administration:Itistheprocessoractivityofrunningabusiness,

organization,etc. ·Compliance:Itistheprocessofdefiningbothindividualandgroup

behaviorstoensuretheorganization’sapplicablelawsandpoliciesarefollowed.

·Decentralize:Itmeanstomovedepartments(ofalargeorganization)awayfromasingleadministrativecentretootherlocations.



1.Writeanoteontheevolutionandhistoryofpersonnelmanagement. 2. Write short notes on:

NOTES



(a)Herzberg’sTwoFactorsTheoryofMotivation b)McGregor’sTheoryXandTheoryY 3. What do you understand by personnel management? 4.WriteashortnoteonthedutiesofaLabourWelfareOfficer. 5.DifferentiatebetweenpersonnelmanagementandHRM.

LongAnswerQuestions

1.Describegrowthofpersonnelmanagementduringhumanrelationseraand behavioural science era.

2.GiveadetaileddescriptionofMaslow’sNeedHierarchyTheoryorDeficitTheoryofMotivation.

3.GiveadetailedexplanationofpersonnelmanagementinIndia.DiscussthefactorsimpedingthegrowthofHRMinIndiaindetail.

4.WhatisthefutureofpersonnelmanagementinIndia?












Human Resource Planning

NOTES


UNIT 3 HUMAN RESOURCE PLANNING

Structure 3.0 Introduction 3.1 Objectives 3.2 ConceptandProcessofHumanResourcePlanning(HRP) 3.3 Factors in Human Resource Planning 3.4 Answers to Check Your Progress Questions 3.5 Summary 3.6 Key Words 3.7 SelfAssessmentQuestionsandExercises 3.8 Further Readings

3.0 INTRODUCTION

Since every organization ismadeupof people, acquiring their services,developingtheirskills,motivatingthemtohigherlevelsofperformanceandensuringthattheycontinuetomaintaintheircommitmenttotheorganizationareessentialtoachieveorganizationalobjectives.Thoseorganizationsthatare able to acquire, develop, stimulate and keep outstanding workers will be botheffectiveandefficient.Ontheotherhand,thoseorganizationsthatareineffectiveorinefficienthavetheriskofstagnatingorgoingoutofbusiness.Human resource thus creates organizations andmakes them survive andprosper.Ifhumanresourcesareneglectedormismanaged,theorganizationis unlikely to do well. Human resource planning has thus become a crucial requirementineveryorganization.Itinvolvespredeterminingthefuturepathofactionselectedfromanumberofdifferentcoursesofactiontoacquire,build up, administer and stimulate the human element of enterprise. Itidentifiesadeliberatechoiceofpatternsofthehumanizationofworkmilieuinanorganization.

This unit explains the concept, objectives and importance ofHRplanning,includingtheprocess,strategies,advantagesandlimitationsofit.

3.1 OBJECTIVES

Aftergoingthroughthisunit,youwillbeableto: ·DiscusstheconceptofHumanResourcePlanning(HRP) ·ExplainthefactorsinHRP ·DescribetheprocessofHRP

NOTES


Human Resource Planning3.2 CONCEPT AND PROCESS OF HUMAN

RESOURCEPLANNING (HRP)

Human resourceplanning is thepredeterminationof the futurecourseofactionchosenfromanumberofalternativecoursesofactionforprocuring,developing, managing, motivating, compensating, career planning, succession planningandseparatingthehumanelementofenterprise.Itdeterminesaconsciouschoiceofstaffingdecisionsinanorganization.

Characteristics ofHRPlanning

AccordingtoGeisler,‘HRplanningistheprocess(includingforecasting,developingandcontrolling)bywhichafirmensures that ithas the rightnumberofpeopleandtherightkindofpeopleattherightplacesattherighttimedoingworkforwhichtheyareeconomicallymostuseful.’

AccordingtoWendellFrench,humanresourceplanningmaybedefinedas“theprocessofassessingtheorganization’shumanresourcesneedsinthelightoforganizationalgoalsandmakingplanstoensurethatacompetent,stableworkforceisemployed.”

Fromtheabovedefinitions,wecangathersomegeneralcharacteristicsofhumanresourceplanningasfollows: 1. Human resource planning must incorporate the human resource

needsinthelightoforganizationalgoals. 2.Ahumanresourceplanmustbedirectedtowardswell-defined

objectives. 3. Human resource planning must ensure that it has the right number

ofpeopleandtherightkindofpeopleattherighttimedoingworkforwhichtheyareeconomicallymostuseful.

4.Humanresourceplanningshouldpavethewayforaneffectivemotivational process.

5.Ahumanresourceplanshouldtakeintoaccounttheprincipleofperiodicalreconsiderationofnewdevelopmentsandextendingthe plan to cover the changes during the given long period.

6.Adequate flexibilitymust bemaintained in human resourceplanningtosuitthechangingneedsoftheorganization.

TheHRmanagermustfollowasystematicprocessforHRplanningas given in Figure 3.1.


NOTES


FORECASTING DEMAND

Considerations · Product/Service demand · Technology · Organizationalgrowth · Financial resources · Management philosophy · Absenteeism · Labourturnover

Techniques · Trendanalysis · Estimation · Delphi

technique

FORECASTING SUPPLY

ExternalConsiderations · Demographic changes · Labourmobility · Policiesofgovernment · Educationlevelof

workers

Techniques · Marko

analysis · Replacement

charts · Succession

planning

BALANCING SUPPLY AND DEMAND

RECRUIT – (For shortages). Employeescanberecruitedforfulltimevacancies, part time basis or on contract basis. We may also recall retrenched workers REDUCTION OF SURPLUS STAFF – Organizationslayoff,terminate or give golden handshake to surplus work force

Fig. 3.1 Flow Chart Depicting ‘Human Resource Planning Model’

Objectives ofHRplanning

FromFigure3.1,itisclearthatthefailureinHRplanningwillbealimitingfactorinachievingtheobjectivesoftheorganization.Ifthenumberofpersonsinanorganizationislessthanthenumberofpersonsrequired,then,therewillbedisruptionsinthework—productionwillbehampered,thepaceofproductionwillbeslowandtheemployeesburdenedwithmorework.Ifontheotherhand,thereissurplusmanpowerintheorganization,therewillbeunnecessaryfinancialburdenontheorganizationintheformofalargepaybillifemployeesareretainedintheorganization,oriftheyareterminatedthecompensationwillhavetobepaidtotheretrenchedemployees.Therefore,it isnecessary tohaveonly theadequatenumberofpersons toattain theobjectivesoftheorganization.

Inordertoachievetheobjectivesoftheorganization,theHRplannershouldkeepinmindthetimingandschedulingofHRplanning.Furthermore,themanagementhastobepersuadedtousetheresultsofmanpowerplanningstudies.

Manpowerplanningcanalsobeusedasanimportantaidinformulatinganddesigningthetraininganddevelopmentprogrammesfortheemployeesbecause it takes into account the anticipated changes in the HR requirements oftheorganizations.

NOTES


Human Resource PlanningImportanceofHRplanning

HRplanning is a highly important anduseful activity.Without clear-cutplanning,anestimationoftheorganization’shumanresourceneedsisreducedtomereguesswork.Ifusedproperly,itoffersanumberofbenefits.Theseare: 1.Planningdefinesfuturemanpowerneedsandthisbecomesthebasis

ofrecruitinganddevelopingpersonnel. 2.Employeescanbetrained,motivatedanddevelopedinadvanceand

thishelpsinmeetingfutureneedsforhigh-qualityemployees. 3. Change in technology has attached more importance to knowledge and

skill resulting in surplus manpower in some areas and shortage in other areas. HR planning helps in creating a balance in such a situation.

4. Jobs are becomingmore andmore knowledge-oriented.This hasresultedinachangedprofileofHR.Becauseofincreasedemphasisonknowledge, recruitment costs have also increased. To avoid the high costofrecruitment,properHRplanningisnecessary.

5.Theorganizationcanhaveareservoiroftalentatanypoint.Peoplewithrequisite skills are readily available to carry out the assigned tasks.

6.Planningfacilitatesthepreparationofanappropriatemanpowerbudgetforeachdepartment.Thisinturn,helpsincontrollingmanpowercostsbyavoidingshortages/excessesinmanpowersupply.

7.SystematicHRplanningforcestopmanagementofanorganizationtoparticipateactivelyintotalHRmanagementfunctions.Whenthereisactiveinvolvementoftopmanagement,theywillappreciatetherealvalueofhumanresourcesinachievingorganizationaleffectiveness.

8.SystematicHRPforcestopmanagementofanorganizationtoparticipateactivelyintotalHRMfunctions.Whenthereisactiveinvolvementoftopmanagement,theywillappreciatetherealvalueofhumanresourcesinachievingorganizationaleffectiveness.

Process ofHRPlanning

With the expansion of business, adoption of complex technology andprofessionalmanagementtechniques,theprocessofHRplanninghasassumedgreatersignificance.Itconsistsofthefollowingstages.

(i)Analysingorganizationalplansanddecidingonobjectives

BeforeundertakingtheHRplanningofanorganizationtheshort-termandlong-termobjectivesshouldbeanalysed.TheprocessofHRplanningshouldstartwithanalysingtheorganizationalplansandprogrammes.Theyhelpinforecastingthedemandforhumanresourcesasitprovidesthequantumoffutureworkactivity.


NOTES


(ii)Analysing factors formanpower requirements

Theexistingjobdesignandanalysismaybereviewedthoroughlykeepinginviewthefuturecapabilities,knowledgeandskillsofpresentemployees.Thejobdesignandanalysisshouldreflectthefuturehumanresourcesandorganizationalplans.Thefactorformanpowerrequirementscanbeanalysedin two ways: (a) Demand forecasting – Forecasting the overall HR requirements in

accordancewiththeorganizationalplans. (b) Supply forecasting –Obtaining thedata and information about the

presentinventoryofhumanresourcesandforecastthefuturechangesin present human resource inventory.Demandandsupplyforecastingarediscussedindetailinsection1.5.

(iii)Developing employmentplans

Afterdeterminingthenumberofpersonnelforeachjobintheorganization,theHRdepartmenthastospelloutthejobdescriptionandjobspecification. (a) Job description: A job description generally describes the work to be

performed,theresponsibilitiesinvolved,theskillortrainingrequired,conditions under which the job is done, relationships with other jobs and personal requirements on the job.

(b) Jobspecification: Jobspecificationisanoutputofjobdescriptionandstatestheminimumacceptablequalificationsthatthenewcomermustpossesstoperformthejobsatisfactorilyandsuccessfully.

(iv)Developinghumanresourceplans

NetHRrequirementsintermsofnumberandcomponentsaretobedeterminedinrelationtotheoverallHRrequirement.Afterestimatingthesupplyanddemandofhumanresources,themanagementstartstheadjustment.Whentheinternalsupplyofemployeesismorethanthedemand,thatis,thereisahumanresourcesurplus;thentheexternalrecruitmentisstopped.Ifthereisahumanresourcedeficit,thentheplannershavetorelyonexternalsources.

AdvantagesofHRPlanningProgrammes

AsthemanpowerplanningisconcernedwithoptimumuseofHR,itcanbeofgreatbenefittotheorganizationinparticularandtothenationingeneral.Atthenational level, itwouldbeconcernedwithfactorslikepopulation,economicdevelopment, educational facilitiesand labourmobility.At theleveloftheorganizationitisconcernedwithpersonnelrequirements,sourcesofavailability,thewelfareofHR,etc.TheadvantagesofHRplanningarediscussed below:

NOTES


Human Resource Planning(a) Improvementof labourproductivity

Manpower orHRas a factor of production differs fromother factors ofproduction.Asitissubjecttoitsfreewill,theproductivityoflabourcanbeimprovediftheworkersarekeptsatisfied.Inotherwords,justasthesatisfiedworkers canbeproductive, dissatisfiedworkers can evenbedestructive.Therefore,throughproperHRplanningwecanimprovethemoraleofthelabour and thereby labour productivity.

(b) RecruitmentofqualifiedHR

Talented and skilled labour has become a scarce resource, especially in developingcountries.Therefore,forthesurvivalofthefirmitisessentialtorecruitthebestlabourforcethroughpropermanpowerplanning.

(c) Adjustingwith rapid technological changes

With the advancement in technology, job and job requirements are changing. Therefore,itisnecessarytoforecastandmeetthechangingmanpower,whichcanwithstandthechallengesof thetechnologicalrevolution.Thiscanbedonethrougheffectivemanpowerplanning.

(d)Reducing labour turnover

Labourturnoverreferstothemobilityoflabouroutoftheorganizationduetovariousfactors,suchasdissatisfaction,retirement,death,etc.Duetolabourturnoverafirmlosesexperiencedandskilledlabourforce.Thislosscanbeminimizedthroughefficientmanpowerplanning.

(e)Control over recruitmentand training costs

Highly skilled personnel are in short supply and it is costly to hire, train, and maintain them. A company has to incur heavy costs in processing applications, conducting written tests, interviews, etc., and in the process providing adequatetrainingfacilities.Inconsiderationofthesecostsitisessentialtoplancarefullyvis-à-vismanpowersoastominimizecosts.

(f) Mobility of labour

Today,itisdifficulttoretainqualifiedpersonnelinanorganizationastheymovefromonejobtoanotherinsearchofbetterprospects.Inafreesociety,peopleenjoyunrestrictedmobilityfromonepartofthecountrytotheother.Therefore,inordertoreducethelossofexperiencedandskilledlabour,everyorganizationmusthaveasoundsystemofmanpowerplanning.

(g) Facilitating expansionprogrammes

In these days of rapid industrial development every company goes forexpansionofitsactivities.Withtheincreaseincompanysize,thedemand


NOTES


forHRalsoincreases.Thisnecessitatespropermanpowerplanningsoastoensurethecontinuedsupplyoftherequiredmanpowerforthefirms’activities.

(h) To treatmanpower like real corporateassets

Today it is being increasingly felt by the practicingmanagers andpsychologiststhatemployeesinanorganizationmustbetreatedasthemostsignificant assets.Theproductivity of a company canbe improvedonlythroughmanpower planning, recognizing the significance of the humanfactorinbusiness.Apropermanpowerplanningisbasedontherealizationthatsatisfiedworkerscancontributetotheoverallprofitabilityofthefirmthrough improved productivity.

LimitationsofHRPlanning

ThemainhurdlesintheprocessofHRplanningare: (a Inaccuracy:HRplanninginvolvesforecastingthedemandforand

supplyofHR.Projectingmanpowerneedsoveraperiodoftimeisariskytask.Itisnotpossibletotrackthecurrentandfuturetrendscorrectlyandconvertthesameintomeaningfulactionguidelines.Longerthetimetaken,greateristhepossibilityofinaccuracy.Inaccuracyincreaseswhendepartmentalforecastsaremerelyaggregatedwithoutcriticalreview. Factors such as absenteeism, labour turnover, seasonal trends in demand, competitive pressures, technological changes etc., may reducetherestofmanpowerplansasfashionable,decorativepieces.

(b)Uncertainties:Technological changes andmarket fluctuations areuncertainties, which serve as constraints to HR planning. It is risky todependupongeneralestimatesofmanpowerinthefaceofrapidchanges in environment.

(c)Lackofsupport:Supportfrommanagementislacking.ThelatterisunwillingtocommitfundsforbuildinganappropriateHRInformationSystem.Thetimeandeffortinvolvedwithnotangibleandimmediategainsoftenforcethemtolookthe‘otherway’.· HR planning grows slowly and gradually. In some cases,

sophisticatedtechnologiesareforcefullyintroducedjustbecausecompetitorshaveadoptedthem.Thesemaynotyieldfruitunlessmatchedwiththeneedsandenvironmentoftheparticularenterprise.

· Planningisgenerallyundertakentoimproveoverallefficiency.Inthenameofcostcuttingitalsohelpsmanagementweedoutunwantedlabouratvariouslevels.Thefewefficientonesthatsurvivesuchfrequentonslaughtscomplainaboutincreasedworkload.

Supportfrommanagementislacking.ThelatterisunwillingtocommitfundsforbuildinganappropriateHRinformationsystem.Thetimeandeffortinvolved–withnotangible,immediategains–oftenforcethemto

NOTES


Human Resource Planninglookthe‘otherway’.HRplanninggrowsslowlyandgradually.Insomecases,sophisticatedtechnologiesareforcefullyintroducedjustbecausecompetitorshaveadoptedthem.Thesemaynotyieldfruitunlessmatchedwiththeneedsandenvironmentoftheparticularenterprise.

(d)Numbers’game:Insomecompanies,HRplanningisusedasanumbers’game.Thefocusisonthequantitativeaspecttoensuretheflowofpeopleinandoutoftheorganization.Suchanexclusivefocusoverlooksthemoreimportantdimension,i.e.thequalityofhumanresources.HRplanning,inthelongrun,maysufferduetoanexcessivefocusonthequantitativeaspects. Aspects such as employee motivation, morale, career prospects, training avenues, etc may be totally discounted.

(e)Employeesresistance:Employeesandtradeunionsfeelthatduetowidespreadunemploymentpeoplewillbeavailable for jobsasandwhenrequired.MoreovertheyfeelthatHRplanningincreasestheirworkload and regulates them through productivity bargaining.

(f)Employersresistance:EmployersmayalsoresistHRplanningonthegroundthatitincreasesthecostofmanpower.

(g)Lackofpurpose:ManagersandHRspecialistsdonotfullyunderstandthehumanplanningprocessandlackastrongsenseofpurpose.

(h)Timeand expense: Manpower planning is a time-consuming and expensiveexercise.Agooddealoftimeandcostsareinvolvedindatacollectionandforecasting.

(i)Inefficientinformationsystem:Inmostoftheorganizations,humanresource information systemhas not been fully developed. In theabsenceofreliabledata,itisnotpossibletodevelopeffectiveHRplans.

Responsibility forHRplanning

HRplanningistheresponsibilityofthepersonneldepartment.ThedepartmenthastorecommendrelevantpersonnelpoliciesinrespectofHRplanning,devisemethodsandproceduresanddetermine thequantitativeaspectsofHRplanning.Geisler has enumerated the responsibility of the personneldepartmentwithregardtoHRplanninginthefollowingwords: 1. To assist, counsel and pressurise the operating management to plan

and establish objectives. 2.To collect and summarisedata in total organizational terms and to

ensureconsistencywithlong-rangeobjectivesandotherelementsofthe total business plan.

3.Tomonitorandmeasureperformanceagainsttheplanandkeepthetopmanagementinformedaboutit.

4.To provide the research necessary for effectivemanpower andorganizationalplanning.


NOTES


DifferentApproaches toHRP

Thestartingpointofeffectivehumanresourceplanningistheorganizations’overallpurposeormission.Strategicplansareasuniqueastheorganizationsthat develop them, but underlyingmost organizational strategies is thedetermination of someunfulfilled need for products or services that theorganizationscansatisfy.Satisfyingtheseproductsorservicesthenbecomesa part of the organization’s goals.Anorganizational goal is a long-termbroadpurposeoraim.Apartofstrategicplanning is thedevelopmentoforganizationalgoalsandobjectives.

To a great extent, organizational goals influence the nature of allmanagerial processes and of human resourcemanagement in particular.Thismeans that the structureof theorganization, the specific jobs tobeperformedand thefinancial and technological resourcesneeded, and thenumberandqualificationsofpeopleemployedwillconsistentlyreflecttheorganizationalgoals.Thus,humanresourceplanningistheongoingplanningoftheorganization’shumanresourcesphilosophy,policiesandprogrammesinthecontextoftheoverallstrategicplansandthechangingconditionswithinandoutsidetheorganization.

RoleofHR strategy in strategicmanagement

OneofthemajorproblemswithexistingHRsystemsisthattheyarefragmented,incomplete and sometimes built on faulty assumptions about human ororganizationalgrowth.Grundy(1997)arguesthatstrategichumanresourcedevelopmentandplanninginvolveslinkingbusinessstrategyoftheorganizationtothecurrentandemergingpoolofmanagementskills,thusidentifyingthekeyshiftsandgapsandareasforintervention.Figure3.2explainsthis.

StrategicHRPlanningandDevelopment

CurrentOrganizationalPolicies

CompetitiveStrategy Future

OrganizationalPlans

Environment

Fig. 3.2 Strategic Human Resource Planning and Development Organization and Strategy

Source:Grundy,Tony.‘HumanResourceManagement:AStrategicApproach’,Long Range Planning, 30: 507–17.

NOTES


Human Resource PlanningFigure 3.2 shows how competitive strategy influences the currentpositionoftheorganization.Italsoshowsthelinkagesbetweenthestrategichuman resources planning and development with the competitive strategy. TheabsenceofaclearHRstrategylinkedtocorporatestrategymayadverselyaffectorganizationaleffectiveness.

Strategies forHumanResourcePlanning

Theobjectiveofmanpowerplanningistohelptheorganizationtoachieveits goals. For this purpose, the manpower planners have to develop some strategies.Stainerhassuggestedthefollowingninestrategiesforthebenefitofmanpowerplanners: 1.They should collect,maintain and interpret relevant information

regarding human resources. 2. They should report periodically the manpower objectives, requirements

andexistingemploymentandalliedfeaturesofmanpower. 3. They should develop procedures and techniques to determine the

requirementsofdifferenttypesofmanpoweroveraperiodoftime,fromthestandpointoforganization’sgoals.

4.Theyshoulddevelopmeasuresofmanpowerutilizationascomponentofforecastsofmanpowerrequirementalongwithindependentvalidation.

5.They should employ suitable techniques leading to the effectiveallocationofworkwithaviewtoimprovingthemanpowerutilization.

6.Theyshouldconductresearchtodeterminethefactorshamperingthecontributionofindividualsandgroupstotheorganizationwithaviewtomodifyingorremovingthesehandicaps.

7.Theyshoulddevelopandemploymethodsofeconomicassessmentofthehumanresources,reflectingitsfeaturesasincome-generatoranditsexpenditureandaccordinglyimprovethequalityofdecisionsaffectingthe manpower.

8.Theyshouldevaluatetheprocurement,promotionandretentionoftheeffectivehumanresources;and

9.Theyshouldanalysethedynamicprocessofrecruitment,promotionandlosstotheorganizationandcontroltheseprocessessoastomaximisetheindividualandgroupperformancewithoutinvolvinghighcost.

TypesofHRMstrategies

ThesuccessofHRMliesinitsflexibilityinreorientingitselfintunewiththechanginginternalandexternalforcesoftheorganizations.StaceandDunphyhaveproposedfourHRMstrategies.ThesestrategiesaresummarizedintheTable 3.1.


NOTES


Table 3.1 HRM Strategies and their Conditions for Use

HRMStrategytype Conditionsforuse Task-FocusedHRMStrategy HRMstrategystronglyfocusedonthebusinessunit · Strong bottom line orientation · Emphasis on workforce planning, job

redesign and work practice reviews · Focus on tangible reward structures · Internalorexternalrecruitment · Functional skills training and formalized

multi-skilling · Formalizedindustrialrelationsprocedures · Strong business unit culture

Used when market/products/services are undergoing major change and niche strategies are prevalent. HRM strategies must deliver the capacity for rapid structural systems, skill andcultural changes. Strong emphasis on business unit autonomy, maximum devolution, right-sizing (continuous redeployment) outsourcingoflabour

DevelopmentStrategy HRM strategy is jointly carried out by the corporate HR unit and the business units · Emphasis on developing the individual and

the team · Internal recruitment, where ever possible · Extensivedevelopmentprogrammes · Useofintrinsicrewards · Corporate organizational development given

high priority · Strong emphasis on corporate culture

Used when markets are growing and product/market innovation is desired. HRM strategies must create cross-organizationalsynergy and a market-leader culture. Strong emphasis on individual development, corporate culture management, developing strong internal labour market (promotions/appointments) and team skills.

TurnoverHRMStrategy HRM strategy is driven for a short period bythe executive leadership, characterized bychallenging, restructuring or abolishing HR systems, structures and methodologies. · Major structural changes affecting the totalorganizationandcareerstructures.

· Downsizingretrenchments · Lateral recruitment of key executives from

outside · Executive team building, creating a new

mindset · Breaking awayfrom the old culture

Used when the business environment changes dramatically, i.e.,when theorganization isnotcompatible with its environment. Also used when the business strategy of the organizationradically changes. HRM strategies must break and abolish redundant HRM practices, structures and redefine a new culture. Strongemphasis on forced downsizing, lateralrecruitment, new HRM systems and radical work and job restructuring.

PaternalisticHRMStrategy HRM Practice is centrally administered · Centralist personnel orientation · Emphasis on procedures, precedent anduniformity

· Organization and methods studies · Inflexibleinternalappointmentspolicy · Emphasis on operational and supervisory

training · Industrial awards and agreements set the HR framework

Used only in very limited mass production situations where the organization has anabsolute monopoly on stable markets/products. HRMstrategiesareusedasdevicesforcontroland uniformity of procedures/operations.Strong emphasis onformalemployer-employee industrial relationships and industrial awards.

Source: Stace, D. and D. Dunphy ‘Beyond Traditional Paternalistic and Developmental ApproachestoOrganizationalChangesandHumanResourceStrategy’International Journal of Human Resource Management, 2(3): 263–83 (1991).

BusinessHRMalignment

AlargenumberofHRMprofessionalsandstrategicandcorporateplannersinsist that there must be a sharp linkage between the business plans and the

NOTES


Human Resource PlanningHRMplansinanorganization.TheybelievethatsuchanassociationnotonlystrengthenstheorganizationalfunctioningbutalsopositionstheHRMinastrategicrole.TomasGaravan,NoreenHeratyandPatCostinehaveidentifiedtenapproachesthatorganizationscanfollowtoestablishthesaidlinkage.These approaches are described below: 1.Top-downapproach:Thisapproachinvolves: (a) identificationofthebusinessplan, (b) formulationofHRMstrategycorrespondingtothebusinessplan,

and (c) designing HRM activities based on HRM strategy. 2.Market-drivenapproach: Here employees are grouped depending on

their skill and knowledge. It is necessary to assess the skills available andpredictwhatskillstheemployeesrequiretomeettheorganizationalmarket demands.

3.Career planning approach:The existence and growth of everyemployeeproceedsfromthebusinessplansoftheorganization.Here,thecareerplansofeachemployeeislinkedtothebusinessplan.

4.The futuring approach: In the strategy formulation stage,HRMbecomesamajorfocusandingredientofthebusinessplan.

5.Performance diagnosis approach:This approach proposes that linkage between the two can be achieved through HRM playing the facilitatorroleintheformulationandexecutionofthebusinessplans.

6.Artificialexperienceapproach: HRM practitioners in this approach createsimulationoffuturebusinessplansanddevelopwaysofHRMalignment.

7.Pulse-taking approach: Here survey technique and training and develop-mentinterventionsareemployedtogaugetheeffectivenessofthebusinessplans.

8.Theeducationalapproach:The linkage achieved in this approach mainlyincludesofferingtrainingandknowledgeofstrategicthinking,methods to prepare business plans and also equipping them with implementation skills.

9. Interpersonalapproach: This approach is based on the premise that asubstantialpercentageofcorporatestrategyisinformalanddynamic.Therefore,itistheHRMprofessionals,whowiththeirinterpersonalapproachcaninstitutionalizethisinformalstrategyinaplannedandformalway.

10.The rifle approach: This approach is based on troubleshooting. HRMshouldbeusedtoidentifytheproblemsandconstraintsintheimplementationofbusinessplansandalsotoresolvethem.


NOTES


Strategic andoperational control

Strategiccontrolistheprocessoftakingintoaccountthechangingpremiseson which the strategy is based, continuously evaluating the strategy as it is being implemented and taking corrective actions to adjust the strategy to the new requirements. This process is necessary because there is a time lag betweenstrategyformulationanditsimplementationrequiringchangesinthestrategicformulationitself.

Operational control is concernedwith action or performance andis aimed at evaluating the performance of the organization as awholeor its different components.Operational control is usedby almost everyorganizationinsomeformortheother.

HaroldKoontzetal.havegiventhedifferencebetweenstrategicandoperation control which is shown in the Table 3.2.

Table 3.2DifferencebetweenStrategicandOperationalControl

Factors StrategicControl OperationalControl 1. Basic question 2. Aim 3. Main concern

Are we moving in right direction? Proactivecontinuousquestioningofthebasicdirectionofthestrategy Steeringthefuturedirectionoftheorganization

How are we performing? Allocationanduseoforganizational resources Action control

Source: KoontzHarold,CyrillO’DonnellandHeizWeihrich,Management. McGraw-Hill, New York, (1980).

Procedure

Procedures are planswhich help establishmethods for handling futureactivities.Theyprescribebasically thechronologicalsequencesofactionrequired to achieve an objective.Itisastandingplanactingasameansofimplementingapolicy.Forexamplethesalesdepartmentlaysdownapolicytoexecuteallorderswithin48hours.Theprocedureofexecutionoftheorderswillprescribeasequenceofstepsthatmustbefollowedafterthereceiptoftheorder, till thedispatchofgoods to thecustomer.Thesechronologicalseriesofstepsortasksconstituteaprocedure.

AccordingtoTerryandFranklin—‘Aprocedureisaseriesofrelatedtasksthatmakeupthechronologicalsequenceandtheestablishedwayofperformingtheworktobeaccomplished’.

Procedures provide the guidelines for performing an action.Theyincludehoweachtaskintheorganizationshouldtakeplace,whenitshouldtakeplaceandbywhomitshouldtobeperformed.

NOTES


Human Resource PlanningCharacteristics of a goodprocedure

Sinceproceduresare the standingplanswhichcanbeused frequently inperforming thework, these shouldbe framedvery carefully.Normally aprocedureorsetofprocedureswiththefollowingcharacteristicscontributesinapositivewaytotheorganization: 1.A procedure should be based on adequate facts of the particular

situation.Itshouldbesuchthatitdoesnothindertheefficiencyoftheorganization.

2. A procedure should possess stability. A stable procedure provides continuity in the action and people get well-versed with the system.

3.Flexibilityofaprocedureisdesirableinordertocopewithacrisisoremergency.Therefore,abalanceshouldbemaintainedbetweenthestabilityandflexibilityoftheprocedure.

4.Thereshouldbeacontinuousreviewoftheproceduressothattheirutility is ascertained.

5. The procedures should small otherwise they become more important than the results themselves.

Advantagesofprocedure

Aprocedurehasthefollowingadvantages: · Itensuresuniformityofaction. · Itdecreasestheneedforfurtherdecision-makingbylayingdowna

standardpathtofollow. · Itincreasescoordinationamongthepersonnelintheorganizationand

its departments. · Itprovidesagoodstandardforthemanagertoappraisehisemployees. · Itisanimportantaidforcommunicationbecausetheycommunicate

thestepstobefollowedtocompleteaparticularpieceofwork. · Itoftenleadstothesimplificationoftheworkflowandeliminationof

unnecessary steps. · It ensures uniformity and consistency of action under recurring

situations.

Disadvantagesofprocedures

·Aprocedurelaysdownthefixedwayofdoingaparticularjobandthuscreativity is lost.

·Theybringaboutrigidityintheperformanceofoperations. · They need to be reviewed and updated constantly. ·Theydiscouragethesearchforanyimprovement.


NOTES


3.3 FACTORS IN HRP

SomeofthestepsthatmaybetakentoimprovetheeffectivenessofHRPareasfollows: · Objectives:TheHRplanmustfitinwiththeoverallobjectivesofthe

organization.Importantaspects,suchasworkingconditions,humanrelationships, etc., must be kept in mind while developing the plan. The HRplanshouldbebalancedwiththecorporateplanoftheenterprise.Themethodsandtechniquesusedshouldfittheobjectives,strategiesandenvironmentoftheparticularorganization.

· Topmanagement support:The plan must meet the changing needsoftheorganizationandshouldenjoyconsistentsupportfromtopmanagement.Beforestarting theHRPprocess, thesupportandcommitmentof topmanagement shouldbeensured.Moreover, theexerciseshouldbecarriedoutwithinthelimitsofthebudget.Thereisnouseformulatingplanswhichcannotbeimplementedduetofinancialconstraints.

· Appropriatetimehorizon:TheperiodofaHRPshouldbeappropriatetotheneedsandcircumstancesofthespecificenterprise.Thesizeandstructureoftheenterpriseaswellasthechangingaspirationsofthepeople should be taken into consideration.

· Manpowerinventory:Thequantityandqualityofhumanresourcesshould be stressed in a balanced manner. The emphasis should be onfillingfuturevacancieswith therightpeople rather thanmerelymatchingexistingpeoplewithexistingjobs.Theorganizationmusthave an up-to-date employee skills inventory showing pervious jobs held, tenureoncurrent job, educational and trainingqualifications,specificknowledgeandskills,priorworkperformance,pastandcurrentcompensationandmobilityfactors.TheMarkovanalysis(anapproachtoforecasttheinternalsupplyofmanpowertrackingpastpatternsofpersonnel movements) may be pressed into service while preparing themanpowerinventory.Upwardmobilityofexistingstaffneedstobeconsideredcarefully.

· Humanresourceinformationsystem: An adequate database should be developedforhumanresourcestofacilitateHRP.Tomanageemployeeskills inventories, organizations shouldmaintain computerizedhumanresourceinformationsystemscontainingdataon:individuals,demographics, career progression, appraisals and skills.

NOTES


Human Resource PlanningCheckYourProgress

1.Definehumanresourceplanning. 2.StateonebenefitofHRplanning. 3.Whatisdemandforecasting? 4.MentiononelimitationofHRplanning. 5. Why is strategic control needed?


1.Humanresourceplanningistheprocessofassessingtheorganization’shumanresourcesneedsinthelightoforganizationalgoalsandmakingplanstoensurethatacompetent,stableworkforceisemployed.

2.Planningdefinesfuturemanpowerneedsandthisbecomesthebasisofrecruitinganddevelopingpersonnel.

3.DemandforecastingmeansforecastingtheoverallHRrequirementsinaccordancewiththeorganizationalplans.

4.Technologicalchangesandmarketfluctuationsareuncertainties,whichserve as constraints to HR planning.

5. Strategic control is necessary because there is a time lag between strategyformulationanditsimplementationrequiringchangesinthestrategicformulationitself.

3.5 SUMMARY

·Humanresourceplanningisthepredeterminationofthefuturecourseofactionchosenfromanumberofalternativecoursesofactionforprocuring, developing, managing, motivating, compensating, career planning,successionplanningandseparatingthehumanelementofenterprise.

· According to Geisler, ‘HR planning is the process (including forecasting,developingandcontrolling)bywhichafirmensuresthatithastherightnumberofpeopleandtherightkindofpeopleattherightplacesattherighttimedoingworkforwhichtheyareeconomicallymostuseful.’

·HRplanningisahighlyimportantandusefulactivity.Withoutclear-cutplanning,anestimationoftheorganization’shumanresourceneedsisreduced to mere guesswork.


NOTES


· Change in technology has attached more importance to knowledge and skill resulting in surplus manpower in some areas and shortage in other areas. HR planning helps in creating a balance in such a situation.

·BeforeundertakingtheHRplanningofanorganization,theshort-termand long-term objectives should be analysed.

·The process of HR planning should start with analysing theorganizationalplansandprogrammes.

·The existing job design and analysismaybe reviewed thoroughlykeepinginviewthefuturecapabilities,knowledgeandskillsofpresentemployees.

·After determining the number of personnel for each job in theorganization,theHRdepartmenthastospelloutthejobdescriptionandjobspecification.

·ManpowerorHRasafactorofproductiondiffersfromotherfactorsofproduction.

·HRplanninginvolvesforecastingthedemandforandsupplyofHR.Projectingmanpowerneedsoveraperiodoftimeisariskytask.

·Technologicalchangesandmarketfluctuationsareuncertainties,whichserve as constraints to HR planning.

·Theplanmustmeetthechangingneedsoftheorganizationandshouldenjoyconsistentsupportfromtopmanagement.

·AnadequatedatabaseshouldbedevelopedforHRtofacilitateHRplanning.

· A separate manpower planning division must be created, especially inlargeorganizationstocoordinatemanpowerplanningexerciseatvarious levels.

·HRplanningistheresponsibilityofthepersonneldepartment. · The department has to recommend relevant personnel policies in respect

ofHRplanning,devisemethodsandproceduresanddetermine thequantitativeaspectsofHRplanning.

·ThesuccessofHRMliesinitsflexibilityinreorientingitselfintunewiththechanginginternalandexternalforcesoftheorganizations.

·Strategiccontrol is theprocessof takingintoaccountthechangingpremises on which the strategy is based, continuously evaluating the strategy as it is being implemented and taking corrective actions to adjust the strategy to the new requirements.

NOTES


Human Resource Planning3.6 KEY WORDS

·Employee:Itreferstoapersonemployedforwagesorsalary,especiallyatnon-executivelevel.

·Manpower:Itisthenumberofpeopleworkingoravailableforworkor service.

·Compensation:Itreferstosomething,typicallymoney,awardedtosomeoneinrecognitionofloss,suffering,orinjury.



1.StatethecharacteristicsandobjectivesofHRplanning. 2. Why is HR planning important? 3.DiscussthelimitationsofHRplanning. 4.WhoisresponsibleforHRplanning?

LongAnswerQuestions

1.DiscusstheprocessofHRplanningindetail.WhataretheadvantagesofHRplanningprogrammes?

2.WhatistheroleofHRstrategyinstrategicmanagement?DiscussthevarioustypesofHRMstrategies.

3.Whatareprocedures?Explainthecharacteristicsofagoodprocedure.Alsodiscusstheadvantagesanddisadvantagesofprocedures.

4.DiscusssomeofthestepsthatmaybetakentoimprovetheeffectivenessofHRP.






NOTES









NOTES


Job Analysis and Design

UNIT 4 JOB ANALYSIS AND DESIGN

Structure 4.0 Introduction 4.1 Objectives 4.2 JobAnalysisandJobDesign 4.3 JobDescription 4.4 JobSpecification 4.5 Answers to Check Your Progress Questions 4.6 Summary 4.7 Key Words 4.8 SelfAssessmentQuestionsandExercises 4.9 Further Readings

4.0 INTRODUCTION

Jobanalysisistheprocessbymeansofwhichadescriptionofthemethodsandproceduresofdoingajob,thephysicalconditionsunderwhichthejobisdoneandtherelationofthejobtootherjobsandconditionsofemploymentaredeveloped.Thefirstoutcomeofajobanalysisisajobdescription.Thejobdescriptiondefinesthescopeofajob,itsmajorresponsibilitiesaswellasitspositioningintheorganization.RecruitmentisanothercriticalHRfunction.It is theprocessof identifyingqualifiedandskilledpersons foractualoranticipatedvacanciesinorganizations.Itisimportantfororganizationstohavearecruitmentpolicy.Selectioncanbeoftwokinds—internalorexternal.Itistheprocessofselectingacertainnumberofpeople,fromalargenumberof applicants,who aremost likely to perform their jobswithmaximumeffectivenessandremainwiththecompany.Afterselectingacandidate,he/she should be placed in a suitable job. Placement is an important HR activity andinvolvesassigningaspecificrankandresponsibilitytoanemployee.

Thisunitcoversthefundamentalsofjobanalysis,jobdescriptionandjobspecification.

4.1 OBJECTIVES

Aftergoingthroughthisunit,youwillbeableto: ·Discusstheroleandusesofjobanalysisandjobdesign ·Explainthecomponentsandusesofjobdescription · Describe how to write a job description ·Analysejobspecification


NOTES


4.2 JOB ANALYSIS AND JOB DESIGN

Jobanalysisistheprocessthroughwhichadescriptionisdevelopedofthepresentmethodsandproceduresofdoingajob,physicalconditionsinwhichthejobisdone,relationofthejobwithotherjobs,andotherconditionsofemployment.Thepurposeof jobanalysis isnot todescribe the idealbutto show themanagementhowat themoment the constituent parts of itsbusiness are being carried out. Thus, job analysis helps in the development ofthepresentmethodandprocedureofdoingajob,thephysicalconditionsinwhichitisdonetherelationofthejobwithotherjobsandotherconditionsofemployment.

Usesof JobAnalysis

Job analysis is of fundamental importance tomanpowermanagementprogramme.Thefollowingarethepossibleusesofjobanalysis: (i) Provides complete knowledge of the job: It provides complete

knowledge about the job.Therefore, it is helpful in organizationalplanning.

(ii) Helps in recruitment and selection: By indicating the specificrequirements of each job, job analysis provides a realistic basisfor recruitmentandselectionofemployees. It is thebestmeansofdiscovering the essential traits and personal characteristics leading to successorfailureonthejob.

(iii) Establishes a base for compensation of employees: By indicating the qualificationsrequiredfordoingaspecifiedjobandtheriskandhazardsinvolvedindoingajob,jobanalysishelpsinestablishingabasisforcompensation.Itprecedesjobevaluationthatmeasurestheworthofjobswithin theorganization for thepurposeof establishing a baseforwages.Asatisfactoryevaluationofjobsisnotpossiblewithoutacomprehensive job analysis.

(iv) Job re-engineering: Job analysis provides information that enablesus to change jobs in order to permit their being manned by personnel withspecificcharacteristicsandqualifications.Ithelpstorearrangetheworkflowandtoreviseexistingprocedure.

(v) Employee development:Jobanalysisprovidesthenecessaryinforma-tionforemployeedevelopment.Whenconsideringanemployeeforpromotion,itmayfacilitatehiseasyconsiderationforthejob.

(vi) Performance appraisal: Jobanalysishelps inestablishingclear-cutstandards.Thishelpstheemployeesastheycanknowwhatisexpectedofthem.Italsohelpsthemanagerstoappraisetheperformanceoftheirsubordinates.

NOTES


Job Analysis and Design (vii) Training:Jobanalysisrevealstherequiredskillsandknowledgefordoingajob.Thishelpsinprovidingsuitabletrainingfortheworkersbydeterminingthecontentandsubjectmatterforthetrainingcourse.

Roleanalysis andJobdesign

RoleAnalysisistheprocesswherebyinformationrelatedtotherequirementsofvariousrolesiscollected,analysedandrecordedtoformthebasisofaroleprofile.Roleanalysisfocusesonwhatisexpectedoftheroleholders,thatis,whattheyareexpectedtoknowandhowtheyareexpectedtoperform.Asthenamesuggests,roleanalysishastheconceptofaroleatitscore.Rolehere,referstothepartpeopleplayinfulfillingtheobjectivesoftheirworkthroughefficientoperation.Italsoincludesthemannerinwhichpeopleareabletoperformwithsufficientflexibilityinkeepingwiththestructure,goalsandprocessesoftheorganization.

Incaseofajob,nomatterwhothejobholderis,his/herresponsibilitiesanddutiesarefixed.Systematicanalysisofrolesandjobsisdonetofindouttheirrelativesize.Thisisreferredtoasjobevaluation.Thetermsjobevaluationandroleevaluationareoftenusedinterchangeably.

Roleanalysiscanbesaidtobeabranchofjobanalysisandisgenerallydone through interviews along with some competency analysis technique. RoleanalysisfocussesontheidentificationoftheKRAorkeyresultareas.It helps define the behavioural and occupational competencies that jobholders must possess and their importance in smooth operations. It analyses therelationshipofthejobholderswiththeirteammembers,teamleaders,clients, suppliers and all those they are required to deal with outside the organization.Roleanalysishelpstodefinethemannerinwhichjobholdersfitintothestructureoftheorganization,theinitiativestheyareexpectedtotake and the manner in which they set priorities.

Importanceof role analysis inanorganization

Role analysis and job evaluation are aimed at establishing the relative value orsizeofjobsorroles.Itprovidestherelevantinformationfordesigningand maintaining equitable pay structures and grades. Role analysis helps to place roles and jobs within a grade structure in the most objective manner possible.Italsofacilitatesconsistentdecisionsregardingthegradingofjobsorrolestoensurethattheorganizationfulfillstheethicalrequirementswithregardtopay.Roleanalysishelpsorganizationsavoiddiscriminationonthebasisofsex,religion,disabilityorrace.

Advantagesof role analysis

· Itallowsjudgementsaboutrelativesizeofjobandgradingstobemadeobjectively.


NOTES


· Judgements can bemade on the basis of factswithout relying onopinions.

· Itallowsevaluationofthejobandnottheperson. ·Evaluationsignorethejobholder’spersonalcharacteristics. ·Evaluationsdonotdirectlytakeintoconsiderationthevolumeofwork. · Role analysis does not take into account market rates.

Managementinvariousorganizations,workatdifferentlevelsalongwiththeirsubordinatestoidentifygoalsandsetobjectivesthatareconsistentwiththegoalsoftheorganization.Theyworkhand-in-handtoachievetheseorganizationalgoals.

Measurementofperformanceisdoneagainstobjectivesanddeviationsare discussed.The existingobjectives are reviewedby superiors aswellas subordinates andnewobjectives aredefined followingdiscussionsondeviations.ManagementbyobjectivesorMBOisaself-evaluationtechniquewhereintheprocessofsettinggoalsisextremelyparticipative.

MBO is essentially amethod of self-evaluation.Goal-setting is ahighlyparticipativeprocesswithself-establishedroleprescriptions.SincejobanalysisdoesnotcoveralltheactivitiesoftasksperformedbytheseniorsandsubordinatesunderMBO,here,roleanalysisispreferredtocoverthetaskperformedunderMBOprogrammesbytheemployees.

Inviewofthecriticismagainstjobanalysis,EdwinBFlippowasoftheopinionthatroleanalysisshouldincludethedifferentrolesplayedbyanemployee.Arolewouldcomprisethejobholder’spatternofexpectedbehaviour, interactions aswell as sentiments.The concept of role goesbeyondthatofajob.Usually,ajobholderisexpectedtoplaydifferentrolesintheprocessofdischarginghisduties.Amanager,forinstance,isexpectedtoalsoactasanindividualwhoprotectstheinterestsofsubordinates.Thesubordinates,inthesameway,areexpectedtoworktowardsmaximizingsales/profits/productivity.Attimes,employeesareexpectedtoplayvariousroles,informally.Suchrolesarenotincludedinjobanalysis.

In a boundary spanning job, the incumbent is assigned the taskofdealingwith an element of the outer environment. Employees holdingboundary spanning jobs, such as personnel managers, are required to interact with tradeunion leaders, government officers,management associations,etc.Therefore,theyarerequiredtopossessverbalskills,acertaindegreeofsensitivitytothevaluesofexternalindividualsandemployees,counsellingskillsandinterpersonalrelations.Thepersonnelmanager,therefore,playsmanydifferentroles—rolesthatconflictwithoneanother,rolesthatareinadditiontothepersonnelmanager’sdutiesasoutlinedinthejobdescription.

Therefore,inmodernorganizations,thejobdesignerstrytotakeintoaccounttheconceptofroleanalysiswhiledesigningjobs.

NOTES


Job Analysis and DesignMBOwithregardstoHRformsthebasisforperformanceappraisalandattheendofthespecifiedperiodperformanceevaluation.Thesuperiorinsettinguptheobjectivestriestoincludeallpossiblerolesoftheincumbent.MBOisabroadertermforanorganizationandevenoverallstrategyforshorttermandlongtermformulatedbythedirectorsalsocoveredbythis.Inthisarticle we have discussed the MBO in relation to superior and incumbent in their work-related area.

CheckYourProgress

1.Stateoneuseofjobanalysis. 2.Defineroleanalysis.

4.3 JOB DESCRIPTION

Jobdescriptionisanimportantdocument,whichisbasicallydescriptiveinnatureandcontainsastatementofjobanalysis.Itprovidesbothorganizationalinformation(locationinstructure,authority,etc.)andfunctionalinformation(whattheworkis).Itdefinesthescopeofjobactivities,majorresponsibilitiesandthepositioningofthejobintheorganization.Itprovidestheworker,analystandsupervisorwithaclearideaofwhattheworkermustdotomeetthedemandsofthejob.

Jobdescriptionisdifferentfromperformanceassessment.Theformerisconcernedwithfunctionssuchasplanning,coordinatingandassigningresponsibility;whilethelatterisconcernedwiththequalityofperformanceitself.Though jobdescription isnotassessment, itprovidesan importantbasisforestablishingassessmentstandardsandobjectives.

Jobdescriptiondescribesthe‘jobs,’notthe‘jobholders.’Themovementofemployeesduetopromotion,quits,etc.,wouldcreateinstabilitytojobdescriptionsifpeopleratherthanjobsaredescribed.

Usesof JobDescription

Jobdescriptionhasseveraluses,suchas: (i)Preliminary drafts can be used as a basis for productive group

discussion,particularlyiftheprocessstartsattheexecutivelevel. (ii) Itaidsinthedevelopmentofjobspecifications,whichareusefulin

planning recruitment, in training and in hiring people with required skills.

(iii) It can be used to orient new employees towards basic responsibilities and duties.


NOTES


(iv) Itisabasicdocumentusedindevelopingperformancestandards. (v) Itcanbeusedfor jobevaluation,awageandsalaryadministration

technique.Ajobdescriptionenablesthemanagertoframesuitablequestionsto

beaskedduringaninterview.Itisparticularlyhelpfulwhentheapplicationformisusedasatoolforeliminatingunfitpersonnel.AccordingtoZerga, a job description helps in: (i) Jobgradingandclassification (ii)Transfersandpromotions (iii)Adjustmentsofgrievances (iv)Definingandoutliningpromotionalsteps (v)Establishingacommonunderstandingofajobbetweenemployers

and employees (vi) Investigating accidents (vii) Indicatingfaultyworkproceduresorduplicationofpapers (viii) Maintaining, operating and adjusting machinery (ix)Timeandmotionstudies (x)Definingthelimitsofauthority (xi) Indicatingcaseofpersonalmerit (xii)Facilitatingjobplacement (xiii)Studiesofhealthandfatigue (xiv)Scientificguidance (xv)Determiningjobssuitableforoccupationaltherapy (xvi)Providinghiringspecifications (xvii)Providingperformanceindicators

Components orContents of JobDescription

Ajobdescriptioncontainsthefollowingdata: (i) Jobidentificationororganizationalpositionwhich includes the job

title,alternativetitle,department,division,plantandcodenumberofthejob.Thejobtitleidentifiesanddesignatesthejobproperly.Thedepartment,division,etc.,indicatethenameofthedepartmentwhereit is situated - whether it is the maintenance department, mechanical shop,etc.Thelocationgivesthenameoftheplace.Thisportionofjobdescription gives answers to two important questions: to what higher leveljobisthisjobaccountable;andwhoissuperviseddirectly?

(ii) Job summary serves two important purposes. First, it provides a short definitionwhichisusefulasanadditionalidentificationinformation

NOTES


Job Analysis and Designwhen a job title is not adequate. Second, it serves as a summary to orient the reader towards anunderstandingof detailed informationwhichfollows.Itgivesthereadera‘quickcapsuleexplanation’ofthecontentofajobusuallyinoneortwosentences.

(iii) Job duties and responsibilities give a comprehensive listingof thedutiestogetherwithsomeindicationofthefrequencyofoccurrenceorpercentageoftimedevotedtoeachmajorduty.Itisregardedastheheartofajob.Ittellsuswhatneedstobedone,howitshouldbedone,and why it should be done. It also describes the responsibilities related tothecustodyofmoney,thesupervisionofworkersandthetrainingofsubordinates.

(iv) Relation to other jobs:Thishelpstolocatethejobintheorganizationby indicating the job immediately below or above it in the job hierarchy. It alsogivesan ideaof thevertical relationshipsofworkflowandprocedures.

(v) Supervision: Underitisgiventhenumberofpersonstobesupervisedalongwiththeirjobtitles,andtheextentofsupervisioninvolved—general, intermediate or close supervision.

(vi) Machine, tools and equipment defineeachmajortypeortradenameofthemachinesandtoolsandtherawmaterialsused,

(vii) Working conditions usuallygiveinformationabouttheenvironmentin which a job holder must work. These include cold, heat, dust, wetness,moisture,fumes,odor,oilyconditions,etc.presentinsidetheorganization.

(viii) Hazards giveusthenatureofriskstolifeandlimb,theirpossibilitiesofoccurrence,etc.

WritingaJobDescription

Opinionsdifferonhowtowritejobdescriptions.Someexpertsareoftheviewthattheseshouldbewrittenindetailandintermsofworkflow.Othersfeelthattheseshouldbewrittenintermsofgoalsorresultstobeachieved,inotherwordsasperformancestandards (orwhat ispopularlyknownas‘managementbyobjectives’).Theprevalentthinkingisthatjobdescriptionsshouldbewritten in termsofdutiesand responsibilities, i.e., in termsoffunctionsperformed.

Job descriptions arewritten by the personnel department or itsrepresentatives.

Althoughthereisnosetwayofwritingajobdescription,thefollowingpatternisfairlytypical,andusedbymanycompanies:


NOTES


(i) A paragraph is allocated to each major task or responsibility. (ii) Paragraphs are numbered and arranged in a logical order, task sequence

or importance. (iii)Sentencesarebegunwithanactiveverb,e.g.,‘typesletters’,‘interviews

thecandidates’,‘collects,sortsout,routesanddistributesmail.’ (iv)Accuracyandsimplicityareemphasizedratherthananelegantstyle. (v) Brevity is usually considered to be important but is largely conditioned

bythetypeofjobbeinganalysedandtheneedforaccuracy. (vi)Examplesofworkperformedareoftenquotedandareusefulinmaking

thejobdescriptionexplicit. (vii) Jobdescriptions,particularlywhentheyareusedasbasesfortraining,

oftenincorporatedetailsofthefaultswhichmaybeencounteredinoperatortasksandsafetycheck-points.

(viii)Statementsofopinion,suchas‘dangeroussituationsareencountered’,should be avoided.

(ix)Whenjobdescriptionsarewrittenforsupervisoryjobs,themainfactors(suchas,manning,costcontrol,etc.)areidentifiedandlisted.Eachfactoristhenbrokendownintoaseriesofelementswithanoteonthesupervisor’sresponsibility.

TheBritishInstituteofManagementpublicationaddsfourmoreguidelines: (i)Giveaclear,conciseandreadilyunderstandablepictureofthewhole

job. (ii)Describeinsufficientdetaileachofthemaindutiesandresponsibilities. (iii) Indicatetheextentofdirectionreceivedandsupervisiongiven. (iv)Ensurethatanewemployeeunderstandsthejobifhereadsthejob

description.

Limitationsof JobDescription

Inanyuseofjobdescriptions,itshouldberememberedthatthesedescriptionsarenotperfectreflectionsofthejob.‘Theobjectofajobdescriptionistodifferentiateitfromotherjobsandsetitsouterlimits.’Further,executivestendtocarryworkpatternswiththemintonewjobs,thusmodifyingthejobdrastically.

To avoid such problems, caremust be exercised inwriting a jobdescription to make it as accurate as possible, and at the managerial or professionallevel,itshouldbereviewedanddiscussedafterthejob.Jobstendtobedynamic,notstatic,andajobdescriptioncanquicklygooutofdate.Therefore,ajobshouldbeconstantlyrevisedandkeptup-to-dateandthepersonnelandotherdepartmentalheadsshouldbeapprisedofanychanges.

NOTES


Job Analysis and Design4.4 JOB SPECIFICATION

Jobspecificationstatesthebareminimumacceptablequalitiesimportanttojobperformancesatisfactorily.Makingjobdescriptionasitsbase,itlaysdownthe abilities and qualities that a worker should possess in order to hold the jobinquestion.Jobspecificationstranslatethejobdescriptionintotermsofthehumanqualificationswhicharerequiredforasuccessfulperformanceofajob.Ajobspecificationormanspecificationisastatementoftheminimumacceptablehumanqualitiesnecessarytoperformajobsatisfactorily.Ittellswhatkindofpersontorecruitandforwhatqualitiesthatpersonshouldbetested.Thesespecificationsrelateto: (i) Physical characteristics: height, weight, vision, voice, etc. (ii) Personal characteristics: emotional stability, good and pleasing

manners, skill in dealing with others, etc. (iii) Psychological characteristics: analytical ability, mental concen tration

and alertness, mechanical aptitude, etc. (iv) Responsibilities:responsibilityforthesafetyofothers,responsibility

forgeneratingconfidenceandtrust,etc. (v) Demographic characteristics:age,sex,education,experience,etc.

Jobspecificationsarebasedontheopinionofsupervisorsandpersonnelmanagers. It should be remembered that preparing a complete and correct jobspecificationisrelativelydifficultascomparedwithpreparingacorrectjob description. There is always considera ble disagreement concerning the humanrequirementforwork.Further,thereisalsoadifferenceofopiniononwhetherarequirementshouldbe‘mandatory’or‘desirable’.

HotelManjuranOldPortRoad,Bunder,Mangalore-575001

EducationQualification:SchoolleavingcertificatelikeSSC,SSLCClassXor equivalentExperience:At least 2 years in similar position in starred hotelsSkill,KnowledgeandAbilitiesSkill:Glassworkcleaning,useofmechanicalcleaner/polisherprocedureforcleaningplasticsigns,useofmenu,howtochangemenusSocialSkills:Diplomacy (problemsof interruptionbyguests), liaisonwithmaintenancedepartment,liaisonwithstaff.Abilities:AbilitytohavelightconversationwithguestsinEnglishandlocallanguage.Knowledge:Storesindentprocedures,recognitionofelectricalfaultsonsigns,currentguestlist,andstaffcurrentlyemployed.


NOTES


WorkOrientationFactors:Positionmayrequirestandingupto30%ofworktimingsAge:Preferablybelow28yearsEducationalQualification:MBAwith specialization inHRMorMA inIndustrialPsychologyorMSWwithspecializationinlabourwelfare.Desirable:AdegreeordiplomainLabourLaw.Experience:Atleast3yearsexperienceinalargemanufacturingcompany.Skill: Skill in conducting job analysis interview, making group presentations, writingjobdescription,conductingexitinterviewstofindoutmoreaboutthedeficiencyinthepresentsystem.Ability:Ability in conductingmeetingswith departmental heads, prioritizeworkandtoputforthviewsinaconvincingmanner.Knowledge:Knowledgeofcompensationpracticesincompetingindustries,procedureofcompensationsurveytechniques,analysingperformanceappraisalsystems, conducting job analysis procedures.WorkOrientationFactors:Thepositionmayrequiretravellingextensivelyfromtheplaceofworktoanextentofatleast15%oftheworktime.Age:Preferablybetweentheageof35and45years.

CheckYourProgress

3. What is job description? 4. Who writes job descriptions?


1. Jobanalysisprovidescompleteknowledgeaboutthejob.Therefore,itishelpfulinorganizationalplanning.

2.Role analysis is the processwhereby information related to therequirementsofvariousrolesiscollected,analysedandrecordedtoformthebasisofaroleprofile.

3. Jobdescriptionisanimportantdocument,whichisbasicallydescriptiveinnatureandcontainsastatementofjobanalysis.

4. Job descriptions arewritten by the personnel department or itsrepresentatives.

4.6 SUMMARY

· Jobanalysisistheprocessthroughwhichadescriptionisdevelopedofthepresentmethodsandproceduresofdoingajob,physicalconditions

NOTES


Job Analysis and Designinwhichthejobisdone,relationofthejobwithotherjobs,andotherconditionsofemployment.

·Thepurposeofjobanalysisisnottodescribetheidealbuttoshowthemanagementhowatthemomenttheconstituentpartsofitsbusinessare being carried out.

·By indicating the specific requirements of each job, job analysisprovidesarealisticbasisforrecruitmentandselectionofemployees.

·Role analysis is the processwhereby information related to therequirementsofvariousrolesiscollected,analysedandrecordedtoformthebasisofaroleprofile.

·Rolehere,referstothepartpeopleplayinfulfillingtheobjectivesoftheirworkthroughefficientoperation.

·RoleanalysisfocussesontheidentificationoftheKRAorkeyresultareas.

· Role analysis and job evaluation are aimed at establishing the relative valueorsizeofjobsorroles.

·Management by objectives orMBO is a self-evaluation techniquewhereintheprocessofsettinggoalsisextremelyparticipative

· Jobdescriptiondescribesthe‘jobs,’notthe‘jobholders.’Themovementofemployeesduetopromotion,quits,etc.,wouldcreateinstabilitytojobdescriptionsifpeopleratherthanjobsaredescribed.

· Job descriptions arewritten by the personnel department or itsrepresentatives.

· In anyuseof jobdescriptions, it shouldbe remembered that thesedescriptionsarenotperfectreflectionsofthejob.

· ‘Theobjectofajobdescriptionistodifferentiateitfromotherjobsandsetitsouterlimits.’

· Jobspecificationstatesthebareminimumacceptablequalitiesimportanttojobperformancesatisfactorily.

·Ajobspecificationormanspecificationisastatementoftheminimumacceptablehumanqualitiesnecessarytoperformajobsatisfactorily.

· Jobspecificationsarebasedontheopinionofsupervisorsandpersonnelmanagers.

· It should be remembered that preparing a complete and correct job specificationisrelativelydifficultascomparedwithpreparingacorrectjob description.


NOTES


4.7 KEY WORDS

·Assessment:Itistheactionofassessingsomeoneorsomething. ·Manager: It refers to a person responsible for controlling or

administeringanorganizationorgroupofstaff. ·Job:Itreferstoapaidpositionofregularemployment. ·Salary: It is afixed regular payment, typically paid on amonthly

basisbutoftenexpressedasanannualsum,madebyanemployertoanemployee,especiallyaprofessionalorwhite-collarworker.

·Subordinate:Itreferstoapersonundertheauthorityorcontrolofanotherwithinanorganization.



1. What is job analysis and what are its uses? 2.Brieflydiscussthemeaningandusesofjobdescription. 3.Whatarethelimitationsofjobdescription? 4.Writeadetailednoteonjobspecification.

LongAnswerQuestions

1.Discusstheimportanceofroleanalysisinanorganization.Whatareits advantages?

2.Whatarethecomponentsofjobdescription? 3. Write a detailed note on how to write a job description.






NOTES


Job Analysis and DesignDecenco, David A. and Stephen P. Robbins. 1989. Personnel/HRM, 3rd Edition.NewDelhi:Prentice-HallofIndia.






Recruitment

NOTES


BLOCK - II EMPLOYEE SELECTION AND TRAINING

UNIT 5 RECRUITMENTStructure 5.0 Introduction 5.1 Objectives 5.2 Recruitment: Concept, Factors and Types 5.3 Answers to Check Your Progress Questions 5.4 Summary 5.5 Key Words 5.6 SelfAssessmentQuestionsandExercises 5.7 Further Readings

5.0 INTRODUCTION

In the previous unit, you studied the meaning, objectives, importance and process of human resource planning.Apart from this, you also gatheredvaluable informationabout jobanalysis and jobdesign. In thisunit, youwill learn about the recruitment techniques. Recruitment plays a vital role intheplanningfunctionofthehumanresourceofanyorganizationandtheircapabilitytocompete.Therearetwosourcesofrecruitment;internalsourcesandexternalsources.Humanresourcesofhighproficiencyarepositionedatappropriatelevelswithinanorganization.Therecruitmentprocessisaimedatachievingaspecificnumberandqualityofworkforce.Thisworkforceiscapableofsupportingtheorganizationforachievingitsgoalsandobjectives.Asanextensionofthesamegoal,recruitmenthelpsinthecreationofateamofprospectivecandidatesforthecompany.Fromthisgroup,themanagementcanmakeaselectionofasuitableemployeefortheappropriatevacancy.

5.1 OBJECTIVES

Aftergoingthroughthisunit,youwillbeableto: ·Discusstheconceptofrecruitment ·Explainthefactorsaffectingrecruitment ·Describethetypesofrecruitment

NOTES


Recruitment5.2 RECRUITMENT: CONCEPT, FACTORS AND

TYPES

IftheHRdepartmentfailstoidentifythequalityandthenumberofpersonstoberecruitedandalsofailstoprocuretheservicesofpersonswithrequiredqualifications,skillandcalibrecontinuously,atimemaycomeultimatelywhenallthequalifiedpersonshaveretired,andnoqualifiedpersonremainsintheorganization.Therefore,theimportanceofrecruitmentandselectionoftherighttypeofpersonsattherighttimeisindispensabletotheorganization.

MeaningandDefinitions

Recruitmentisaprocessdesignedtoattractaqualifiedpoolofjobapplicantsto the organization. It is important to ensure that there is compatibilitybetween the job and the applicant.Before the recruitment efforts begin,therequirementsforthejobstobefilledmustbeclearlyspecified.Theserequirements can be established by job analysis, job descriptions and job specifications.

Jobanalysis,asyouhavealreadylearnedinthepreviousunit,isanorderly study of job requirements and involves systematic investigationrelating to the operations and responsibilities including knowledge, skills and abilitiesrequiredforthesuccessfulperformanceofa job.Theinformationcollectedincludesworkactivityastowhatisbeingdone,natureofthephysicalenvironment,typeofequipmentandtoolsused,performancestandardsandpersonalattributesoftheworkersuchasskills,training,experienceandsoon.Jobanalysisformsthebasisforjobdescriptionandjobspecification.

You have also learned in the previous unit that job descriptions are written statements that outline the duties and responsibilities involved in performingjobs.Itisatangibleoutcomeofjobanalysisasto‘whodoeswhat,when,where,howandwhy.’Ajobdescriptiongenerallycontainsinformationwhichincludesjobidentification,briefsummaryofthetypeofjob,dutiesperformed,typeofmachineryhandled,workingconditionsandsoon.Jobdescriptions clearly communicate to workers as to what they are required to do,andthisreducesconfusionandmisunderstanding.

Job specifications define the characteristics of the individualswhoshouldbehiredforthejob.Thesespecificationsrelateto:

· Physicalcharacteristics:These include general health, height and weight, vision, endurance level, hearing, colour discrimination, reflexes,motorcoordinationandsoon.

· Psychological characteristics:These includemental dexterity,emotional stability, maturity, patience, aggressiveness, outgoing

Recruitment

NOTES


nature, poise, initiative, drive, leadership qualities, cooperative spirit, conversational ability and so on.

· Responsibility:Thisinvolvessupervisionofothers,responsibilityforsafetyofothersandsoon.

· Other characteristics:Thesemaybe, for the record, age, sex,education,experience,trainingrequired,fluencyinlanguagesandothersensorydemandssuchassenseofsight,smellorhearing.

Once a complete job analysis has been completed and manpower needs have been determined, then management can begin the recruitment process. The recruitmentmay be internal to the organization or the prospectivecandidatescanbedrawnfromoutsidesources.Towhatextenttheinternalsourcesorexternalsources for recruitmentwouldbeusedwoulddependuponthespecificenvironmentoftheorganizationaswellasitsphilosophyofoperations.Somecompaniesprefertopromotefromwithinforkeypositionsbecausethesepersonsknowthecompanywell.Othersprefertohirefromoutside because the outside personnel do not know the company so that they canbringsomenewandfreshideasintothecompany.

According to Flippo, recruitment is ‘a process of searching forprospectiveemployeesandstimulatingandencouragingthemtoapplyforjobsinanorganization’.

InthewordsofMamoria,‘Recruitingisthediscoveringofpotentialapplicantsforactualoranticipatedorganizationalvacancies’.

TypesandProcesses ofRecruitment

Basically,thesourcesofrecruitmentareoftwotypes:internalandexternal.

InternalSources

Internalsourcesincludepersonnelalreadyonthepayrollofanorganization.Filling a vacancy from internal sources by promoting people has theadvantagesofincreasingthegenerallevelofmoraleofexistingemployeesandofprovidingtothecompanymorereliableinformationaboutthecandidate.Internalsourcesincludepromotions,transfers,andresponseofemployeestonotifiedvacancy.Employeereferralsandformeremployeesalsoconstitutetheinternalsourcesofrecruitment.Letusdiscussthesefivetypesofsources.

1. Promotions

Promotions from among present employees can be a good source ofrecruitment.Tobeeffective,promotionrequiresusingjobposting,personnelrecordsandskillbanks.Jobpostingmeansnotifyingvacantpositionsbyannouncing at staffmeetings, postingnotices and inviting employees toapply to notified vacancies. Examining personnel recordsmay help inidentifyingtalentedemployeesforhigherpositions.Skillbanksarealistof

NOTES


Recruitmentemployeeswhohavespecificskills.Promotionshaveseveraladvantagesfortheorganizationaswellasitsemployees,suchas: · Itbuildsmoraleamongemployeesasorganizationsconsiderthemfor

higher positions. · Itischeaperthangoingforoutsidesources. · Internalemployeesarefamiliarwiththeorganizations. · Promotionwhen carefully planned acts as a training device for

developingemployeesforhigherleveljobs. · It improves the probability of a good selection since the person is

alreadyknowntotheorganization. · It encourages competent individuals who are ambitious.

Here it should be noted that promotions can be dysfunctional toorganizationsastheadvantageofhiringoutsiderswhomaybebetterqualifiedand skilled is denied. Promotion also results in inbreeding and discourages newbloodfromenteringtheorganizationwhichisnotgoodforit.

2. Transfers

Atransfer isachangeinjobassignment.Itdoesnot involveachangeinresponsibilityandstatus.Amovementofanemployeebetweenequivalentpositionsatperiodicalintervalsiscallsas‘transfer’.Atransfer,therefore,doesnotinvolveinachangeofresponsibilityorcompensation.Transfersare normally made to place employees in positions where they are likely tobemoreeffectiveorwheretheyarelikelytogetgreaterjobsatisfaction.Transfersareoftenimportant inprovidingemployeeswithabroad-basedviewoftheorganization.

3. Responseof employees tonotifiedvacancies

Employeeswho are qualifiedbut are doing jobsbelow their educationalqualificationsorskilllevelmayrespondtonotifiedvacancies.Thispracticeisnotfollowedforseniorpositionswhicharegenerallyfilledwithpeoplehiredfromoutside.Whenemployeesrespondtonotifiedvacancies,examiningpersonnel records is desirable. It helps to track persons who have the potential forfurthertrainingorthosewhohavetherightbackgroundforthevacantpositions.

4. Employee referrals

Employeereferralscanalsobetreatedasagoodsourceofinternalrecruitment.Thissourceisusuallyoneofthemosteffectivemethodsofrecruitingbecausemany qualified people are reached at a very low cost to the company.Therefore,whenvacancies are notified it is also necessary to bring thisinformation to theemployeesbypostingnotices,circulatingpublicationsorannouncingjobvacanciesatstaffmeetings.Inanorganizationwithlarge

Recruitment

NOTES


numberofemployees,thisapproachcanprovidequitealargepoolofpotentialorganizationmembers.

Employeereferralscanhelpemployeestodevelopgoodprospectstotheirfamilymembers,friendsandcaninducethemtoapplyforvacanciesintheorganizations.Mostemployeesknowfromtheirownexperienceabouttherequirementsofthejobandwhatsortofpersonsthecompanyislookingfor.Oftenemployeeshavefriendsoracquaintanceswhomeettheserequirements.

5. Former employees

Former employees can include those who have worked on part-time basis and nowdesiretoworkonafull-timeemployment,retiredemployeesorthosewhohaveleftthecompanyforsomereasonbutarenowwillingtocomebackandwork.Formeremployeesareagoodinternalsourceofrecruitment.Theyhavetheadvantageofknowingtheorganization,which,inturn,knowtheperformanceofthesepeople.

Merits of internal sourcesof recruitment

Themeritsofinternalsourcesofrecruitmentareasfollows: · They absorb people already acquainted with the company culture. · They provide tried and tested people on whom the company can depend. ·They are a useful signal to employees that assures them that their

servicesarerecognized,whichhelpsinmaintainingtheirmotivationand morale.

·They reduce labour turnover as it gives employees a sense of jobsecurityandopportunityforadvancement.

·Theyminimizejobtraining. ·Theyarelesscostlythantheothersourcesofrecruitment.

Demerits of internal sourcesof recruitment

Internal sourcesof recruitment suffer fromcertainconstraints thatareasfollows: ·Theylimitthechoicetoafewemployeesonly. ·Thelikesanddislikesofthesuperiorsplayanimportantroleinthe

selectionofanemployee. ·Theycreatefrustrationamongtheunselectedemployees.

ExternalSources

Externalsourceslieoutsidetheorganization.Therearesevenexternalsourcesofrecruitment,whicharediscussedasfollows:

NOTES


Recruitment1. Advertisements

Advertising in newspapers, trade journals andmagazines is themostfrequentlyusedmethod.Inordertobesuccessful,anadvertisementshouldbecarefullywritten.Ifitisnotproperlywritten,itmaynotdrawtherighttypeofapplicantsoritmayattracttoomanyapplicantswhoarenotqualifiedforthejob.

2. Employment exchanges

Anemploymentexchangeisanofficesetupforbringingtogetherasquicklyaspossiblecandidatessearchingforemploymentandemployeeslookingforprospectiveemployees.Themainfunctionsofemploymentexchangesareregisteringjobseekersandtheirplacementinnotifiedvacancies.

3. Campus recruitment

Sometimes, recruiters are sent to educational institutions where they meet the placement officer or the facultymemberswho recommend suitablecandidates. This system is prevalent in USA where campus recruitment is amajorsource.However,todaytheideaofcampusrecruitmenthasslowlycaughtupthefancyofIndianemployerstoo.

4. Unsolicitedapplicants

Unsolicited applicants are another source. Some candidates send in their applicationswithoutanyinvitationfromtheorganization.

5. Labour contractors

Manyorganizationsemploylabourcontractorstohireworkers.Thismethodisusuallyresortedtowhentheworkisofatemporarynature.

6. Employee referrals

Friendsandrelativesofpresentemployeesarealsoagoodsourcefromwhichemployees may be drawn.

7. Field trips

An interviewing team makes trips to towns and cities, which are known tocontainthekindsofemployeesrequired.Inthismethodofrecruitment,carefullypreparedbrochuresdescribingtheorganizationandthejobitoffersaredistributedtothecandidatesbeforetheinterviewerarrives.Thearrivaldatesand the timeandvenueof interviewaregiven to thecandidates inadvance.

8.Webrecruitment

In accordancewith the research by the Society forHumanResourceManagement,theInternetisusedby96percentofalljobseekers.Thismakesit

Recruitment

NOTES


themostcommonlyusedmodeofsearching.Ontheotherhand,Internetisusedby88percentofrecruiterstoadvertisefornewopportunitiesandvacancies.Thisapproachisconsideredcheaper,fasterandhighlyefficientbyfirmsandcandidates.ApplicantscanmakeuseofanumberofwebsitesthatcanbeavailedontheInternet,forthispurpose.Theapplicantscanmakeuseofthesewebsitesforsubmittingtheirresumesandsimilarly,prospectiveemployerscanchecktheseresumesforcandidateswhomaysuitetheirrequirements.Thesewebsitesalsohaveasystemtomatchtherequirementswiththeskillsofthecandidates.Recently,firmshavefounditmoreconvenientandeffectivetoconstructtheirown websites, wherein they advertise the job vacancies. Websites prove to be speedy,convenientandcost-effectiveforapplicantswhousetheInternettosubmittheirresumes.Theresumesarethenconvertedintoastandardformatthatusesthesoftwaretomakeashortlistofcandidates.Thisisinaccordancewiththesetcriteriasuchasqualifications,experiences,etc.TherequirementsarefurnishedbytheHRdepartmentwhichalsogeneratestheprofilesofcandidatesfromthecompany’sdatabase. · Recruitment alternatives: Recruiting sources are equipped for

locatingandhiringfull-timeandpermanentemployees.Nevertheless,economic facts, combinedwith the trends ofmanagement such asrightsizing,havecausedtheemergenceofslightlydifferentfocus.Alargemajorityofcompaniesispresentlyhiringtemporaryemployees,leased employees and are using independent contractors.

· Temporaryhelpservice:This proves to be valuable when meeting short-termfluctuationsintheneedforhumanresourcemanagementTemporary employees prove to be specifically.Though they aretraditionalintheirwayofhandlingofficeadministration,yettemporarystaffingserviceshaveexpandedtoabroadrangeofskills.Itispossibleto hire temporary computer programmers, accountants, technicians, administrative assistants, etc.

· Leasedemployees:Leasedemployeestendtobewithafirmforalongtime.Theyworkandareemployedwiththeorganizationinaccordancewithaleasingarrangement.Ifafirmisonthelookoutforemployeeswhoarespecificallyskilled,itgetsintouchwithleasingfirms.Thesefirmscaterthemwithleasedemployees.Leasedemployeesaretrainedwell.Theleasingfirmscreensthem,asrequiredandgivesthempropertraining.Theyareassignedtoorganizationswithabsoluteguarantee.Incasealeasedemployeedoesnotperform,theorganizationisgivenareplacement,orthepaidfeeisreturned.Thisisalsobeneficialtotheemployeewhoisbeingleased.Thereareafewworkerswholiketheirlivestobeflexible.Whentheyareonlease,itallowsthemthechoicetoworkattheirconvenienceandforaslongastheydesire.

· Independentcontractors:Independent contracting is an alternative method of recruitment. Firmsmay prefer hiring of independent

NOTES


Recruitmentcontractors for specific jobs that are locatedwithin or outside itspremises.The systemof independent contracting is beneficial fortheorganizationaswellasfortheworker.Inthiscase,theworkerisdifferentfromanemployee,sinceitismoreeconomicforthecompanywithfullorpart-timeemployees,intermsofsocialsecurityschemessuch as provident fund, insurance, gratuity, etc. In addition, this isalsoagoodwaytokeepidealworkersinassociationwiththefirm.Ifanindividualisallowedthefreedomtoworkfromhome,asperhisconvenienceoftime,itisbeneficialtoboth,thefirmandtheindividual.

9.Employment exchange

Employmentexchangeisalsoanimportantexternalsourceofrecruitment.TheEmploymentExchanges(CompulsoryNotificationofVacancies)

Actwasenactedin1959toprovideforcompulsorynotificationofvacanciestotheEmploymentExchangesandfortherenditionofreturnsrelatingtoEmploymentsituationbytheemployers.Thisactcameintoforcewitheffectfrom1stMay1960.

All Establishments in public sector and such establishments inprivatesectorexcludingagriculture,whereordinarily25ormorepersonsare employedcomewithin thepurviewof theAct.These establishmentsare required to notify all vacancies (other than those exempted) to theappropriateEmploymentExchangeasnotifiedintheofficialGazettebytheStateGovernmentintheprescribedformat.

This Act will not apply to vacancies in any employment in agriculture (includinghorticulture),domesticservice,unskilledofficework,employmentconnectedwiththestaffofparliament,andifthetotaldurationofthevacanciesare less than three months.

The establishments are also required to render quarterly employment returninFormERIforeveryquarterending31stMarch,30thJune,30thSeptember and 31st December and biennial occupational return in Form ER-IIonceintwoyearsviz.,byprivatesectorinoddyearsandbypublicsector in even years.

AspertheprovisionsofthisAct,personsauthorizedbytheGovernmentshall haveaccess to any relevant recordsof the employer.Theyare alsoempoweredtoinspectortakecopiesofrelevantrecordsordocument.Penalprovisionofimpositionoffineforanyoffencehasbeenmadeforviolationforvariousprovisionsofthisact.

Merits of external sourcesof recruitment

Themeritsoftherecruitmentsusingexternalsourcesareasfollows: · Freshtalentandskillcomeintotheorganization. · New employees may try to change old habits.

Recruitment

NOTES


·Newemployeesmaybeselectedatthelatesttermsandconditionsoftheorganization.

·Highlyqualifiedandexperiencedemployeesmayhelptheorganizationtoboostperformance.

· Sincepersonsarerecruitedfromalargemarket,thebestselectioncanbemade.Inotherwords,therecruiterhasawiderangeofcandidatestochoosefrom.

·Theyprovidetherequisitetypeofpersonnelhavingtherequiredskilland standard.

Demerits of external sourcesof recruitment

Theconstraintsofrecruitmentsusingexternalsourcesareasfollows: ·Theyreducethemoraleofexistingemployeesbecauseoutsidersare

preferredtofillupsuperiorvacancies. ·Theydenycarrieradvancementforexistingemployees. · Proper evaluation may not be possible due to the time constraint

resultinginfaultyselection. ·Outsidersnotbeingacquaintedwiththepoliciesandproceduresofthe

organizationneedtraining,beforetheycandeliver.Fromallthis,wecanconcludethatthereisnohardandfastrulewhether

therecruitmentmustbeinternallyorexternallyorexclusivetoeachother.Thebestmanagementpolicyregardingrecruitmentmustbetofirstlookwithintheorganizationandifnoabletalentisavailable,externalsourcesmaybelookedat.TousethewordsofKoontzandO’Donnell‘The(recruitment)policyshouldbeto‘raise’talentratherthan‘raid’forit’.

Constraints

Some constraints might crop up while placing an employee on a job. These problems could include: ·Employee’sexpectationsfromthejobarenotmatchingwithreality. · Expectationfromtheemployersaremorethantheemployee’sability

or skills. · Technological changes might result in mismatch between the job and

the employee. ·Changeintheorganizationalstructuremayresultinchangesinthejob.

Thesechangesresultinamisfitbetweentheemployeeandthejob.

RecruitmentPolicy

Apolicy is a directive providing a continuous framework for executiveactions on recurrent managerial problems. A policy assists decision-

NOTES


Recruitmentmaking.However,deviationsmaybeneeded,asexceptionsandundersomeextraordinary circumstances.Such a policy asserts the objectives of therecruitmentandprovidesaframeworkofimplementationoftherecruitmentprogrammeintheformofprocedures.

Theessentialsofpolicyformationmaybelistedasfollows:· Itshouldbedefinite,positiveandclear.Everyoneintheorganization

should understand it.· It should be translatable into practice.· Itshouldbeflexibleandatthesametimeshouldhaveahighdegree

ofpermanency.· Itshouldbeformulatedtocareallreasonableanticipatedconditions.· Itshouldbefoundeduponfactsandsoundjudgements.· Itshouldconformtoeconomicprinciples,statutesandregulations.· Itshouldbeageneralstatementoftheestablishedrules.Therefore, awell-considered and pre-planned recruitment policy,

based on corporate goals and needs, may avoid hasty decisions and help the organizationtoappointtherighttypeofpersonnel.

According to Yoder, ‘A recruitment policy may involve a commitment to broad principles such as filling vacancieswith the best-qualifiedindividuals...Itmayalsoinvolvetheorganizationsystemtothedevelopedforimplementingrecruitmentprogrammeandprocedurestotheemployed’.Therefore,arecruitmentpolicyinvolvesacommitmentbytheorganizationto principles, such as:

· Tofindandemploythebestqualifiedpersonsforeachjob· Toretainthebesttalentbyofferinglife-timecarriers· Tofacilitatepersonalgrowthonthejob

ConditionsNecessary foraGoodRecruitmentPolicy

Agoodrecruitmentpolicymustsatisfythefollowingconditions: (i)Organization’s objectives:A good recruitment policy should be

in conformitywith the organization’s objectives. Itmust take intoconsiderationthebasicparametersforrecruitmentdecisions.

(ii)Identificationofrecruitmentneeds:A good recruitment policy should beflexibleenoughtomeetthechangingneedsofanorganization.Therecruiters shouldprepareprofiles foreachcategoryofworkersandaccordinglyworkouttheemployees’specifications.

(iii)Ensuringlongtermemploymentopportunitiesforitsemployees: Agoodrecruitmentpolicyshouldbesodesignedbytheorganizationastoensurecareergrowthforitsemployeesonalong-termbasis.Itshouldhelpindevelopingthepotentialitiesofemployees.

Recruitment

NOTES


(iv)Preferredsourcesofrecruitment:A good recruitment policy should matchthequalitiesofemployeeswiththerequirementsoftheworkforwhichtheyareemployed.Thepreferredsourcesofrecruitment,whichwouldbetappedbytheorganizationforskilledorsemi-skilledworkerscouldbeinternalsourcesoremploymentexchanges,whereasforhighlyspecializedmanagerialpersonnel,externalsourcescouldbepreferred.

CheckYourProgress

1. What is recruitment? 2.Whatisrequiredtomakepromotionseffective? 3.Whatisatransfer? 4.Whatdoyouunderstandbyemploymentexchange? 5.Definewhatconstitutesagoodrecruitmentpolicy.


1.Recruitment isaprocessdesigned toattractaqualifiedpoolof jobapplicantstotheorganization.

2.Tobeeffective,promotionrequiresusingjobposting,personnelrecordsand skill banks. Job postingmeans notifying vacant positions byannouncingatstaffmeetings,postingnoticesandinvitingemployeestoapplytonotifiedvacancies.

3.Amovementofanemployeebetweenequivalentpositionsatperiodicalintervalsiscallsas‘transfer’.

4.An employment exchange is anoffice set up for bringing togetheras quickly as possible candidates searching for employment andemployeeslookingforprospectiveemployees.

5.A good recruitment policy should be in conformity with theorganization’s objectives. Itmust take into consideration the basicparametersforrecruitmentdecisions.

5.4 SUMMARY

·Recruitmentplaysavitalroleintheplanningfunctionofthehumanresourceofanyorganizationandtheircapabilitytocompete.

·Therearetwosourcesofrecruitment; internalsourcesandexternalsources.

NOTES


Recruitment ·Human resources of highproficiency are positioned at appropriatelevelswithinanorganization.

·Therecruitmentprocessisaimedatachievingaspecificnumberandqualityofworkforce.

·Selection, either internal or external, is a deliberate effort oforganizationstoselectafixednumberofpersonnelfromalargenumberofapplicants.

·Recruitment isaprocessdesigned toattractaqualifiedpoolof jobapplicantstotheorganization.Itisimportanttoensurethatthereiscompatibility between the job and the applicant.

· Once a complete job analysis has been completed and manpower needs have been determined, then management can begin the recruitment process.

·According to Flippo, recruitment is ‘a process of searching forprospective employees and stimulating and encouraging them to apply forjobsinanorganization’.

· InthewordsofMamoria,‘Recruitingisthediscoveringofpotentialapplicantsforactualoranticipatedorganizationalvacancies’.

· Internal sources include personnel already on the pay roll of anorganization.

·Filling a vacancy from internal sources by promoting people hastheadvantagesofincreasingthegenerallevelofmoraleofexistingemployeesandofprovidingtothecompanymorereliableinformationabout the candidate.

·Promotionsfromamongpresentemployeescanbeagoodsourceofrecruitment.Tobe effective, promotion requires using jobposting,personnel records and skill banks.

·Here it should be noted that promotions can be dysfunctional toorganizationsastheadvantageofhiringoutsiderswhomaybebetterqualifiedandskilledisdenied.

·Employeereferralscanalsobetreatedasagoodsourceof internalrecruitment.Thissourceisusuallyoneofthemosteffectivemethodsofrecruitingbecausemanyqualifiedpeoplearereachedataverylowcost to the company.

·Anemployment exchange is anoffice set up for bringing togetheras quickly as possible candidates searching for employment andemployeeslookingforprospectiveemployees.

·Manyorganizationsemploylabourcontractorstohireworkers.Thismethodisusuallyresortedtowhentheworkisofatemporarynature.

Recruitment

NOTES


· InaccordancewiththeresearchbytheSocietyforHumanResourceManagement,theInternetisusedby96percentofalljobseekers.

·On theother hand, Internet is usedby88per cent of recruiters toadvertisefornewopportunitiesandvacancies.

·Recently,firmshavefounditmoreconvenientandeffectivetoconstructtheir own websites, wherein they advertise the job vacancies.

·Recruitingsourcesareequippedforlocatingandhiringfull-timeandpermanent employees.

·However, amajority of companies are presently hiring temporaryemployees, leased employees and are using independent contractors.

·Leasedemployeestendtobewithafirmforalongtime.Theyworkandareemployedwiththeorganizationinaccordancewithaleasingarrangement.

· Incasealeasedemployeedoesnotperform,theorganizationisgivenareplacement,orthepaidfeeisreturned.

· Independentcontractingisanalternativemethodofrecruitment. ·Thesystemofindependentcontractingisbeneficialfortheorganization

aswellasfortheworker. ·TheEmploymentExchanges(CompulsoryNotificationofVacancies)

Actwasenacted in1959 toprovide forcompulsorynotificationofvacanciestotheEmploymentExchangesandfortherenditionofreturnsrelatingtoEmploymentsituationbytheemployers.

·AllEstablishmentsinpublicsectorandsuchestablishmentsinprivatesectorexcludingagriculture,whereordinarily25ormorepersonsareemployedcomewithinthepurviewoftheAct.

·TousethewordsofKoontzandO’Donnell‘The(recruitment)policyshouldbeto‘raise’talentratherthan‘raid’forit’.

·Apolicyisadirectiveprovidingacontinuousframeworkforexecutiveactions on recurrent managerial problems.

5.5 KEY WORDS

·Skill: It is the ability and capacity acquired through deliberate, systematic,andsustainedefforttosmoothlyandadaptivelycarryoutcomplexactivitiesorjobfunctions

·Applicant:Itreferstoapersonwhomakesaformalapplicationforsomething, especially a job.

NOTES


Recruitment ·Referral:Itisaprogramwhereinemployeesreferstheirownfriends,ex-colleagues,collegebatchmatesoracquaintancesforrecruitmentinthe company where they work.



1.Discussthemeaningofrecruitmentbymeansofvariousdefinitionsgiven in the unit.

2.Whatarethemeritsanddemeritsofinternalsourcesofrecruitment? 3.Writeashortnoteonemploymentexchange. 4.Describetheconditionsnecessaryforagoodrecruitmentpolicy.

LongAnswerQuestions

1.Discussthespecificationsrequiredtodefinethecharacteristicsoftheindividualswhoshouldbehiredforajob.

2.Whatarethevarioustypesofsourcesofrecruitment?Discusseachindetail.

3.What is a recruitment policy?What are the essentials of policyformation?








Recruitment

NOTES






NOTES


Selection

UNIT 6 SELECTIONStructure 6.0 INTRODUCTION 6.1 Objectives 6.2 ConceptofSelection:ProcessandSelectionTests

6.2.1 ObjectivesofSelection 6.2.2 MethodsofSelection

6.3 Barriers in Selection 6.4 Answers to Check Your Progress Questions 6.5 Summary 6.6 Key Words 6.7 SelfAssessmentQuestionsandExercises 6.8 Further Readings

6.0 INTRODUCTION

If an organization fails to procure the services of personswith requiredqualifications,skillandcalibrecontinuously,atimemaycomeultimatelywhenallthequalifiedpersonsretireandthentheorganizationisboundtosuffer.Therefore,theimportanceofrecruitmentandselectionoftherighttypeofpersonsattherighttimeisindispensabletotheorganization.

In the previous unit, we discussed recruitment. In this unit we will discuss selection.

6.1 OBJECTIVES

Aftergoingthroughthisunit,youwillbeableto: ·Discusstheconceptofselection ·Explaintheprocessofselection · Describe selection tests · Analyse the barriers in selection

6.2 CONCEPT OF SELECTION: PROCESS AND SELECTION TESTS

Selection,eitherinternalorexternal,isadeliberateeffortoforganizationstoselectafixednumberofpersonnelfromalargenumberofapplicants.Theprimaryaimofemployeeselectionistochoosethosepersonswhoaremostlikelytoperformtheirjobswithmaximumeffectivenessandtoremainwiththecompany.Thus,anattemptismadetofindasuitablecandidateforthe

Selection

NOTES


job. In doing so naturally many applicants are rejected. This makes selection anegativefunction.

According toYoder, “thehiringprocess isofoneormany ‘go-no-go’gauges.Candidatesarescreenedbytheemployerandtheshort-listedapplicantsgoontothenexthurdle,whiletheunqualifiedonesareeliminated”.

Steps inSelectionProcedure

Thereisnoshortcuttoanaccurateevaluationofacandidate.Avarietyofmethods are used to select personnel. The selection pattern, however, is not commonforallorganizations.Itvariesfromonetoanother,dependingonthesituationandneedsoftheorganization.Therefore,thereisnostandardselectionprocedurefollowedbyall.

However, according toYoder the steps commonly followed are asunder:

(a)ApplicationBlank

In a sense the application blank is a highly structured interview in which thequestionsarestandardizedanddeterminedinadvance.Anapplicationblank,isatraditional,widelyaccepteddeviceforgettinginformationfromaprospectiveapplicant.Theapplicationblankprovidespreliminaryinformationaswellasaidsintheinterviewbyindicatingareasofinterestthatmaybeusefulfordiscussion.

(b) Initial Interviewof theCandidate

Thosewhoareselectedforinterviewsonthebasisofparticularsfurnishedintheapplicationblankarecalledforinitialinterviewbytheorganizations.Thisismeanttoevaluatetheappearanceofthecandidateandtoestablisha friendly relationship between the candidate and the company and forobtainingadditionalinformationorclarificationontheinformationalreadyon the application bank. Preliminary interview becomes a necessity, when a largenumberofcandidatesapplyforajob.

(c)SelectionTests

Forfurtherassessmentofacandidate’snatureandabilities,sometestsareusedintheselectionprocedure.Iftestsareproperlyconducted,theycanreducetheselectioncostbyreducingthelargenumberofapplicantstomanageablelevels.Thedifferenttypesoftestsare: (i)Aptitude Test: Aptitude or potential ability tests are widely used to

measurethetalentandabilityofacandidatetolearnanewjoborskill.Aptitudetestsmeasureabilityandskills.Theyenableustofindoutwhetheracandidatewouldbesuitableforthejob.

NOTES


Selection (ii) Interest Test: Interest test finds out the type ofwork inwhich thecandidatehasaninterest.Aninteresttestonlyindicatestheinterestofacandidateforaparticularjob.Itdoesnotrevealhisabilitytodoit.

(iii) Intelligence Test: Thistestisusedtofindoutthecandidate’sintelligence.Itrevealsthecandidate’smentalalertness,reasoningability,powerofunderstandingetc.ThescoresonintelligencetestsareusuallyexpressedasIntelligenceQuotient(IQ),whichiscalculatedasfollows:

Mental Age IQ = × 100Actual Age

(iv)PerformanceorAchievementTest: This test is used to measure the candidate’s level of knowledge and skill in a particular trade oroccupation. Achievement test measures the skill or knowledge which isacquiredasaresultofpreviousexperienceortrainingobtainedbya candidate.

(v)Personality Test: Personality test is used to measure the characteristics that constitute personality.

(d) Interviews

Candidates are called for an interview after they have cleared all othertests.Theinterviewconsistsofinteractionbetweentheinterviewerandtheapplicant.Ifhandledproperly,itcanbeapowerfultechniqueinachievingaccurateinformationandgettingaccesstomaterialotherwiseunavailable.Iftheinterviewisnothandledcarefully,itcanbeasourceofbias,restrictingordistortingtheflowofcommunication.Aninterviewisthusanattempttosecuremaximumamountofinformationfromthecandidateconcerninghissuitabilityforthejobunderconsideration.

(e)CheckingReferences

Thereferenceprovidedbytheapplicanthastobechecked.Thisistofindoutfromthepastrecordsofthecandidate.Referencecheckingrequiresthesameuseofskillsasrequiredbytheinterviewerandsomeamountofdiplomacy.Themaindifficultyisascertainingtheaccuracyofinformationgiven.Besidesinaccuratefacts,thereferees’inabilitytoassessanddescribetheapplicantand his limited knowledge about the candidate also pose problem. In spite of its difficulties, it is necessary to carry out reference checks. Inmanyorganizations,referencecheckingistakenasamatterofroutineandtreatedcasually or omitted entirely.

(f)Physical orMedicalExamination

Thenext step is getting the candidatesmedically examined if there is aneed.Quiteoftenthecandidatesaretoldtogetmedicallyexaminedbeforereportingforduty.InGovernmentandotherquasi-governmentorganizations

Selection

NOTES


gettingmedicallyexaminedisamustbeforereportingfordutyoratthetimeofreportingforduty.Medicalexaminationisapartoftheselectionprocessforallsuitablecandidatesinmanyorganizations.

(g)Final Interviewand Induction

Afterthecandidateisfinallyselectedthemanagementwillhavetoexplainthe job to him. He should be told as to what his duties are, what is required ofhimandwhatarehisfutureprospectsintheorganization.Normallythisinformationisgiventothecandidateatthetimeoffinalselectioninterview.Thisisthewayhowthecandidateisinductedintothejob.Heisformallyappointed by issuing him an appointment letter or by concluding with him a service agreement. The appointment letter contains the terms and conditions oftheemployment,payscaleandotherbenefitsassociatedwiththejob.

The interviewer can describe the company and its policies, the duties andresponsibilitiesoftheapplicantaswellastheopportunitiesavailabletohimforfuturepromotion.Theinterviewershould,infacthighlightthefavourableaspectsofthejob.Thisprocessisexplainedingreatdetailinthesubsequent sections.

6.2.1 Objectives ofSelection

AsBlumandNaylor observe, the purposeof the selectionprocess is tomakeeffectiveuseofindividualdifferenceswithaviewtoselectindividualswhopossess thegreatestdegreeofqualities required foraneffective jobperformance.Indeed,individualdifferencesprovidethebasisfortheselectionandplacement processes. It has been found that differencesbetween themostefficientandtheleastefficientworkersforcertainjobs,suchasspoonpolishing,arefivetimes.Thisindicatesadvantagesofdevelopingselectionmethodstorejectindividualswithrelativelylessefficiency.Itmaybenoted,asthepsychologyofindividualdifferencesreveals,thatpersonalqualitiesofpeople are normally distributed in the population. Thus, some individuals will haveahighamountofacertainqualityandsomewillhavealowamount,whilemostoftheindividualswillhaveamoderateamountofthatquality.

6.2.2 MethodsofSelection

Earlier onyou studied that although selection procedures vary fromoneorganizationtoanother,intermsofsize,industry,location,andscalarlevelsofjobsbeingfilled,theselectionprocessdependsuponeffectivejobanalysisand recruitment. As Yoder et al. suggest, the selection process involves sevenstepsasfollows:(i)preliminaryscreeningofapplicants,(ii) review ofapplicationblank,(iii)checkingreferences,(iv)physicalexamination,(v) psychological testing, (vi) employment interview, and (vii)evaluationoftheprogramme.Letusnowstudytheseindetail.

NOTES


SelectionI.PreliminaryScreeningandReviewofApplicationBlank

(a)PreliminaryScreening

Itishighlynon-economicaltoadministertheentireseriesoftestsofselectionprocess to all the applicants. It is advantageous to sort out unsuitable applicants before using the selection battery. For this purpose, usuallypreliminary interviews, application blank check-lists and short tests can be used. As regards screening interviews, they should be conducted by skilledand trained interviewers insteadof some lowercadreclerk in thepersonneldepartment.The rejection standards for applications shouldbewelldefined.Further,applicationblankcheck-listscanalsobeusedtosortout applicants. However, the list should be determined through research, anda suitable standard for rejectionshouldbeworkedout.Suppose, theminimumstandardfortypingis40wordsperminute;thecheck-listshouldincludethisinformation.Allapplicantswithatypingspeedbelow40canbestraightaway rejected. Sometimes, oral trade tests or aptitude tests are also usedforscreeningpurposes.

AScreeningDevice

Yoder et al. suggestToops’ successive-hurdles technique as an effectivescreeningdevice.Accordingtothistechnique,allselectionfactorsarearrangedinthedecreasingorderofimportance.Forexample,iftheaptitudetesthasthehighest correlation among all the selection devices with job success, it would berankedfirst.Likewise,ifpersonalhistoryhastheleastcorrelationamongallfactorswithjobsuccess,itwouldcomeinlast.Accordingly,anaptitudetestcanbeusedtoscreenouttheapplicants.Then,thenextvalidtestwillbeused.Someorganizationsusenon-objectivemethodssuchasobservationaltechniques(i.e., facialexpression)and lengthofexperience, inscreeningapplicants. This is a highly arbitrary method having only a chance validity.

(b)ReviewofApplicationBlank

Personal History Data. Applicationblanksarefrequentlyusedasselectiondevices.Theseblanksvary from small one-page sheet to several foldersconsisting of hundreds of items regarding the applicant’s history.Theapplication forms usually involve items such as name, address, age,maritalstatusanddependents,schooling,experienceandreference.Theremaybe several other itemsdependingupon the specific requirements ofthe organization and the job.AsHarrell observes, these blanks providepreliminaryinformationaswellashelpintheinterviewbyindicatingtheareasofinterestanddiscussion.Iftheapplicationblanksconsistoftheproperitems,thepersonalhistoryitemscanbeeffectivelyused.Usually,thepastprovidesindicationsregardingthefuture.Themosteffectivepredictorofjobsuccessisone’sdemonstratedabilitytoperformeffectivelyinasimilarjob.

Selection

NOTES


Limitation.However,inpractice,theseapplicationformsarenotaseffectiveastheyappeartobe.Sometimes,theapplicantstendtoexaggeratetheir abilities. In several cases, the questions contained in the blanks themselves are irrelevant. In addition, sometimes the personnel department members are unaware of the proper evaluationprocedure of blanks andaccordinglycannotmaketheireffectiveuse.

DeterminingtheEffectivenessofPersonalHistoryData.Notwithstandingtheselimitations,theapplicationblankshaveprovedtobehighlyeffectiveinseveraljobs.Forexample,severalissuesofpersonalhistorysuchasage,maritalstatusandnumberofdependentsarefoundtobeeffectivecorrelatesofsuccessoflifeinsuranceagentsanddepartmentorstoresalesmen.Likewise,personal history has been found to be associatedwith turnover.Collegescholarshipandotherfactorshavebeencomparedwiththatofsalariesafterfiveyearsfollowinggraduation.Theresultsrevealedthatcollegescholarshipwasthemostimportantfactorforsuccessinbusiness.Someresearchershavepointedoutthatbusinessleadersarecollegegraduatesandhavenotbenefitedby‘familypull’inthebusiness,andthattheyusuallycomefromhomesofprofessionalpeople,managersandbusinesspeople.Itmaybenoted,however,that those results should be interpreted with caution. Attempts should be madetoconstantlydeterminetheeffectivenessofpersonalhistorydataforjobsandorganizations.

Weighted Application Blanks. Weighted application blanks can be prepared on the basis of information regarding personal history itemsassociatedwithjobsuccess.Suppose,ifbeingunder30yearsofageisanadvantageforaninsuranceagent,itisweighedhigh,andforahandicapitisweighedlow.Likewise,ifacademicachievementistheleastpredictorforfuturesuccessinsalesmanship,itisassignedalow-weightedvalue.Ifitismarkedlyassociatedwithsuccessinexecutivejobs,itisassignedarelativelyhighweight.Itisnotpossibletoprepareaweightedapplicationblankforall jobs in general. Rather, attempts should be made to prepare weighted applicationsforspecificjobsandorganizations.

II.ReferenceCheckingandPhysicalExaminations

(a)ReferenceChecking

Applicantsshouldberequestedtogivecharacterandgeneralreferencesinthe application blanks. The previous employers and schools can provide useful information.Attemptsmay bemade tomake personal visits andtelephone calls to procure objective responses. Usually, correspondence is made toverifyworkhistory information includingdatesofemployment,dutiesperformed,andwagesandsalariesreceived.Itisaneffectivepracticetosendabriefquestionnaireinvolvingcheckingofanswersinsteadofagreatdealofwriting.Theenquiriesshouldbeasspecificandpreciseaspossible.

NOTES


Selection(b)PhysicalExaminations

Physical examinations are frequently conducted andused for differentialplacementpurposesratherthanrejectionofapplicants.Largeorganizationshavetheirownmedicalclinicswhilethesmalleronesrefertoprivateclinics.Medical examinations have assumed significance in viewof increasingfringeandwelfareprogrammes.AsYoderobserves,physicalexaminationsform a positive rather than a negative selection device.This helps ineffectivemanpowerutilizationbystressingdifferentialplacement,involvingassessment of an individual’s capacities andmatching themwith severaljobpossibilitiesintheorganizationalsetting.Attemptsshouldbemadetoconduct physical demands analysis related to physical and environmental job requirements and conditions, and physical capacities analysis related to the determinationofhowextensivelyapersoncanindulgeinphysicalactivities.Thephysicaldemandsofthejobsshouldbematchedandcomparedwiththephysicalcapacitiesofapplicants.Everyoneishandicappedphysicallyatsomejobortheother.Therefore,physicalexaminationisofutmostsignificanceinselectiveordifferentialplacement.

Methods. Following Hanman, physical-demands analysis can be conducted by three methods: (1) the disability method, (2) the rating method, and(3)thespecificmethod.Thedisabilitymethodstressesuponemployees’disabilities rather thanabilities.Forexample, jobsareclassified in termsoftheirsuitabilityforpeoplewithvarioushandicapssuchastheblind,theone-armedorthedeaf.Theratingmethodinvolvesratingofjobsdemanding‘heavylifting’,‘moderatelifting’,‘lightlifting’,etc.Thisisahighlysubjectivemethod.Thespecificmethodstresseswhattheemployeecando.Attemptsaremadetostatethejobdemandsaswellasemployeecapacitiesinspecific,objective terms, thereby enabling matching and comparison. This method also involvesdevelopmentofspecificphysicalandenvironmentaldemandsofajob through job analysis. Thus, it enables the personnel manager to assess specificabilitiesanddemandsforspecificapplicantsforseveralspecificjobs.

III.PsychologicalTesting

(a)GeneralPrinciples

Psychologicaltestsareusedinorganizationsforseveralpurposesincludingselection and placement of employees, their transfer and promotion,determining training needs, evaluation of training programmes andcounselling. Among these purposes, psycho-logical testing is primarily used for selection and placement.The testing programme is effective ifthenumberofapplicantsforajobishigh.Systematicuseoftestshelpsinrejectingapplicants.Thus,thetestingprogrammeishighlyusefulwhenthereis considerable unemployment and abundanceof applicants.However, itdoesnotmeanthatitisnotusefulwhenthenumberofapplicantsisless.In

Selection

NOTES


suchasituation,itisusefulforplacementpurposestoenablethemanpowermanagertoplacetheindividualinajobforwhichheismostsuitable.

AsTiffin andMcCormick point out, it should be recognised thatpsychologicaltestsarenotinfallible,andthatsometimestheyrevealresultswhicharenotatrueindicationofthepotentialjobsuccessofthecandidate.Theeffectivenessofanymethoddependsuponthedegreeofimprovementand not perfection. Suppose,without the use of testing programme, theturnoverrateis30percentandwiththeuseoftestingprogrammeitcomesdownto25percent.Here,thetestingprogrammeisconsideredassuccessfulalthough it has not eliminated the turnover.

(b)TypesofTests

Psychological tests can be classified under several types.Theremaybegroup or individual tests, instrumental or paper and pencil tests, aptitude or achievement tests, personality and interest tests, and power or speed tests. Grouptestscanbeadministeredtoanynumberofcandidatessimultaneouslydependinguponphysicalinfrastructure,whileindividualtestscanbegiventooneapplicantatatime,usuallyinvolvingutmostattentionofthetester.The examples of group tests are PurdueVocationalAchievementTests,Adaptability Test, Wonderlic Personnel Test, etc. while among individual tests, Purdue PegboardTests ofManualDexterity can be cited.Theinstrumentaltestsmakeuseoftoolsandareusuallyindividualincharacter.The paper and pencil tests are usually group tests involving written responses.

Aptitudetestsassessanindividual’spotentialitytolearnaboutajobthroughadequatetraining.Thesetestsareeffectiveforfreshers.Achievementtestsindicatehoweffectivelyanindividualcanperformajobandwhatheknowsaboutit.Thesetestsareusefulifthecandidateshavepriorexperiencesofsimilarjobs.Itmaybenotedthattherearecertaintestswhichwhenusedin aparticularwayare classifiedas achievement tests andwhenused inotherways,canbedesignatedasaptitudetests.Thus,thebasicclassificationcriterion should be the purpose and not the content. Personality and interest testsindicatepersonaltraitsconducivetothejobperformance.Thesetestsareakintoaptitudetests.Apowertestreferstoatestwheretheabilityofthecandidate to complete the test items is more crucial than his speed, while speed testreferstoatestwhereeachitemcanbecompletedbymostcandidates,but in which speed is crucial.

Testing theTests

Thetestsshouldbetestedbeforetheyareactuallyconducted.ValidityofTests. Explicitly,thetestsshouldhaveadequatevalidity.

Theterm‘validity’meansthatatestmeasureswhatitpurportstomeasure.There are severalmethodsof validating the tests.Thepresent employeemethodandthefollow-upmethodarelargelyused.Thepresentemployee

NOTES


Selectionmethodinvolvestestingofpresentemployeesandcorrelatingtheirtestscoreswithasuitablecriterionofjobperformance.Thefollow-upmethodinvolvesassessingnewemployeesatthetimeofrecruitment,filingthetestscoresandsubsequently determining the relationship between the test scores and the performanceofemployeesonthejobafteraperiodoftime.Althoughthesemethods have several advantages and disadvantages, the testing programme shouldmakeuseofbothmethodstohavemaximumeffectiveness.Therearefourtypesofvalidityrelatedtoseveralpurposesoftesting.Thesearecontent validity, predictive validity, concurrent validity and construct validity. Contentvalidityisassessedbyindicatinghoweffectivelythecontentofatestrepresentsthesubjectmatterortypesofsituationswhichthetestpurportstomeasure.Predictivevalidity (exemplifiedby the follow-upmethod) isassessedby indicatinghoweffectivelypredictionsmadeby the testhavebeenconfirmedsubsequently.Concurrentvalidity(exemplifiedbythepresentemployeemethod)isassessedbyindicatinghoweffectivelythetestisrelatedtosomepresentcriterionofperformance.Constructvalidityisassessedbydetermining what psychological characteristics a test usually measures. This is accomplished by correlating a test with another which measures the same characteristics.Factoranalysiscanalsobeusedforthispurpose.

Inadditiontovalidity,asTiffinandMcCormickpointout,otherfactorsdeterminingthefunctionalvalueofpsychologicaltestsincludereliability,selectionratioandthepercentageofpresentemployeeswhoaresatisfiedwith the job.

Reliability. Thisreferstothedegreeofconsistencywithwhichatestmeasureswhat itpurports tomeasure.Therearethreetypesofreliabilityincludingcoefficientofstability,coefficientofequivalence,andcoefficientof internal consistency.Coefficient of stability is assessed by the test-retestmethod.Agroupofindividualsareadministeredthesametesttwiceafteraperiodof time,andthenthetwosetsof testscoresarecorrelated.Thecoefficientofequivalenceisevaluatedbythealternateformsmethodinvolvingadministrationoftwoseparatebutequivalentformsofthetesttothecandidates.Thecoefficientofequivalenceisderivedbycorrelatingthescoresofthetwoforms.Indexofinternalconsistencyisevaluatedbythesplit-halvesmethod.Eachtestisscoredoneachofthetwohalvesoftheitems(oddversusevenorchancehalvesrandomlychosen),andthenthetwosetsofscoresarecorrelated.Usually,testswiththecoefficientsofreliabilityabove0.80aresatisfactory.Itmaybenotedthatthetestmighthavereliabilitybutnotnecessarilyhighvalidity.However,ifatesthaslowreliability,itisnotlikelytohavesatisfactoryvalidity.

SelectionRatio.Moreover, the functional value of the test of amanpowermanagerdependsupontheselectionratio—theratioofthepersonsselected to those tested. Suppose, we have 100 applicants and place the 75 who score the highest on the test. Thus, we reduce those placed to 75 per cent

Selection

NOTES


ofthosetested.Accordingly,theselectionratiowillbe0.75.Likewise,ifwetest 200 applicants and place the 100 who score the highest on the test, our selection ratio will be reduced to 0.50. Again, suppose we test 500 applicants and place only the 50 who score the highest on the test, the selection ratio willbereducedto0.10.Overall,theeffectivenessofthetestingprogrammeincreaseswithafallintheselectionratio.Thus,asTiffinandMcCormickobserve, in group testing where the manpower manager is interested in average,ratherthanindividualresults,hecaneffectivelyusethetestwithlower validity by adequately decreasing the selection ratio. Thus, in group testing,adecreaseinselectionratioprovidesasubstituteforhighvalidity.Thisdoesnotmeanthatitisasubstituteof‘novalidity’.Thetestmusthavesomevaliditytopermittheutilizationofreductionintheselectionratio.

PercentageofPresentSatisfactoryEmployees.Finally,anotherfactorinfluencingtheefficiencyofapsychologicaltestrelatestothepercentageofthepresentemployeeswhohavebeenconsideredsatisfactory.Otherthingsremainingthesame,thelowerthepercentageofexistingemployeeswhohavebeenplacedsatisfactorilywithout test, thehigher thepercentageofsatisfactoryemployeesplacedbyusingtestsislikelytoresult.Letusassumethatwehaveatestwithavalidityof0.50anduseaselectionratioof0.50,andonly5percentofemployeesplacedbythetraditionalmethodaresuccessful.Undertheseconditions,theexpectedincreaseto9percentrepresentsan80percentincreaseinthenumberofsatisfactoryemployeesplacedbythetest.Indeed,ifthepercentagesofsatisfactoryemployeesplacedwithoutthetestislarger,thepercentagesofincreaseaccomplishedbyusingthetestbecomessmaller.Accordingly,for90percentofsatisfactoryemployeesplacedbythetraditionalmethod,theincreaseofthispercentageto97percentbyusingthetestwillleadtoagainofonly8percentinthenumberofemployeessatisfactorilyplaced.

Thus,otherthingsbeingequal,ifmorecomplicateditistoidentifyandplacesatisfactoryemployeeswithoutapplyingtests,themoreadvantagea manpower manager can acquire through a proper psychological testing programme. The Taylor-Russell tables can be used to ascertain as to what percentageofemployeesrecruitedwillbeeffectiveunderseveralcombinationsoftestvalidity,selectionratioandpercentageofpresentemployeesviewedeffective.However,thesetablesshouldbeusedwithcaution.

Using theTests

Asignificant issue ishowtouse the testsforemploymentpurposes.Theselection standard (critical score) on the test should vary with the market conditions.If themarketconditionsaretight, thecriticalscoreshouldbelowandifloose,theselectionstandardshouldbehigh.Anotherpointisthatseveral tests should be combined into a battery.

NOTES


SelectionA Battery. There are twomethods of combining tests in a battery.Theseincludethemultiplecut-offandthemultiplecorrelationmethod.Inthemultiplecut-offmethod,testsareadministeredoneatatimeandapplicantswhodonotperformsatisfactorilyareeliminatedwitheachtest.Thus,thefirst testwill eliminateall the low-scoringcandidates, and the remainingcandidateswillbeadministeredthesecondtestwhichwillfurthereliminatemore candidates and so on. The multiple correlation method involves the computationofmultiplecorrelationbetween thebestcombinationof testscoresandtherelevantcriterion.Thus,theperformanceondifferenttestscan be combined into a composite score in order to weigh each to attain the maximumcorrelationbetweentheperformanceonthetestbatteryandthecriterionofjobsuccess.Thus,thevalueofthetestingprogrammeincreasesby using many tests in combination because no single test gives as high a validitycoefficientasdoesthebatteryasawhole.

Inspection or Graphic Method. Yoder et al. suggest the inspection or the graphicmethodusingmaximumaswellasminimumcuttingscores.Explicitly,wemaycomeacross thefact that individualswhoscoredveryhigh in thetest as well as those who scored very low, had a short tenure in an enterprise. These typesof relationships are called ‘curvilinear’ and involve separatecorrelational techniques. Usually the eta coefficientisusedforthispurpose.Astudyofturnoverdataofacompanywillrevealthatshorttenureemployeesare those who have scored either below 80 or above 120 on the intelligence test.Obviously,settingaminimumcriticalscoreat80andamaximumat120will remove short tenure risks related with either very high or very low scores. Itmaybenotedthattheselectionratiodiscussedaboveassumeslinearityofrelationshipsandaccordinglycannotbeusedforcurvilineardata.

Training. Lastbutnottheleast,adequatetrainingoftestersisofutmostsignificancefor thefulladvantageofthetestingprogramme.Testinghumanbeingsisquitedifferentfromtestingmaterialsorprocesses.Humansmayreactbothfavourablyandunfavourablytotestsituations.So,attemptsshouldbemadetoobtainafavourableresponse.Thetesters,therefore,shouldhaveproper training to take the best out oftheapplicantsandleavefavourableimpressionofthecompanywiththem.

IV.PsychologicalTests inSelectionandPlacement

TiffinandMcCormickdescribeseveraltypesoftestsusedforselectionandplacement under three categories including aptitude tests, personality and interest tests, and achievement tests.

(a)AptitudeTests

Aptitudeshavebeengroupedintofivecategoriesincludingmentalabilities,mechanical and related abilities, psychomotor abilities, visual skills and a classofotherspecificaptitudes.

Selection

NOTES


(i) Mental Ability. The term mental ability has been used interchangeably withintelligence.Thereareseveralkindsofmentalabilitiessuchasverbalcomprehension,wordfluency,memory, inductive reasoning,numberfacility,speedofperceptionandspatialvisualization.Mostof these testsused for selectionandplacementpurposes aregrouptests.TheteststhatareusedmostfrequentlyinindustryincludetheAdaptabilityTest,OtisSelf-AdministeringTests ofMentalAbility,WonderlicPersonnelTest,ThePurdueNon-LanguagePersonnelTest,etc.Thesetestshavebeeneffectivelyusedforclericalandsupervisoryjobsandfoundusefulintheselectionofnewspaperwriters,teletypeoperator trainees, etc. However, these tests have negative relationships withperformanceinroutinejobssuchasassemblyworkers.

(ii) Mechanical Ability. Thetermmechanicalabilityreferstotheabilityinvolved in theworking ofmechanical parts and equipment.Thisabilityhastwoaspects—mentalandmotororphysical.Thementalaspectrelatestomechanicalcomprehensionandtheunderstandingofthe mechanical principles, while the motor or physical aspect relates to skillssuchasmuscularcoordinationanddexterity.Mechanicalabilityhasbeenusedinitsrestrictedsenseinvolvingacomplexofintellectualabilities.Theremaybeageneralmental ability aswell as specificabilitiessuchasvisualizationofspatialrelations.Themostfrequentlyused group tests formechanical ability includeFlanaganAptitudeClassificationTests,BennettTest ofMechanicalComprehension,Purdue Mechanical Adaptability Test, Revised Minnesota Paper Form Board, etc. There is also some individual test, such as Minnesota MechanicalAssemblyTest, PurdueMechanical PerformanceTest,etc.Thesetestshavebeenfoundeffectiveespeciallyforapprentices,craftsmen,mechanicsandrepairmen,draftsmenandengineers.

(iii) Psychomotor Tests. Thesetestsmeasuredexterity,manipulativeability,motor ability, eye-hand coordination and allied sensory and muscular abilities.Specifically,thesetestsinvolveseveralfactorssuchascontrolprecision, multilimb coordination, response orientation, reaction time, speedofarmmovementratecontrol,manualdexterity,fingerdexterity,wristfinger speed and aiming.Typical psychomotor tests includeO’ConnorFingerDexterityTest,O’ConnorTweezerDexterityTest,PurduePegboard,MinnesotaRateofManipulationTest,etc.Thesetestshavebeenfoundveryusefulintheselectionandplacementofpackers and minor operators.Visual Skills. Visiontestsareofspecialsignificanceforpracticallyevery

industrialjob.Thevisualskillsrequiredinanindustryincludekeennessofvision(visualacuity)atappropriatedistances,discriminationofdifferencesatdistances (depthperceptionor stereopsis),discriminationofdifference

NOTES


Selectionincolourandposturalcharacteristicsof theeyes (phorias)atappropriatedistances. Among the major vision tests used in industry include Ortho-Rater, the Sight-Screener, the Telebinocular and the Vision Tester. Research results haverevealedseveralvisualjobfamilies,i.e.,groupsofjobswhicharesimilartoeachothervis-à-visvisualrequirements.Thesevisualjobfamiliesincludeclerical and administrative inspection and close work, vehicle operator, machine operator, labourer, mechanic and skilled tradesmen, etc.

Special Aptitudes. In addition to the earlier mentioned aptitude tests, there are several other tests to test the special aptitudes such as clerical aptitude, reading speed and comprehension, vocabulary and perceptual speed.

Clusters.On the basis of extensive research, aptitude tests havebeengrouped into three‘clusters’—intellectualability,spatialabilityandmotorability.Intellectualabilitytestsarehighlyeffectiveinselectionandthe placement of general supervisors, foremen, general clerks, salesmen,protective-serviceworkersandcomplexmachineoperatorsandleasteffectiveforvehicleoperators.Thespatialabilitytestshavethehighestvalidityforstructuralworkersand the lowest forgeneralsupervisorsandclerks.Themotorabilitytestsarefoundusefulforselectionandplacementofvehicleoperators, processing workers and gross manual workers.

(b)Personalityand InterestTests

Ithasbeenrecognisedthatanemployeemayhaveadequateaptitudeforarequiredjob,butheisstilllikelytofailifhepossessesapersonalitywhichwould cause adjustment difficulties inwork settings.This necessitatesidentification of desirable and undesirable personality traits among jobapplicants.Severalattemptshavebeenmadetodevisetestsformeasuringpersonality and interest traits. Among the major personality tests conducted in the industry are Bernreuter Personality Inventory, the Humm Wadsworth TemperamentScale,theGuilfordSeriesofPersonalityTests,theMinnesotaMultiphasicPersonalityInventory,theGordonPersonalProfile,theRorschachProjective Test and Thematic Apperception Test. As regards interest tests, StrongVocationalInterestBlankandKuderPreferenceRecord,arelargelyappliedintheindustry.Themajorlimitationofpersonalityandinteresttestsforemploymentpurposesrelatesto‘faking’,i.e.,thepossibilityofresponsestotestitemsarenotdescriptiveofthetestee.

Overall,personalitytestsappeartobemoreeffectiveforselectionofclerks,salesmen,publicrelationsofficialsandtradesandcraftsthanforotheroccupational categories. It has been widely agreed that the non-intellectual traits of personality aremost significant for failures atwork and for theeffectivenessofmanagers.Therehasbeenmoreevidenceoftheusefulnessofpersonalityteststhanofinteresttestsintheindustry.

Selection

NOTES


(c)AchievementTests

In industry,achievement testsareused for recruitmentof individuals forjobsdemandingexperience,transferandpromotionofexistingemployeesandtrainingpurposes.Achievementtestsmeasuretheactualjobproficiencyofthetestees.

Types. Achievementtestsareclassifiedinthreegroupsincludingjobsample(orperformance)tests,writtentests,andoraltests.

Thejoborworksampletestsinvolveutilizationofequipmentswhichareusedon the job.Anexampleof jobsample test isaminiaturepunchpressusedeffectivelyforselectingindividualsinjobssuchaspackaging,inspectingandseveraltypesofmachineoperation.Likewise,aperformancetesthasbeendevisedforselectingfork-liftoperators.Again,severaltestshavebeendesignedtoselectindividualsforstenographic,clericalandsecretarialpositions.These includeBlackstoneStenographicProficiencyTests, thePurdueClericalAdaptabilityTestandtheThurstoneExaminationinTyping.Usually,writtentestsare‘tailor-made’tomeettherequirementsforspecifictrainingprogrammes.AnexampleofsuchtestisthePurdueVocationalTestwhichhasbeenusedforseveraltradessuchastheoperationofthegrinder,planer, lathe and milling machine.

Although achievement tests are not largely used in the industry, they appearpromising fornotonlydifferentiatingvarious jobgroupsbutalsodifferentlevelsofabilitywithinajob.Overall,achievementtestsarehighlyusefulinselectingtradesmenandapprentices.

V. InterviewProcess

Since the interview is oneof themost commonly usedpersonal contactmethods,ithastobeconductedwithgreatcare.Generally, thefollowingstepsarefollowedinaninterviewprocess.Theyare: 1.Reviewingbackgroundinformation 2. Preparing a question plan 3.Creatingahelpfulsitting 4. Conducting the interview. 5.Checkingreferences. 6.Physicalormedicalexamination. 7. Final interview and induction.

1.ReviewingBackground Information

Beforetheactualinterviewbegins,thecriticalareasinwhichquestionswillbeaskedmustbeidentifiedforjudgingtheabilityandskillsrequiredforthejob.Pertinentinformationaboutthecandidateshouldbecollectedand

NOTES


Selectionnotedbeforehand.Thispreparationsavestimeandmentaleffortsduringtheinterview.If there ismore thanone interviewer,somepracticeandmockinterviews will help.

2.PreparingaQuestionPlan

Everyinterviewershouldhaveaquestionplan.Thisisformedbyscrutinisingthe informationgiven in the application form.This procedurewillmakethecandidatemorecomfortablebecause thediscussionwill focusonhisexperiences.Besides,preparingaquestionplanisusefulforinexperiencedinterviewers. It will act as a guide and the interviewer will know whether he hascoveredalltheareasoftheinterviewornot.

3.CreatingaHelpfulSetting

Theplaceofinterviewshouldbecarefullychosen.Makearrangementsforreception and seating so as to give an impression to the interviewee that he is an important person to whom the interviewer will devote great attention. Mostinterviewshaveovertonesofemotionalstressfortheapplicant.Successin interviewing depends on reducing this stress. Properly arranged seating should be made available. The candidates should be well-received by the receptionist.Thesittingroomisgenerallykeptawayfromtheplacewherethe actual interviews are held so that the conversation between the interviewer andtheintervieweeisnotoverheardbyothercandidates.Inbrief,theplaceofinterviewshouldhaveprivacyandcomfort,atmosphereofleisure,freedomfrominterruptions,authenticfeelingforandinterestinthecandidate.

4.Conducting the Interview

Conducting the interview is usually aimed at establishing rapport with the candidate,gettingcompleteandaccurateinformationfromhimandrecordingitproperly.Itis,therefore,necessarytouseanumberofdifferentapproachesduringthecourseofaninterview. (a)EstablishingRapport:Thefundamentalstepisestablishing‘rapport’,

putting the interviewee at ease, conveying the impression that the interviewisaconversationbetweentwofriendsandnotaconfrontation.A job interview can be a trying experience for the applicant.Theinterviewershouldgain theconfidenceof thecandidateat theverybeginning by establishing rapport with him. To begin with, the interview shouldproceedintheformofaconversationsothatthetwomaygettoknoweachother,withthespecificunderlyingpurposeofgettinginformationincertainareas.Sufficienttimeshouldbeallowedtoenablethecandidatetorevealthefactsnecessaryforafairassessmentofhim.

(b) Getting Complete andAccurate Information: Once the interviewee is put at ease, the interviewer starts asking questions or seekinginformationrelatedtothejob.Gettingcompleteandaccurate

Selection

NOTES


informationfromtheapplicantisanartwhichcallsforexperience,skill and techniqueon the part of the interviewer.The interviewershould use the language which is clear to the applicant. Here again itisextremelyimportanttoleaduptocomplexquestionsgradually.Askingadifficultandcomplexquestioninthebeginningcanaffectsubsequent interaction,particularly if the intervieweeisnotable toanswer thequestion.Thus, it is advisable for thepattern to followthesimple-to-complexsequence.Somegeneralrulestobeobservedregarding questioning are:

1. The interviewer should be prepared with precise questions and nottaketoomuchtimeinframingthem.

2.Leading questions should be avoided because they give theimpressionthattheinterviewerisseekingcertainkindsofanswers.

3.Closeendedquestionswhichcallfor“yes”and“no”shouldnotbeaskedfortheyofferlittlescopetothecandidatetoexpandhisanswersandgivemoreinformation.

4.Showingsurpriseordisapprovalofspeech,clothesoranswerstoquestions can also inhibit the candidate.

5.Aninterviewershouldnotallowtheinterviewtogetoutofhand.Heshouldbealertandchecktheintervieweeifhetriestoleadthe discussion into areas which are not relevant to the interview.

6.Theinterviewershouldhavetalent,experience,andasympatheticattitude so that he is able to draw out the applicant who may have a considerable potential but who may be shy and reserved in the beginning.

7. Highly personal questions should be omitted until one is sure that rapporthasbeenfullyestablished.

(c)RecordingofImpressions:In order to make an accurate evaluation oftheinterview,itisnecessarythattheinterviewers’impressionsarebrieflywrittendown.Thiswillhelptheinterviewertoarriveatafinaljudgment.

(d)ConcludingtheInterview:Inthefinalfewmoments,theinterviewerguidestheinterviewtoaclose.Thecloseoftheinterviewisasimportantas its beginning. The interview should be closed diplomatically so that theintervieweemayfeelsatisfiedthathewasgivenafullhearing.Afterthe candidate leaves, the interviewer looks over his notes, recalls his impressionsandmakesaprovisionalappraisalbeforeseeingthenextcandidate.

5.CheckingReferences

Thereferencesprovidedbytheapplicanthavetobechecked.Thisistofindoutthepastrecordsofthecandidate.Referencecheckingrequiresthesame

NOTES


Selectionuseofskillsasrequiredbyanintervieweranddiplomacy.Themaindifficultyisascertainingtheaccuracyofinformationgiven.Besidesinaccuratefacts,thereferees’inabilitytoassessanddescribetheapplicantandhislimitedknowledgeaboutthecandidatearethedifficultiesincheckingreferences.Inspiteofthesedifficulties,itisnecessarytoverifytheinformationsecured.Inmanyorganization,referencecheckingistakenasamatterofroutineandtreated casually or omitted entirely.

6.Physical orMedicalExamination

Thenextstepisgettingthecandidatescheckedmedicallyifthereisaneed.Quiteoftenthecandidatesaretoldtogetmedicallyexaminedbeforereportingforduty.Ingovernmentandotherquasigovernmentorganizations,gettingmedicallyexamined isamustbefore reporting fordutyorat the timeofreportingforduty.Medicalexaminationisapartoftheselectionprocessforallsuitablecandidateinmanyorganizations.

Theobjectivesofthisexaminationare: (a) tocheckthephysicalfitness. (b) to protect the company against unwarranted claims for

compensation. (c) to prevent communicable diseases. (d) topreventinjuryordamagetothehealthofemployees. (e) todiscoverexisting liabilitiesat the timeofhiringso that the

company’s subsequent liabilities can be assessed in case ofworkmen’sclaimforcompensationforaninjury.

(f) toplacepersonson those jobswhich theycanhandlewithoutdamage to their health.

Themainpurposeofthemedicalexaminationistoseewhetherthecandidateismedicallyfittooccupyaparticularpostandhasthecapabilitiestowithstandthephysicalandpsychologicalstressesandstrainsrequiredofthe job. When conducted by in service medical personnel, they are more valuable to the applicant than when done by a doctor knowing very little about the working conditions under which the job is done. For instance, in defenseservice, themedicalexaminationisdonebythedoctorsattachedtoeachdefensewing.Suchanexaminationcanpredict,thepossiblehealthproblems in future involving serious surgical conditions and prolongedtreatmentwhichwouldinvolvehugemedicalexpendituretotheorganization.Normallycandidatesarenot rejected inmedicalexaminationunless theyaresufferingfromcontagiousorincurablediseasesorcomplexemotionalproblems.Thoughmedicalexaminationsaregenerallyconducted,theyoftenfailtodetectcomplicateddiseasesbecausetheyareconductedinacursoryway.Further,thevalidityandreliabilityofmedicalexaminationasaselectiontoolisminimumbecauseoftworeasons.Theyare:

Selection

NOTES


1.Withgrowingautomation,lessphysicalstrengthwillberequiredformost jobs.

2. A sound physical condition is no guarantee against accidents.Toconclude,medicalexaminationrevealswhetherornotacandidate

possesses the required stamina, strength and tolerance of hardworkingconditions.Majordeficienciesmayserveasabasisforrejections.Thebasicpurposeofaphysicalexaminationistoplaceselectedcandidatesonjobswhich they can handle without injury to their health.

7.Final Interviewand Induction

Afterthecandidateisfinallyselected,themanagementwillhavetosellthejobtohim.Heshouldbetoldastowhathisdutiesare,whatisrequiredofhimandwhatarehis futureprospects in theorganization.Normally thisinformationisgiventothecandidateatthetimeoffinalselectioninterview.Thisisthewayhowthecandidateisinductedintothejob.Heisformallyappointed by issuing an appointment letter or by concluding with him a service agreement. The appointment letter contains the terms and conditions ofemployment,payscaleandotherbenefitsassociatedwiththejob.

The interviewer can describe the company and its policies, the duties andresponsibilitiesoftheapplicantaswellastheopportunitiesavailabletohimforfuturepromotion.The interviewershould infacthighlight thefavourableaspectsofthejob.

6.3 BARRIERS IN SELECTION

Themainobjectiveof selection is tohirepeople that arecompetent andcommitted to work and deliver results. However, this objective is sometimes defeated because of certain barriers. The impedimentswhich checkeffectivenessofselectionareperception, fairness,validity, reliabilityandpressure.Thisarediscussedindetailasfollows: 1.Perception:Our inability to understand what others say accurately is

possiblythemostfundamentalbarriertoselectingtherightcandidate.Selectiondemandsanindividualoragroupofpeopletoassessandcompare the respective competencies of others,with the aim ofchoosingtherightpersonsforthejobs.However,itisquitenotablethatourviewsandopinionsarehighlypersonalized.Asnotwopeoplearethesame,differentpeoplehavedifferentperceptions.Thislimitedperceptualabilityisdefinitelyastumblingblocktotheobjectiveandrationalselectionofpeopleandneedstobeaddressed.

2.Fairness:Fairness in selection requires that no individual should be discriminatedagainstonthebasisofreligion,region,raceorgender.However,theexistingemploymentdatapointsintheotherdirection.

NOTES


SelectionThe lownumbersofwomenandother less-privilegedselectionsofthe society in middle and senior management positions and open discriminationon thebasisofage in jobadvertisementsand in theselectionprocess,wouldsuggestthatalltheeffortstominimizeinequityhavenotbeenveryeffective.

3.Validity:Validityisa test thathelpspredict jobperformanceofanincumbent.Atestthathasbeenvalidatedcandifferentiatebetweentheemployeeswhocanperformwellandthosewhocannot.However,avalidated test is not completely reliable and does not predict job success accurately.Itcanonlyincreasepossibilityofsuccessaccuratelyandcanonlyincreasepossibilityofsuccess.

4.Reliability:A reliable method is one which will produce consistent resultswhen repeated in similar situations.Like a validated test, areliabletestmayfailtopredictjobperformancewithaccuracy.

5.Pressure:This is another major barrier to selection. Many a times, pressure is brought on the selectors by politicians, bureaucrats, relatives, friendsandpeerstoselectparticularcandidates.Candidatesselectedbecauseofcompulsionsareobviouslynottherightonesasmoreoftenthan not they are not competent enough.

CheckYourProgress

1.Statetheprimaryaimofemployeeselection. 2. What is an application blank? 3. What does aptitude tests measure? 4.Whatdoesaninterviewconsistof? 5. Name the three methods required to conduct physical-demands

analysis.


1.Theprimaryaimofemployeeselectionistochoosethosepersonswhoaremostlikelytoperformtheirjobswithmaximumeffectivenessandto remain with the company.

2. The application blank is a highly structured interview in which the questionsarestandardizedanddeterminedinadvance.

3. Aptitude tests measure ability and skills. 4.Theinterviewconsistsofinteractionbetweentheinterviewerandthe

applicant.

Selection

NOTES


5. Physical-demands analysis can be conducted by three methods namely, thedisabilitymethod,theratingmethodandthespecificmethod.

6.5 SUMMARY

·Selection, either internal or external, is a deliberate effort of theorganizationtoselectafixednumberofpersonnelfromalargenumberofapplicants.

·Theprimaryaimofemployeeselectionistochoosethosepersonswhoaremostlikelytoperformtheirjobswithmaximumeffectivenessandremain with the company.

·AccordingtoYoder,“thehiringprocessisofoneormany‘go-no-go’gauges. Candidates are screened by the employer and the short-listed applicantsgoon to thenexthurdle,while theunqualifiedonesareeliminated”.

·Avarietyofmethodsareusedtoselectpersonnel.Theselectionpattern,however,isnotcommonforallorganizations.

· In a sense the application blank is a highly structured interview in whichthequestionsarestandardizedanddeterminedinadvance.

·Thosewho are selected for interviews on the basis of particularsfurnishedintheapplicationblankarecalledforinitialinterviewbytheorganizations.

·Forfurtherassessmentofacandidate’snatureandabilities,sometestsare used in the selection procedure.

· Aptitude or potential ability tests are widely used to measure the talent andabilityofacandidatetolearnanewjoborskill.

· Interesttestfindsoutthetypeofworkinwhichthecandidatehasaninterest.

· Personality test is used to measure the characteristics that constitute personality.

·Candidatesarecalledforaninterviewaftertheyhaveclearedallothertests.Theinterviewconsistsofinteractionbetweentheinterviewerandthe applicant.

·Thereferenceprovidedbytheapplicanthastobechecked.Thisistofindoutfromthepastrecordsofthecandidate.

·Afterthecandidateisfinallyselected,themanagementwillhavetoexplainthejobtohim.Heshouldbetoldastowhathisdutiesare,whatisrequiredofhimandwhatarehisfutureprospectsintheorganization.

·AsBlumandNaylorobserve,thepurposeoftheselectionprocessistomakeeffectiveuseofindividualdifferenceswithaviewtoselect

NOTES


Selectionindividualswhopossessthegreatestdegreeofqualitiesrequiredforaneffectivejobperformance.

· As Yoder et al. suggest, the selection process involves seven steps as follows: (i) preliminary screening of applicants, (ii) review ofapplication blank, (iii)checkingreferences,(iv)physicalexamination,(v) psychological testing, (vi) employment interview, and (vii) evaluationoftheprogramme.

·Aptitudetestsassessanindividual’spotentialitytolearnaboutajobthrough adequate training.

·Asignificantissueishowtousethetestsforemploymentpurposes.The selection standard (critical score) on the test should vary with the market conditions.

·Aptitudes havebeengrouped intofive categories includingmentalabilities, mechanical and related abilities, psychomotor abilities, visual skillsandaclassofotherspecificaptitudes.

·Achievementtestsareclassifiedinthreegroupsincludingjobsample(orperformance)tests,writtentests,andoraltests.

· Conducting the interview is usually aimed at establishing rapport with thecandidate,gettingcompleteandaccurateinformationfromhimandrecording it properly.

6.6 KEY WORDS

·Barrier:Itreferstoacircumstanceorobstaclethatkeepspeopleorthings apart or prevents communication or progress.

·Appraisal:Itisaformalassessment,typicallyinaninterview,oftheperformanceofanemployeeoveraparticularperiod.

·Discrimination:Itistheunjustorprejudicialtreatmentofdifferentcategoriesofpeople,especiallyonthegroundsofrace,age,orsex.



1.Whatarethestepsfollowedinaselectionprocedure? 2.Writeanoteexplainingthetypesofemploymenttests. 3.Discusstheobjectivesofselection. 4.Brieflydescribetheinterviewprocess.

Selection

NOTES


LongAnswerQuestions

1.Giveadescriptiveexplanationofthemethodsofselectionindetail. 2.Thetestsshouldbetestedbeforetheyareactuallyconducted.Critically

comment. 3.Howarethetestsforemploymentpurposesused?Discuss. 4.Elaborateonthebarriersfacedduringselection.












NOTES


Induction

UNIT 7 INDUCTIONStructure 7.0 Introduction 7.1 Objectives 7.2 Meaning,DefinitionandNeedforInduction 7.3 Problems Faced during Induction 7.4 Induction Programme Planning 7.5 Answers to Check Your Progress Questions 7.6 Summary 7.7 Key Words 7.8 SelfAssessmentQuestionsandExercises 7.9 Further Readings

7.0 INTRODUCTION

Theintroductionoftheemployeetothejobisknownasinduction.Itistheprocess by which new employees are introduced to the practices, policies and purposesoftheorganization.Itisbasicallyawelcomingprocess.Inductionfollowsplacementandconsistsofthetaskoforientingorintroducingtheemployeeto thecompany.Insteadof leavinghimtostumble throughtheorganization,itisbettertosystematicallyintroducehimtothecompany,itspolicyanditspositionintheeconomy.Consideringthefactthatanumberofworkers,newlyrecruited,eithercomefromruralsurroundingsorhavesecuredappointmentsinanindustrialunitforthefirsttime,itisimperativetohaveathoroughinductionprogrammetoeasethestraineffectedbythechangeinsocialenvironment.ItisregrettablethatverylittleofthisisdoneinIndia.NopersonnelfunctionismoreneglectedinIndianindustriesthaninduction.Anewemployeeisexpectedtolearnaboutthecompanythroughaprocessoftrialanderror.Theemployeeinvariablyfallsinthehandsofthosewhoareanxioustoassumeleadership.Quiteoftentheemployeeacquiresawrongversionofthecompany’spolicyfromsuchleaders.Inthesecases,theemployerhasonlyhimselftoblame,forhehadthefirstopportunitytoputtherightideasintothemindofthenewemployee,buthehadnotavailedhimselfofthesame. Theunitwilldiscussvariousaspectsofinduction.

7.1 OBJECTIVES

Aftergoingthroughthisunit,youwillbeableto: ·Discussthemeaninganddefinitionofinduction ·Explaintheneedforinduction

Induction

NOTES


·Assesstheproblemsfacedduringinduction · Describe induction programme planning

7.2 MEANING, DEFINITION AND NEED FOR INDUCTION

According toR.PBillimoria, inductionororientation is “a techniquebywhich a new employee is rehabilitated into the changed surroundings and introducedtothepractices,policiesandpurposesoftheorganization”.Aformalorientationtriestobridgetheinformationgapofthenewemployee.Whenapersonjoinsanorganization,heisastrangertoit.Hemayexperiencealotofdifficultieswhichcouldleadtotensionandstressinhim.Thisinturncanreducehiseffectiveness.

Need forOrientation

Inanorganization,orientationisrequiredforovercomingemployeeanxiety,realityshocksandforaccommodatingemployees. ·Newemployeesexperiencealotofanxietyinanorganization.Thisis

a natural phenomenon which can be overcome through orientation. ·An employee joins an organizationwith certain assumptions and

expectations.When these expectations do notmatchwith reality,thenewemployeeexperiencesarealityshock.Effectiveorientationprogrammes help to reduce this reality shock by providing a more realisticexpectationonthepartofthenewemployee.

· Proper employee orientation helps to accommodate the new employee with existing employees by developing new acquaintances andunderstandingofthevariousaspectsofthejob.Content of the Induction Programme:KeithDavis has listed the

following topics that need to be covered in an employee’s inductionprogramme:

Table 7.1 Topics of an Induction Programme

1.OrganizationalIssues· Historyofthecompany· Namesandtitlesofkeyexecutives· Employees’titleanddepartment· Layoutofphysicalfacilities· Probationary period· Products/Servicesoffered· Overviewofproductionprocesses

NOTES


Induction· Company policies and rules· Disciplinary procedures· Employees’handbook· Safetysteps

2.EmployeeBenefits· Pay scales, pay days· Vacations, holidays· Rest pauses· Training avenues· Counselling· Insurance,medical,recreation,retirementbenefits

3. Introductions· To supervisors· To co-workers· To trainers· To employee counsellors4. JobDuties· Joblocation· Jobtasks· Jobsafetyneeds· Overviewofjobs· Jobobjectives· Relationship with other jobs

Typesof InductionProgrammes

Letusdiscussdifferenttypesofinductionprogrammes.

(a)General InductionProgramme

Onceanofferofemploymenthasbeenextendedandaccepted,thefinalstageinprocurementfunctionisconcluded.Theindividualhasthentobeorientedtowardsthejobandtheorganization.Thisisformallydonethroughaprocessknownasinductionororientation.Inductionisawelcomingprocess—theidea is towelcomethecandidate,makehimfeelathomein thechangedsurroundings and to introduce him to the practices, policies and purposes oftheorganization.Thenecessityofaninductionprogrammeisthatwhenaperson joins anorganization,hemay feel strange, shy, insecureand/ornervous.Inductionleadstoreductionofsuchanxieties.

Induction

NOTES


(b)SpecificOrientationProgramme

Specificorientationisconductedbytheforeman.Inductionisspecificandrequiresskillonthepartoftheforeman.Anewemployeemustbeprovidedoperational knowledge that is specific to the position and location.Theimmediateboss (foreman) is responsible forsuch inductionand training.Everynewemployeeshouldknow (i) the people he/she works with (ii) theworkheisresponsiblefor (iii) the result to be accomplished (iv) thecurrentstatusofthework (v) hisrelationshipsintheorganization (vi) reports and records he must understand and maintain (vii) operating policies, procedures and rules (viii) service group available to help him

Thepurposeofspecificinductionistoenableanemployeetoadjusthimselftohisworkenvironment.

(c)Follow-up InductionProgramme

Thepurposeofthefollow-upinductionprogrammeistofindoutwhethertheemployeeisreasonablysatisfiedwiththejob.Itisusuallyconductedbytheforemanorbyaspecialistfromthepersonneldepartment.Throughguidanceandcounselling,effortsaremadetoremovethedifficultiesexperiencedbythenewcomer.Usually,followupinductiontakesplaceafteraboutoneortwomonthsfromthetimeofappointment.

7.3 PROBLEMS FACED DURING INDUCTION

In every organization, new employees often go through an orientationprogramwhichfamiliarizesthemwiththeworkcultureoftheirnewcompany.Theinductionoftheemployeesisavitalcomponentinthedevelopmentofadedicatedandfocusedworkforce.Orientationenablesnewemployeestosocializeandknowtheiremployerbetter.Unfortunately,notpayingmuchattentiontoitsplanningandimplementationresultsinanunder-proficientworkforce.Thefactorsresultinginthisareveryminorandifrectified,wouldbenefitboththeemployeeandthecompany.Someoftheproblemsfacedduringinductionareasfollows:

NoPlanning

Oftencompaniesdonotinvestenoughtimeandmoneyintheirorientationprogramandoverlooks its impact in the long run.A lot of research and

NOTES


Inductionplanning is requiredbeforeconductingan induction.Avaluableprogramiswell-researched,made interesting and carefully organized, taking intoconsiderationthegoalsofboththeemployerandtheemployees.

Management Involvement

Usually, the topmanagementexcludes itself from inductionprogrammesand leaves it completely to the human resource department. Mostly, the communication about the induction is delayed. Just the appearance ofmanagers can result in a positive atmosphere. They need to consider this as anopportunitytoeffectivelycommunicatecompanygoalstonewemployees.

IneffectiveHandouts

Another important thing that gets overlooked during induction are handouts. They do not receive much attention. Handouts are like an itinerary containing thecontentofpresentationsfortheday.Thesecanbeusedasareferencebyanyemployeelater.Further,alltheinformationcanbeplacedonrecordatthe company website.

NoFollow-Up

Companiestreatinductionasthefinalstep.Majorityofthecompaniesdonothavefollow-upsessionsafteranorientationprogram.Itbecomesdifficulttomeasuretheimpactofinductionandtoknowwhetherthenewemployeesarecomfortablewithcompanypolicies.Periodicfollow-upsessionsarewaysoffindingouthowtheemployeesperceivedtheirworkplace.

7.4 INDUCTION PROGRAMME PLANNING

Awellorganisedinductionprogrammeisoneofthemosteffectivewaystointroducenewemployeestotheiremployer.Itfunctionsasanopportunitytoreassuretheemployeesabouttheirdecisiontocomeandworkforthatcompany.Italsohelpstoensurethatthenewemployeesfeelcomfortableintheirnewjobandunderstandthecorporatecultureandworkethicsofthecompany they are joining.

Byprovidingemployeeswithasolidfoundationofknowledgeupfront,they are more likely to settle in quickly, with little disruption to others. It furtherenablesthemtounderstandtheirresponsibilitiesclearlythussavingmanager’stime.Therefore,theinductiontrainingshouldensurethatthenewemployeeswhowanttobeintegratedwithintheorganizationknowaboutthespecifictaskstheywillberequiredtoperformwithintheorganization.

An importantpre-requisiteof inductionplanning is that thepersonconducting the induction process should be very knowledgeable about the organizationtosuccessfullyintegratenewemployeesintothefirm.Manycompanieshavediscoveredthatthecostofnottrainingishigherthanthe

Induction

NOTES


costoftraining,andhencethereisahigherriskinchoosingnottotrainnewemployees into the business.

Steps in the Induction Programme Planning: The HR department may initiatethefollowingstepswhileorganizingtheinductionprogramme: 1.Welcomingthenewrecruittotheorganization. 2. Providing knowledge about the company: what it is, what it does,

howitfunctions,theimportanceofitsproducers;knowledgeofconditionsofemployment,andcompany’swelfareservices.

3.Givingthecompany’smanualtothenewrecruit. 4. Showing the location/ department where the new recruit will

work.Thisstepshouldincludespecificjoblocationandduties. 5.Providingdetailsaboutvariousgroupsandtheextentofunionism

withinthecompany.Inthisstepthenewemployeeisgivenabriefidea about the setupof thedepartment, productionprocesses,differentcategoriesofemployees,workrules,safetyprecautionsand rules.

6.Givingdetailsaboutpay,benefits,holidays,leave,etc. 7.Definingtheemployee’scareerprospectswithreferencetothe

traininganddevelopmentactivitiesthatthecompanyorganizeswithspecialreferencetothenewrecruits’position.

Settingupawell-plannedandsuccessfulemployeeinductionprogramisthefirststeptowardswelcomingnewemployeesandhelpsingainingtheircommitment in the long run. While preparation plays an important role, it is equallyimportanttomakesurethattheinformationintheinductiontrainingis regularly reviewed and updated. That way the training will always be relevant and applicable to new employees.

CheckYourProgress

1.Defineinduction. 2.Whoconductsthespecificorientationprogramme? 3.Whatisthepurposeoffollow-upinductionprogramme? 4. What are handouts?


1. Inductionororientation is “a techniquebywhichanewemployeeis rehabilitated into the changed surroundings and introduced to the practices,policiesandpurposesoftheorganization”.

NOTES


Induction 2.Specificorientationisconductedbytheimmediateboss(foreman). 3.The purpose of the follow-up induction programme is to find out

whethertheemployeeisreasonablysatisfiedwiththejob. 4.Handoutsarelikeanitinerarycontainingthecontentofpresentations

fortheday.

7.6 SUMMARY

·AccordingtoR.PBillimoria,inductionororientationis“atechniquebywhich a new employee is rehabilitated into the changed surroundings and introduced to the practices, policies and purposes of theorganization”.

· Inanorganization,orientationisrequiredforovercomingemployeeanxiety,realityshocksandforaccommodatingemployees.

· Inductionisawelcomingprocess—theideaistowelcomethecandidate,makehimfeelathomeinthechangedsurroundingsandtointroducehimtothepractices,policiesandpurposesoftheorganization.

·Specificorientationisconductedbytheforeman. ·Thepurposeofspecificinductionistoenableanemployeetoadjust

himselftohisworkenvironment. ·The purpose of the follow-up induction programme is to find out

whethertheemployeeisreasonablysatisfiedwiththejob. ·Throughguidanceandcounselling, efforts aremade to remove the

difficultiesexperiencedbythenewcomer. ·Usually,followupinductiontakesplaceafteraboutoneortwomonths

fromthetimeofappointment. · Ineveryorganization,newemployeesoftengothroughanorientation

programwhichfamiliarizesthemwiththeworkcultureoftheirnewcompany.

·Often companies do not invest enough time andmoney in theirorientation program and overlooks its impact in the long run.

·A lot of research and planning is required before conducting aninduction.

· Another important thing that gets overlooked during induction are handouts.

·Handoutsarelikeanitinerarycontainingthecontentofpresentationsfortheday.

·An importantpre-requisiteof inductionplanning is that thepersonconducting the induction process should be very knowledgeable about theorganizationtosuccessfullyintegratenewemployeesintothefirm.

Induction

NOTES


7.7 KEY WORDS

· Induction:Itisanoccasionwhensomeoneisformallyintroducedintoanewjobororganization,especiallythroughaspecialceremony.

·Acquaintance:Itreferstoapersononeknowsslightly,butwhoisnotaclosefriend.

· Implementation:Itistheprocessofputtingadecisionorplanintoeffect;execution.



1. Why is orientation needed? 2.Whatformsthecontentofaninductionprogramme? 3.Brieflydescribeageneralinductionprogramme. 4. Should senior management be involved in induction programmes? 5. Write a short note on induction programme planning and discuss the

steps involved in planning.

LongAnswerQuestions

1.Exemplify induction training rolled out in some of the leadingorganizationsapartfromthosementionedintheunit.

2.Elaborateandanalysethevarioustypesofinductionprogrammes. 3.Assesstheproblemsfacedduringaninductionandmeasuretheirimpact

in the short and long run.






NOTES


InductionDecenco, David A. and Stephen P. Robbins. 1989. Personnel/HRM, 3rd Edition.NewDelhi:Prentice-HallofIndia.






Training

NOTES


UNIT 8 TRAININGStructure 8.0 Introduction 8.1 Objectives 8.2 Training:Concept,SignificanceandNeeds 8.3 TypesofTraining 8.4 Answers to Check Your Progress Questions 8.5 Summary 8.6 Key Words 8.7 SelfAssessmentQuestionsandExercises 8.8 Further Readings

8.0 INTRODUCTION

Inthisunit,youwilllearnaboutemployeetraining.Foranyorganizationtoperpetuateitselfthroughgrowth,thereisabasicneedfordevelopingitsmanpower resources. It is one thing to possess knowledge but another to putittoeffectiveuse.Itisessentialtohelpdevelopskillsandalsoupdateknowledge.Especially,inarapidlychangingsociety,employeetraininganddevelopmentisveryimportantforanorganization.

Trainingisamethodofacquiringasuccessionofplannedbehaviour.Itattemptstoimproveemployees’performanceonthecurrentjoborpreparethemforanintendedjob.Amongotherbenefits,traininginstructstheworkerstowardsbetterjobadjustmentandreducestherateoflabourturnoverandabsenteeism.

8.1 OBJECTIVES

Aftergoingthroughthisunit,youwillbeableto: ·Describetheconceptandsignificanceoftraining ·Explaintrainingneeds · Analyse training methods ·Discussvarioustypesoftraining

8.2 TRAINING: CONCEPT, SIGNIFICANCE AND NEEDS

Trainingisundertakenbyorganizationstoimprovetheperformance,quality,skill and knowledge of their employees.Thus, it is a vital phase in thedevelopmentofindustrialrelations.

NOTES


TrainingFeaturesof training

McFarland defines several concepts used in the development of humanresources. Although training and education are closely connected, these conceptsdifferfromeachotherincrucialways.Whiletheterm‘training’relatestoimpartingspecificskillsforspecificobjectives,theterm‘education’involvesthedevelopmentofthewholeindividualsocially,intellectuallyandphysically.Accordingly,trainingformsonlyapartoftheentireeducationalprocess.Moreover,educationismoreakintotheconceptsofgrowthanddevelopmentthantraining.Thetermdevelopmentcanbedefinedasthenatureanddirectionofchangetakingplaceamongpersonnelthrougheducationaland training processes.

Natureof tasksand responsibilities as adeterminant

Therelativeamountoftrainingandeducationchangeswiththenatureoftasksandresponsibilitiesinorganizationalsettings.Asonegoesupwardintheorganization, the requirement of trainingusually diminishes, and therequirement of education goes up.Explicitly, non-managerial personnelrequire more job or trade-related skills than managerial personnel demandingthegeneralizedconceptualskillsandhumanrelationsinsights.Accordingly,thereisadifferencebetweenemployeetrainingandmanagementdevelopment. Thus, employee training relates to the process by which non-managerialemployeesareimpartedjobskills.Thistypeoftrainingislargelytask-centredinsteadofcareer-centred,andsupplementsbasicskillsandjobtraining obtained in trade schools.

Developmentas applied tomanagers

On the other hand, development as applied to managers involves the processes by which managerial personnel accomplish not only skills in their present jobs,butalsocompetenceforprospectiveassignmentsofenhanceddifficultiesandscope.Thehigherresponsibilitiesembracecomplexconceptualthoughtsand analyses, and decision-making abilities. The development process relates to the pressures, changes and growth patterns. Thus, development as applied to managersembracesallthoserecognizedandcontrolledmeasures,whichexertamarkedinfluencetowardstheimprovementofabilitiesoftheparticipanttoaccomplishhispresentjobmoreeffectivelyandenhancehispotentialforprospective higher responsibilities.

Narrowandbroadperspectives

However,Dunn and Stephens do not limit the term ‘development’ tomanagerial personnel only.According to them, ‘Training refers to theorganization’seffortstoimproveanindividual’sabilitytoperformajobororganizationalrole,whereasdevelopmentreferstotheorganization’sefforts(and the individual’s own efforts) to enhance an individual’s abilities to

Training

NOTES


advanceinhisorganizationtoperformadditionaljobduties.’Thus,trainingprovidesknowledgeandskillsrequiredtoperformthejob.Itmayinvolveshowing a lathe operator how to produce a new component, demonstrating tosupervisorshowtohandlegrievances,andimprovingaplantmanager’sskill to negotiate a contract with the trade union. Accordingly, training can be viewed as job-oriented leading to an observable change in the behaviour ofthetraineeintheformofincreasedabilitytoperformthejob.

On the other hand, although development is still job-related, it is much broader in scope. This is implied in management development programmes purportingtopreparemanagersforhigherlevelpositions.Itenhancesgeneralknowledge related to a job as well as the ability to adapt to change. Thus, trainingisnarrowinscopeandlargelyrelatestotheacquisitionofskills,whiledevelopmentembracesabroaderscope.Theconceptof‘education’relatestotheacquisitionofknowledgeofageneralnature.

Present and futureorientations

Thus,asFitzgeraldobserves,trainingprovidesemployeeswithspecificskillsorhelpsthemtoovercomedeficienciesintheirpresentperformance.Ontheother hand, development provides employees with that the abilities that the organizationwillneedinthefuture.

Trainingversusdevelopment

AccordingtoYoder,althoughtheterms‘training’and‘development’appearsynonymous,thereisarecognizeddifferencebetweentheseconcepts.Earlier,trainingprogrammesstressedpreparationforanimprovedperformanceinlargelyspecificrank-and-filejobs.Withthegrowthoforganizations,severalproblems developed specifically at the supervisory level.Accordingly,supervisory training programmes were launched enabling them to deal withdistinctiveproblems.Duringthetrainingofthesupervisors,theneedtotraintheirbossesappearedsignificant.Therefore,specialdevelopmentalprogrammesformiddlemanagerswereorganized.Lateron,thedevelopmentprogrammeswerestartedforthetopmanagementaswell.Theseprogrammesindicatedthesignificanceoftheconceptofdevelopment,andthustrainingappeared to be an improper designation for learning awide variety ofcomplex,difficultandintangiblefunctionsofmanagerialpersonnel.

Thus,theconcept‘training’wasdegraded.Asmanagersthemselvesremarked, ‘training is for dogs, people are developed’.Today, the terms‘development’and‘education’aremoresuitablethantheterm‘training’.Itisnotthetrainingbutthefulldevelopmentofpersonalitythatenablesthehumanresourcestoexerttheirfullpotential.Accordingly,traininganddevelopmentprogrammesarecombinedtogetherfordevelopingskillsaswellasbasicattitudes, leading to a continued personal growth. These programmes purport toimprovejobperformance,minimizewasteandscrap,prepareindividuals

NOTES


Trainingforpromotions,reduceturnover,enableindividualstoacceptorganizationalchanges,facilitateunderstandingoftheorganizationalgoalsandattainalliedbehavioural objectives. Obviously, the basic problem in development is to integratetheindividual’sachievement,motivationandself-interestwiththegoalsoftheorganization.

Difference from four standpoints

Likewise,Gomez-Mezia et al. visualized that training tends to focus onimmediateorganizationalneeds,whiledevelopmentfocusesonlong-termrequirements.Whilethescopeofdevelopmentisonthewholeworkgroupoftheorganization,thescopeoftrainingisrestrictedtoanindividualemployee.Thetwoconceptsalsodiffervis-à-vistheirgoals.Whiletrainingovercomescurrentskilldeficiency,developmentpreparestheemployeesforfutureworkdemands. Training is concerned with the current job, whereas development relatestobothcurrentandfuturejobs.Accordingly,itisnecessarytorememberthesedifferenceswhileevolvingandevaluatingtrainingprogrammes.

Thus,theuseoftrainingprogrammestoinfluencelong-rangeissuesislikelytobeineffective.Inthesameway,theuseofadevelopmentprogrammetoimprovecurrentjobperformancewillbefutile.

Obviously, training provides ameasure formodifying employeebehaviour involving complex attitudes, knowledge and understandingand improving organizational effectiveness.Attempts are beingmade todeterminethetrainingneedsfortheentireorganizationratherthanitsspecificdepartments and also to involve the top management in this programme. Thereisanurgentneedforovercomingresistancetoatrainingprogrammebydemonstratingtheconcreteresultsoftraining,allowingthelinepersonneltodetermineitsspecificneedsandperformitsowntrainingasmuchaspossible.Thisapproachensuresinterestandinvolvementofthelinepersonnelandminimizeconflictsbetweenthelineandstaffpersonnel.

TrainingNeedsandObjectives

Theneedsandobjectivesareasfollows:

(a)Evaluatinggapby skills analysis

AsPriceobserves,atrainingneedexistswhenthereisagapbetweenthepresentperformanceofanemployeeorgroupofemployeesandthedesiredperformance.The existence of this gap can be determined on the basisof a ‘skills analysis’ involving the followingfive steps: (1)Analysis anddeterminationofthemajorrequirementsofthespecificjob,(2)Identificationof thetasksneededtobeaccomplishedtomeetthejobrequirements,(3)Understanding of the procedures needed to accomplish each of the jobtasks, (4)Analysisof theknowledgeandskillsneededtoaccomplishthe

Training

NOTES


procedures,(5)Identificationofanyspecialproblemofthejobandanalysisofanyparticularskillneededtomeettheproblem.

(b)Trainingas apreventive tool to specificproblems

Trainingneedsshouldbedeterminedfromthestandpointofaspecificproblemforwhichtrainingisthemosteffectivesolution.Theproblemmaybeactualorpotential.Theremaybenumerousproblems forwhich training formsapreventive tool. Itmaysolve severalproblemsofexcessivenumberofaccidents,lackofambitionamongemployees,excessivebuckpassing,poorcooperation,absenceofjobpride,excessivespoilageofmaterial,frequentchanges in procedures, lack of understanding of responsibilities, lack ofeffectiveteamwork,excessivenumberoftransfersorrequestfortransfers,higherturnover,etc.Theobjectiveoftraininginthesesituationsistopreventtheoccurrenceofsuchspecificproblems.Asindicated,specifictrainingneedscanbedeterminedbydeductingtheexistingamountofemployeeskillsfromthe job requirements.

(c)Trainingas a tool to achieveorganizational goals

AsBernardinpointsout,anorganizationshouldprovideresourcestotrainingprogrammesiftheyfacilitateintheattainmentoforganizationalgoals.Forthis purpose, needs analysis must be conducted to collect the best possible data for justifying the use of training programmes.Organizationswhichimplement training programmes without such assessments are likely to make pitfallsandwastemoney.Forexample, theresearchmayreveal theneedforjobredesignratherthantraining.Thisanalysismustbeconductedinthecontextofstrategicplansofanytypeofstrength,weakness,opportunityandthreat analysis. According to Bernardin, needs assessment can be considered as a systematic, objective determinant for trainingneedswhich involvesconducting three primary types of analysis: organizational analysis, jobanalysis,andpersonanalysis.Thesetypesofanalysiscanhelpindeterminingtheobjectivesforthetrainingprogrammes.

SignificanceandBenefits ofTraining

Trainingisaprocessoflearningasequenceofprogrammedbehaviour.Itisapplicationofknowledge.Itgivespeopleanawarenessoftherulesandprocedurestoguidetheirbehaviour.Itattemptstoimprovetheirperformanceonthecurrentjoborpreparethemforanintendedjob.‘AccordingtoEdwinDFlippo,thepurposeoftrainingistoachieveachangeinthebehaviourofthosetrainedandtoenablethemtoperformbetter.’Inordertoachievethisobjec tive, any training programme should try to bring positive changes in: ·Knowledge:Ithelpsatraineetoknowfacts,policies,proceduresand

rules pertaining to his job.

NOTES


Training · Skills: Ithelpshimto increasehis technicalandmanualefficiencynecessary to do the job.

·Attitude: It moulds his behaviour towards his co-workers and supervisorsandcreatesasenseofresponsibilityinhim.

Importanceof training

(a) Itequipsthemanagementtofacethepressuresofchangingenvironment. (b) Itusuallyresultsintheincreaseofquantityandqualityofoutput. (c) Itleadstojobsatisfactionandhighermoraleoftheemployees. (d) Trained workers need lesser supervision. (e)Trainedworkersenabletheenterprisetofacecompetitionfromrival

organizations. (f) Itenablesemployeestodevelopandrisewithintheorganizationand

increase their earning capacity. (g) Itmouldstheemployees’attitudesandhelpsthemtoachievebetter

cooperationwithintheorganization. (h)Trained employeesmake better economic use ofmaterials and

equipmentresultinginreductionofwastageandspoilage. (i) Training instructs the workers toward better job adjustment and reduces

therateoflabourturnoverandabsenteeism.

Benefits of training

(a)Benefitstoorganizations:Aprogrammeoftrainingbecomesessentialforthepurposeofmeetingspecificproblemsofaparticularorganizationarisingoutof the introductionofnew linesofproduction, changesindesign,demandsofcompetition,andsoon.Themajorbenefitsoftrainingtoanorganizationare:

(i)Higherproductivity:Training can help employees to increase theirlevelofperformanceontheirpresentassignment.Itenhancesskills.Increasedperformanceandproductivityaremostevidentonthepartofnewemployeeswhoarenotyetfullyawareofthemostefficientandeffectivewaysofperformingtheirjobs.Enhancedskillusuallyhelpstoincreasebothquantityandqualityofoutput.

(ii)Better organizational climate:Anendless chain of positivereactionsresultsfromawell-plannedtrainingprogramme.In-creased morale, less supervisory pressures, improved product quality,increasedfinancialincentives,internalpromotions,andsoonresultinabetterorganizationalclimate.

(iii)Less supervision:Training does not eliminate the need forsupervision;itreducestheneedforconstantsupervision.

Training

NOTES


(iv)Preventsmanpower obsolescence:Manpower obsolescence ispreventedbytrainingasitfostersinitiativeandcreativityofemployees.Anemployeeisabletoadapthimselftotechnologicalchanges.

(v)Economicaloperations:Trained personnel will make economical useofmaterialsandequipment.Thisreduceswastageinmaterialsand damage to machinery and equipment.

(vi)Preventsindustrialaccidents: Proper training can help to prevent industrial accidents.

(vii) Improvesquality:Trained employees are less likely to make operationalmistakestherebyincreasingthequalityofthecompa-ny’sproducts.

(viii)Greaterloyalty: Acommonobjectiveoftrainingprogrammewillmouldemployees’attitudestoachievesupportfororganizationalactivities and to obtain better cooperation and greater loyalty. Thus,traininghelpsinbuildinganefficientandloyalworkforce.

(ix)To fulfil organization’s futurepersonnelneeds: When the needarises,organizationalvacanciescanbestaffedfrominternalsources, ifanorganizationinitiatesandmaintainsanadequatetraining programme.

(x)Standardizationofprocedures: Trained employees will work intelligently andmake fewermistakeswhen theypossess therequired know-how and understand their jobs.

(b)Benefitstoemployees (i)Personal growth: Employees on a personal basis gain individu-

allyfromtraining.Theysecurewiderawareness,enlargedskillandenhanced personal growth.

(ii)Developmentofnewskills:Trainingimprovestheperformanceoftheemployeesandmakesthemmoreusefulandproductive.Theskillsdeveloped through training serve as a valuable personal asset to the employee. It remains permanently with the employee.

(iii)Higher earning capacity: By imparting skills, training facil-itates higher remuneration and othermonetary benefits to theemployee.Thus,traininghelpseachemployeetoutilizeanddevelophisfullpotential.

(iv)Helps adjustwith changing technology: Old employees need refresher training to enable them to keep abreast of the changingmethods,techniquesanduseofsophisticatedtoolsandequipment.

(v) Increasedsafety: Proper training can help prevent industrial accidents. Trainedworkershandlethemachinessafely.Thus,theyarelessprone

NOTES


Trainingtoindustrialaccidents.Asafeworkenvironmentalsoleadstoamorestablementalattitudeonthepartoftheemployees.

(vi)Confidence:Trainingcreatesafeelingofconfidenceinthemindsofemployees.Itgivessafetyandsecuritytothemintheorganization.

TrainingMethodsandSchemes

Therearemanytypesoftrainingmethods,someofthemare: (a) Inductionororientationtraining:It is themethodofintroducing

a new employee into the organizationwith a view to gaining hisconfidenceanddevelopingasenseofcooperationinhim.Itisatrainingprogrammeusedtoinductanewemployeeintothenewsocialsettingofhis work. The new employee is introduced to his job situation and to his co-employees.Heisalsoinformedabouttherules,workingconditions,privilegesandactivitiesofthecompany.Theinductiontrainingnotonlyhelpspersonaladjustmentofthenewemployeetohisjobandworkgroupbutalsopromotesgoodmoraleintheorganization.

An induction programme should aim at achieving the followingobjectives:

(i)Tobuildupthenewemployee’sconfidenceintheorganizationsothathemaybecomeefficient

(ii)Toensurethatthenewemployeemaynotformfalseimpressionsregardinghisplaceofwork

(iii)Topromoteafeelingofbelongingandloyalty (iv)Togiveinformationtothenewemployeeaboutcanteen,leave

rulesandotherfacilities,etc In short, planned induction welcomes a new employee, creates a good

attitude,reduceslabourturnoverandmakestheemployeefeelathomerightfromthebeginning.

(b) Jobinstructiontraining:Theobjectofjobtrainingistoincreasetheknowledgeofworkersaboutthejobwithwhichtheyareconcerned,sothattheirefficiencyandperformanceareimproved.Injobtraining,workersareenabledtolearncorrectmethodsofhandlingmachinesandequipmentavoidingaccidents,minimizingwastes,andsoon.

Under this technique, an employee is placed in a new job and is told howitmaybeperformed.Itisprimarilyconcernedwithdevelopinginanemployeetheskillsandhabitsconsistentwiththeexistingpracticesofanorganizationandwithorientinghimtohisimmediateproblems.The employees learn the job by per sonal observation and practice as well as occasionally handling it. It is learning by doing, and it is most usefulforjobsthatareeitherdifficulttostimulateorcanbelearned

Training

NOTES


quicklybywatchinganddoing.Theactualtrainingfollowsafour-stepprocess:

(i)Preparationofthetraineeforinstruction (ii)Presentationoftheinstructionsinaclearmanner (iii) To help the trainee try out the job to show that he has understood

the instructions (iv)Encouragequestionsandallowingthetraineetoworkalongwith

regularfollow-upbythetrainer (c)Promotionaltraining:Manyconcernsfollowapolicyoffillingsomeof

thevacanciesathigherlevelsbypromotingexistingemployees.Thispolicyincreasesthemoraleofworkers.Whentheexistingemployeesarepromotedtosuperiorpositionsintheorganization,theyarerequiredto shoulder new responsibilities. For this, training has to be given.

(d)Refreshertraining:Withthepassageoftime,employeesmayforgetsomeofthemethods,whichweretaughttothem,ortheymayhavebecomeoutdatedbecauseoftechnologicaldevelopmentandimprovedtechniquesofmanagementandproduction.Hence,refreshertrainingisarrangedforexistingemployeesinordertoprovidethemanopportunityto revive and also improve their knowledge.

According to DaleYoder ‘Retraining (refresher training) pro-grammes are designed to avoid personnel obsolescence.’Thus,refreshertrainingisessentialbecause:

(i)Employees require training to bring themup-to-datewith theknowledgeandskillsandtorelearnwhattheyhaveforgotten.

(ii)Rapid technological changesmake even themost qualifiedworkersobsoleteincourseoftime.

(iii)Refresher trainingbecomesnecessarybecausemanynewjobsarecreatedandaretobemannedbytheexistingemployees.

(e)Apprenticeshiptraining:Apprenticeship training system is widely invoguetodayinmanyindustries.Itisagoodsourceofprovidingtherequiredpersonnelfortheindustry.Underthismethod,bothknowledgeandskillsindoingajoboraseriesofrelatedjobsareinvolved.Theapprenticeshipprogrammescombineon-the-jobtrainingandexperiencewith classroom instructions in particular subjects. Apprenticeship trainingisdesirableinindustrieswhichrequireaconstantflowofnewemployeesexpectedtobecomeall-roundcraftsmen.

(f) Internship training: Internship training is usuallymeant forsuch vocations where advance theoretical knowledge is to be backedup by practical experience on the job.Under thismethod,theprofessionalinstitutesenterintoarrangementwithabigbusiness

NOTES


Trainingenterprise for providing practical knowledge to its students. Forexample, engineering students are sent to industrial enterprise andmedicalstudentsaresenttohospitalsforpracticalknowledge.

(g)Vestibule training: In this method, actual work conditions are simulatedinaclassroom.Material,filesandequipmentthatareusedin the actual job are used in the training programme too. In vestibule training, theory canbe related to practice.This type of training iscommonlyusedfor trainingemployeesforskilledandsemi-skilledjobs.Vestibuletrainingconsistsoftwoparts:· Thelecturemethodthatfocusesontheoreticalframeworkandthe

principlesinvolvedinthejobperformance,and· Thepracticalexercisesbasedonthetheoreticalaspectsinaworkshop

thatissimilartotheshopfloorintheproductiondepartment. Thevestibuletrainingismoresuitableforthoseemployeeswhoare

required to possess certain specific technical skills before they areemployed in actual operations.

Systemsapproaches to training

Whiledesigningtrainingprogrammesthegoaloftheorganizationshouldbekeptinmind.Theorganizationalgoalsandstrategiesformthebasisfortrainingobjectives.However,manyof theorganizationsdonotmaketheconnection between their strategic objectives and their training programme. Asaresult,muchofanorganization’sinvestmentintrainingprogrammesdoesnotcontributedirectlytoorganizationaleffectivenessandperformance.Tomakecertainthatinvestmentsintraininganddevelopmenthavemaximumimpactonindividualandorganizationalperformance,asystemsapproachtotrainingshouldbeused.ThesystemsapproachtotraininghasfourphaseswhichareexplainedinFigure8.1.

.

PHASE 1:

Need Assessment · Organization

analysis · Task analysis · Person analysis

PHASE2: Design · Instructional

objectives · Trainee

readiness · Learning

principles

PHASE3: Implementation · On-the-job

methods · Off-the-job

methods · Management

development

PHASE4: Evaluation · Reactions · Learning · Behaviour

(transfer) · Results

Fig. 8.1 System Model of Training

Training

NOTES


Phase1:Conductingtheneedsassessment:Theneedfortrainingshouldbefeltbytheorganization.Managers,particularlyHRmanagers,shouldfindoutthetypesoftrainingthatareneeded,wheretheyareneeded,whoneedsthem, and which method should be used to train the employees. In order to dothis,wemustfollowthreesteps: 1. Organization analysis: It is an examination of the environment,

strategies,andresourcesoftheorganizationtodeterminewheretrainingemphasis should be placed.

2. Task analysis:After doing the organization analysis, the next stepis to do the task analysis. Task analysis involves reviewing the job descriptionandjobdescriptionandjobspecificationtoidentifytheactivitiesperformedinaparticularjob.Taskanalysisoftenbecomesmore detailed than job analysis, but the overall purpose is to determine theexactcontentof the trainingprogramme.Theknowledgeskillsandabilities(KSAs)neededtoperformtheparticularjobshouldbeascertained.Thecompetencyassessmentfocusesonthesetofskillsandknowledgeemployeesneedtobesuccessful,particularlyfordecision-oriented and knowledge-intensive jobs.

3. Person analysis: Person analysis involves determining which employees require training and which employees do not need the particular type oftraining.Personanalysishelpstheorganizationsinseveralways(i)ithelpsinavoidingthemistakeofsendingallemployeesintotrainingwhen some do not need it. (ii) It enables managers to determine what prospective trainees are able to do when they enter training so that the programmescanbedesignedtoemphasizetheareasinwhichtheyaredeficient.

Phase2: Designing the training programme: The second step is to design thetypeoflearningenvironmentnecessarytoenhancelearning.Thetrainingdesignshouldfocusonthefollowing: 1. Instructional objectives: They describe the skills and knowledge to

be acquired and the attitudes to be changed.A clear statement ofinstructionalobjectiveswillprovideasoundbasisforchoosingmethodsandmaterialsandforselectingthemeansforassessingwhethertheinstructionwillbesuccessfulornot.

2. Trainee readiness:Foranytrainingtobesuccessfulthetraineeshouldbe prepared to receive the training. In order to achieve this, prospective trainees should be screened to determine that they have the background knowledge and skill necessary to absorb what will be presented to them.

3. Principles of learning: Since the success or failure of a trainingprogramme is frequently related to certain principles of learning,managers and employees should understand that different training

NOTES


Trainingmethods or techniques vary in extent towhich they utilize theseprinciples.

4. Characteristics of instructors:Thesuccessofanytrainingeffortwilldependtoalargeextentontheteachingskillsoftheinstructors.Agoodinstructorisonewhoshowsalittlemoreeffortordemonstratesmoreinstructional preparation.

Phase3: Implementing the training programme: A major consideration in choosing among the various training methods is determining which one is moreappropriatefortheKSAstobelearned.Phase4:Evaluatingthetrainingprogramme:Trainingshouldbeevaluatedtodetermineitseffectiveness.Thefourbasiccriteriaavailabletoevaluatetraining are: (i) reactions (ii) learning (iii) behaviour and (iv) results. These criteriacangiveatotalpictureofthetrainingprogrammeandhelpmanagersevaluatethesuccessorotherwiseofthetrainingprogramme.

Training programme is a costly and time-consuming process. The followingtrainingprocedureisessentiallyanadoptionofthejobinstruction-trainingcourse.Thefollowingstepsareusuallyconsiderednecessary. (a)Discoveringoridentifyingthetrainingneeds:A training programme

shouldbeestablishedonlywhenitisfeltthatitwouldassistinthesolutionof specificproblems. Identificationof trainingneedsmustcontainthreetypesofanalysis:

(i)Organizationalanalysis:Determinetheorganization’sgoals,itsresourcesandtheallocationoftheresourcesastheyrelatetotheorganizationalgoals.

(ii)Operations analysis: Focusesonthetaskorjobregardlessoftheemployee doing the job.

(iii)Man analysis: Reviews the knowledge, attitudes and skills a personmustacquiretocontributesatisfactorilytotheattainmentoforganizationalobjectives.

Armedwith the knowledge of each trainee’s specific trainingneeds, programmesof improvement canbedeveloped that are tai-loredtotheseneeds.Thetrainingprogrammethenfollowsageneralsequence aimed at supplying the trainee with the opportu nity to develop his skills and abilities.

(b)Preparingtheinstructor:Theinstructoristhekeyfigureintheentireprogramme. He must know both the job to be taught and how to teach it. The job must be divided into logical parts so that each can be taught atapropertimewithoutthetraineelosingperspectiveofthewhole.This becomes a lesson plan. For each part one should have in mind thedesiredtechniqueofinstruction,i.e.,whetheraparticularpointisbesttaughtbyillustration,demonstrationorexplanation.

Training

NOTES


(c)Preparingthetrainee:Thisstepconsistsof:· Putting the learner at ease· Statingtheimportanceandingredientsofthejobanditsrelationship

toworkflow· Explainingwhyheisbeingtaught· Creatinginterestandencouragingquestions,findingoutwhatthe

learner already knows about his job or other jobs· Explainingthe‘why’ofthewholejobandrelatingittosomejob

the worker already knows· Placing the learner as close to his normal position as possible· Familiarizinghimwiththeequipment,materials,toolsandtrade

terms (d)Presenting the operations:This is the most important step in a

training programme. The trainer should clearly tell, show, illustrate and question in order to put across the new knowledge and operations. There aremanywaysofpresentingtheoperation,suchasexplanationanddemonstration.Aninstructormostlyusesthemethodofexplanation.Inaddition,onemayillustratevariouspointsthroughtheuseofpictures,charts,diagramsandothertrainingaids.Demonstrationisanexcellentdevice when the job is essentially physical in nature. The training programmemaybefollowedasperthefollowingsteps:

(i)Explainthecourseofthejob (ii) Do the job step-by-step according to the procedure (iii)Explaineachstepthatheisperforming (iv)Havethetraineeexplaintheentirejob Instructionsshouldbegivenclearly,completelyandpatiently;there

shouldbeanemphasisonkeypointsandonepointshouldbeexplainedat a time. The trainee should also be encouraged to ask questions in order to indicate that he really knows and understands the job.

(e)Tryoutthetrainees’performance:Under this, the trainee is asked togothroughthejobseveraltimesslowly,explaininghimeachstep.Mistakesarecorrected,andifnecessary,somecomplicatedstepsaredoneforthetraineethefirsttime.Thenthetraineeisaskedtodothejob, gradually building up skill and speed. As soon as the trainee demonstrates that he can do the job in the right way, he is put on his own. The trainee, through repetitive practice, will acquire more skill.

(f)Follow-up:Thefinalstepinmosttrainingproceduresisthatoffollow-up.This step isundertakenwithaview to test theeffectivenessoftraining efforts.The follow-up system shouldprovide feedbackon

NOTES


Trainingtrainingeffectivenessandontotalvalueoftrainingsystem.Itisworthrememberingthatifthelearnerhasnotlearnt,theteacherhasnottaught.

Comparisonof on-the-jobandoff-the-job trainingprogrammes

Merits of on-the-job training

(a) It permits the trainee to learn on the actual equipment and on-the-job environment.

(b) It is a relatively cheaper and less time consuming as no additional personnelorfacilitiesarerequiredfortraining.

(c)Asthetraineegetsafeelingofactualproductionconditions,itincreasestheeffectivenessoftraining.

Demerits of on-the-job training

(a)Theinstructioninon-the-jobtrainingisoftenhighlydisorganizedandhaphazard.

(b)Traineesareoftensubjectedtodistractionsofanoisyshoporoffice. (c) There is low productivity.

Trainingmethodsand theirSuitability

Thesuccessofanytrainingordevelopmentprogrammelargelydependsontheselectionofthemethodsused.Here,itshouldberememberedthatnosinglemethodcanprovetobethebestmethod.Variousmethodsaresuitableforvariousreasons.Table8.1showsthemethodsandtheirsuitabilityfortraining.

Selectionof a trainingmethod

Theselectionofanappropriatemethoddependsuponthefollowingfactors: (a)Natureofproblemarea:Thechoiceofatrainingmethoddepends

upon the task to be done or the manner in which people interact with each other, i.e., the problem may be either an operational problem or a human relations problem.

(b)Leveloftraineesintheorganization’shierarchy:Thechoiceofatrainingmethodalsodependsupontheleveloftheparticipants.

(c)Method’s ability tohold and stimulate the interest of traineesduring the trainingperiod:A trainer has to consider alterna tive methodsofpresentingtrainingmaterialtoparticipantsalsofromthepointofviewoftheirabilitytostimulateinterestandfacilitateretentionofthematter.

(d)Availabilityofcompetenttrainers:Atrainingmethodisaseffectiveas the ability of the trainer.He is themost importantfigure in theentiretrainingprogramme.Therefore,beforeventuringintoatrainingprogrammewehavetofirstfindagoodtrainer.

Training

NOTES


(e)Availability of finance:Availability of finance is crucial for anytrainingprogramme.Tomakeatrainingprogrammeeffectiveadequatefinanceisnecessary.

(f)Availabilityoftime:Training cannot be done in a hurry. Adequate time is necessary to make the training programme a success.

Table 8.1 Suitability of Training Methods

Technique of Training Suitability

Lecture For large groups. For orientation or easy to understand material.

Case study

For small groups. Requires discussion and participation by all participants. It may be used to develop group decision-making skills.

In-basket technique

For small groups. For developing analytical and decision-making skills.

Conferencesandseminars For broadening knowledge, stimulating new ideasandchangingattitudesandfordeveloping skills.

Programmed instruction and computer-assisted learning

For either large or small groups where cost is critical. Permits people to study at their own convenience.

Simulation and gaming

For group projects. For developing decision-makingskillsrequiredtheintegrationofmanyfactors.

Laboratory training Forgroupsofalmostanysize.Forchangingan organization’sattitudes.Forincreasingorganizational problem-solving capabilities.

T-group sensitivity training For developing better understanding and betterperceptionsofco-workers.

CheckYourProgress

1. Why is training important? 2. What is induction or orientation training?

8.3 TYPES OF TRAINING

Traininginvolveslearningandinatrainingsituationlearningisfacilitatedby the trainer.Anumber of trainingmethods are available that facilitatelearning.Therearealsodifferenttypesoftrainings.Thefollowingsectionidentifiessomepopulartypesoftraining.

NOTES


TrainingInductiveTraining

Thisreferstothetrainingconductedbyorganizationstoinitiateanemployeeintotheorganization.Inductiontrainingisnormallyaprocessbywhichnewemployeesareinformedabouttheactivitiesoftheorganization,thetermsandconditionsofemployment,andhisnewdutiesandresponsibilities.Duringinduction the employee may be introduced to the workers with whom he will beworkingaswellasthematerials,theplantorequipmenthewillbeexpectedtouse.Thepurposeofinductiontrainingistoorientnewemployeeswiththemanagement,theorganizationstructureandtheorganizationalvision,mission and values.

Itisduringtheprocessofinductionthatthenewemployeegetsinitiatedinto the organizational culture specific to his company.Most inductiontrainings are a kindof one-way communication inwhich the company’srepresentativeaddressesthetrainees.Thereislittleornoparticipationfromthe employees undergoing induction training. Induction training per se does notcontributetoemployeedevelopment,skillenhancementororganizationalgrowth.Inductiontrainingprogrammesarenotonlyfornewemployees.Thesearealsoconductedforin-companypromoteeswhohavetobeorientedtothedemandsofnewpositionsandresponsibilities.

Induction trainingisbasedonthephilosophythat theentryofnewemployees into the organization has to be facilitated and that they haveto be eased into their new jobs and responsibilities. The aim is to make the assimilation of new employees in the organizational culture littleless complex.Organizations spend considerable thought and resource inorganizinginductivetrainingbecauseofitscrucialroleinfacilitatingtheentryofnewemployees.Thetrainingconsistsofvisitingthevariousdepartmentsof theorganization tounderstand their functioning.The traineesarealsointroducedtotheoperationalaspectoftheorganization.Inshort,inductiontrainingisanelaboratelyplannedinitiationofthenewemployeesintotheorganizationalcultureandstructure.

Training inParticularSkills

Everytaskdemandsaspecificskillsetforitseffectiveaccomplishment.Allorganizationsconductskilltrainingprogrammesofsomekindortheotherfor theemployeestomakethemcapableofaccomplishingspecifictasks.Skilltrainingisdirectlyrelatedtotheacquisitionoftechnicalorpracticalexpertise.Skilltraininghasaverynarrowandfocusedobjective,whichistocreate competent workers who can contribute productively to the achievement oforganizationalgoals.

HumanRelationsTraining

Humanrelationstrainingreferstothattrainingthathasspecificbehaviouralobjectives.Theseobjectivesarerelatedtothefollowing:

Training

NOTES


·Aspectsofmanagingstyle ·Awarenessofbehaviourinitsdifferentforms · Altering or shaping behaviour · Improvementofinterpersonalbehaviour

ProblemSolvingTraining

Problemsolvingtrainingprovidesafoundationforacontinuousprocessorsystemimprovement.Thepurposeofproblemsolving training is tohelpparticipants understand the variousmodels of problem solving, discoverspecifictechniquesforanalysingproblems,anduseavarietyof toolsforsolving problems on the job.

Managerial andSupervisoryTraining

Managerial jobs combine both management techniques and conceptual knowledge.Incasethemanagerial jobis thatofaspecialist, the trainingwould focus on subjects like operations research, finance, productionmanagement,etc.Ifitisageneralmanagementjob,thenthetrainingwouldinvolvemanagementprinciplesandpractices.Thefocusoftheentiretrainingwould be to make the manager conceptually clear and technically sound so thatheisabletofunctioneffectivelyasamanagerorsupervisor.

ApprenticeTraining

In India, theApprenticeAct of 1961 lays the foundation for apprenticetraining. The motive behind apprenticeship training is to provide some basic skillstounskilledindividualssoastoenablethemtobeemployedgainfully.According to theAct, industrial organizations in specified industries arerequiredtotrainapprenticesinproportiontotheirworkforceindesignatedtrades.

Classroom

Thisisthemosttraditionaltypeoftrainingandtheteachingmethodcanvaryfromtheclassicalmethodinwhichthetrainerlecturesonachosentopictotheteachingmethodwherethetraineractsasafacilitator.Classroomtrainingcanvaryfromdirectivetonon-directive.Thelearnerparticipationinlearningcan vary, depending on the participation allowed by the instructor.

Outdoors

Thistypeoftrainingiswidelyusedbythearmedforces,particularlyinsuchfields as leadership training and teambuilding.Off late, corporateshavestartedusingoutdoortrainingschedulesforteambuildingandotherexercises.Theadvantageofoutdoortrainingisthatindividualdefencesareloweredand barriers to learning are removed in a non-structured environment. But sometrainersfindoutdoortraininglackingtherigourofclassroomtraining.

NOTES


TrainingComputerAssistedLearning

Thistypeoftrainingisbasicallyaprogrammedlearningmethodinwhichthe learner progresses step by step. That is, the learner has to master one step beforemovingontothenext.Thetrainingmaterialisdeliveredelectronicallyandwiththegrowthofcomputertechnology,computerassistedlearningisgetting popular among learners.

E-Learning

With the growthof computer technology and the spreadof the Internet,e-learning has become an increasingly accepted training and learning method.

Theaboveparagraphs list somecommon typesof trainingwithoutfollowing any classificatory criterion.Some trainers and experts classifytrainingtypesonthebasisoftrainingmethods,someonthebasisoftrainerandlearnerroles.Theclassificationcontinuesaspertheconvenienceandunderstandingofthetrainer.

CheckYourProgress

3.Whatisthepurposeofproblemsolvingtraining? 4.WhatistheApprenticeActof1961?


1.Trainingisimportantbecauseitequipsthemanagementtofacethepressuresofchangingenvironment.

2. Inductionororientationtrainingisthemethodofintroducinganewemployeeintotheorganizationwithaviewtogaininghisconfidenceanddevelopingasenseofcooperationinhim.

3.The purpose of problem solving training is to help participantsunderstandthevariousmodelsofproblemsolving,discoverspecifictechniquesforanalysingproblems,anduseavarietyoftoolsforsolvingproblems on the job.

4.AccordingtotheApprenticeActof1961,industrialorganizationsinspecifiedindustriesarerequiredtotrainapprenticesinproportiontotheirworkforceindesignatedtrades.

8.5 SUMMARY

·Trainingisundertakenbyorganizationstoimprovetheperformance,quality,skillandknowledgeoftheiremployees.

Training

NOTES


·McFarlanddefinesseveralconceptsusedinthedevelopmentofhumanresources.

·Thetermdevelopmentcanbedefinedasthenatureanddirectionofchange taking place among personnel through educational and training processes.

·Therelativeamountoftrainingandeducationchangeswiththenatureoftasksandresponsibilitiesinorganizationalsettings.

·Explicitly,non-managerialpersonnelrequiremorejobortrade-relatedskillsthanmanagerialpersonneldemandingthegeneralizedconceptualskills and human relations insights.

·AsFitzgeraldobserves,trainingprovidesemployeeswithspecificskillsorhelpsthemtoovercomedeficienciesintheirpresentperformance.

· On the other hand, development provides employees with that the abilitiesthattheorganizationwillneedinthefuture.

·AccordingtoYoder,althoughtheterms‘training’and‘development’appearsynonymous, thereisarecognizeddifferencebetweentheseconcepts.

·Trainingneedsshouldbedeterminedfromthestandpointofaspecificproblemforwhichtrainingisthemosteffectivesolution.

·Trainingisaprocessoflearningasequenceofprogrammedbehaviour.Itisapplicationofknowledge.

·Trainingcanhelpemployeestoincreasetheirlevelofperformanceontheir present assignment.

·Trainingdoesnoteliminatetheneedforsupervision;itreducestheneedforconstantsupervision.

·Manpowerobsolescenceispreventedbytrainingasitfostersinitiativeandcreativityofemployees.

·Byimpartingskills,trainingfacilitateshigherremunerationandothermonetarybenefitstotheemployee.

·Oldemployeesneedrefreshertrainingtoenablethemtokeepabreastofthechangingmethods,techniquesanduseofsophisticatedtoolsandequipment.

·Theobjectof job training is to increase theknowledgeofworkersaboutthejobwithwhichtheyareconcerned,sothattheirefficiencyandperformanceareimproved.

· Apprenticeship training system is widely in vogue today in many industries.

· The apprenticeship programmes combine on-the-job training and experiencewithclassroominstructionsinparticularsubjects.

NOTES


Training · Apprenticeship training is desirable in industries which require a constant flow of new employees expected to become all-roundcraftsmen.

· Internshiptrainingisusuallymeantforsuchvocationswhereadvancetheoreticalknowledgeistobebackedupbypracticalexperienceonthe job.

·Thesuccessofanytrainingordevelopmentprogrammelargelydependsontheselectionofthemethodsused.

· Inductiontrainingisbasedonthephilosophythat theentryofnewemployeesintotheorganizationhastobefacilitatedandthattheyhaveto be eased into their new jobs and responsibilities.

·Problemsolvingtrainingprovidesafoundationforacontinuousprocessor system improvement.

· InIndia,theApprenticeActof1961laysthefoundationforapprenticetraining.

· The motive behind apprenticeship training is to provide some basic skills to unskilled individuals so as to enable them to be employed gainfully.

8.6 KEY WORDS

·Training:Itistheprocessoflearningtheskillsthatyouneedforaparticular job or activity.

·Development: It is the process in which someone or something grows or changes and becomes more advanced.

·EmployeeRetention:Itreferstotheabilityofanorganizationtoretainits employees.



1.Differentiatebetweentraininganddevelopment. 2.Discussthesignificanceandbenefitsoftraining. 3. Why is training important? 4. What is job instruction training? 5. What do you understand by vestibule training? 6. What is inductive training?

Training

NOTES


LongAnswerQuestions

1.Explaintheconceptoftrainingindetail.Discussitsfeatures,objectivesand need.

2.Elaborateonanythreetrainingmethodsdiscussedintheunit. 3.Whatarethephasesofsystemsapproachtotraining?Discusseachin

detail. 4.Whatarethestepstakenbeforeestablishingatrainingprogramme? 5.Describethevariouspopulartypesoftrainingindetail.












NOTES


Performance AppraisalBLOCK - III

PERFORMANCE AND BENEFITS OF EMPLOYEES

UNIT 9 PERFORMANCE APPRAISAL

Structure 9.0 Introduction 9.1 Objectives 9.2 PerformanceAppraisal:ProcessandTechniques

9.2.1 PurposeofPerformanceAppraisal 9.2.2 NeedofPerformanceAppraisal 9.2.3 ProcessofPerformanceAppraisal 9.2.4 MethodsorTechniquesofPerformanceAppraisal

9.3 Answers to Check Your Progress Questions 9.4 Summary 9.5 Key Words 9.6 SelfAssessmentQuestionsandExercises 9.7 Further Readings

9.0 INTRODUCTION

Performance appraisal is regarded as the key to good human resourcemanagement.Itistheformal,systematicassessmentofhowwellemployeesareperforming their jobs in relation to theestablishedstandards,and thecommunicationofthatassessmenttotheemployees.Thisunitexplainsthepurposeofperformanceappraisalandtheprocessinvolved.Itwillfurtherfamiliarizeyouwiththevarioustechniquesofperformanceappraisalandhow to evaluate them.

9.1 OBJECTIVES

Aftergoingthroughthisunit,youwillbeableto: ·Explaintheconceptofperformanceappraisal ·Describethepurposeofperformanceappraisal ·Assesstheprocessandmethodsofperformanceappraisal ·Analysethemajorissuesinperformanceappraisal

Performance Appraisal

NOTES


9.2 PERFORMANCE APPRAISAL: PROCESS AND TECHNIQUES

According toWendell French, performance appraisal is, ‘the formal,systematicassessmentofhowwellemployeesareperformingtheirjobsinrelationtoestablishedstandards,andthecommunicationofthatassessmenttoemployees.’

AccordingtoFlippo‘Performanceappraisalisthesystematic,periodicandanimpartialratingofanemployee’sexcellenceinmatterspertainingtohispresentjobandhispotentialforabetterjob.’

AccordingtoDaleYoder,‘Performanceappraisalincludesallformalprocedures used to evaluate personalities and contributions and potentials ofgroupmembersinaworkingorganization.Itisacontinuousprocesstosecureinformationnecessaryformakingcorrectandobjectivedecisionsonemployees.’

According to C.D. Fisher, L.F. Schoenfeldt and J.B. Shaw,‘Performanceappraisalistheprocessbywhichanemployee’scontributiontotheorganizationduringaspecifiedperiodoftimeisassessed.’

Fromtheabovedefinitions,wecanconcludethatperformanceappraisalismethodofevaluatingthebehaviourofemployeesintheworkspot,normallyincludingboththequantitativeandqualitativeaspectsofjobperformance.Itisasystematicandobjectivewayofevaluatingbothwork-relatedbehaviourandpotentialofemployees. It isaprocess that involvesdeterminingandcommunicatingtoanemployeehowheisperformingthejobandideallyestablishing a plan of improvement. Performance appraisal emphasizesindividualdevelopment.Itisusedforevaluatingtheperformanceofallthehumanresourcesworkingatall levelsoforganizationandofall types.Itevaluatestheperformanceoftechnical,professionalandmanagerialstaff.

Objectives ofPerformanceAppraisal

Performanceappraisalplansaredesignedtomeettheneedsoftheorganizationand the individual. It is increasingly viewed as central to good human resource management.Performanceappraisalcouldbetakeneitherforevaluatingtheperformanceofemployeesorfordevelopingthem.Theevaluativepurposehas a historical dimension and is concerned primarily with looking back at howemployeeshaveperformedoveragiventimeperiod,comparedwiththerequiredstandardsofperformance.Thedevelopmentalpurposeisconcernedwiththeidentificationofemployee’straininganddevelopmentneeds.Appraisalofemployees’servesseveralusefulpurposes.Someoftheseareasfollows:

NOTES


Performance Appraisal(i)Feedback

Itservesasafeedbacktotheemployee.Ittellshimwhathecandotoimprovehispresentperformanceandgoupthe‘organizationalladder’.Theappraisalthusfacilitatesself-development.Italsomakestheemployeeawareofhiskeyperformanceareas.

(ii)CompensationDecisions

Itprovidesinputstothesystemofrewards.Theapproachtocompensationisattheheartoftheideathatraisesshouldbegivenformeritratherthanforseniority.

(iii)Database

Itprovidesavaliddatabaseforpersonaldecisionsconcerningplacements,pay,promotion,transfer,andsoon.Appraisalalsomakestheemployeeawareofhiskeyperformanceareas.Permanentperformanceappraisalrecordsofemployees help management to do planning without relying upon personal knowledgeofsupervisorswhomaybeshifted.

(iv)PersonalDevelopment

Performanceappraisalcanhelprevealthecausesofgoodandpooremployeeperformance.Throughdiscussionswithindividualemployees,alinemanagercanfindoutwhytheyperformastheydoandwhatstepscanbeinitiatedtoimprovetheirperformance.

(v)TrainingandDevelopmentProgramme

Byidentifyingthestrengthsandweaknessesofanemployee, itservesasaguideforformulatingasuitabletraininganddevelopmentprogrammetoimprovehisperformance.Itcanalsoinformemployeesabouttheirprogressandtellthemwhatskillstheyneedtodeveloptobecomeeligibleforpayrises and/or promotions.

(vi)PromotionDecisions

Itcanserveasausefulbasisforjobchangeorpromotion.Byestablishingwhethertheworkercancontributestillmoreinadifferentorahigherjobithelpsinhissuitablepromotionandplacement.Ifrelevantworkaspectsaremeasuredproperly, ithelps inminimizingfeelingsoffrustrationof thosewho are not promoted.

(vii) ImprovesSupervision

Theexistenceofaregularappraisalsystemtendstomakethesupervisorsmoreobservantoftheirsubordinates,becausetheyknowthattheywillbeperiodicallyexpectedtofilloutratingformsandwouldbecalledupontojustifytheirestimates.Thisimprovessupervision.


NOTES


Performanceappraisalhelpstohavecomparativeworthofemployees.Appraising employee performance is, thus, useful for compensation,placementandtraininganddevelopmentpurposes.InthewordsofM.W.Cummings,‘theoverallobjectiveofperformanceappraisalistoimprovetheefficiencyofenterprisebyattemptingtomobilizethebestpossibleeffortsfrom individual employed in it. Such appraisals achieve four objectivesincludingthesalaryreviews,thedevelopmentandtrainingofindividuals,planningjobrotationandassistancepromotions.’Theinformationcanalsobeusedforgrievancehandlingandkeepingtherecord.Ithelpsinimprovingthequalityofsupervisionandbettertheemployee–employerrelationship.

UsesofPerformanceAppraisal

Performanceappraisalisasignificantelementoftheinformationandcontrolsysteminorganization.Performanceappraisalisusedinorderto: (i)Provide valuable information for personnel decisions such as pay

increases, promotions, demotions, transfers and terminations.Theinformationprovidedformsthebasisforsuitablepersonnelpolicies.

(ii)Provide feedbackabout the levelof achievementandbehaviourofsubordinates, rectifying performance deficiencies and to set newstandardsofwork,ifnecessary.Italsoidentifiesindividualswithhighpotentialwhocanbegroomedupforhigherpositions.

(iii) Tell a subordinate how he is doing and suggest necessary changes in hisknowledge,behaviourandattitudes.Itthusprovidesinformationthat helps to counsel the subordinate. It also serves to stimulate and guideemployee’sdevelopment.

(iv) Analyse training and development needs. These needs can be assessed because performance appraisal shows peoplewho require furthertraininghowtoremovetheirweaknesses.Byidentifyingtheweaknessesofanemployee,itservesasaguideforformulatingasuitabletraininganddevelopmentprogrammetoimprovehisperformanceinhispresentwork.

(v)Performanceappraisalservesasmeansforevaluatingtheeffectivenessofdevicesusedfortheselectionandclassificationofemployees.It,therefore,helpstojudgetheeffectivenessofrecruitment,selection,placementandorientationsystemsoftheorganization.

(vi) Itfacilitateshumanresourceplanningandcareerplanning;permanentperformanceappraisalrecordsofemployeeshelpmanagementtodohuman resource planning without relying upon personal knowledge ofsupervisors.

(vii)Performanceappraisalpromotesapositiveworkenvironment,whichcontributes toproductivity.Whenachievementsarerecognizedandrewarded on the basis of objective performancemeasures, there

NOTES


Performance Appraisalis improvement in thework environment. Performance appraisal,therefore,providetherationalfoundationforincentives,bonus,etc.Theestimatesoftherelativecontributionsofemployeeshelpstodeterminethe rewards and privileges rationally.

(viii)The existence of a regular appraisal system tends tomake thesupervisors and executivesmore observant of their subordinatesbecause,theyknowthattheywillbeexpectedperiodicallytofilloutratingformsandwouldbecalledupontojustifytheirestimates.Thisknowledge results in improved supervision.

(ix)Performance appraisal records protectmanagement from chargesof favouritismanddiscrimination.Employeegrievancecanalsobereducedasithelpstodevelopconfidenceamongemployees.

9.2.1 PurposeofPerformanceAppraisal

Organizationsuseperformanceappraisalsforthreepurposes: (i)Administrative: It commonly serves as an administrative tool by

providing employerswith a rationale formakingmany personneldecisions, such as decisions relating to pay increases, promotions, demotions,terminationsandtransfers.

(ii)EmployeeDevelopment: It provides feedback on an employee’sperformance.Appraisaldatacanalsobeusedforemployeedevelopmentpurposesinhelpingtoidentifyspecifictrainingneedsofindividuals.

(iii)ProgrammeAssessment:Programme assessment requires the collectionandstorageofperformanceappraisaldataforanumberofuses.Therecordscanshowhoweffectiverecruitment,selectionandplacementhavebeeninsupplyingaqualifiedworkforce.Itisgenerallyacceptedthatperformanceappraisalsserveoneormore

ofthefollowingpurposes: (a)Tocreateandmaintainasatisfactorylevelofperformance; (b)Tomeetanindividual’sdevelopmentneeds; (c)Tobringaboutbetteroperationalorbusinessneeds; (d)Tofacilitatefairandequitablecompensationbasedonperformance; (e) To help the superiors to have a proper understanding about their

subordinates; (f)To provide information useful formanpower planning by

identifyingemployeeswithapotentialforadvancement;and (g)Tofacilitatefortestingandvalidatingselectiontests,interview

techniques through comparing their scoreswith performanceappraisal ranks.


NOTES


9.2.2 NeedofPerformanceAppraisal

Theneedofperformanceappraisalisthatitenablesthemanagementtomakeeffectivedecisions.Theneedofanappraisalisconcernedwith: (i)Creating andmaintaining a satisfactory level of performance of

employees in their present job. (ii)Fixationofsalary,allowances,incentivesandbenefits. (iii)Evaluatingtheeffectivenessoftraininganddevelopmentprogrammes. (iv)Assessingthestrengthsandweaknessesofhumanresource(HR). (v)Performance appraisal helps employees to improvebygivinghim

feedback.

9.2.3 Process ofPerformanceAppraisal

Performanceappraisal isplanned,developedand implemented throughaseriesofsteps.Thesestepsareasfollows.

(i) JobAnalysis, JobDescriptionandJobSpecification

Performanceappraisalisaprocessnottobeundertakeninisolationofvarioushumanresourcesfunctions.Itbeginswithjobanalysis,jobdescriptionandjobspecification.Thesehelpinestablishingthestandardperformance.

(ii)EstablishingStandardsofPerformance

Appraisalsystemsrequireperformancestandardsthatserveasbenchmarksagainstwhichperformanceismeasured.Thestandardssetforperformancemustbeclearlydefinedandunambiguous.Itshouldbeattainablebyeveryemployee.To be useful, standards should relate to the desired result ofeach job.Performance standardsmustbeclear toboth theappraiser andtheappraisee.Theperformancestandardsorgoalsmustbedevelopedwiththehelpofthesupervisorstoensurethatalltherelevantfactorshavebeenincluded. Where the output can be measured, the personal characteristics, whichcontributetoemployeeperformance,mustbedetermined.

Goals must be written down. They must be measurable within certain time and cost considerations.

(iii)CommunicatingPerformanceStandards toEmployees

Performanceappraisalinvolvesatleasttwoparties;theappraiserwhodoesthe appraisal and the appraiseewhose performance is being evaluated.Theperformance standards specified in the second step above are to becommunicatedandexplainedtotheemployees(bothappraiserandappraisee)sothattheyknowwhatisexpectedofthem.Feedbackshouldalsobegivensothatthereisnoconfusionormisunderstanding.Throughfeedbackthemanagerknows that the informationhas reached the employees. If necessary, the

NOTES


Performance Appraisalstandardsmayberevisedormodifiedinthelightoffeedbackobtainedfromtheemployeesandevaluators.AspointedoutbyDeCenzoandRobbins,‘toomanyjobshavevagueperformancestandardsandtheproblemiscompoundedwhenthesestandardsaresetinisolationanddonotinvolvetheemployee.’

(iv)MeasuringActualPerformance

After theperformancestandardsare set andaccepted, thenext step is tomeasure actual performance.This requires choosing the right techniqueofmeasurement, identifying the internal and external factors influencingperformance and collecting information on the results achieved. It canbe affected through personal observation,written and oral reports fromsupervisors.Theperformanceofdifferentemployeesshouldbesomeasuredthatitiscomparable.Performancemeasures,tobehelpfulmustbeeasytouse,bereliableandreportonthecriticalbehaviourthatdetermineperformance.

Performancemeasuresmaybeobjectiveorsubjective. (a) Objective Performance Measures: Objective performance

measuresareindicationsofjobperformancethatcanbeverifiedby others and are usually quantitative. Objective criteria include thefollowing:

· Qualityofproduction · Degreeoftrainingneeded · Accidents in a given period · Absenteeism · Lengthofservice

(b) Subjective Performance Measures: Subjective performancemeasuresareratingsthatarebasedonthepersonalstandardsofopinionsofthosedoingtheevaluationandarenotverifiablebyothers. Subjective criteria include:

· Ratings by supervisors · Knowledge about overall goals · Contributiontosocio-culturalvaluesoftheenvironment

It should be noted here that objective criteria could be laid down while evaluatinglowerleveljobswhicharespecificanddefinedclearly.Thisis not the case with middle level and higher-level positions that are complexandvague.

(v) ComparingActualPerformancewithStandardsandDiscusstheAppraisalwithEmployees.

Actual performance is comparedwith the predetermined performancestandards.Theactualperformancemaybebetterthanexpectedandsometimesitmay go off track.Deviations if any from the set standards are noted.


NOTES


Along with the deviations, the reasons behind them are also analysed and discussed. Such discussions will enable an employee to know his weaknesses andstrengths.Theformerisdiscussedsothattheemployeeismotivatedtoimprovehisperformance.

Theassessmentofanotherperson’scontributionandabilityisnotaneasy task. Ithasseriousemotionalovertonesas itaffects theself-esteemoftheappraisee.Anyappraisalbasedonsubjectivecriteriaislikelytobequestioned by the appraisee and leave him quite dejected and unhappy when the appraisal turns out to be negative.

(vii) InitiatingCorrectiveAction, if any

The last step in the process is to initiate corrective action essential to improve theperformanceoftheemployee.Correctiveactionisoftwotypes: (a)Theemployeecanbewarnedsothathehimselfcanmakenecessary

attemptstoimprovehisperformance.Butthisisnotenoughorproper. (b) Through mutual discussions with employees, the steps required to

improve performance are identified and initiated.The reasons forlowperformance are identified and initiated.The reasons for lowperformanceshouldbeprobed.Theemployeeistakenintoconfidenceandmotivatedforbetterperformance.Training,coaching,counselling,andsoon,areexamplesofcorrectiveactions thathelp to improveperformance.

Essentials of aGoodAppraisalSystem

Asoundappraisalsystemshouldcomplywiththefollowing:

(i)ReliabilityandValidity

The system should be both valid and reliable.The validity of ratings isthedegree towhich theyare truly indicativeof the intrinsicmeritof theemployees.Thereliabilityofratingsistheconsistencywithwhichtheratingsaremade,eitherbydifferentraters,orbyonerateratdifferenttimes.Bothvalidityandreliabilityresultfromobjectivedatabase.Appraisalsystemshouldprovideconsistent,reliableandvalidinformationanddatawhichcanbeusedtodefendtheorganization—eveninlegalchallenges.

(ii) JobRelatedness

Theevaluatorsshouldfocusonjob-relatedbehaviourandperformanceoftheemployees.Inordertofocusattentiononbehaviourundertheemployee’scontrol,ratersmustbecomefamiliarwiththeobservedbehaviour.Itisalsonecessarytoprepareachecklistsoastoobtainandreviewjobperformancerelatedinformation.Ratingsshouldbetiedupwithactualperformanceofunitsundertherater’scontrol.Theinformationgeneratedthroughevaluatorsshouldbetailoredtotheneedsoftheorganization,performancerequirements

NOTES


Performance Appraisalandnormsofbehaviour.Multiplecriteriashouldbeusedforappraisal,andit should be done periodically rather than once a year.

(iii)Standardization

Well-definedperformancefactorsandcriteriashouldbedeveloped.Appraisalforms,procedures,administrationoftechniques,ratings,andsoon,shouldbe standardized as appraisal decisions affect all employeesof thegroup.Itwillhelptoensureuniformityandcomparisonofratings.Theappraisaltechniques should measure what they are supposed to measure. They should also be easy to administer and economical to use.

(iv)PracticalViability

The techniques should be practically viable to administer, possible to implement and economical to undertake continuously. It must have the supportofalllinepeoplewhoadministerit.Ifthelinepeoplethinkitistootheoretical,tooambitious,toounrealistic,orthativory-towerstaffconsultantswhohavenocomprehensionofthedemandsontimeofthelineoperatorshavefoisteditonthem,theywillresentit.

(v)Training toAppraisers

The evaluators or appraiser should be provided adequate training in evaluating theperformanceoftheemployeeswithoutanybias.Evaluatorsshouldalsobegiventraininginphilosophyandtechniquesofappraisal.Theyshouldbeprovided with knowledge and skills in documenting appraisals, conducting post appraisal interviews, rating errors, and so on. Familiarity with rating errorscanimprovetherater’sperformanceandthismayinjecttheneededconfidenceinappraiserstolookintoperformanceratingsmoreobjectively.

(vi)OpenCommunication

The system should be open and participative. Not only should it provide feedbacktotheemployeesontheirperformance,itshouldalsoinvolvetheminthegoalsettingprocess.Thishelpsinplanningperformancebetter.Theemployeesshouldactivelyparticipateinmanagingperformanceandintheongoingprocessofevaluation.Thesuperiorshouldplaytheroleofcoachandcounsellor.Theoverallpurposeofappraisalsshouldbedevelopmentalrather than judgemental.

(vii)EmployeeAccess toResults

Employees should receive adequate feedback on their performance. Ifperformanceappraisalsweremeantforimprovingemployeeperformance,thenwithholdingappraisalresultwouldnotserveanypurpose.Iftheresultofappraisal is negative and goes against the employee, it should be immediately communicatedtohimsothathemayimprovehisperformance,orhemaygo


NOTES


forappealbeforetheappropriateauthorityincaseheisnotsatisfied.Suchprovisions should be made. This will enable the management to gain the confidenceoftheemployees.

(viii)ClearObjectives

Theappraisalsystemshouldbeobjectiveoriented.Itshouldfulfilthedesiredobjectiveslikedeterminingthepotentialforhigherjobsorforsanctiononannualincrementinthesalaryorforgrantingpromotionorfortransferortoknowtherequirementsfortraining.Theobjectivesshouldberelevant,timelyandopen.Theappraisalsystemshouldbefairsothatitisbeneficialtoboththeindividualemployeeandtheorganization.Thesystemshouldbe adequately and appropriately linkedwith other subsystemsof humanresource management.

(ix)PostAppraisal Interview

Afterappraisal,an interviewwith theemployeeshouldbearranged.It isnecessary to supply feedback, to know the difficulties underwhich theemployeesworkandtoidentifytheirtrainingneeds.Theappraisershouldadopt a problem solving approach in the interview and should provide counsellingforimprovingperformance.

(x)PeriodicReview

The system should be periodically evaluated to be sure that it is meeting its goals. Not only is there the danger that subjective criteria may become more salientthantheobjectivestandardsoriginallyestablished,thereisthefurtherdangerthatthesystemmaybecomerigidinatangleofrulesandprocedures,manyofwhicharenolongeruseful.

(xi)NotVindictive inNature

Itshouldbenotedbytheexecutivesatthehelmofaffairsoftheorganizationsthat theaimofperformanceappraisaloranysystemfor thatmatter is toimprove performance, organizational effectiveness and to accomplishorganizationalobjectivesandnottoharasstheemployeesandworkersoftheorganizationswhoarethevitalhumanresource.

9.2.4 MethodsorTechniquesofPerformanceAppraisal

Anumber of different performance appraisalmethods or techniques areavailableforevaluatingtheperformanceoftheemployees.Thesemethodstrytoexplainhowmanagementcanestablishstandardsofperformanceanddevisewaysandmeanstomeasureandevaluatetheperformance.Thereisnofoolproofmethodofevaluatingtheperformanceofemployees.Everymethodsuffersfromcertaindrawbacksinspiteofsomemerits.Thesemethodscan broadly be divided into traditional and modern methods.

NOTES


Performance AppraisalI. TraditionalMethods

Thesemethods are the oldmethods of performance appraisal based onpersonal qualities like knowledge, capacity, judgement, initiative, attitude, loyalty,leadership,andsoon.Thefollowingarethetraditionalmethodsofperformanceappraisal.

(i)UnstructuredMethodofAppraisal

Under this method, the appraiser has to describe his impressions about the employee under appraisal in an unstructured manner. This is a simple method ofperformanceappraisal.Theraterhastolisthiscommentsspecificallyonqualities,abilities,attitude,aptitudeandotherpersonaltraitsoftheemployees.This makes the method highly subjective in nature.

(ii)StraightRankingMethod

In this technique, the evaluator assigns relative ranks to all the employees in thesameworkunitdoingthesamejob.Employeesarerankedfromthebesttothepoorestonthebasisofoverallperformance.Thismethodisalsohighlysubjectiveandlacksfairnessinassessingtherealworthofanemployee.

(iii)PairedComparisonMethod

Ranking becomes more reliable and easier under the paired comparison method. This method is an attempt to improve upon the simple ranking method.Underthismethodemployeesofagrouparecomparedwithoneanotheratonetime.IfthereisagroupoffiveemployeesA,B,C,DandEthenA’sperformanceiscomparedwiththatofB’sanddecisionistakenastowhoseperformanceisbetter.Similarly,A’sperformanceiscomparedwithC,D,andEanddecisionsregardingcomparativelybetterperformancearetaken.Comparisonismadeonthebasisofoverallperformance.Thenumberofcomparisonstobemadecanbedecidedonthebasisofthefollowingformula:

whereNisthenumberofpersonstobecompared.The paired comparison method is more reliable, but the method is not

suitablewhenlargenumberofemployeesistobeevaluated.

(iv)Man-to-ManComparisonMethod

Inman-to-man comparisonmethod, the performance of an employee isevaluatedbyobtainingratingsabouttheirperformancefromtheevaluators.Ateamofevaluatorsisinvolvedingivingratingstotheemployeeperformance.Eachmemberoftheteamgivestheappropriateratings,lowest,low,middle,highandhighestperformerstotheemployees.Theseratingsarethenusedtodeterminetheappraisalprocedureforaparticularemployee.Themain


NOTES


benefitofthismethodisthattheratingsarebasedontherealperformanceoftheemployees.However,thedrawbackofthistechniqueisthattheratingsgiven by each evaluator may not be consistent because each evaluator has hisorherownscalingcriteriamakingitdifficulttoevaluateanemployee’sperformancecorrectly.

(v)GradingMethod

Underthistechniqueofperformanceevaluationcertaincategoriesofwortharedeterminedinadvanceandtheyarecarefullydefined.Theseselectedandwell-definedcategoriesinclude

Grade‘A’foroutstanding Grade‘B’forverygood Grade‘C’foraverage Grade‘D’forpoor,etc.Thesegradesarebasedoncertainselectedfeaturessuchasknowledge,

judgement,analyticalability,leadershipqualities,self-expression,andsoon.Theactualperformanceofemployeesiscomparedwiththeabovegradesandemployeesareallottedgradesthatspeakfortheirperformance.

(vi)GraphicRatingScale

Perhaps, themost commonlyusedmethodof performance evaluation isthe graphic rating scale. The evaluator is asked to rate employees on the basisofjobrelatedcharacteristicsandknowledgeofjob.Evaluatorisgivenprintedforms.Theperformanceisevaluatedonthebasisofthesetraitsonacontinuousscale.Itisastandardized,quantitativemethodofperformanceappraisal.The scores are tabulated indicating the relativeworth of eachemployee.

(vii)ForcedChoiceMethod

ThismethodwasdevelopedduringWorldWarIIforevaluatingtheperformanceofAmericanarmypersonnel.Theevaluatorsratetheperformanceashigh,moderate or low and escape the important responsibility assigned to them. The primarypurposeoftheforcedchoicemethodistocorrectthetendencyofarater to give consistently high or low ratings to all the employees. This method makesuseofseveralsetsofpairphrases,twoofwhichmaybepositiveandtwonegativeandtheraterisaskedtoindicatewhichofthefourphrasesisthemostandleastdescriptiveofaparticularworker.Actually,thestatementitems are grounded in such a way that the rater cannot easily judge which statementappliestothemosteffectiveemployee.Theevaluatorisforcedtoselectfromeachgroupofstatements(normallytwo).Thestatementsmaybethefollowing:

NOTES


Performance Appraisal (a)Goodworkorganizer (b) Shows patience with slow learners (c) Dishonest or disloyal (d)Carefulandregular (e) Avoid work (f)Hardworking (g)Cooperateswithfellowworkers (h) Does not take interest in work

Fromtheabovelistofstatements,favourablestatementsaremarkedplus and unfavourable statements aremarked zero.Under thismethodsubjectivityofevaluatorisminimized.

(viii)Checklist

Achecklistrepresents,initssimplestform,asetofobjectivesordescriptivestatements about the employee and his behaviour. The rater checks to indicate ifthebehaviourofanemployeeispositiveornegativetoeachstatement.Theperformanceofanemployeeisratedonthebasisofnumberofpositivechecks.Thefollowingaresomeofthesamplequestionsinthechecklist. · Is the employee regular on the job? Yes/No · Is the employee respected by his subordinates? Yes/No · Is the employee always willing to help his peers? Yes/No ·Doestheemployeefollowinstructionsproperly? Yes/No · Does the employee keep the equipment in order? Yes/No

Theobjectionstothismethodareasfollows: (a) Itisdifficulttoconstructagoodchecklist. (b)Aseparatechecklistisneededforeachjobbecausestatements

usedinonechecklisttoevaluateonecategoryofworkerscannotbeusedinanotherchecklisttoevaluateothercategoryofworkers.

(ix)WeightedChecklist

The checklist provides to the evaluator statements relating to work-related behaviour of the employees.Every statement is given equal importance.However,underweightedchecklisttheitemshavingsignificantimportancefor organizational effectiveness are givenweightage.Thus, inweightedchecklist,weightsareassignedtodifferentstatementstoindicatetheirrelativeimportance.


NOTES


(x)FreeEssayMethod

Under this method no quantitative approach is undertaken. It is open-ended appraisalofemployees.Theevaluatordescribesinhisownwordswhatheperceivesabouttheemployee’sperformance.Whilepreparingtheessayontheemployee,theraterconsidersthefollowingfactors: (a) Jobknowledgeandpotentialoftheemployee. (b)Theemployee’sundertakingofthecompany’sprogrammes,policies,

objectives, etc. (c)Theemployee’srelationswithco-workersandsuperiors. (d)Theemployee’sgeneralplanning,organizingandcontrollingability. (e)Theattitudesandperceptionsoftheemployeeingeneral.

Thedescriptionisexpectedtobeasfactualandconcreteaspossible.Anessaycanprovideagooddealofinformationabouttheemployeeespeciallyiftheevaluatorisaskedtogiveexamplesofeachoneofhisjudgements.

(xi)Critical IncidentsMethod

Underthismethod,theperformanceoftheworkerisratedonthebasisofcertaineventsthatoccurduringtheperformanceofthejob(i.e.,theevaluationis based on key incidents). These critical incidents or events represent the outstandingorpoorbehaviourofemployeesonthejob.Theratermaintainslogs on each employee, whereby he periodically records critical incidents ofworkersbehaviour.Attheendoftheratingperiod,theserecordedcriticalincidentsareusedintheevaluationoftheworkers’performance.Criticalincidents method helps to avoid vague impressions and general remarks as the rating is based on actual records of behaviour/performance.Thefeedbackfromactualeventscanbediscussedwiththeemployeetoallowimprovements.Theratercanfullydefendhisratingsonthebasisofhisrecord.

(xii)FieldReviewMethod

In this method, an HR specialist interviews line supervisors to evaluate their respective subordinates. The interviewer prepares in advance the questions to be asked. By answering these questions, a supervisor gives his opinions aboutthelevelofperformanceofhissubordinate,thesubordinate’sworkprogress, his strengths and weaknesses, promotion potential, and so on. The evaluatortakesdetailednotesoftheanswers,whicharethenapprovedbyconcerned supervisor. The concerned supervisor then approves these. These arethenplacedintheemployee’spersonnelservicefile.

Sinceanexpertishandlingtheappraisalprocess,inconsultationwiththesupervisor,theratingsaremorereliable.However,theuseofHRexpertsmakesthisapproachcostlyandimpracticalformanyorganizations.

NOTES


Performance Appraisal(xiii)ConfidentialReport

Aconfidentialreportbytheimmediatesupervisorisstillamajordeterminantofthesubordinate’spromotionortransfer.Thisisatraditionalformofappraisalusedinmostgovernmentorganizations.Itisadescriptivereportprepared,generallyattheendofeveryyear,bytheemployee’simmediatesuperior.Thereporthighlightsthestrengthsandweaknessesofthesubordinate.Thedisadvantagesofthismethodareasunder: (i) Itinvolvesalotofsubjectivitybecauseappraisalisbasedonimpressions

rather than on data. (ii)Nofeedbackisprovidedtotheemployeebeingappraisedand,therefore,

its credibility is very low. (ii)Themethodfocusesonevaluatingratherthandevelopingtheemployee.

The employee who is apprised never knows his weaknesses and the opportunitiesavailableforovercomingthem.Inrecentyears,duetopressurefromcourtsandtradeunions,thedetails

ofanegativeconfidentialreportaregiventotheappraisee.

(xiv)ForcedDistributionMethod

Oneof the errors in rating is leniency; of clustering a large number ofemployeesaroundahighpointona ratingscale.The forceddistributionmethod seeks to overcome this problem by compelling the rater to distribute therateesonallpointsontheratingscale.Theprimarypurposeoftheforcedchoicemethodistocorrectthetendencyofaratertogiveconsistentlyhighorlowratingstoalltheemployees.Theforceddistributionmethodoperatesunder the assumption that the employee performance level conforms toa normal statistical distribution. Generally, it is assumed that employee performancelevelsconformtoabell-shapedcurve.

Themajorweaknessesoftheforceddistributionmethodareasfollows: (a)Theassumptionthatemployeeperformancelevelsalwaysconform

to a normal distribution. (b) Forced distribution method is not acceptable to raters and ratees,

especiallywhenmembersareallofhighability. (c)Theresultsoftheforcedchoicemethodmaynotbeusefulfor

trainingemployeesbecausetheraterhimselfdoesnotknowhowhe is evaluating the worker.

II. ModernMethods

Modern methods are an improvement over the traditional methods. Modern methods are an attempt to remove defects fromoldmethods.These arediscussed below:


NOTES


(i)BehaviourallyAnchoredRatingScales (BARS)

Itisdesignedtoidentifycriticalareasofperformanceofajob.Underthismethodthebehaviourallyanchoredratingsscalesareoutlinedtorecognizethecriticalareasofeffectiveandineffectiveperformancebehaviourforgettingresults.Theevaluatorisrequiredtoobservethebehaviouroftheemployeewhileperformingthejob.Hethencomparesthesebehaviouralobservationswith the behaviourally anchored rating scales. This method is more valid and expectedtogivemorereliableresultsasitminimizestheerrorsinperformanceappraisal.Itidentifiesmeasurablebehaviourandisthereforemorescientific.

ThefollowingaresomeoftheimportantfeaturesofBARSmethod: (a)Performanceareasoftheemployeesthatneedtobeassessedare

determined and described by the individuals who will use the scales.

(b)Thescalesareattachedwiththeexplanationsoftheactualjobbehaviourtorepresentparticularlevelsofperformance.

(c)Alltheareasofperformancethatneedtobeexaminedarebasedontheobservablebehaviourandaresignificanttothejob,whichisbeingevaluatedbecauseBARSarecustomizedforthejob.

(d) As the raters who will use the scales actively participate in the developmentprocess,theyaremorededicatedtothefinalproduct.

BARSwereintroducedtopresentresultstoimprovetheperformanceoftheemployeesofacompany.BARSalsohelpinovercomingratingerrors.

(ii)Result-OrientedAppraisal orMBOTechnique

Theresult-orientedappraisalsarebasedontheconcreteperformancetargetsthat are usually established jointly by the superior and subordinates.

MuchoftheinitialimpetusforMBOwasprovidedbyPeterDrucker(1954)andbyDouglasMcGregor(1960).DruckerfirstdescribedMBOin1954 in thePracticeofManagement.Druckerpointed to the importanceofmanagershavingclearobjectivesthatsupportthepurposesofthoseinhigherpositionsintheorganization.McGregorarguesthatbyestablishingperformancegoalsforemployeesafterreachingagreementwithsuperiors,theproblemsofappraisalofperformanceareminimized.MBOinessenceinvolvesnotingclearlydefinedgoalsofanemployeeinagreementwithhissuperior.RefinementsbroughtoutbyGeorgeOdione,Valentine,Humbleand others have enriched the concept and made it more acceptable as an appraisal technique.

TheMBOprocesshasthefollowingfoursteps: (a)Thefirststepistoestablishtheobjectivesbythesuperiorsthat

each employee should attained. These objectives are used to evaluatetheperformanceofeachemployeeintheorganization.

NOTES


Performance Appraisal (b)The second step is to set the standards for evaluating theperformanceoftheemployees.Asemployeesperform,theyknowfairlywellthestandardsagainstwhichtheirperformanceistobejudged.

(c)Thethirdstepistocomparetheactuallevelofattainedobjectiveswiththeobjectivessetbytheorganization.Theevaluatordepictsthereasonsfortheobjectivesthatwerenotmet.Thisstephelpsindeterminingtheneedstoprovidetrainingtotheemployeesoftheorganization.

(d)Thefinal step is to establishnew strategies for theobjectivesthatwerenotmet.Thisstepinvolvesactiveparticipationofthesuperiors and subordinates in setting objectives.

Thisprocessismostusefulatthemanagerialandsubordinatelevel.MBO does not apply to the assembly line workers whose jobs have less flexibilityandtheirperformancestandardsarealreadydefined.

(iii)AssessmentCentreMethod

ThismethodofappraisingwasfirstappliedintheGermanArmyin1930.Laterbusinessorganizationsalsostartedusingthismethod.Thisisnotatechniqueofperformanceappraisalbyitself.Infact,itisasystem,whereassessmentofseveralindividualsisdonebyvariousexpertsbyusingvarioustechniques.

In thisapproach, individuals fromvariousdepartmentsarebroughttogether to spend twoor three days’working on an individual or groupassignment similar to the ones they would be handling when promoted. Evaluators observe and rank the performance of all the participants.Experiencedmanagers with proven ability serve as evaluators. Thisgroup evaluates all employees both individually and collectively by using simulation techniques like role playing, business games and in basket exercises.Assessmentsaredonegenerallytodetermineemployeepotentialforpromotion.

Thefollowingarethedrawbacksofthismethod: (a)Costly:Organizations have to pay for the travel and lodging

costoftheemployeestobeassessed.Moreover,theworkofanorganizationalsosuffersforthetimeperiodtheyareawayfromthejob.Also,thecompanieshavetopayheavyexpenditureinestablishmentofassessmentcenters.

(b) Impressionoftheemployees:Centrestaffis influencedbythesubjectiveelements,suchassocialskillsandpersonalityoftheemployeeratherthanthequalityoftheirwork.

(c)Demoralizeanemployee:Anegativereportforanemployeemaydemoralizeanemployee.Itmayhaveanadverseeffectonthebehaviourandworkofanemployeewhoisnotpromoted.


NOTES


(d) Promotes unhealthy competition: It promotes strong and unhealthy competition among the employees that are assessed.

(e) Overemphasis on centre results: This method lays overemphasis on the result of the centre,which is based on judgement ofemployeesoverashortspanoftime.

(iv)HumanResourceAccountingMethod

Humanresourcesareavaluableassetofanyorganization.Thisassetcanbevaluedintermsofmoney.Whencompetent,andwell-trainedemployeesleaveanorganizationthehumanassetisdecreasedandviceversa.

Human resource accountingdealswith cost of and contributionofhumanresourcestotheorganization.Costoftheemployeeincludescostofmanpower, planning, recruitment, selection, induction, placement, training, development,wagesandbenefits,etc.Employeecontributionisthemoneyvalueofemployeeservicewhichcanbemeasuredbylabourproductivityorvalueaddedbyhumanresources.Differencebetweencostandcontributionwillreflecttheperformanceoftheemployees.

Human resource accounting method is still in the transition stage. The contributionmadebyemployeecanbemeasuredintermsofoutput.

Ifthecostincurredonanemployeeisgreaterthanthecontributionmadethanthisisanindicatoroffindingoutthecausesoflowperformance,analysing it and then making a proper check to control such causes. In case the contribution is more or equivalent to the cost incurred than this also requiresreviewforfuturereference.

The various techniques under human resource accounting methods are:· Probationary reviews · Informalone-to-onereviewdiscussions· Counselling meetings · Observation on the job · Skill- or job-related tests · Assignmentor task followedby review, including secondments

(temporaryjobcoverortransfer)· Surveyofopinionofotherswhohavedealingswiththeindividual· Graphology (handwriting analysis) All these techniques are related to each other. A manager must keep a

writtenrecordofalltheseforfuturereference.

(v)PsychologicalAppraisals

Psychologicalappraisalsareconductedtoassesstheemployeepotential.Largeorganizationsrecruitfull-timepsychologisttoassessthefutureperformance

NOTES


Performance Appraisalof the employees. Psychological appraisals include in-depth interviews,psychological test, and discussions with supervisors. Psychological appraisals areconductedtoassessthefollowingfeaturesoftheemployees: · Intellectual abilities ·Emotionalstability · Reasoning and analytical abilities · Sociability · Interpretation and judgement skills · Motivational responses ·Abilitytoforeseethefuture

Psychologicalevaluationcanbedoneeithertoevaluatetheperformanceofemployeesforaparticularjobopeningortoassessthefuturepotentialofallemployeesglobally.Psychologicalappraisalresultsareusefulfordecision-making about employee placement, career planning and development and training.

(vi) 360DegreeAppraisal

Itisamethodofappraisalinwhichemployeesreceivetheirperformancefeedback from their boss, colleagues, customers, peers and their ownsubordinates in the organization.This form of performance evaluationcanbeverybeneficialtomanagersbecauseittypicallygivesthemamuchwiderrangeofperformance-relatedfeedbackthanatraditionalevaluation.This method helps individuals to know their strengths and weaknesses and, thus, helps them to develop their interpersonal skills. It also improves communication between employees and their customers, as they will be able toknowwhatthecustomersthinkaboutthem.Thus,itisanefficientmethodtoimproveinterpersonalskillsofemployeesandtoattainhighercustomersatisfactionlevel.

Thefollowingaresomeofthedrawbacksofthismethod: (a) It is possible that the team member can have personal problems

with the employee and, thus, he may not take an honest decision. (b) It involves lotof time required in selecting the team thatwill

ratetheperformance,preparingquestionnairesandanalysingthecollectedinformation.

Post-appraisalAnalysis

Performanceappraisal systemshouldbeeffectiveasanumberofcrucialdecisionsaremadeonthebasisofscoreorratingsgivenbytheappraiser.All organizations use performance appraisal for purposes such as salaryincrease, determining training needs, motivating employees or establishing


NOTES


abasisforfuturepersonneldecisions.Theidealapproachtoperformanceevaluationis that inwhichtheevaluatorisfreefrompersonalbiasesandprejudices.Thisisbecausewhenanevaluatorisobjective,itminimizesthepotentialdysfunctionalbehaviouroftheevaluatorwhichwillbedetrimentalto the achievementof the organizational goals.Given that all appraisalsentail judgements andgiven that judgements,maynot always be fair, avarietyoftechniquestomakeappraisalmoreobjectivehavebeenintroduced.Anappraisalsystemtobeeffectiveshouldpossessthefollowingessentialcharacteristics:

(i)ReliabilityandValidity

Appraisalsystemshouldprovideconsistentreliableandvalidinformationanddatawhichcanbeusedtodefendtheorganizationeveninlegalchallenges.However,asinglefoolproofevaluationmethodisnotavailable.Inequitiesinevaluationoftendestroytheusefulnessoftheperformancesystem—resultingininaccurate,invalidappraisals,whichareunfairtoo.Iftwoappraisersareequallyqualifiedandcompetenttoappraiseanemployeewiththehelpofsame appraisal techniques, their ratings should agree with each other. Then thetechniquesatisfiestheconditionsofinter-raterreliability.

(ii)ConfidenceandTrust

Theexistenceofanatmosphereofconfidenceandtrustisnecessarytodiscussmattersfranklyandoffersuggestionsfortheimprovementoftheemployeesothattheorganizationaswellasemployeestandstobenefit.

(iii) ImmediateSuperiorasAppraiser

Theimmediatesuperioroftherateesmustmaketheratings,butthepersonneldepartment can assume the responsibilityofmonitoring the system.Thesuperiorshouldanalysethestrengthsandweaknessesofanemployeeandadvice him on correcting the weaknesses.

(iv)Swift andEconomical

The appraisal programme should be less time consuming and economical. Appraisalforms,procedures,administrationoftechniques,ratings,andsoon,shouldbestandardized.Anappraisalprogrammeshouldbringmaximumbenefit.

(v)OpenCommunication

Theresultsoftheappraisal,particularlywhentheyarenegative,shouldbeimmediately communicated to the employees, so that they may try to improve theirperformance.Agoodappraisalsystemprovidestheneededfeedbackon a continuing basis. The appraisal interviews should permit both parties tolearnaboutthegapsandpreparethemselvesforfuture.

NOTES


Performance Appraisal(vi)Post-appraisal Interview

A post-appraisal interview should be arranged so that employees are given feedback and the organization understands the difficulties underwhichemployees work, so that their training needs may be discovered. Permitting employeestoreviewtheresultsoftheirappraisalallowsthemtodetectanyerrorsthatmayhavebeenmade.Iftheydisagreewiththeevaluation,theycanevenchallengethesamethroughformalchannels.

(vii) JobRelatedness

Suggestionsforimprovementshouldbedirectedtowardstheobjectivefactsofthejob.Plansforthefuturemustbedevelopedalongsideinconsultationwithsubordinates.Theindividualasapersonshouldneverbecriticized.

ProblemsofPerformanceAppraisal

None of themethods for appraising performance is absolutely valid orreliable.Eachhasitsownstrengthsandweaknesses.Inspiteofknowingthatacompletelyerror-freeperformanceappraisalcanonlybeanidealizedmodel,wecanisolateanumberoffactorsthatsignificantlyimpedeobjectiveevaluation.Themajorproblemsinperformanceappraisalare:

(i)RatingBiases

Most appraisalmethods involve judgements.The performance appraisalprocess and techniques rely on the evaluator who has his own personal biases, prejudices and idiosyncrasies. It would be naïve to assume that all evaluators willimpartiallyappraisetheirsubordinates.Theevaluatororrater’sbiasesincludethefollowing: (a) Leniencyandstrictnesserror:Errorsof leniencyarecausedby the

tendencyofthelenientratertoputmostoftherateesonthehighersideofthescale,whilethetoughraterplacesthemonthelowersideofthe scale. This is so because every evaluator has his own value system that acts as a standard against which appraisals are made. Relative to thetrueoractualperformanceanindividualexhibits,someevaluatorsmarkhighandotherslow.Theformerisreferredtoaspositiveleniencyerror and the latter as negative leniency error (strictness error). When evaluators are positively lenient in their appraisal, an individual’sperformancebecomesoverstated.Similarly,anegativeleniencyerrorunderstatesperformance,givingtheindividualalowerappraisal.Ifthe sameperson appraised all individuals in anorganization, therewouldbenoproblem.Althoughtherewouldbeanerrorfactor,itwouldbeappliedequallytoeveryone.Thedifficultyariseswhentherearedifferentraterswithdifferentleniencyerrorsmakingjudgements.


NOTES


(b) Haloerror:The‘haloeffect’isatendencytoallowtheassessmentononetraittoinfluenceassessmentonothers.AccordingtoBernardinandBeatty,haloeffectisa‘tendencytoratehighorlowonallfactorsduetotheimpressionofahighorlowratingonsomespecificfactors.’Thisariseswhentraitsareunfamiliar,ill-definedandinvolvepersonalreactions.Onewayofminimizingthehaloeffectisbyappraisingalltheemployeeswithonetraitbeforegoingontoratethemonthebasisofanothertrait.

(c) Central tendency error: Thecentraltendencyerrorreferstothetendencyofnotusingextremescalescoresonthejudgementscale;mostoftherates are clustered in the middle. According to Bernardin and Beatty, centraltendencyis‘thereluctancetomakeextremeratings(ineitherdirection); the inability todistinguishbetweenandamongratees;aformofrangerestriction’.Raterswhoarepronetothecentraltendencyerror are those who continually rate all employees as average. They followplaysafepolicybecauseofanswerabilitytomanagementorlackofknowledgeaboutthejobandpersonheisratingorleastinterestinhisjob.Thistypeofratingwillcreateproblems,especiallyiftheinformationisusedforpayincreases.

(d)Personalprejudice:Therater’spersonalprejudicecaninfluencetheobjectivityofperformanceappraisals.Iftheraterdislikesanemployee,he may rate him poorly.

(e) Consequenceofappraisal: Iftheevaluatorknowsthatapoorappraisalcouldsignificantlyhurttheemployee’sfuture(particularlyopportunitiesforpromotionorasalaryincrease)theevaluatormaybereluctanttogive a realistic appraisal.

(f) Therecencyeffect:Ratersgenerallyremembertherecentactionsoftheemployeeatthetimeofrating.Ifafavourableactionhastakenplace recently, the employee will be given a high rating. Conversely, hewillbegivenapoorratingifanunfavourableactionhastakenplacerecently.

(ii)OpportunityBias

Thisresultswhentheamountofoutputisinfluencedbyfactorsbeyondthecontrol of employees. Some employees have betterworking conditions,supportivesupervisors,moreexperiencedco-workers,andhencetheiroutputmay be greater than others working on identical tasks.

(iii)GroupCohesiveness

Cohesive groups with high morale can produce more than less cohesive groups with low morale.

NOTES


Performance Appraisal(iv)KnowledgeofPredictorBias

Arater’sknowledgeoftheperformanceofanemployeeonpredictorscaninfluencehisappraisal ratings.Anemployeewho topped in theselectionlist might leave the impression that he is the best among the employees and, hence,theratermayratehimas‘good’whenhisperformanceismoderate.

(v)SimilarityError

When evaluators rate other people in the same way that the evaluators perceive themselves, they are making a similarity error. Based on the perception that evaluatorshaveofthemselves,theyprojectthoseperceptionsonothers.Forexample,theevaluatorwhoperceiveshimselfasaggressivemayevaluateothersbylookingforaggressiveness.

Ways for ImprovingPerformanceAppraisals

(i)Choosing theAppraisalMethod

Withawiderangeofappraisalmethodscurrentlyavailable,anorganizationisfacedwiththedifficulttaskofselectingthebestapproachtomeetitsneeds.Beforeselectingthemethodofappraisaltobefollowedweshouldexaminetwo areas with special care: (a)Variousfactorsthatcanhelporhindertheimplementationofaparticular

appraisal programme and (b)Theappropriatenessof theappraisalmethodfor thespecial jobs to

which the appraisal system will apply.

(ii)MultipleRaters

As the number of raters’ increases, the probability of getting accurateinformationincreases.Ifapersonhashadtensupervisors,ninehaveratedhimexcellentandonepoor,wecandiscountthevalueoftheonepoorevaluation.Therefore,bymovingemployeesaboutwithintheorganizationsoastogainanumberofevaluations,weincreasetheprobabilityofachievingmorevalidand reliable evaluation.

(iii)TrainingAppraisers

Ifyoucannotfindgoodraters,thealternativeistomakegoodraters.Evidenceindicatesthatthetrainingofappraiserscanmakethemmoreaccurateraters.Commonerrorssuchashaloandleniencyhavebeenminimizedoreliminatedin workshops where managers can practice observing and rating behaviours.

(iv)OngoingFeedback

Employees like toknowhow theyaredoing. Ifmanagerssharewith thesubordinatebothexpectationsanddisappointmentsonaday-to-daybasisby


NOTES


providingtheemployeewithfrequentopportunitiestodiscussperformancebefore any reward or punishment consequences occur, therewill be nosurprisesatthetimeoftheannualformalreview.

(v)SelectiveRating

It has been suggested that appraisers should rate in those areas in which theyhavesignificantjobknowledge.Ifratersmakeevaluationononlythosedimensions on which they are in a good position we increase the inter-rater agreement and make the evaluation a more valid process.

(vi)PeerEvaluation

Themainadvantagesofpeerevaluationareasfollows: (a)Thereisatendencyforco-workerstooffermoreconstructiveinsight

to each so that, as a unit, each will improve and (b)Therecommendationsofpeerstendtobemorespecificregardingjob

behaviours.However,forpeerassessmentstofunctionproperly,theenvironment

intheorganizationmustbesuchthatpoliticsandcompetitionforpromotionsareminimized.

(vii)Post-appraisal Interviews

Itisnecessarytocommunicatetoemployeeshowtheyhaveperformed.Tomeet this need, managers must take the time to schedule a meeting with their subordinatestodiscusstheresultsoftheperformanceevaluation.Employeesneedtoknowhowtheyaredoing,berecognizedforoutstandingachievementsandbenotifiedaboutwherethereisroomforimprovement.

(viii)Rewards toAccurateAppraisers

The managers who are evaluating must perceive that it is in their personal andcareerintereststoconductaccurateappraisals.Iftheyarenotproperlyrewardedfordoingeffectiveappraisals,theywilltaketheeasywayoutbyfirsttryingtoavoidtheprocessentirely.Ifpushed,theywillcompletetheappraisals,butthesecanbeexpectedtosufferfrompositiveleniencyandlowdifferentiation.Encouraging and rewarding accurate appraiserswillremovethisflow.

Toconclude,wecansaythatperformanceevaluationsareanintegralpart of every organization. Properly developed and implemented, theperformance evaluation can help an organization achieve its goals bydeveloping productive employees.

NOTES


Performance AppraisalCheckYourProgress

1.Whoallareinvolvedinperformanceappraisals? 2.Whatareobjectiveperformancemeasures? 3.Whatisunstructuredmethodofappraisal? 4.WhenwasAssessmentCentreMethodfirstapplied?


1.Performance appraisal involves at least two parties; the appraiserwhodoestheappraisalandtheappraiseewhoseperformanceisbeingevaluated.

2.Objectiveperformancemeasuresareindicationsofjobperformancethatcanbeverifiedbyothersandareusuallyquantitative.

3.Under theUnstructuredMethodofAppraisal, the appraiser has todescribe his impressions about the employee under appraisal in an unstructured manner.

4.AssessmentCentreMethod of appraisingwas first applied in theGerman Army in 1930.

9.4 SUMMARY

·AccordingtoWendellFrench,performanceappraisalis,‘theformal,systematicassessmentofhowwellemployeesareperforming theirjobs inrelation toestablishedstandards,and thecommunicationofthatassessmenttoemployees.’

· Itisasystematicandobjectivewayofevaluatingbothwork-relatedbehaviourandpotentialofemployees.

· Through discussions with individual employees, a line manager can findoutwhytheyperformastheydoandwhatstepscanbeinitiatedtoimprovetheirperformance.

·Performanceappraisalisasignificantelementoftheinformationandcontrolsysteminorganization.

·Performanceappraisalisplanned,developedandimplementedthroughaseriesofsteps.

· Itbeginswithjobanalysis,jobdescriptionandjobspecification.


NOTES


·Appraisal systems require performance standards that serve asbenchmarksagainstwhichperformanceismeasured.

·Performance appraisal involves at least two parties; the appraiserwhodoestheappraisalandtheappraiseewhoseperformanceisbeingevaluated.

·Anumberofdifferentperformanceappraisalmethodsortechniquesareavailableforevaluatingtheperformanceoftheemployees.

·Thesemethodstrytoexplainhowmanagementcanestablishstandardsofperformanceanddevisewaysandmeanstomeasureandevaluatetheperformance.

· Ranking becomes more reliable and easier under the paired comparison method. This method is an attempt to improve upon the simple ranking method.

·Achecklist represents, in its simplest form, a set of objectives ordescriptive statements about the employee and his behaviour.

·BARSwereintroducedtopresentresultstoimprovetheperformanceoftheemployeesofacompany.

·Theresult-orientedappraisalsarebasedontheconcreteperformancetargets that are usually established jointly by the superior and subordinates.

·Human resource accountingdealswith cost of and contributionofhumanresourcestotheorganization.

·Costoftheemployeeincludescostofmanpower,planning,recruitment,selection, induction, placement, training, development, wages and benefits,etc.

9.5 KEY WORDS

·Evaluation:Itistheprocessofjudgingsomething’squality,importance,orvalue,orareportthatincludesthisinformation.

·Promotion:Itistheadvancementofanemployee’spositionwithintheorganization.

·Compensation: It is the total cash and non-cash payments given to anemployeeinexchangefortheworktheydoforbusiness.Itismorethananemployee’sregularpaidwages.

·Administrative:Pertainingtoactivitiesrelatedtoanorganization’sorbusiness’administrationandmanagement.

NOTES


Performance Appraisal9.6 SELF ASSESSMENT QUESTIONS AND

EXERCISES


1.Statetheobjectivesofperformanceappraisal. 2.Whataretheusesofperformanceappraisal? 3.Statethethreepurposesofperformanceappraisal. 4. Write short notes on: (a) Paired Comparison Method (b) Grading Method (c) Forced Choice Method (d) Behaviourally Anchored Rating Scales (BARS) (e) Psychological Appraisals

LongAnswerQuestions

1.Whatarethestepsinvolvedintheprocessofperformanceappraisal?Discuss.

2.Describetheessentialsofagoodappraisalsystem. 3. Draw a comparative study between the traditional methods and modern

methodsofperformanceappraisal. 4. Discuss post-appraisal analysis in detail. 5.Assessthewaystoimproveperformanceappraisals.





Wages and Salary

NOTES


UNIT 10 WAGES AND SALARYStructure 10.0 Introduction 10.1 Objectives 10.2 Wage and Salary Administration

10.2.1 NatureandSignificanceofWageandSalaryAdministration 10.2.2 TheoriesofWages 10.2.3 MethodsofWageFixation


10.0 INTRODUCTION

In this unit, you will learn about and salary wage determination. Proper job evaluationisthefoundationfordevelopingasoundwagestructure.Whilejobevaluationisaformalandsystematiccomparisonofjobsinordertodeterminetheworthofonejobinrelationtoanother,itislogicaland,tosomeextent,anobjectivemethodofrankingjobsrelativetooneanother.

Thebasicpurposeofwageandsalaryadministrationistoestablishandmaintain an equitable wage and salary structure. Its secondary objective is the establishmentandmaintenanceofanequitablelabour-coststructure,i.e.,anoptimalbalancingofconflictingpersonnelinterestssothatthesatisfactionofemployeesandemployersismaximizedandconflictsminimized.Thewageandsalaryadministrationisconcernedwiththefinancialaspectsofneeds,motivation and rewards.

10.1 OBJECTIVES

Aftergoingthroughthisunit,youwillbeableto: ·Discussthenatureandsignificanceofwageandsalaryadministration ·Explainthetheoriesofwages ·Describethemethodsofwagefixation

10.2 WAGE AND SALARY ADMINISTRATION

Theactivitiesofwageandsalaryadministrationareasfollows: · Jobevaluation

NOTES


Wages and Salary · Surveysofwageandsalaries ·Analysisofrelevantorganizationalproblems ·Developmentandmaintenanceofthewagestructure ·Establishingrulesforadministeringwages · Wage payments · Incentives · Profitsharing · Wage changes-adjustments · Supplementary payments ·Controlofcompensationandotherrelateditems

10.2.1 NatureandSignificanceofWageandSalaryAdministration

Thebasic purpose ofwage and salary administration is to establish andmaintain an equitable wage and salary structure. Its secondary objective is theestablishmentandmaintenanceofanequitablelabour-coststructure,i.e.,anoptimalbalancingofconflictingpersonnelinterestssothatthesatisfactionofemployeesandemployersismaximized,andconflictsminimized.Thewageandsalaryadministrationisconcernedwiththefinancialaspectsofneeds, motivation and rewards.

Theobjectivesofthewageandsalaryadministrationarementionedasfollows:

1.For employees

·Employeesarepaidaccordingtorequirementsoftheirjobs. ·The chances of favouritism (which creep inwhenwage rates are

assigned)aregreatlyminimized. · Jobsequencesandlinesofpromotionareestablishedwhereverthey

are applicable. ·Employees’morale andmotivation are increased because awage

programmecanbeexplainedandisbaseduponfacts.

2.To employers

·Theycansystematicallyplanforandcontroltheirlabourcosts. · Indealingwithatradeunion,theycanexplainthebasisoftheirwage

programmebecauseitisbaseduponasystematicanalysisofjobandwagefacts.

·Awageandsalaryadministrationreduces the likelihoodoffrictionand grievances over wage inequities.

Wages and Salary

NOTES


· Itenhancesanemployee’smoraleandmotivationbecauseadequateandfairlyadministeredwagesarebasictohiswantsandneeds.

· Itattractsqualifiedemployeesbyensuringanadequatepaymentforall the jobs.

WageDeterminationProcess

Thestepsinvolvedinthewagedeterminationprocessstepsareasfollows: · Performingjobanalysis · Wage surveys ·Analysis of relevant organizational problems forming thewage

structure · Framingrulesofwageadministration ·Explainingthesetoemployees · Assigning grades and price to each job and paying the guaranteed wage

Figure10.1illustratesthestepsinvolvedinthedeterminationofwagerates.

Self-Instructional

232 Material

Absenteeism and

Labour Turnover

NOTES

2. to employers

• They can systematically plan for and control their labour costs.

• In dealing with a trade union, they can explain the basis of their wage programme

because it is based upon a systematic analysis of job and wage facts.

• A wage and salary administration reduces the likelihood of friction and grievances

over wage inequities.

• It enhances an employee’s morale and motivation because adequate and fairly

administered wages are basic to his wants and needs.

• It attracts qualified employees by ensuring an adequate payment for all the jobs.

6.4.2 Wage Determination Process

The steps involved in the wage determination process steps are as follows:

• Performing job analysis

• Wage surveys

• Analysis of relevant organizational problems forming the wage structure

• Framing rules of wage administration

• Explaining these to employees

• Assigning grades and price to each job and paying the guaranteed wage

Figure 6.1 illustrates the steps involved in the determination of wage rates.

Fig. 6.1 Steps Involved in Determination of Wage Rate

6.4.3 Factors Influencing Wage and Salary Structure and

Administration

The wage policies of different organizations vary somewhat. Marginal units pay the

minimum necessary to attract the required number and kind of labour. Often these units

pay only the minimum wage rates required by labour legislation and recruit marginal

labour. At the other extreme, some units pay well above the going rates in the labour

market.

Fig. 10.1 Steps Involved in Determination of Wage Rate

Factors InfluencingWageandSalaryStructureandAdministration

Thewage policies of different organizations vary somewhat.Marginalunits pay the minimum necessary to attract the required number and kind oflabour.Oftentheseunitspayonlytheminimumwageratesrequiredbylabourlegislationandrecruitmarginallabour.Attheotherextreme,someunits pay well above the going rates in the labour market.

NOTES


Wages and SalaryA sound wage policy is to adopt a job evaluation programme in ordertoestablishfairdifferentialsinwagesbasedupondifferencesinjobcontents.Besides,thebasicfactorsprovidedbyajobdescriptionandjobevaluation,thosethatareusuallytakenintoconsiderationforwageandsalaryadministrationareasfollows:

· Theorganization’sabilitytopay· Supplyanddemandoflabour· The prevailing market rate· Thecostofliving· Livingwage· Productivity· Tradeunion’sbargainingpower· Jobrequirements· Managerial attitudes· Psychologicalandsociologicalfactors

Principles ofWageandSalaryAdministration

Thecommonlysuggestedprinciplesgoverningfixationofwageandsalaryare: ·Thereshouldbeadefiniteplantoensurethatdifferencesinpayfor

jobsarebaseduponvariationsinjobrequirements,suchasskill,effort,responsibilityofjoborworkingconditions,andmentalandphysicalrequirements.

·Thegenerallevelofwagesandsalariesshouldbereasonablyintunewith that prevailing in the labour market. The labour market criterion is most commonly used.

·Theplanshouldcarefullydistinguishbetweenjobsandemployees.Ajobcarriesacertainwagerate,andapersonisassignedtofillitatthatrate.Exceptionssometimesoccurinveryhigh-leveljobsinwhichthejob-holdermaymaketheofferlargeorsmall,dependinguponhisability and contributions.

·Equal pay for equalwork, i.e., if two jobs have equal difficultyrequirements,thepayshouldbethesame,regardlessofwhofillsthem.

·An equitable practice should be adopted for the recognition ofindividualdifferencesinabilityandcontribution.Forsomeunits,thismaytaketheformofrateranges,within-gradeincreases;inothers,itmaybeawageincentiveplan;instillothers,itmaytaketheformofcloselyintegratedsequencesofjobpromotion.

Wages and Salary

NOTES


·There should be a clearly established procedure for hearing andadjusting wage complaints. This may be integrated with the regular grievanceprocedure,ifitexists.

·Theemployeesandthetradeunion,ifthereisone,shouldbeinformedabout the procedure used to establishwage rates.Every employeeshouldbeinformedofhisownposition,andofthewageandsalarystructure. Secrecy in wage matters should not be used as a cover-up forhaphazardandunreasonablewageprogramme.

·Thewageshouldbesufficienttoensurefortheworkerandhisfamilyareasonablestandardofliving.Workersshouldreceiveaguaranteedminimum wage to protect them against conditions beyond their control.

·Thewage and salary structure should beflexible so that changingconditions can be easily met.

· Promptandcorrectpaymentsoftheduesoftheemployeesmustbeensuredandarrearsofpaymentshouldnotaccumulate.

· Forrevisionofwages,awagecommitteeshouldalwaysbepreferredto the individual judgement, however unbiased, or a manager.

·Thewageandsalarypaymentsmustfulfilawidevarietyofhumanneeds,includingtheneedforself-actualization.Ithasbeenrecognizedthat‘moneyistheonlyformofincentivewhichiswhollynegotiable,appealingtothewidestpossiblerangeofseekers....Monetarypaymentsoften act asmotivators and satisfiers interdependently of other jobfactors.’

10.2.2 Theories ofWages

Differentmethodsofwagepaymentareprevalentindifferentindustriesandin various countries. There may be payment by time or payment by results, including payment at piece rates.

Wagesarefixedmainlyasaresultofindividualbargaining,collectivebargaining or by public or state regulation. How wages are determined has beenthesubjectofseveraltheoriesofwages.Themainelementsinthesetheoriesmaybesummedupasfollows:

1. SubsistenceTheory

Thistheory,alsoknownas‘IronLawofWages,’waspropoundedbyDavidRicardo (1772-1823). This theory (1817) states that ‘the labourers are paid to enablethemtosubsistandperpetuatetheracewithoutincreaseordiminution.’Thetheorywasbasedontheassumptionthatiftheworkerswerepaidmorethan subsistence wage, their numbers would increase as they would procreate more,andthiswouldbringdowntherateofwages.Ifthewagesfallbelowthesubsistencelevel,thenumberofworkerswoulddecreaseasmanywould

NOTES


Wages and Salarydieofhunger,malnutrition,disease,cold,etc.,andmanywouldnotmarry;when that happened the wage rates would go up.

2. WagesFundTheory

This theory was developed by Adam Smith (1723–1790). His basic assumptionwasthatwagesarepaidoutofapre-determinedfundofwealthwhichlayssurpluswithwealthypersonsasaresultofsavings.Thisfundcouldbeutilizedforemployinglabourersforwork.Ifthefundwaslarge,wageswouldbehigh;ifitwassmall,wageswouldbereducedtosubsistencelevel.Thedemandforlabourandthewagesthatcouldbepaidthemweredeterminedbythesizeofthefund.

3. TheSurplusValueTheoryofWages

ThistheoryowesitsdevelopmenttoKarlMarx(1849–1883).Accordingtothistheory,thelabourwasanarticleofcommercewhichcouldbepurchasedonpaymentof‘subsistenceprice’.Thepriceofanyproductwasdeterminedbythelabourtimeneededforproducingit.Thelabourerwasnotpaidinproportion to the time spent on work, but much less, and the surplus was utilizedforpayingotherexpenses.

4. ResidualClaimantTheory

Francis A Walker 1984 propounded this theory. According to him, there are fourfactorsofproduction/businessactivity,viz., land, labour,capitalandentrepreneurs.Wagesrepresenttheamountofvaluecreatedintheproductionwhichremainsafterpaymenthasbeenmadeforallthesefactorsofproduction.In other words, labour is the residual claimant.

5. MarginalProductivityTheory

This theorywas developed byPhillipsHenryWicksteed (England) andJohnBates Clark (USA). According to this theory, wages are based upon an entrepreneur’sestimateofthevaluethatwillprobablybeproducedbythelastor marginal worker. In other words, it assumes that wages depend upon the demandfor,andsupplyof,labour.Consequently,workersarepaidwhattheyare economically worth. The result is that the employer has a larger share in profitashedoesnothavetopaythenon-marginalworkers.Aslongaseachadditional worker contributes more to the total value than the cost in wages, itpaystheemployertocontinuehiring;wherethisbecomesuneconomic,the employer may resort to superior technology.

6. TheBargainingTheoryofWages

JohnDavidson propounded this theory.Under this theory,wages aredeterminedbytherelativebargainingpowerofworkersortradeunionsandofemployers.Whenatradeunionisinvolved,basicwages,fringebenefits,

Wages and Salary

NOTES


jobdifferentials and individual differences tend to be determinedby therelativestrengthoftheorganizationandthetradeunion.

7. BehaviouralTheories

Many behavioural scientists— notably industrial psychologists andsociologists—likeMarsh and Simon, Robert Dubin, Eliot Jacques have presentedtheirviewsorwagesandsalaries,onthebasisofresearchstudiesandactionprogrammesconductedbythem.Briefly,suchtheoriesare:Employee’sAcceptanceofaWageLevel:Thistypeofthinkingtakesintoconsiderationthefactorswhichmayinduceanemployeetostayonwithacompany.Thesizeandprestigeofthecompany,thepoweroftheunion,thewagesandbenefitsthattheemployeereceivesinproportiontothecontributionmadebyhim—allhavetheirimpact.InternalWageStructure:Social norms, traditions, customs prevalent in the organizationandpsychologicalpressuresonthemanagement,theprestigeattachedtocertainjobsintermsofsocialstatus,theneedtomaintaininternalconsistency inwagesat thehigher levels, the ratioof themaximumandminimumwagedifferentials,andthenormsofspanofcontrolanddemandforspecializedlabourallaffecttheinternalwagestructureofanorganization.

Wage,Salaries andMotivators

Moneyoftenislookeduponasameansoffulfillingthemostbasicneedsofmen.Food, clothing, shelter, transportation, insurance, pensionplans,education andother physicalmaintenance and security factors aremadeavailable through the purchasing power provided by monetary income-wages andsalaries.Meritincreases,bonusesbasedonperformance,andotherformsofmonetaryrecognitionforachievementaregenuinemotivators.However,basicpay,costof living increases,andotherwage increasesunrelated toan individual’sownproductivitymay typically fall into themaintenancecategory.

CompensationPlan

Forthehighermanagement,salariesareinfluencedbythesizeofacompanyinaspecificindustry,andinpartbythecontributionoftheincumbenttothe process of decision-making.The bigger the firm, the greater is thecompensationpaid to theexecutives.The industries thataremorehighlyconstrainedbygovernmentalregulation(banks,lifeinsurance,airtransport,railroads,publicutilities)payrelativelylessthanthosethataremorefreetocarryontheirbusiness(privatefirms).

Straightsalaries,bonuses,stockpurchaseplansandprofit-sharingareusedtocompensatemajorexecutives.Ofthese,thestraightsalaryisthemostcommon method. The salary is determined by mutual agreement between

NOTES


Wages and Salarytheindividualandtheemployer.Thesalesaffected,thecostofproduction,reductioninexpensesandtheprofitsmadearealsotakenintoaccount.

Bonusesarealsoaidtoexecutivesatacertainpercentageoftheprofits.Thebonusesmayaveragefrom30percentto50percentofthebasicsalary.Thesebonusesoperatemosteffectivelyinincreasingmotivationwhenthefollowingconditionsexist:

· The amount paid is closely related to the level of individualperformance.

· The amountpaid after taxes represents a clearlynoticeable riseabove the base salary level.

· The amount paid is closely related to the level of companyperformance.

· The amount paid is tied into the base salary in such a way that the combined earnings are equitable both in relation to internal and externalstandards.

· The amount paid is reduced drastically whenever an individual experiences a real and continuing decrease in performanceeffectiveness.

· Theamountpaidisbasedonaneasilyunderstandablesystemofallocation,andtheindividualisprovidedwithcompleteinformationontherelationshipbetweenbonusandperformance.

Moreover, executives are compensated for the various expensesincurredbythem,fortaxationtakesawayamajorportionoftheirsalary.Suchpaymentsareintheformof:

· Medical care· Counselandaccountantstoassistinlegal,taxandfinancialproblems· Facilitiesforentertainingcustomersandfordiningout· Company recreational area (swimming pool and gymnasium)· Thecostoftheeducationandtrainingofexecutives,scholarships

fortheirchildren,andallowancesforbusinessmagazinesandbooks· Freewell-furnishedaccommodation,conveyanceandservants

Wage Incentives

The termwage incentives has been used both in the restricted sense ofparticipationand in thewidest senseoffinancialmotivation. It hasbeendefineddifferentlybydifferentauthors.Wegivehereafewofthesedefinitions.

‘Itisatermwhichreferstoobjectivesintheexternalsituationwhosefunctionistoincreaseormaintainsomealreadyinitiatedactivity,eitherindurationorinintensity.’AccordingtoHummel and Nicker son:‘Itreferstoall

Wages and Salary

NOTES


theplansthatprovideextrapayforextraperformanceinadditiontoregularwagesforajob.’Florenceobserves:‘Itreferstoincreasedwillingnessasdistinguishedfromcapacity.’Incentivesdonotcreatebutonlyaimtoincreasethenationalmomentumtowardsproductivity.’

In thewordsofScott, ‘it isany formalandannouncedprogrammeunderwhichtheincomeofanindividual,asmallgroup,aplantworkforceoralltheemployeesofafirmarepartiallyorwhollyrelatedtosomemeasureofproductivityoutput.’

AccordingtotheNationalCommissiononLabour,‘wageincentivesareextrafinancialmotivation.Theyaredesignedtostimulatehumaneffortbyrewardingtheperson,overandabovethetime-ratedremunerationforimprovementsinthepresentortargetedresults.’

‘Awage incentive scheme is essentially amanagerial device ofincreasingaworker’sproductivity.Simultaneously,itisamethodofsharinggainsinproductivitywithworkersbyrewardingthemfinanciallyfortheirincreasedrateofoutput.’AccordingtoSun,thisdefinitionisbasedontheprinciplethat‘anofferofadditionalmoneywillmotivateworkerstoworkharderandmoreskilfullyforagreaterpartoftheworkingtime,whichwillresultinastepped-uprateofoutput.’

Wemaydefineawageincentiveasasystemofpaymentunderwhichthe amount payable to a person is linked with his output. Such a payment may also be called payment by results. The term incentive has gradually acquiredawideconnotationandincludesallthepossiblefactors,besideseconomic gains, which can possibly motivate human beings towards better andgreaterperformance.

Objectives ofWage IncentivePlans

Wageincentiveplansaimatthefulfilmentofoneormoreofthefollowingobjectives: ·Toimprovetheprofitofafirmthroughareductionintheunitcostsof

labour and materials or both. ·Toavoidorminimizeadditionalcapitalinvestmentfortheexpansion

ofproductioncapacity. ·Toincreaseaworker’searningswithoutdraggingthefirminahigher

wageratestructureregardlessofproductivity. ·Tousewageincentivesasausefultoolforsecuringabetterutilization

ofmanpower,betterproductionschedulingandperformancecontrol,andamoreeffectivepersonnelpolicy.

Merits ofWage IncentivePlans

Suchplansareregardedasbeneficialtobothemployersandworkers.Theyareacceptedasasoundtechniquefortheachievementofgreaterproduction

NOTES


Wages and Salaryonthegroundsthatworkerswouldworkattheirbestiftheywereofferedmonetary rewards for good performance. For employers the need for avigorous supervision is reduced, and consequently there is a cut in the expenditureonsupervision. · When well-designed and properly applied, payment by results may

generallybereliedupontoyieldincreasedoutput,lowerthecostofproduction and bring a higher income to the workers.

· A works study associated with payment by results is a direct stimulus toworkerstoimprovetheorganizationofworkandtoeliminatelosttime and other waste.

·Labour and total costs per unit of output can be estimatedmoreaccurately in advance.

·Lessdirectsupervisionisneededtokeepoutputuptoareasonablelevel.

·The conflicting interests of employers and employees are unified.Increasedefficiencyandsmoothworkingcanthereforebepromotedand sustained.

Demerits ofWage IncentivePlans

·Qualitytendstodeteriorateunlessthereisastrictersystemofcheckingand inspection.

· Payment by results may lead to opposition or restriction on output when new machines and methods are proposed or introduced. This is becauseofthefearthatthejobmayberestudied,andearningsreduced.

· When paid by result, workers tend to regard their highest earnings as normsand,therefore,pressforaconsiderablehigherminimumwage.

·Theamountandcostofclericalworkincreases. ·There is a danger of disregarding safety regulations and thereby

increasingtherateofaccidents. · Some workers tend to overwork and thus undermine their health. · Jealousiesmayariseamongworkersbecausesomeareabletoearnmore

thanothersorbecausefastworkersaredissatisfiedwiththeslowerorolder workers in the group.

· It is difficult to set pieceor bonus rates accurately. If they are toolow, workers may be under pressure to work too hard and become dissatisfied;andiftoohigh,theymayslackertheireffortstoavoidarevisionofrates.Asuccessfulwageincentivesplanshouldconsistofthefollowingkey

points:

Wages and Salary

NOTES


·Themanagementshouldrecognizethattheeffectivenessofanincentivedepends on the total situation, which includes worker-management confidence,relationswiththetradeunion,thequalityofcommunicationand supervision and the traditions in an industry.

· The management should not introduce an incentive system until it has takenactiontoensurefullunderstandingofwhatisinvolved.Thismaycallforproceduresfortheparticipationofemployeesandnegotiationswith the trade union.

· The management should avoid any action that may be interpreted as unfair.Theremustbepropermachineryforhandlinggrievances.Themanagementshouldavoidactionsthatresemble‘ratecutting’becauseoftheneedtochangemethodsandratesfromtimetotime.

· It is essential that the management pay in proportion to output once thisoutputrisesabovetherequiredamountofguaranteedpay.

· The management should train supervisors all the way down the line so thatforemenanddepartmentmanagersareabletodealwithproblemswithin their own departments.

· Great care should be taken in setting up standards to avoid rates that are too loose or too tight.

10.2.3 MethodsofWageFixation

Wageincentiveplansmaybediscussedasfollows: · Plansforblue-collarworkers · Plansforwhite-collarworkers · Plansformanagerialpersonnel

Eachofthesecategoriesofemployeeshasseparateanddistinctneedsandspecificplanstailoredforeachmayprovebeneficial.

1. IncentivePlans forBlue-CollarWorkers:For Individuals:

Short-TermPlans

Thesesystemsmaybebroadlyclassifiedintothreecategories: (a)Systemsunderwhichtherateofextraincentiveisinproportiontothe

extraoutput (b)Systemsunderwhichtheextraincentiveisproportionatelyatalower

rate than the increase in output (c)Systemsunderwhichtherateofincentivesisproportionatelyhigher

thantherateofincreaseinoutput

NOTES


Wages and SalaryLong-TermPlans

Thisisclassifiedintothreetypes: 1. A standard output 2.The‘valueadded’bymanufacturer 3.Bonuscanalsobecalculatedontheincreasedvalueofsaleswherethis

result is obtained by increased production

Some ImportantWage IncentivePlans

Thechiefincentiveplansareasfollows: (i) Halsey Premium Plan (ii) Halsey-Weir Premium Plan (iii) Rowan Premium Plan (iv) 100 Per Cent Premium Plan (v)BedeauxPointPlan (vi)Taylor’sDifferentialPieceRatePlan(vii)Merric’sMultiplePieceRatePlan (viii) Gnatt Task and Bonus Plan (ix)EmersonEfficiencyPlan (x)Co-PartnershipSystem (xi)AcceleratingPremiumSystems(xii)ProfitSharingSchemes

Thegroupincentiveplansareusuallythefollowing:

ScanlanPlan

(i) HalseyPremiumPlan

This is a time-saved bonus plan which is ordinarily used when accurate performancestandardshavenotbeenestablished.

Formula: Bonus = ½ of Time savedTime taken

×Daily wage

Merits

Themeritsofthisplanareasfollows: · Itguaranteesafixedtimewagetoslowworkersand,atthesametime,

offersextrapaytoefficientworkers. ·The cost of labour is reducedbecause of the percentagepremium

system; the piece rate of pay gradually decreaseswith increasedproduction.

Wages and Salary

NOTES


· The plan is simple in design and easy to introduce. · As the wages are guaranteed, it does not create any heartburning among

such workers as are unable to reach the standard.

Demerits

Thedisadvantagesoftheplanareasfollows: · Itdependsuponpastperformanceinsteadofmakingnewstandards. · The workers can beat the game by spurting on certain jobs to capture

apremiumandsoldieringonotherjobstorestundertheprotectionoftheguaranteeofdaywages.

· Fromthepointofviewoftheadministration,thepolicyisoneofdrift,for,inthisplan,theworkerisleftalonetodecidewhetherornottoproducemoreafterthestandardhasbeenreached.

(ii)Halsey-WeirPremiumPlan

ThisplanissimilartotheHalseyPremiumPlanexceptthat50percentofthe time saved is given as premium to the worker.

Formula: Bonus = ½ × Time Saved × Hourly Rate

(iii)RowanPremiumPlan

IntheRowanPlan,thetimesavedisexpressedasapercentageofthetimeallowed,andthehourlyrateofpayisincreasedbythatpercentagesothattotalearningsoftheworkerarethetotalnumberofhoursmultipliedbytheincreased hourly wages.

Formula: Bonus = Time savedTime taken × Time Taken × Hourly Rate

(iv) 100PerCentPremiumPla

Adefinitehourlyrateispaidforeachtaskhourofworkperformed.Theplanisidenticalwiththestraightpiecerateplanexceptforitshigherguaranteedhourlyrateandtheuseoftasktimeasaunitofpaymentinsteadofapriceperpiece.Theworkerispaidthefullvalueofthetimesaved.

(v)BedeauxPointPlan

Thisplanisusedwhencarefullyassessedperformancestandardshavebeenestablished.Itdiffersfromthe100percentplaninthatthebasicunitofthetimeistheminutetermedasB.EveryjobisexpressedintermsofBs(afterBedeaux),whichmeansthatajobshouldbecompletedinsomanyminutes.

(vi)Taylor’sDifferentialPieceRatePlan

Thissystemwasintroducedwithtwoobjects:First,togivesufficientincentivetoworkmentoinducethemtoproduceuptotheirfullcapacity;andsecond,

NOTES


Wages and Salarytoremovethefearofwagecut.Thereisonerateforthosewhoreachthestandard;theyaregivenahigherratetoenablethemtogetthebonus.

(vii)Merric’sMultiplePieceRatePlan

Thisplan,too,isbasedontheprincipleofalowpiecerateforaslowworkerandahigherpiecerateforhigherproduction;buttheplandiffersfromTaylor’splaninthatitoffersthreegradedpieceratesinsteadoftwo.(i)Upto,say83percentofstandardoutputapiece-rate+10percentoftimerateasbonus;(ii)Above83per cent andup to100per centof standardoutput—samepiecerate+20percentoftimerate;and(iii)Above100percentofstandardoutput—samepieceratebutnobonus.

(ix)EmersonEfficiencyPlan

Underthissystem,astandardtimeisestablishedforastandardtask.Thedaywage is assured. There is no sudden rise in wages on achieving the standard of performance.The remuneration based on efficiency rises gradually.Efficiency isdeterminedby theratiobetween thestandard timefixedforaperformanceandthetimeactuallytakenbyaworker.Thus,iftheperiodof8hoursisthestandardtimeforataskandifaworkerperformsitin16hours,hisefficiencyis50percent.Aworkerwhofinishesthetaskin8hourshas100percentefficiency.Nobonusispaidtoaworkerunlessheattains662/3percentefficiency,atwhichstagehereceivesanominalbonus.Thisbonusgoesonincreasingtill,heachieves100percentefficiency.Thebonusis20percentoftheguaranteedwage.At120percentefficiency,aworkerreceivesabonusof40percentandat140percentefficiencythebonusis60percentofthedaywage.

(x)Co-PartnershipSystem

Thissystemtriestoeliminatefrictionbetweencapitalandlabour.Underthissystem,notonlydoesaworkerhaveashareintheprofitsoftheundertakingbuthealsotakespartinitscontroland,therefore,sharesresponsibilities.Therearedifferentdegreesof thispartnershipandcontrolallowedto theoperativesindifferentcases;butinacompleteco-partnershipsystem,thefollowingfactorsexist: ·Thepaymentoftheexistingstandardwagesoflabour. ·Thepaymentofafixedrateofinterestoncapital. ·Thedivisionof the surplusprofitbetweencapital and labour inan

agreed proportion. ·Thepaymentforapartoftheworker’slabourbytheallotmentofa

share in the capital. ·Thesharingin thecontrolof thebusinessbytherepresentativesof

labour.

Wages and Salary

NOTES


Thesystemarousesandsustainstheinterestoftheworkersintheirwork.Bygivingthemavoiceinthemanagementofthefactoryitraisestheirstatus as well. As they have become partners in the business, they try to make itaveryprofitableenterprise.

(xi)AcceleratingPremiumSystems

Thesearethesystemswhichprovideforaguaranteedminimumwageforoutput below standard.

(xii)ProfitSharingScheme

Profit sharing is regarded as a stepping stone to industrial democracy.Professor Seager observes: ‘Profit-sharing is an arrangement bywhichemployeesreceiveashare,fixedinadvanceoftheprofits.’

FeaturesofProfitSharing

Themainfeaturesoftheprofitsharingschemeare: ·Theagreementisvoluntaryandbasedonjointconsultationmadefreely

between the employers and the employees. ·Thepaymentmaybeintheformofcash,stockoffuturecreditsofsome

amount over and above the normal remuneration that would otherwise be paid to employees in a given situation.

·The employees should have someminimumqualifications, suchas tenure,orsatisfysomeotherconditionofservicewhichmaybedetermined by the management.

·The agreement onprofit sharinghavingbeenmutually accepted isbindingandthereisnoroomonthepartoftheemployertoexercisediscretion in a matter which is vital to the employees.

· The amount to be distributed among the participants is computed on thebasisof someagreed formula,which is tobeapplied inallcircumstances.

·The amount to be distributed depends on the profits earned by anenterprise.

·Theproportionoftheprofitstobedistributedamongtheemployeesis determined in advance.

CheckYourProgress

1.Whatisthebasicpurposeofwageandsalaryadministration? 2. What is a sound wage policy? 3. State the subsistence theory. 4.Whodevelopedwagefundtheory?

NOTES


Wages and Salary10.3 ANSWERS TO CHECK YOUR PROGRESS

QUESTIONS

1.Thebasicpurposeofwageandsalaryadministrationistoestablishand maintain an equitable wage and salary structure.

2. A sound wage policy is to adopt a job evaluation programme in order toestablishfairdifferentialsinwagesbasedupondifferencesinjobcontents.

3. The subsistence theory (1817) states that ‘the labourers are paid to enable them to subsist and perpetuate the race without increase or diminution.’

4. This theory was developed by Adam Smith (1723–1790).

10.4 SUMMARY

·Thebasicpurposeofwageandsalaryadministrationistoestablishand maintain an equitable wage and salary structure.

· Its secondaryobjective is theestablishmentandmaintenanceofanequitablelabour-coststructure,i.e.,anoptimalbalancingofconflictingpersonnelinterestssothatthesatisfactionofemployeesandemployersismaximized,andconflictsminimized.

· A sound wage policy is to adopt a job evaluation programme in order toestablishfairdifferentialsinwagesbasedupondifferencesinjobcontents.

·Wagesarefixedmainlyasaresultofindividualbargaining,collectivebargaining or by public or state regulation.

·Subsistencetheory,alsoknownas‘IronLawofWages,’waspropoundedby David Ricardo (1772-1823).

· This theory (1817) states that ‘the labourers are paid to enable them tosubsistandperpetuatetheracewithoutincreaseordiminution.’

·Thetheorywasbasedontheassumptionthatiftheworkerswerepaidmore than subsistence wage, their numbers would increase as they wouldprocreatemore,andthiswouldbringdowntherateofwages.

·WagesfundtheorywasdevelopedbyAdamSmith(1723–1790). ·Hisbasicassumptionwasthatwagesarepaidoutofapre-determined

fundofwealthwhichlayssurpluswithwealthypersonsasaresultofsavings.

Wages and Salary

NOTES


·Forthehighermanagement,salariesareinfluencedbythesizeofacompanyinaspecificindustry,andinpartbythecontributionoftheincumbenttotheprocessofdecision-making.

· The salary is determined by mutual agreement between the individual and the employer.

·Wageincentives:‘Itisatermwhichreferstoobjectivesintheexternalsituationwhose function is to increase ormaintain some alreadyinitiatedactivity,eitherindurationorinintensity.’

·Wemaydefineawageincentiveasasystemofpaymentunderwhichtheamount payable to a person is linked with his output. Such a payment may also be called payment by results.

·WageIncentivePlansareregardedasbeneficialtobothemployersandworkers.

·Theyareacceptedasasoundtechniquefortheachievementofgreaterproductiononthegroundsthatworkerswouldworkattheirbestiftheywereofferedmonetaryrewardsforgoodperformance.

· IntheRowanPlan,thetimesavedisexpressedasapercentageofthetimeallowed,andthehourlyrateofpayisincreasedbythatpercentageso that total earnings of theworker are the total number of hoursmultiplied by the increased hourly wages.

10.5 KEY WORDS

·Wages: It refers to thefixed regular payment earned forwork orservices, typically paid on a daily or weekly basis.

·Survey: Itmeans to ask (many people) a question or a series ofquestionsinordertogatherinformationaboutwhatmostpeopledoor think about something.

·Union:Itisasocietyorassociationformedbypeoplewithacommoninterest or purpose.



1.Describethenatureandpurposeofwageandsalaryadministration. 2.Explainthewagedeterminationprocess. 3.Whatfactorsinfluencethewageandsalarystructureandadministration?

NOTES


Wages and Salary 4.Whatare thecommonlysuggestedprinciplesgoverningfixationofwage and salary?

5. What is Halsey premium plan? Discuss its merits and demerits. 6.Discussthefeaturesofprofitsharing.

LongAnswerQuestions

1.Giveadetailedexplanationofthemainelementsinvarioustheoriesofwages.Explaineachtheoryindetail.

2. Discuss compensation plan. 3.What arewage incentives?Explain its objectives andmerits and

demerits in detail. 4.Describethevarioustypesofwageincentiveplans.




Well, IanBeard and LenHolden.Human Resource Management - A Contemporary Perspective. Macmillan.



Incentives

NOTES


UNIT 11 INCENTIVESStructure 11.0 Introduction 11.1 Objectives 11.2 ConceptofIncentives

11.2.1 EffectiveIncentiveSystem 11.2.2 TypesofIncentiveSchemes


11.0 INTRODUCTION

Servicesrenderedbyindividualstoorganizationshavetobeequitablypaidfor.Thiscompensationgenerallycomprisescashpaymentswhichincludewages,bonus,andsharedprofits.Goodcompensationplanshaveasalutaryeffectontheemployees.Theyarehappierintheirwork,cooperativewithmanagement and productivity is up. Although, there can be both monetary andnon-monetaryformsofcompensation,itisthemonetarywhichisthemostbasicelementbywhichindividualsareattractedtoanorganizationandare persuaded to remain there.

Awidevarietyofincentivewageplanshasbeendevisedbyindustriesunderwhichtheworker’searningsarerelateddirectlytosomemeasurementofworkdoneeitherbyhimselforbyhisgroup.Inthisunit,youwillstudyabouttheconceptofincentivesindetail.

11.1 OBJECTIVES

Aftergoingthroughthisunit,youwillbeableto: ·Discusstheconceptofincentives ·Analyseeffectiveincentivesystem ·Describethetypesofincentiveschemes

11.2 CONCEPT OF INCENTIVES

Wages in the widest sense mean any economic compensation paid by theemployerundersomecontracttohisworkersfortheservicesrendered

NOTES


Incentivesbythem.ThePaymentofWagesAct1936,Sec2(vi)defineswagesas,‘anyawardofsettlementandproductionbonus,ifpaid,constituteswages.’

MethodsofWagePayment

Compensationpaidtothelabourfortheserviceofferediscalledaswagesor salary. Giving satisfactory and fair amount of compensation, canprobablyeliminatemostofthelabourdisputes.Thefundamentalmethodsofcompensatingtheworkersare: (a) Time Wage (b) Piece Wage

1.TimeWage

It is basedon the amount of time spent.Wage ismeasuredon the basisofunitoftime,e.g.,perday,permonth,etc.Wagesdonotdependontheperformanceoftheemployee.

Features of time wage

· It is more widely used as it is very simple to compute the earnings. · Itprovidesguaranteedandsecuredincome,therebyremovingthefear

ofirregularityofincome. · Itfacilitatespayrollfunction.

Advantages of time wage system

· Senseofsecurityofincome.Theworkerknowsexactlytheamountheis to get.

·Conduciveclimateisprovidedforbetterlabour–managementrelationsasdisputesareminimized.

·Theworkerwillgivegreatercareandattentiononqualityand,therefore,workmanship can be assured.

Disadvantages of time wage system

·TimeWageSystemoffersnoincentivefortheemployeestoputforththeirbestefforts.Effortsandrewardhavenodirectpositivecorrelation.

·Thereisnoencouragementforbetterperformance.Meritisdiscountedandinefficiencyisatapremiumasallreceivethesamesalary.Itisanunsound,unscientificandarbitrarybasisofwagepayment.

·Ambitiousworkersreceivenomonetaryrewardfortheirtalents. · It demands intensive and strict supervision.

Incentives

NOTES


(b)PieceWageSystem

Itisbasedontheamountofworkperformedorproductivity.Theearningsoftheemployeearedirectlyproportionaltohisoutputorperformance.Featuresofpiecewagesystemare: · Itcanofferdirectconnectionbetweeneffortandreward.Hence,itis

the best method to ensure higher productivity. · Wage cost determination is easy.

Advantages of piece wage system

·Directconnectionbetweeneffortandreward. · It is simple and easy to understand. ·Theworkerisinterestedinhigherefficiency. · Cost accounting and control by management is made easy.

Disadvantages of piece wage system

·Danger of overwork.This leads to risk of accident and excessivefatigue.

·Werequirealotofsupervisiontomaintainthequalityandstandardofwork.

· Itisanineffectivemethod,ifqualityistobegiventoppreference.

IncentiveWagePlans

Asystemofwagepaymentthatwouldmaintainbothqualityandquantityiscalledincentivewageplan,anditisnaturallyajudiciouscombinationofbothbasicsystemsofwagepayments,i.e.,timeandpiecewages.Undertheincentiveplansofwagepayment,bothtimewageandpiecewagesystemsareblended together in such a manner that the workers are induced to increase their productivity.

EssentialsofaSoundWageIncentivePlan:· Measurementoftheamountofworkdone.· Establishmentofstandardoutputonthebasisofwhichtheincentive

has to be worked out.· Settingupasuitablerateofincentive.Typesofincentiveplans:Thefollowingaresomeimportantplansof

incentive wage payment: (a)HalseyPlan: It is a plan originated by F.A. Halsey to encourage

efficiencyamongworkersaswellas toguarantee themwagesaccordingtotimebasis.Thestandardtimerequiredforajobisdeterminedbeforehandonthebasisoftimeandmotionstudies.

NOTES


IncentivesWorkerswhoperformthejobinlessthanthestandardtimeandthus save time are rewarded with a bonus but the worker who takes longer than the standard time is not punished and is paid wages accordingtotimewagesystem.Thetotalearningsofaworkerunderthisplanconsistofwagesfortheactualtimeplusabonuswhichisequaltothemoneyvalueof33percentofthetimesavedincaseofstandardtimesetonpreviousexperience,and50percentofthetimesavedwhenthestandardsarescientificallyset.

(b)RowanPlan: Wages, according to time basis, are guaranteed and the slowworker isnotmade to suffer.Astandard time isdeterminedbeforeandabonusispaidaccordingtotimesaved.TheonlydifferencebetweenHalseyPlanandRowanPlanrelatestothecalculationofbonus.Underthisplanbonusisbasedonthatproportionofthetimesavedwhichthetimetakenbearstothestandardtime.Itcanbeexpressedasfollows:

Bonus = Time Saved × Time Taken × Hourly Rate Standard Time

Thus,ifa20hourjobisdonein16hoursandifthehourlyrateis80paisa,thetotalearningsoftheworkerwillbe:

[16×.80]+[4×(16÷20)×.80] =12.80+2.56=`15.36 (c)Taylor’sDifferentialPieceWagePlan: Under this plan, there is

noguaranteeofwages.Thestandardofoutputisfixedperhourorperdayandtwopiecewageratesarelaid.Thoseexceedingthestandard or even just attaining it, are entitled to the higher rate and those, whose output is less than the standard output are paid at a lowerrate.Forexample,thestandardmaybefixedat40unitsperdayandthepieceratesmaybe30paisaand25paisaperunit.Ifaworkerproduces40unitsheshouldgetwagesattherateof30paisa, i.e., `12.Ifheproducesonly39unitshewouldbepaidattherateof25paisaperunitsohiswageswillbe` 9.75.

(d)TheEmersonEfficiencySystem: In this system, the worker is allowed a certain time within which he is required to complete hisjob.Ifhecompletesthejobwithintherequiredtime,heispaidbonus.Ifhetakeslongerthentherequiredtime,hereceivesa lower bonus. Under this system, the daily wage is guaranteed.

(e)TheGantt System:This system is similar to the Emersonefficiencysystem.Theworkerreceivesthebonusonlyifheattainstherequiredstandardofefficiency.Nobonusispaidtoaworkerwherehisefficiencyislessthan100%.Theforemanisalsogivenabonusiftheworkerunderhiscareattainstherequiredstandardofefficiency.

Incentives

NOTES


(f)BedeauxPointPremiumPlan:Thechiefnoveltyofthisplanisthatthevalueoftimesavedisdividedbetweenworkersandforeman, 3/4 toworkers and1/4 to foreman.This is doneonthebasisthataworkercannotshowgoodresultsifhisforemandoesnotfullycooperatewithhim.Therefore,theforemanisalsoentitled to an incentive.

VariableCompensation Individual andGroup

Incentive compensation, also called ‘payment by result’, is essentially amanagerialdeviceforincreasingworkers’productivity.Further,itisamethodofsharinggainsinproductivitywithworkersbyrewardingthemfinanciallyfortheirincreasedrateofoutput.Thepaymentbyresultsschemeisdirectlyrelatedtoanemployee’sproductivity.Therearemanyvariationsofincentivewagesystem.Thesimplestmethodisthatofpayingaworkmanbythenumberofunitsofaproductheproduces.Theobjectiveofanincentivewagesystemis relating wages to output, thereby stimulating greater output at lower costs. Incentive system also helps in narrowing the gap between management and workersandbringingthemclosertogetherwithacommonalityofgoalsandtargets.Manyauthorshavedefinedthetermwageincentives.

InthewordsofHummelandNickerson,wageincentives‘referstoalltheplansthatprovideextrapayforextraperformanceinadditiontoregularwagesforajob.’

AccordingtoScott,Wageincentives‘isanyformalandannouncedprogramunderwhichtheincomeofanindividual,asmallgroup,aplantworkforceoralltheemployeesofafirmarepartiallyorwhollyrelatedtosomemeasureofproductivityoutput.’

BroadCategories ofWage IncentiveSchemes

TherearethreebroadcategoriesofincentiveschemesasclassifiedbyDunnand Rachel. They are: 1. SimpleIncentivePlan:Thesimplestofallwageincentivesmaybe

described as the straight piece-rate system. The piece-work method isperhapsoneoftheoldestandsimplestoftheincentiveplans.Thebasisofcomputationistherateperpiecemultipliedbythenumberofpiecesproduced.Forexample,ifthepiece-rateis`2foreachunitofoutput,thenaworkerwhoproduces10unitsinagiventime,say8hours, will be paid ̀ 20. Another worker whose production is 12 units in the given time (i.e., 8 hours) will receive ` 24, and so on.

This methodofpaymentissuitableif theprocessofproductionisstandardizedandlargequantitiesareproducedbyrepetitivework.Thesystem is not suitable where workers by working rapidly to earn more wagesarelikelytolowerthequalityofthegoodstheyproduce.

NOTES


Incentives 2. Sharing IncentiveWagePlan:Therearea largenumberofplansin this category.These plans are themodifications of theTaylor’sdifferential piece rate incentive plan.Under this plan, theworkersexceedingthestandardorevenjustattainingit,areentitledtothehigherrate and those, whose output is less than the standard output are paid atalowerrate.Taylor’sphilosophywastoattainahighlevelofoutputand,therefore,therewasadifferentialpiecerate,lowratesforoutputbelowthestandard,andhighrateforoutputabovethestandard.

3.GroupIncentivePlan: Individual incentive scheme is not suited to caseswhereseveralworkersarerequiredtoperformjointlyasingleoperation.Insuchcases,a teamapproachiscalledfor,withall themembersofthatteamdoingtheirsharetoachieveandmaintaintheoutput.Theadvantageofgroupincentiveplansisthattheyencourageteamspiritandasenseofmutualcooperationamongworkers.Underthegroup incentiveplan, eachmemberof thegroup is determinedfirstofallbymeasuringtheamountoftheproductionwhichpassesinspection as it leaves the group.The total earnings for the grouparethendeterminedandifallthemembersareofequalskill,theseearnings are usually divided among them equally. There are three broad categoriesofincentiveschemes(i)SimpleIncentivePlan.(ii)SharingIncentive Wage Plan. (iii) Group Incentive Plan.

11.2.1 Effective IncentiveSystem

An incentive scheme is based on three basic assumptions. They are ·Thebeliefthatmoneyisastrongmotivator. ·Thereisadirectrelationshipbetweeneffortandreward. ·Theworkerisimmediatelyrewardedforhisefforts.

Though monetary incentive plans do motivate employees, these plans willnotbeeffectiveunlesscertainrequisitesaremet.Severalauthoritiesonthesubjecthavesuggestedalistofrequisitesthatmonetaryincentiveplansshouldmeetiftheyaretobeattractivetotheemployees.Theserequisitesaregivenasfollows: ·The relations betweenmanagement, supervisory staff andworkers

shouldbecordialandfreefromsuspicion.Managementmust,therefore,ensureassociationofworkersduringthedevelopmentandinstallationofthescheme.

· The incentive plan should reward employees in direct proportion to theirperformance.The standard sethas tobe attainable;necessarytools, equipment, training etc., should be provided and the employee should have adequate control over the work process.

Incentives

NOTES


· The plan should be easily understood by the employees so that they can easilycalculatepersonalcostandpersonalbenefitforvariouslevelsofeffortputinbythem.Complicatedplansandformulaesowseedsofdoubtandmistrustintheworker’smind.

·The plan should provide for rewards to follow quickly after theperformance that justifies the reward.Employeesdonot like toberewardednextmonthforextraeffortexpendedtoday.

·The planmust bewithin the financial and budgetary capacity oftheorganization.Inotherwords,theplanshouldnotbeverycostlyin operation. It should be ascertained in advance that these costs (incentives)areamplycoveredbytheresultantbenefits.

· The work standard once established should be guaranteed against change. The work standard should be viewed as a contract with the employees. This rule must be strictly adhered to by management. Once theplanisoperational,greatcautionshouldbeusedbeforedecreasingthesizeoftheincentiveinanyway.

· The plan should be set on reasonable standards, i.e., it should not be toodifficultortooeasy.Ifthestandardssetaretoodifficulttheymaketheemployeesunenthusiasticaboutit.Ifthestandardssetaretooeasy,theemployeeswouldhardlyexperienceanycompetition.Thus,afairand just standard is the key to any incentive plan.

· The reward must be valuable to the employees. The incentive payments undertheplanshouldbelargeenoughinrelationtotheexistingincomeofemployees.

· The incentive plans must encourage employees to support each other rather than be non-cooperative.

·Theplanshouldnotbedetrimentaltothehealthandwelfareoftheemployees. It should therefore include a ceiling on themaximumearningsbywayofincentives.

· Individual’s or group’s contributions and effortsmust be clearlyidentifiable,ifrewardsaretobegivenforspecificperformance.

·Aguaranteedbaserateshouldbeincludedinanyplan.Employeeswanttobeassuredthattheywillreceiveaminimumwageregardlessoftheiroutput.Thisintroducesaelementofsecurityfortheemployees.

FringeBenefits

Fringebenefitsaretheadditionalbenefitsandservicesthatareprovidedbyacompanytoitsemployeesinadditiontotheirdirectsalary.Therefore,fringescanbedefinedastheadditionalbenefitsandservicesthatacompanyprovidestoitsemployeesonthebasisoftheirperformance.Boththeterms,benefitsand services, are considered similar by most people but some believe that

NOTES


Incentivestheyareentirelydifferent.Accordingtothem,benefitsareapplicableonlyforthoseitemsthatcanbeassociatedwithsomemonetaryvaluewhereasservicesisapplicablefortheitemsthatcannotbeassociatedwithanydirectmoneyvalues.However,moreorless,boththeterms,benefitsandservices,meanthesameinreferencetofringebenefits.

Today,mostly every company provides additional benefits to itsemployeesalongwiththescheduledsalary.Employeesareattractedandgetencouragedwiththeseadditionalbenefitsandservices.Therearealotofadvantagesoffringebenefitsthatattracttheemployees.Firstly,asmostofthefringebenefitsarenottaxedbenefits,theyarenotincludedinthetaxableincome.Another advantage of fringe benefits is that the employees canavailthefringebenefits,suchashealthandinsurancewithlessexpenditure.Companies also use these benefits to attract andmaintain the existingemployeesbyprovidingthemadditionalbenefits.Alongwithattractingtheemployees,fringebenefitssuchasvacationsalongwithholidaysandrestbreakalsohelptheemployeestogetfreshandperformtheirdutywithmoreencouragement.Therefore,wecansaythatthefringebenefitshelp: ·Lessenfatigue · Oppose labour unrest · Satisfyemployeeobjectives · Promote recruitment ·Minimizeturnover · Reduce overtime costs

Principles ofFringeBenefits

Therearefewfactorsthatmustbeconsideredwhiledeterminingthefringebenefits,whichmustbeprovidedtotheemployeesofacompany.Theseare: ·Benefitsandservicesmustbeprovidedtotheemployeesofacompany

to provide them better protection and encourage their wellbeing. The topmanagementshouldnotfeelasiftheyaredoingsomecharitybygiving incentives to their employees.

·Thebenefitsthatareprovidedtotheemployeesshouldfulfilthereal-liferequirementsoftheemployees.

·Thebenefitsandservicesshouldbecosteffective. · Fringebenefitsshouldbemonitoredwithproperplanning. ·Whiledeterminingthefringebenefits,therequirementsofemployees

that are communicated by union representatives must be considered. ·Theemployeesofacompanyshouldbewellinformedsothatcanmake

betterutilizationoffringebenefits.

Incentives

NOTES


Table 11.1 SomeExamplesofMonetaryBenefits

Benefits Example

Legallyrequiredpayments Old age, survivors and health insuranceWorker's compensationUnemployment compensatio

Dependentandlongtermbenefits Pension planGrouplifeinsuranceGroup Health insurancePrepaid legal plansSick leaveDentalbenefitsMaternity leav

Paymentsfortimenotworked VacationsHolidaysVoting pay allowanc

Otherbenefits Travel allowanceCompany car and subsidiesChildcarefacilitiesEmployeemealallowancesMovingexpense

TypesofFringeBenefits

Aswehavediscussedintheconcept,fringebenefitscanoftwotypes.Onethatcanbemeasuredintermsofmoneyvalueandtheothertypeofbenefitsarethosethatcannotbemeasuredintermsofmoneyvalue.Fringebenefitssuch as medical insurance and holiday pay that can be associated with money value,areknownasmonetarybenefits(seeTable11.1)whereasbenefitssuchas company newspaper and company service that cannot be associated with anymoneyvalueareknownasnon-monetarybenefits,asshowninTable11.2.

Table 11.2 ExamplesofNon-monetaryBenefits

Benefits Example

Treats Free lunchCoffeebreaksPicnicsBirthday treatsDinnerforthefamily

Knick-Knacks Company watchesDesk accessoriesWalletsT-shirtsDiaries and planner

ImportantFringeBenefits

Intheprevioussection,wecametoknowaboutthevariousfringebenefitsthatareprovidedbyacompanytoitsemployees.Outofthosebenefits,therearefewbenefitsthataremuchimportantfortheemployees.Theseare: · Paymentforthetimeemployeeshavenotworked · Insurancebenefits

NOTES


Incentives ·Compensationbenefits · Pension plans

Paymentforthetimeemployeeshavenotworked:Thisfringebenefitforms an important benefit for the employeesof company.Mostly everycompanyprovidesthepaymentfortimenotworkedbenefittoitsemployees.Paymentfortimenotworkedbenefitcanbeoftwotypes,on-the-jobfreetimerpaymentandoff-the-jobfreetimepayment.On-the-jobfreetimeincludeslunchperiods,coffeebreaks,restperiods,get-readytimesandwash-uptimeswhereasoff-the-jobfreetimeincludesvacations,sickleaves,publicholidaysand casual leaves.Insurancebenefits:Insurancebenefitsarealsoanimportantfringebenefitfor theemployeesofacompany.Nowadays,everycompanyprovides itsemployeesthefacilityofpurchasinginsurancepoliciesatprices,whichismuchlessthanthecosttheemployeeshavetopayforiftheybuyinsurancethemselves.Compensationbenefits:Companiesalsoprovidecompensationbenefitstoitsworkersagainstsomedisabilityorinjuriestotheemployeesortheirfamilymembers.Otheremployeesofthecompanycontributetothefundsthatarecollectedfortheillorinjuredemployees.AllthesecompensationbenefitsaresynchronizedbytheWorkmen’sCompensationAct.Pensionplans: Companies also provide supplementary income or pension to itsemployeesaftertheirretirement.Thesepensionplanscanbecompanypaidor both company and employee paid. In addition to the pensions, companies also provide bonus to the employees reaching to superannuation.

MonitoringFringeBenefits

Implementingthefringebenefitsinacompanyisnotenoughfortheproperfunctioningof thecompanyandemployeesatisfaction. It isnecessary tomonitorthefringebenefitstoensurethattheyareimplementedproperlyandutilizedfullybytheemployeesofthecompany.Thefollowingarethestepsthatmustbeperformedtomonitorthefringebenefits: · Settingupbenefitobjectives ·Assessingenvironmentalfactors · Determining competitiveness ·Conveyingbenefitinformation ·Controllingbenefitcostsandevaluation

Figure11.1showsthesequenceofvariousstepsinvolvedinmonitoringfringebenefits.

Incentives

NOTES


ENVIRONMENT

Setting upbenefitobjectives

Assessing environ-mentalfactors

DeterminingCompetitiveness

Conveyingbenefitinformation

Controllingbenefitscostsand evaluation

Fig. 11.1 VariousstepsofMonitoringFringeBenefits

Settingupbenefit objectives:To ensure the proper implementation offringebenefits,acompanyneedstosetupcertainobjectivesforthebenefitprogrammes.Thefollowingarethemainobjectivesthatmustbeaccomplishedwhilesettingupfringebenefits:

· Encouragingexternalcompetitiveness· Enhancingcosteffectiveness· Fulfillingtheneedsandpreferencesofeachemployee· Adhering to the legal compulsion

Assessingenvironmentalfactors:Whilemonitoringthefringebenefits,acompanyneedstoidentifyvariousinternalandexternalenvironmentalfactorsthatmayaffectthefringebenefitsprovidedtotheemployees.Externalfactorsincludegovernmentpoliciesandregulations,unionsandeconomicfactors.Internalfactorsincludetheeconomicconditions.Itmeansthatifacompanyiswellestablished,theycanprovidebetterfringebenefitstoitsemployeesthan an emerging company.Determining competitiveness:Whilemonitoring the fringe benefits, acompanyalsoneedtoassessthefringebenefitsprovidedbyitscompetitorstotheiremployees.Tomonitorthecompetitor’sstrategiesofprovidingfringebenefits,thecompanyneedstoconductsurveystoobtaininformationaboutvariousbenefitsofferedbytheircompetitor.Conveyingbenefit information:The employees of a companymust beinformedaboutthedifferenttypesofbenefitprogrammesthroughdifferentcommunication media such as booklets, regular employee meetings, brochuresandslidepresentations.Themosteffectivemethodofconveyingthebenefits information to theemployees is throughcalendars, inwhich

NOTES


Incentiveseachmonthshowsthebenefitsandservicesavailedbytheemployeesofthecompany every month.

Controlling benefit costs and evaluation:An importantmethod ofdeterminingtheusefulnessofthefringebenefitsistoascertainthattowhichextentthenon-monetaryfringebenefitsarehelpfultotheemployees.Toobtainthecorrectfeedbackaboutthenon-monetaryfringebenefits,thefollowingquestions should be answered:

· Havetheearningsoftheemployeesenhanced?· Have the benefits provided by the company able to attract the

employees? · Hastheconfidenceoftheemployeesrisen?· Havetheindustrialrelationsofthecompanyimproved?Theanswersoftheabove-mentionedquestionshelptheHRmanager

toassesstheeffectivenessofthefringebenefits.

ConceptofVariableCompensation

Variablecompensationreferstotheincentiveschemesthataregiventotheworkersonthebasisoftheirproductivity.Theseschemesmayusebonusesorvarietyofratesasincentivestocompensateforthesuperiorperformancesofworkers.These schemes are popular all over theworld and are usedextensively for raising productivity.The various incentive schemes arediscussedinthenextsection.

11.2.2 Typesof IncentiveSchemes

Incentivesschemesareseveralandvaried.Theyarebroadlyclassifiedunder2 heads: · Individual incentive scheme · Group incentive scheme

Fig. 11.2 Individual lncentive Schemes and Group Incentive Schemes

Incentives

NOTES


Individual incentive schemes: Individual incentive scheme may be timebasedorproductionbased.ILOhasclassifiedtheschemesofpaymentbyresultsintofourcategories(refertoFigure11.2):

(a) Schemeswhere theworkers’ earningsvary in the sameproportionas output

Thechiefcharacteristicofthisschemeisthatanygainsorlossesresultingfromaworkersoutputaccruetohim.

Whereas when the worker is paid on hourly, daily or monthly basis, all gainsorlossesresultingfromthechangeofhisoutputaccruetotheemployer.

Thesuccessofthiskindofschemedependsuponaccuratemeasurementofstandardandindividualoutputs.The two methods under this scheme are: (i) The straight piecework method: It is the simplest, oldest and most

commonlyusedmethod.Underthissystem,therateofoutputisfixedperunitandthetotalearningofaworkerisarrivedbymultiplyingthetotaloutput(measuredintermsofunits)bytherateperunit.Therefore,theearningoftheworkerdirectlydependsuponhisperformance.Forexample,ifthetotaloutputofanemployeeis100unitsandtherateper unit is 10 paise, then his earnings would be 100 × 0.10 = ` 10. However, the one limitation under this method is that a worker has to gowithoutwagesifhefailstoproducetherequiredoutput.Inordertoovercomethislimitation,thismethodismodifiedinonerespect,thatis, the workers time rate is guaranteed. Under average conditions the timerateisfixedbelowpiecerate.Itisdesignedtoprotecttheworkeragainstundulylowearningscausedduetofactorsbeyondhiscontrol.

(ii) The standard hour method: This method is also called as 100 per cent gains-sharing.Under thismethod,standard time in termsofhoursisfixedforthecompensationofajobandtherateperhouris thendetermined.Theworkerispaidonastandardtime_rateforcompletionof jobonorbeforestandard time. Inanycase, timewagesarenotguaranteed a worker will be paid same wages calculated on the basis ofstandardtimeevenifhetakesmorethanthestandardtime.Iftimewagesareguaranteed,thenheispaidonthebasisofthetimetakenmultiplied by the time rate.

Thefollowingexampleillustratesthismethod: Standard time = 10 hrs Rate per hour = ` 1 Case (i) Time taken = 8 hrs Earnings=10×1=` 10 Case (2) Time taken = 12 hrs

NOTES


Incentives (a)Earningsiftimewagesarenotguaranteed=10×1=` 10 (b)Earningsiftimewagesareguaranteed=12×1=` 12

(b) Schemeswhere theworkers’ earningsvary lessproportionatelyas output

Underthisscheme,fouralliedbutdifferentplanscomeunderthesemethods: · Halsey plan · Rowan plan · Barth plan ·Bedauxplan

Themostcommonfeatureofalltheseplansisthatbonusispaidonthetime saved. These are called the gain sharing schemes as both the employer andtheemployeesharethegainsfromthetimesaved.Theworkerwouldbepaidforhalf(oranyotherfraction)ofthetimesavedandemployerwouldbe getting the balance amount.

Theseplansareoftenappliedincaseswhereitisnotpossibletosetstandardsortomeasuretheworkersoutputaccurately.Undersomeoftheseplans,itispossiblefortheworkertoearnmoreforacertainlevelofoutputsaswhencomparedtopiecewagemethodunderproductiondifficulties.

Halseyplan:Underthisplan,standardtimeisfixedforthecompletionofajobandtherateperhouristhendetermined.Theworkerwillbepaidwagesontimerateincasehetakesstandardtimeormore.However,ifhetakeslessthanthestandardtimethanheispaidfortheactualtimeplusabonus,whichiscalculatedonaspecifiedpercentageofthetimesaved.Thepercentagemayvaryfrom30to70percent.Theusualshareis50percent,the remaining go to the employer.

Thefollowingexampleillustratestheplan:Standard time = 10 hrsRate per hour = ` 1Case (1) Time taken = 10 hrsEarnings=10×1=` 10Case (2) Time taken = 12 hrsEarnings=12×1=` 12Case (3) Time taken = 8 hrsEarnings:Time wages = 8 × 1 = ` 8 Bonus = 1/2 × 2 × 1 = ` 1 ` 9

Incentives

NOTES


Rowanplan:Underthisplan,standardtimeandrateperhourarefixed.Ifthetimetakentocompletethejobisequaltoorexceedsthestandardtime,thentheemployeeispaidfortheactualtimetakenattherateperhour.Ifthetime taken is less than the standard time, then the employee is paid entitled to bonusinadditiontotimewages.Thebonustakestheformofthepercentageoftheworkerstimerate.Thispercentageisequaltotheproportionofthesaved time, to the standard time.

Thefollowingexampleillustratestheplan:Standard Time = 10 hrsRate per hour = ` 1Case (1) Time taken = 10 hrsEarnings=10×1=` 10Case (2) Time taken = 12 hrsEarnings=12×1=` 12Case (3) Time taken = 8 hrs Earnings=8×1=` 8 Bonus = 2/10 × 8 = ` 1.6 ` 9.60Barth Plan (variable sharing plan): Unlike Halsey and Rowan, it does

not guarantee the time rate. The workers earning is ascertained by multiplying thestandardhourby thenumberofhoursactually taken tocomplete thejobandthentakingthesquarerootoftheproductandmultiplyingitbytheworkers hourly rate.

Thefollowingexamplesillustratesthisplan:Standard time = 10 hrsRate per hour = ` 1Case (1) Time taken = 12 hrsEarnings=Ö12 × 10 = 10.95 × 1 = ` 10.95Case (2) Time taken = 10 hrsEarnings=Ö10 × 10 = 10 × 1 = ` 10Case (3) Time taken = 8 hrsEarnings=Ö8 × 10 = `. 8.94 × 1 = ` 8.94Bedaux plan: Under this plan, the standard time for the job is

determined.EachminuteoftheallowedtimeiscalledapointorB,thusthereare60Bsinanhour.EachjobhasastandardnumberofBs.Theworkerreceives bonus in addition to his hourly rate earns, which under the original planisequalto75percentofthenumberofpointsearnedinexcessof60

NOTES


Incentivesperhourmultipliedbyonesixthoftheworkershourlyrate.Theworkerispaidtimerateifhedoesnotachievethestandardtime.

ThefollowingexamplesillustratetheBedauxplan:Standard time = 10 hrsRate per hour = ` 1Case (1) Actual time = 12 hrsEarnings=12×1=` 12Case (2) Actual time = 8 hrsEarnings:Timewages=8×1=` 8Bonus:Standard Bs = 10 × 60 = 600Actual Bs = 8 × 60 = 480Bs saved = 120Bonus = 75/100 × (120 × 1)/60 = 1.50Totalearnings=8+1.50=` 9.50

(c)Schemeswhere theworkers’ earningsvaryproportionatelymorethanoutput

Under this scheme we have two methods: (a) The high piece rate method (b) The high standard hour method

Underthehighpieceratemethod,theearningsoftheworkerareinproportion to his output as in straight piece method but the increment in earningsforeachunitofoutputabovethestandardisgreater.Forexample,foreachonepercentincreaseinearningsascomparedtoonepercentincreasein output above the standard, there may be 4/3 times increase in earnings as compared to one per cent increase in earnings under the straight piece rate method.Thehigherratesstartapplyingafterthestandardshavebeenreached.Similarly, high standard hour method can be understood by applying logic.

Themainfeatureofthesetwomethodsisthatthedirectlabourcostperunitincreasesforlevelsofoutputabovestandard,makingworkersalsosharethe earnings in overhead costs. The amount that the workers share depends onthesizeoftheincrementsinearningspayableatdifferentlevelsofoutput.

(d)Schemeswhere theworkers’ earningsdifferatdifferent levels ofoutput

This scheme involves several methods such as:The Taylor’sdifferentialpieceratemethod:Under this method, there

islowpieceratefixedforoutputbelowstandardandhighpieceratefixed

Incentives

NOTES


foroutputabovestandardplusabonusof50percentofthetimerateonattainmentofstandardoutputormore.

Thefollowingexamplewillillustratethismethod:Standard output = 100 unitsRate per unit = 10 paiseDifferentialtobeapplied:120%ofpiecerateatorabovethestandard80%ofpieceratewhenbelowthestandardCase (1) output = 120 units Earnings=120×120/100×0.10=14.40Case (2) output = 90 units Earnings=90×80/100×0.10=7.20TheMerrickdifferentialpieceratesystem:Thismethodisamodification

overtheTaylor’smethodinasensethatitusesthreeratesinsteadoftwo.One large step is broken into two in order to encourage new and average workers.Straightpieceratesarepaidupto83percentofthestandardoutputatwhichabonusof10percentofthetimerateispayablewithafurther10percentbonusonreachingthestandardoutput.Highpieceratesarepaidforoutputs above the standard.

Thefollowingexamplewillillustratethismethod:Standard output = 100 unitsPiece rate = 10 paiseCase (1) Output = 80 unitsEfficiency=80/100×100=80%Earnings:Astheefficiencyislessthan83percent,onlythebasepiecerateapplies:80 × 0.10 = ` 8Case (2) Output = 90 unitsEfficiency=90/100×100=90%Earnings:Astheefficiencyismorethan83%butlessthan100%,110%

ofthebasepiecerateapplies:90 × 110/100 × 0.10 = `.9.90 Case (3) Output = 110 unitsEfficiency=110/100×100=110%Earnings:Astheefficiencyexceeds100percenttherefore120percent

ofthebasepiecerateapplies:110 × 120/100 × 0.10 = ` 13.20

NOTES


IncentivesThe Gantt task method: Under this method, the worker is guaranteed timerateforoutputbelowthestandard.Onreachingthestandardoutput,theworkerisgivenabonusof20percentofthetimewages.Fortheoutputabove the standard, high piece rates are paid.

Thefollowingexampleillustratesthemethod:Rate per hour = 0.50High piece rate = ` 0.10Standard output = 80 unitsTime taken = 8 hrsCase (1) output = 70 unitsAs the output is less than the standard, only time wages are paid to

the worker.Earnings=8×0.50=` 4Case (2) output = 80 unitsAs the output is equal to the standard, the worker is entitled to time

wagesplus20%oftimewagesasbonus.Time wages = 8 × 0.50 = `. 4Bonus = 20/100 × 4 = Re 0.80Total earnings = ` 4.80Case (3) output = 110 unitsAs the output is more than the standard, the worker is given high piece

rate = 110 × 0.10 = ` 11Emerson’splan:Underthismethod,standardtimeisfixedforeachjobandtheefficiencyofeachworkerisdeterminedbydividingtimetakenwiththestandardoutput.Upto67percentofefficiency,theworkerispaidbytimeratethereafter100percentefficiencyheispaidabonusof29percent.Heispaidanadditional1percentbonusforeveryadditional1percentefficiency.

Thefollowingexamplewillillustratethismethod:Standard output in 8 hours = 100 units Rate per hour = ` 1Case (1) output in 10 hours = 50 unitsEarnings:Efficiency=50%Astheefficiencyisbelow67%theworkerisentitledtotimeagesonly.10 × 1 = ` 10Case (2) output in 10 hours = 100 unitsEarnings:Efficiency=100%

Incentives

NOTES


Theworkerisentitledtotimeagesplusa20percentoftimewagesas bonus.

Time wages = 10 × 1 = ` 10Bonus = 20/100 × 10 = ` 2 ` 12Case (3) output in 10 hours = 130 unitsEarnings:Efficiency=130percentAt therateof20percentat100percentefficiencyand1percent

increaseforevery1percentincreaseinefficiencytheworkergets50percentoftimewageasbonus.

Time wages = 10 × 1 = ` 10Bonus = 50/100 × 10 = ` 2 ` 15

Theacceleratedpremiummethod: Under this method, with the increase in theleveloutput,thereisaproportionateincreaseintheearningsofaworker.This motivates the worker to produce, more since by producing more they can earn more. This method is complicated to understand and implement.

Groupincentiveschemes: Group incentive schemes are common in mostoftheindustrialestablishments.

Anyindividualschemediscussedbeforecanbeappliedtoagroupofworker, the most common among them is piece rate method.

Depending upon the incentive scheme that is followed, the totalearningsofagrouparedetermined,andthentheearningsaredividedamongthemembersofgrouponsomeequitablebasis:

· Ifthegroupconsistsofmemberswithequalskills,thentheearningsare equally divided among them.

· If the group consists ofmemberswith unequal skills, then theearnings will be divided among the members in proportion to their individualtimeratesorspecifiedpercentages.

Someoftheadvantagesofgroupincentiveschemesare:· Better cooperation among the workers.· Lesssupervision· Reducedincidenceofabsenteeism· Reduced clerical worker· Shorter training timeSomeofthedisadvantagesofgroupincentiveschemesare:· Anefficientworkermaybepenalizedfortheinefficiencyofthe

othermembersofthegroup

NOTES


Incentives· The incentive may not be strong enough to serve its purpose· Rivalryamongthemembersofthegroupdefeatstheverypurpose

ofteamworkandcooperation

CheckYourProgress

1.Definewages. 2.Stateonedisadvantageoftimewagesystem. 3. What is incentive compensation? 4.Whatarefringebenefits?


1.ThePaymentofWagesAct1936,Sec2(vi)defineswagesas,‘anyawardofsettlementandproductionbonus,ifpaid,constituteswages.’

2.TimeWageSystemoffersnoincentivefortheemployeestoputforththeirbestefforts.Effortsandrewardhavenodirectpositivecorrelation.

3. Incentivecompensation,alsocalled‘paymentbyresult’,isamethodof sharing gains in productivitywithworkers by rewarding themfinanciallyfortheirincreasedrateofoutput.

4.Fringebenefitsaretheadditionalbenefitsandservicesthatareprovidedby a company to its employees in addition to their direct salary.

11.4 SUMMARY

· Wages in the widest sense mean any economic compensation paid bytheemployerundersomecontracttohisworkersfortheservicesrendered by them.

·ThePaymentofWagesAct1936,Sec2(vi)defineswagesas,‘anyawardofsettlementandproductionbonus,ifpaid,constituteswages.’

·Compensationpaidtothelabourfortheserviceofferediscalledaswages or salary.

· Time Wage: Itisbasedontheamountoftimespent.Wageismeasuredonthebasisofunitoftime,e.g.,perday,permonth,etc.Wagesdonotdependontheperformanceoftheemployee.

·TimeWageSystemoffersnoincentivefortheemployeestoputforththeirbestefforts.Effortsandrewardhavenodirectpositivecorrelation.

Incentives

NOTES


· Piece Wage System: Itisbasedontheamountofworkperformedorproductivity.Theearningsoftheemployeearedirectlyproportionaltohisoutputorperformance.

·A systemofwage payment thatwouldmaintain both quality andquantity is called incentive wage plan, and it is naturally a judicious combinationofbothbasicsystemsofwagepayments,i.e.,timeandpiece wages.

·Undertheincentiveplansofwagepayment,bothtimewageandpiecewage systems are blended together in such a manner that the workers are induced to increase their productivity.

· Halsey Plan: It is a plan originated by F.A. Halsey to encourage efficiencyamongworkersaswellastoguaranteethemwagesaccordingto time basis.

· Rowan Plan: Wages, according to time basis, are guaranteed and the slowworkerisnotmadetosuffer.

· InthewordsofHummelandNickerson,wageincentives‘referstoalltheplansthatprovideextrapayforextraperformanceinadditiontoregularwagesforajob.’

·Thesimplestofallwageincentivesmaybedescribedasthestraightpiece-rate system.

·Fringebenefitsaretheadditionalbenefitsandservicesthatareprovidedby a company to its employees in addition to their direct salary.

·There are a lot of advantages of fringe benefits that attract theemployees.Firstly,asmostofthefringebenefitsarenottaxedbenefits,theyarenotincludedinthetaxableincome.

· Insurancebenefitsarealsoanimportantfringebenefitfortheemployeesofacompany.

·Variablecompensationreferstotheincentiveschemesthataregiventotheworkersonthebasisoftheirproductivity.

11.5 KEY WORDS

· Incentive: It is a payment or concession to stimulate greater output or investment.

· Insurance: It is an arrangement by which a company undertakes to provideaguaranteeofcompensationforspecifiedloss,damage,illness,ordeathinreturnforpaymentofaspecifiedpremium.

·Pension:Itisanamountofmoneypaidregularlybythegovernmentor a private company to a person who does not work anymore because they are too old or have become ill.

NOTES


Incentives11.6 SELF ASSESSMENT QUESTIONS AND

EXERCISES


1.Statethefundamentalmethodsofcompensatingworkers. 2. Write a short note on incentive wage plans. 3.Whataretherequisitesforthesuccessofanincentiveplan? 4.Howcanwemonitorfringebenefits?

LongAnswerQuestions

1.DescribethebroadcategoriesofincentiveschemesasclassifiedbyDunn and Rachel.

2.Analysetheprinciplesoffringebenefits. 3.Discussthetypesandimportanceoffringebenefits. 4.Assessthetypesofincentiveschemesindetail.






Employee Relations

NOTES


BLOCK - IV DEVELOPMENT & GROWTH

UNIT 12 EMPLOYEE RELATIONSStructure 12.0 Introduction 12.1 Objectives 12.2 ConceptofEmployeeRelations 12.3 Managing Discipline

12.3.1 AspectsandObjectivesofDiscipline 12.3.2 CausesofIndiscipline 12.3.3 Disciplinary Procedure 12.3.4 CodeofDiscipline

12.4 EmployeeCounselling 12.5 Managing Grievance 12.6 Answers to Check Your Progress Questions 12.7 Summary 12.8 Key Words 12.9 SelfAssessmentQuestionsandExercises 12.10 Further Readings

12.0 INTRODUCTION

Industrial relations is an integrative domain that analyses employment relationship. Industrial relations ismorewidely being referred to asemployment relations or employee relations, reason being the importance of non-industrial employment relationships; this approach is at timesvisualizedasadditionalexpansionofthehumanresourcemanagementdrift.Certainly,afewoftheauthorsnowexplainhumanresourcemanagementas interchangeable with employee relations. Other authors view employee relationsaspertainingonlytonon-unionizedpersonnel.Ontheotherhand,laborrelationisreferredtoasdealingwithsyndicatedemployees.

Thisunitwillexaminevariousaspectsofemployeerelationsindetail.

12.1 OBJECTIVES

Aftergoingthroughthisunit,youwillbeableto: ·Discusstheconceptofemployeerelations ·Explainhowdisciplineandgrievancearemanaged ·Describetheconceptofemployeecounselling

NOTES


Employee Relations 12.2 CONCEPT OF EMPLOYEE RELATIONS

Industrial relations deal with the relationship between labour and management, andtheirorganization.Theconcept of‘industrialrelations’isverybroadandincludesinitsfoldalltherelationshipsinmodernindustrialsocietywhichariseoutofemployee-employerexchangesandalsotheroleofthestateintheserelations.Explaining theconceptof industrial relations,RALesterobserved:

Itinvolvesattempttoworkablesolutionsbetweenconflictingobjectivesandvalues—betweenincentiveandeconomicsecurity,betweendisciplineand industrial democracy, between authority and freedom and betweenbargaining and cooperation.

AccordingtotheEncyclopediaBritannica,‘theconceptofindustrialrelationshasbeenextendedtodenotetherelationsofthestatewithemployers,workersandtheirorganizations’.

The InternationalLabourOrganization (ILO),while dealingwithindustrial relations, states that they deal with either the relationship betweentheStateandemployersandworkers’organizationorbetweentheoccupationalorganizationsthemselves.

Thesignificanceofindustrialrelationsisaptlydescribedbythe(First)NationalCommissiononLabour(1969)asfollows:

Aquestforindustrialharmonyisindispensablewhenacountryplanstomakeeconomicprogress.Economicprogressisboundupwithindustrialharmonyforthe simple reason that industrial harmony leads to more cooperation between employers and employees which results in more productivity and thereby contributestoall-roundprosperityofthecountry.Healthyindustrialrelationsonwhichindustrialharmonydependscannot,therefore,beregardedasamatterinwhichemployersandemployeesareconcerned.Itisofvitalsignificanceforthe community as a whole.

The scope ofindustrialrelationsvariesfromtimetotimeandplacetoplace.AccordingtoProfessorRichardson,thescopeofindustrialrelationsincludes:‘Howpeoplegetontogetherattheirwork,whatdifficultiesarisebetween them, how their relations including wages and working conditions areregulated,andwhatorganizationsaresetupfortheprotectionofdifferentinterests.’

12.3 MANAGING DISCIPLINE

Disciplinemeanssystematicallyconductingthebusinessbytheorganizationalmembers who strictly adhere to the essential rules and regulations. It pertains to improving employee performance through a process of assisting theemployee(atleastatfirst)tolearnsoheorshecanperformmoreeffectively.

Employee Relations

NOTES


12.3.1 Aspects andObjectives ofDiscipline

Therearetwoaspectsofdiscipline.Theyare: (a) Positive aspect (b) Negative aspect (a)Positive aspect: Employees complywith rules not out of fear of

punishmentbutoutofaninherentdesiretocooperateandachievegoals.Wheretheorganizationalclimateismarkedbytwo-waycommunication,cleargoals,effectiveleadership,andadequatecompensationemployeesneednotbedisciplinedinthetraditionalway.Thistypeofapproachiscalledpositiveapproachorconstructivedisciplineorself-discipline.According to Spriegel, ‘positive discipline enables an employee to have agreaterfreedominthatheenjoysagreaterdegreeofself-expressioninstrivingtoachievethegroupobjective,whichheidentifiesashisown.’

(b)Negativeaspect:Employeessometimesdonotbelieveinandsupportdiscipline. As such, they do not adhere to rules, regulations and desired standards of behaviour.Hence, disciplinary programme forces andconstraintstheemployeestoobeyordersandfunctioninaccordancewith set rules and regulations through warnings, penalties and other formsofpunishment.Thisapproachtodisciplineiscallednegativeapproach or corrective approach or punitive approach. Negative or punitivedisciplineisoneinwhichmanagementhastoexertpressureor hold out threat by imposing penalties on wrongdoers. When this pressure becomes increasingly severe each time a man is disciplined, it iscalled‘progressive’or‘corrective’discipline.Thefearofpunishmentputs the employee back on rails. According to Spiegel, ‘discipline is theforcethatpromptsanindividualoragrouptoobservetherules,regulations and procedures which are deemed to be necessary to the attainmentofanobjective.’Negativedisciplineconnotesthatpersonnelareforcedtoobserverules

andregulationsonaccountoffearorreprimand,fine,demotion,ortransfer.Butthesearehelpfulinextractingjustminimumstandardsofworkfromtheemployeessincetheyworkonaccountoffear.Incontrast,iftheauthorityisexercisedarbitrarily,orifrulesofconductareunreasonableorifemployeesdonot have sense of adhering to the rules and regulations, discipline isthreatenedandif it isprolonged, itaffects theorganizationalhealth.Anyprogrammeofdisciplinewillbeeffectiveandsuccessfulonlywhenitisusedtosupplementandstrengthenself-discipline.

V.S.P.Raosummarizesthedifferencesbetweenthetwoapproachesasfollows:

NOTES


Employee Relations Table 12.1 DifferencesbetweenPositiveandNegativeDiscipline

Point Negative Discipline Positive Discipline

CONCEPT It is adherence to establishednorms and regulations, out offearofpunishment.

Itisthecreationofaconduciveclimateinanorganzationsothat employees willinglyconformtotheestablishedrules.

CONFLICT Employees do not perceive thecorporate goals as their own.

Thereisnoconflictbetweenindividualandorganizationalgoals.

Source: VSP, Rao. 2000. Human Resource Management—Text and Cases. New Delhi: ExcelBooks,p.433.

Objectives ofdiscipline

Theobjectivesofdisciplineare: (a)Togainwilling acceptanceof the rules, regulations, standards and

proceduresoftheorganizationfromtheemployees (b)Todevelopthefeelingofcooperationamongtheworkers (c)Tocreateanatmosphereofrespectforthehumanpersonalityandhuman

relationsandtomaintaingoodindustrialrelationsintheorganization (d)Toincreasetheworkingefficiencyandmoraleoftheemployeessothat

theirproductivityissteppedupandthecostofproductionisdecreased (e)Todevelopasenseoftoleranceandrespectforhumandignity (f)Togiveandseekdirectionandresponsibility

12.3.2 Causesof Indiscipline

The common causes of indiscipline in an organizationmaybe stated asfollows: · Lack of effective leadership:Effective leadership is amust for

maintaining thediscipline,whichmeans toseekcooperationof thefollowers(subordinates) toachievethedesiredobjectives.InIndia,effectiveleadershipcouldnotbeprovidedeitherbythemanagementor by the trade unions which caused indiscipline in the industries.

· Defectivesupervision:Supervisoristheimmediatebossoftheworkersandmanydisciplinaryproblemsoccurbecauseoffaultysupervision.Theattitudeandbehaviorofthesupervisormaycreatemanyproblems.As themaintenanceof the discipline is the discipline is the core fsupervisoryresponsibilities,indisciplinemayspringfromthewantoftherighttypeofsupervision.

Employee Relations

NOTES


· Varyingdisciplinarymeasures:Consistent disciplinary actions must bethereintheorganizationtoprovideequaljusticetoallconcerned.Atdifferenttimesandforeveryone,thesamestandardofdisciplinarymeasures should be taken otherwise it may give rise to growing indiscipline in the industry in future i.e., the judicious functiononthe past ofmanagementmust be free formmaybias, privilege orfavouritism.

· Divideandrulepolicy:Many mangers in the business obtain secret informationaboutotheremployeesthroughtheirtrustedassistants.Thespyingonemployeesisonlyproductiveofaviciousatmosphereandofundesirableintheorganization.HenryFayolhasrightlypointedoutthatdividingenemyforcestoweakenthemiscleverbutdividingone’sownteamisgravesinagainstthebusiness.Noamountofmanagementskillisnecessaryfordividingpersonnelbutintegratingpersonnelintoateamisthechallengingtaskofsoundmanagement.

· Lackofwell-definedCodeofConduct:Theremustbeacodeofdisciplineineveryorganizationenlistingsufficientrulesregulationsorcustomarypracticesfortheguidanceandinformationofallemployees.Such code should be communicated to all concerned in a clear and simplelanguagesoastobefollowedbytheconcernedinaclearandsimplelanguagesoastobefollowedbytheconcernedpartiesinitstruespirit.Tobeeffective, thecodeshouldbeadoptedbythejointconsultationofmanagersand thesubordinates. In theabsenceofawell-definedcodeofdiscipline,thedisciplinaryactionsemanatefrompersonal whims and temperaments which create indiscipline.

· Deferring settlement of employee grievances:The employee grievancescannotbeputoffbydeferringorneglectingtheirsolutions.The grievances should properly be inquired into and settled by the managersinareasonableperiod.Neglectofgrievancesoftenresultsin reduced performance, lowmorale and indiscipline among theemployees.Strikesandworkstoppagessteminmanycasesformtheutterneglectofemployeegrievances.

· Inadequateattention topersonalproblems:Actions or reactions ofpeoplearethedirectoutcomeoftheirattitudes.Attitudesinfluencehuman beings and their activities. Discipline is the by-product of these attitudes and the attitudes in turn, is determined by thepersonalproblemsofemployees.Inordertomaintainthediscipline,understandingofthepersonalproblemsandindividualdifficultiesaswell as counselling with employees, is necessary. Inadequate attention to the personal problems, thus, gives rise to indiscipline.

· Victimizationandexcessivepressures:Sometimes the manager or thesupervisordevelops ill-feelings inhimaboutsomepersonsand

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Employee Relations victimizestheminhisownway.Itcontributestoindiscipline.Moreover,the supervisor puts excessive pressure ofwork on the employeesunderhisstrictcontrolwhichtheyfeelsuffocative.Itmayresult inindiscipline.

·Misjudgment in promotion and placements:Misjudgment in personnel matters like promotion and placements contribute to the growthof indiscipline in an enterprise.Cases ofmis-judgment arecarefullynoted,widelycirculated,andhotlydebatedbytheemployees.Expectingdisciplinefrommisruledpeopleisnotpossible.Sometimes,undesired persons are placed on the jobs which makes the employees discontented,thengivingrisetotheproblemofindiscipline.

12.3.3 DisciplinaryProcedure

Thefollowingshouldbethestepsfortakingdisciplinaryaction: (a)Preliminaryinvestigation:Thefirststepshouldbetoholdpreliminary

investigation in order to find outwhether a prima facie case ofmisconductexists.Onlyifaprimafaciecaseofmisconductexists,themanagementshouldproceedfurther.Otherwise,thecaseshouldbe dropped.

(b) Issueofachargesheet:Ifaprimafaciecaseofmisconductexists,the management should proceed to issue a charge-sheet to the worker. Thefollowingguidelinesmaybefollowedinframingthecharges:· Eachchargemustbeveryclearandprecise.· Thereshouldbeaseparatechargeforeachallegation.· Charges must not relate to any matter which has already been

decided upon.· Proposed punishment should be avoided in the charge sheet.

(c)Suspensionpendingenquiry(ifneeded):Ifthenatureofmisconductisgraveand if it is in the interestofdisciplineand security in theestablishment, themanagementmaysuspendaworkerevenbeforethe chargesheet is issued. In case the worker is suspended he should bepaidsubsistenceallowanceatthefollowingrates:· Forthefirstninetydaysofsuspension,halfhiswages· Fortheremainingperiodofsuspension,three-fourthsofhiswages

(d)Noticeofenquiry:Onreceiptofreplytothechargesheet,eitherofthefollowingtwosituationsmayarise:

(i) The worker may admit the charge. In such a case, the employer mayawardpunishmentwithoutfurtherenquiry.

(ii) The worker may deny the charge. In this case, the employer must hold the enquiry.

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(e)Conducttheenquiry:Theenquiryofficerisajudge,soitisnecessarythathemustbeimpartialandqualifiedtoactinthatcapacity.Afairopportunityshouldbegiventothechargesheetedemployeetoexaminethe management witnesses.

(f)Recordingoffindingsbytheenquiryofficer:Attheconclusionoftheenquiryproceedingstheenquiryofficershoulddecideastowhetherthechargesmadearevalidornotalongwithreasonsforhisfindings.

(g)Awardingpunishment: The punishment awarded to the accused employee should be communicated to him quickly. The letter should containthefollowing:· Referenceto(i)thechargesheet(ii)theenquiryand(iii)findings

oftheenquiry· Decision· DatefromwhichthepunishmentistobeeffectiveThe strict lawofmaster and servant conferredupon the employer

anunfetteredright tohireandfirehisemployees.This traditional lawofemployer-workmen relationship was based purely on contract. Quite apart fromthelawofcontract,itisobviousthatintheday-to-dayrunningoftheindustry, the management is required to take disciplinary action against erringworkmen.Initialdecisionsastomaintenanceofdisciplinerestwiththe employer. These decisions, when made bonafide, are related to, and dependantuponconsiderationsoftheoverallneedsoftheindustry.Butthereportsofcommitteesandcommissionsonlabourandreporteddecisionsarefullofinstancesthatmanagementshavevictimizedtheirworkmenfortheirunionactivities,andinparticular,forincitingotherworkerstogoonstrikeorfomentingastrike.Instancesarenotlackingwhenassertivestrikingemployees were discharged en masse. Further, instances of dismissal ofworkmenbythemanagementwithoutcomplyingwiththeprovisionsofthestandingordersofthecompanyorrulesofnaturaljusticearenotinfrequent.Under the circumstances, the need to protect workmen against capricious andvindictiveactionofthemanagementbecomesobvious.Itwasrealizedinmostindustriallyadvancedcountriesthatifthelawofmasterandservantwasgivenfreeplay,workerswouldhardlyhaveanysecurityoftenure.

On the other hand, in day-to-day administration, management is called upon to take bonafide decisions against erring workmen. It is also called upontotakedisciplinaryactionagainstaworkmanwhoisfoundguiltyofseriousmisconductwheresuchmisconductconsistsofintentionaldamagetothepropertyoftheconcernorseriouspersonalinjurytootheremployeesoftheconcernorwherethereisreasonableapprehensionoftheircommittingactsof sabotageor instigation,abetmentor incitementofworkersof theconcerntoparticipateintheaforesaidactivities.Underthecircumstances,themerefactthatthemanagement’sorderofdismissaloftheworkmanis

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Employee Relations wrongful, disproportionate ormalafide and affects theworkman cannotaltogetherdeprivethemanagementfromtakingdisciplinaryactionagainstthe workman. To do so is to encourage indiscipline and render day-to-day runningoftheconcernimpossible.

To meet this situation, courts have evolved various norms to regulate management’spowertodismissitsworkmen.Theyhavetriedtomaintainabalancebetweenthepowerofthemanagementtodisciplinetheworkmenandsecurityoftenureofworkmen.Further,thecourtshavenotonlyinterpretedtheexistinglawbutmadenewlawstomeettheneedsoftheindustryandtoavoidhardshipandunfairnesstoworkers.

12.3.4 CodeofDiscipline

TheneedforVoluntaryCodeofDisciplinewasfeltin1957inordertocreateawareness among the parties to industrial relations about their obligations underlabourlaws,asalsotocreateinthemanattitudeofwillingacceptanceoftheirresponsibilitiesandareadinesstodischargethem.ItwasinthiscontextthattheCodeofDisciplinefoundapprovalatthesixteenthIndianLabourConferenceandwasformallyannouncedinJune1958.TheCodewasratifiedbythecentralorganizationofworkersandemployers.TheCodehasbeenacceptedbyamajorityofprivateandpublicsectors.TheCode,primarilyasaresultofthepersuasiveeffortsofCentralImplementationandEvaluationdivision,hasbeenacceptedby166tradeunionsand180employersaffiliatedtoCentralWorkers’andEmployers’Organization.

The Code applies to all public-sector undertakings run as companies andcorporationsexceptindefense,railwaysandportsanddocks.Amongthose,wheretheCodeofDisciplineapplieswithcertainmodificationsincludeReserveBankofIndia,StateBankofIndiaandtheDepartmentofDefenceProduction. Under the Code, management and union(s) agree that: (i) No unilateral action should be taken in connection with any industrial

matter and that disputes should be settled at appropriate level. (ii)Theexistingmachineryforsettlementofdisputesshouldbeutilized

withtheutmostexpedition. (iii) There should be no strike or lockout without notice. (iv)They affirm their faith in democratic principles and they bind

themselvestosettleallfuturedifferences,disputesandgrievancesbymutual negotiation, conciliation and voluntary arbitration.

(v) Neither party will have recourse to (a) coercion (b) intimidation, (c) victimization,or(d)go-slow.

(vi) They will avoid (a) litigation, (b) sit-down and stay-in strikes, and (c) lockouts.

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(vii) They will promote constructive cooperation between their representatives at all levels and as between workers themselves and abidebythespiritofagreementsmutuallyenteredinto.

(viii) They will establish upon a mutually agreed basis, a grievance procedure whichwillensureaspeedyandfullinvestigationleadingtosettlement.

(ix)Theywillabidebyvariousstagesinthegrievanceprocedureandtakeno arbitrary action which would bypass this procedure.

(x)Theywilleducatethemanagementpersonnelandworkersregardingtheir obligations to each other.Inordertoensurebetterdisciplineinindustry,theCodeprovidesfor:(i)

ajustrecognitionbyemployersandworkersoftherightsandresponsibilitiesofeitherpartyasdefinedbythelawsandagreements,(includingbipartiteandtripartiteagreementsarrivedatalllevelsfromtimetotime)and(ii)properandwillingdischargebyeitherpartyofitsobligationsconsequentonsuchrecognition.

In the second set, the management agree (i) not to increase work-loads unlessagreeduponor settledotherwise; (ii)not to supportor encourageanyunfairlabourpractice;(iii)totakepromptactionfor(a)settlementofgrievances,and(b) implementationofsettlements,awards,decisionsandothers;(iv)todisplayinconspicuousplacesinundertakingtheprovisionsofthisCodeinlocallanguage(s);(v)todistinguishbetweenactionsjustifyingimmediate discharge and those where discharge must be preceded by a warning,reprimandsuspensionorsomeotherformofdisciplinaryactionandto arrange that all such disciplinary actions should be subject to an appeal throughnormalgrievanceprocedure;(vi) to takeappropriatedisciplinaryaction against its officers andmembers in caseswhere enquiries revealthat theywere responsible forprecipitatingactionbyworkers leading toindiscipline;(vii)torecognizetheunioninaccordancewiththeprescribedcriteria.

The third set imposes an obligation upon the unions: (i)Nottoengageinanyformofphysicalduress. (ii)Nottopermitdemonstrationswhicharenotpeacefulandnotto

permit rowdyism in demonstration. (iii) That their members will not engage or cause other employees

to engage in any union activity during working hours, unless as providedforbyanylaw,agreementorpractice.

(iv)To discourage unfair labour practices such as, (a) negligenceofduty,(b)carelessoperation,(c)damageofpropertyand(d)insubordination.

(v) To take prompt action to implement awards, agreements, settlements and decisions.

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Employee Relations (vi)To display in conspicuous places in the union offices, theprovisionsofthiscodeinthelocallanguage(s).

(vii)To express disapproval and to take appropriate action againstoffice-bearersandmembersforindulginginactionsagainstthespiritofthisCode.

The Supreme Court in General Secretary, Rourkela Shramik Sangh vs Rourkela Mazdoor Subha,heldthatalthoughSection11oftheCodeisheaded‘implementationmachinery’,itconsistsoftwoseparateorganizations,viz.implementationunitsandtripartiteimplementationcommitteeswhichisobviousfromthelanguageofSection11itselfandalsofromtheseparateconstitutionand functionsof the twoorganizations.TheCourt ruled thatto hold that the implementation unit in the respective labour department together with the respective tripartite committee at Centre, state or local levelwouldconstitutetheimplementationmachineryjointlyandnoteachofthemseparatelywouldrunnotonlycountertotheintentionoftheCodeasismanifestfromthelanguageofSection11andtheirseparatecompositionandfunctions,butwouldalsobeimpracticableinworking.

However,theCodeofDisciplinehasnotbeeneffectivelyimplementedand it is respected more in breach than in observance. Several reasons may beaccountedforthesame:(i)theabsenceofagenuinedesireforandlimitedsupporttoself-imposedvoluntaryrestraintsonthepartofemployers’andworkers’organizations,(ii)theworseningeconomicsituationwhicherodedtherealwageofworkers,(iii)theliabilityofsomeemployerstoimplementtheir obligations, (iv) a disarray among labour representatives due to rivalries, and(v)conflictbetweentheCodeandtheLaw.Inviewofthis,theNationalCommissiononLabourrecommendedthatthepartoftheCodewhichenjoinsstricterobservanceofobligationsandresponsibilitiesunderthevariouslabourlawsmaybelefttothenormalprocessofimplementationandenforcementbythelabouradministrationmachinery,someothersneedtobeformalizedunderlaw.Theseare:(a)recognitionofaunionasbargainingagents;(b)settingupofagrievancemachinery inanundertaking:(c)prohibitionofstrike/lockoutwithoutnotice;(d)penalitiesforunfairlabourpractices;and(e)provisionofvoluntaryarbitration.

WiththeremovaloftheseprovisionsfromtheCodeandongivingthemalegalform,theCodewillhavenousefulfunctiontoperform.

CheckYourProgress

1. What does industrial relations deal with? 2. What is discipline? 3.Whenandwhywastheneedforvoluntarycodeofdisciplinefelt?

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12.4 EMPLOYEE COUNSELLING

Thissectionisdevotedtothestudyofemployeecounselling.

MeaningandSignificanceofCounselling

In general, as a human relations technique, counselling is essential foreffectiveness inmanaging human resources. Specifically, it forms aprerequisitetoperformtheprecedingpersonnelfunctionsofperformanceappraisal,promotion,transferandseparation.Counsellingreferstotheprocessofadvisinganemployeeorpreferablyinmostcases,listeningtohisproblemandenablinghimtofindfromhisownthinkingandtalkingasolutionforitwhichissatisfactorytohimself.Itrelatestoamethodofunderstandingandhelpingpeoplewhoareemotionallyupset.Thus,itcanalsobedefinedasadiscussionofanemotionalproblemwithanemployeewiththegeneralobjectiveofminimizingit.Asthisdefinitionimplies, counselling deals with emotional problems and relates to ‘trouble oftheheart’ratherthan‘botheronthehands’.Itprecludesjobdifficultieswhich do not have much emotional repercussion. Moreover, as counselling involvesdiscussion,itformsaprocessofcommunication.

Effective counselling is a product of good communication skills,largely oral, by which an individual tends to share his emotions with another individual.Explicitly,asimplesocialdiscussionofanemotionalproblembetween two persons is not counselling. For counselling, there must be an understandingonthepartoftheemployee(counselee),whiletheotherperson(counsellor)mustcomeforwardtofacilitateit.Finally,counsellingisnotmerelylimitedtoprofessionallytrainedcounsellorswhoareusuallyrequiredincasesofseriousemotionaldifficulties.Supervisorsandmanagersoftheorganizationcaneffectivelycounselemployeeshavinglessseriousproblems.

In thiscontext, the term‘emotionaldifficultyorproblem’deservesexplanation and illustration. It excludes seriousmental illness.Althoughtheemotionalproblemsmaynotappeartobeverysignificantorcomplextoothers, they are important to the individual who has them and thus, whose productiveefficiencyorperformanceisaffectedbythem.Theseproblemsalsoexertanimpactontheindividuals’‘off-the-job’activitiesinothersettings.The examples of such emotional problems cited in literature include: anemployeewhofeelsthathisprogressisveryslowandthathehasnochanceforpromotioninthecompany;anemployeewhoexpectstobetransferredsoonandthus,whoisdisturbedbytheinsecuritycausedbythissituation;awomanemployeeupsetbyhersupervisor’scriticismofherwork;anemployeewhohas a higher paid job elsewhere but cannot decide whether to accept it or not;anemployeeinfrictionwithco-workersonthejob.Majorityofproblememployeesinindustrysufferfromsuchminoremotionaldifficulties.Ifthese

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Employee Relations people are given timely help, their productive energies are released, and they becomemoreeffectiveintheirjobs.

Significance

Theneedforcounsellingstemsfromthecomplexityofhumanbeings.Itisalmostimpossibleforanyhumanbeingtoalwayshaveanoptimalemotionalbalance.However, thepointof ‘blow-up’varieswitheveryhumanbeingbecause of individual differenceswith respect to toleranceof emotionalproblems.Suppressionof emotional problemswhichgets reflected in anindividual’slowmoraleandreducedperformance,isdangerousbothtotheindividualandtheorganization.Asthemanagementcannotaffordtoignoreanymechanicalfaults,soalsoitcannotoverlooktheemotionalproblemsofitspeople.Keepinginviewthenecessityformaintainingareasonableemotional balance and directing the emotions of employees towardsconstructiveapplications,theneedforcounsellingwasrealisedforthefirsttime in Hawthorne Works in 1928. The counselling programmes received furthermomentumduringWorldWarIIthroughstaffservices.Afterthewar,thepersonnelfunctionofcounsellingwasassignedtothelinesupervisors.

Today,theneedforcounsellingmayarisefromvariedon-andoff-the-jobconditionssuchasdissatisfaction,resistancetochange,alienation,frustration,conflictandstress.Amongtheseconditions,stressdeservesspecialattentioninviewofitsmajorcontributiontoemotionalproblemsintoday’scomplexworkenvironment.Althoughcounsellingformsanimportanttechniquetopreventandtreatemotionalproblemsstemmingfromstressatwork,thereareanumberofothertechniqueswhichcanalsobeusedindependentlytoaccomplishthisgoal.Oneofthemostpromisingofsuchtechniquesisthebio-feedbackprocesswhichenablestheindividualtogaugetheundesirableeffectsofstress fromthe feedbackprovidedby instruments thatmeasuresymptomsofstresssuchasheartbeat,oxygenconsumption,stomachacidflowandtypeofbrainwaves.Thus,hecanreduceundesirableeffectsofstress.Likewise,practiceofZen,Yogaandtranscendentalmeditationalsohelptomanagestress.Specifically,intranscendentalmeditation,attemptismadetomeditatedailyfortwoperiodsof20minutesthroughconcentrationonsilentrepetitionofamantra.OnesurveyofseveralorganizationsintheUSAwhereemployeesactivelypracticedmeditationforaboutayearrevealedthatthemeditatorshadsignificantlymorejobsatisfaction,betterperformanceskills,less desire to leave the job and improved interpersonal relationships than a controlledgroup.Notwithstandingthegrowinguseofmeditationinreducingemotionalstrains,counsellingformsthemostfrequentlyusedtechniqueofdealing with emotional problems at work. As pointed out earlier, the general objectiveofcounsellingistoprovidesupporttotheemotionallydisturbedemployee to dealwith his problem so that he develops self-confidence,understanding,self-controlandabilitytoworkeffectivelyintheorganization.

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FunctionsofCounselling

Counselling accomplishes theobjectivesdiscussed earlier byperformingoneormoreofthefollowingsixfunctions:(i) advice, (ii) reassurance, (iii) communication, (iv)releaseofemotionaltension,(v)clarifiedthinking,and(vi) reorientation. (i) Advice. Advice is mistakenly considered as equivalent to counselling.

However, it forms one of its several functions.Advising involvesjudginganindividual’semotionalproblemsandmarshallingacourseofaction.Itcausescomplicationsbecauseoftheinabilityofapersonto understand another person’s problemand suggest a solution forit. It also provides an inferior status to a counseleewho remainsdependentonthecounsellor.Despiteitsineffectivenessinresolvingemotionalproblemsofanemployee,advice-givingisthemostnaturalphenomenon practised between a superior and a subordinate in day-to-day work situations.

(ii)Reassurance.Counsellingperformsthefunctionofreassurancewhichreferstoawayofprovidingcouragetoanindividualtodealwithaproblemordevelopingconfidenceinhimthatheisfacingtowardsanappropriatecourseofaction.However,thedifficultywithsuchassuranceisthatthecounselleddoesnotacceptcounsellingintrinsically.Evenwhenheisreassured,thecounsellor’sre-assurancefadesawaywiththereemergenceoftheproblem.Despiteitsweaknesses,reassuranceisusefulincertainsituations,ifhandledcarefully.

(iii)Communication.Counsellingfacilitatesbothupwardanddownwardcommunication. It provides the employee with an opportunity to express his feelings in an upward direction to themanagement.Thus, themanagement comes to know how the employees feel.The counsellor should keep in confidence the namesof individualemployeesandinterprettheirfeelingsandconveytothemanagement.These feelings expressed through logically classified statementsmay relate to their emotional problemswith varied aspects of theorganization.Counsellingalsofacilitatesdownwardcommunicationwhere the counsellor helps to interpret varied policies and programmes ofthecompanytopeoplewhotendtodiscusstheirproblemsrelatedto them.

(iv)ReleaseofEmotionalTension.Releaseofemotionaltensionorcatharsisformsasignificantfunctionofcounselling.Byexpressingtheemotionalproblemduring the process of counselling, the counselled gets anemotional release fromhis frustrationandalliedproblems. Indeed,assoonasanindividualstartsexplainingtheproblemstoanactivelistener, his tensions tend to subside and his speech becomes coherent and rational.Although this release of tensionmaynot necessarily

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Employee Relations solve the problems, it removes mental barriers and enables the person toagainfacehisproblemsboldly.

(v)ClarifiedThinking.Counselling facilitates clarified thinkingwhichisanoutcomeofemotionalrelease.Itcanbegeneratedquicklybyaskilled counsellor acting as a catalyst. It may partly or entirely take placeoutsidethecounsellingsessionasaresultofcertaindevelopmentsduringthecounsellingrelationships.Withtheemergenceofclarifiedthinking,theindividualtendstoacceptresponsibilityforsolvinghisemotional problems in a realistic way.

(vi)Reorientation.Lastbutnottheleast,counsellingperformsthefunctionofreorientationwhichrelatestoachangeinanindividual’spsychicselfstemmingfromachangeinhisbasicgoalsandvalues.Itinvolvesashiftinone’slevelofaspirationcorrespondingtorealityandenablesonetorecognizeandacceptone’sownlimitations.However,itcanbe largelygeneratedbyaprofessionalcounsellor rather thana lineexecutive.

TypesandProcesses ofCounselling

Depending upon the extent of direction provided by the counsellor to acounselee,Davisclassifiescounsellinginthreeforms:directive,non-directiveand cooperative.

1. Directive counselling

Directivecounsellingisaprocessoflisteningtoanemployee’semotionaldifficulty,decidingwithhimwhatcanbedoneandthentellingandmotivatinghim to do it. In usual practice, although its major role relates to advice, it alsoperformstoacertainextentotherfunctionsofcommunication,releaseofemotionalfeelingand,insomecases,clarificationofthinking.However,advice is generally unwise and thus, of questionable value. In situationswherethecounsellorisaneffectivelistener,thereisanenhancedpossibilityonthepartofthecounseleetoexperienceemotionalreleaseandtoclarifyhisownthinking.Theadviceandreassuranceprovidedduringthecourseofdirectivecounsellingmaybecomeworthwhileiftheemployeeisenthusedbythecounsellortotakeaworkablecourseofaction.

2. Non-directive counselling

Becauseofitsfocusonthecounseleeratherthanonthecounsellor,thisformofcounsellingisalsocalledclient-centredcounselling.Itreferstotheprocessofskilfullylisteningandinducinganemployeetodescribehisbothersomeemotional difficulties, so that the counsellor can understand them andascertainplausiblecoursesofaction.Itallowstheindividual,overwhelmedby emotional problems to speak about them as long as he wishes without any interruption with an empathetic and an appreciative listener in the counsellor,

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whoshowsafeelingofempathyratherthanofsympathyandwhoactswithanattitudeofdeeprespectfortheindividualhavingaproblem.Heunderstandsthat the individualhimself isbestqualified to resolvehisownproblems.Accordingly,thecounsellorhelpstheindividualrealizethatgoalandthus,allows him to talk about anything which may even seem to be irrelevant. The counsellor is required to have an agile and a receptive mind and mirror each individual’sfeelingstoenablethepersontosolvehisproblem.Thecounsellorencourageshimtoexpresshisthoughtsontheproblemandconcentrateonit.Thecounselleemayproceedfrommeresuperficialitiestodeeperproblemsandwiththereleaseofhisfeelings,tendstoreconcilehimselfwithotherpersonsandhimself.

3. Cooperative counselling

AsDavisindicates,whiletheuseofpurenon-directivecounsellingisnotquitewidespreadinworksettingsbecauseofitsvariedlimitations,theadherencetodirective counselling appears to be inappropriate in modern day democratic work situations.This indicates the need for applicationof a counsellingmethodwhich fallsbetween the twoextreme formsofnon-directiveanddirective counselling.Modern executives can integrate the two formsofcounsellingtoaccomplishtheiradvantagesandthrowofftheirdisadvantages.Cooperativecounsellingmeetsthisneedofthepresentindustrialsettings.It is neither entirely counselee-centred nor counsellor-centred but requires bothofthemtocomeforwardwiththeirvariedknowledge,perspectivesandinsighttoresolvethecounselee’sproblemsinacooperativeway.Thus,itcanbedefinedasacooperativeprocessofmutualdiscussionofanindividual’semotional problems and establishment of conditions conducive to theirsolutions.Itcanbepractisedbypeoplewhodonotnecessarilypossessfull-timeprofessionaltrainingincounselling.Thisformofcounsellingisalsofreefromtheautocraticapproachofdirectivecounselling.

Althoughitdemandssomeamountoftrainingandtimetopractice,itiscertainlywithinthereachofmanagers.Itinitiatestheactivelisteningtechniqueofnon-directivecounselling.However,thecooperativecounsellortends to play a more positive role than the non-directive counsellor with progressofthediscussion.Thecooperativecounsellortendstoprovidethecounseleewithwhateverknowledgeandinsighthehimselfpossessesanddiscussesthesituationfromabroadorganizationalperspective.Adherencetothisapproachenablesthecounseleetoseedifferentperspectivesforpurposesofcomparison.Thisformofcounsellingaccomplishesthefourfunctionsofcounselling including reassurance, communication, emotional release and clarifiedthinking.However, it isnotpossibletoaccomplishreorientationthrough this typeofcounselling forwhich thecounseleecanbe referredto as a professional counsellor.Likewise, if there is a need for directiveaction, the management can do so through its supervisory powers rather than

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Employee Relations throughitscounsellingrole.This typeofcounselling ismostappropriateforpractisingmanagerstohelpresolveday-to-dayemotionalproblemsoftheir employees. Its major contribution to management practice relates to a shiftofthetraditionalmanagementroleofdirectivecounsellingtowardsaparticipativemanagementroleofnon-directivecounselling.

IndianPerspectivesonCounselling

Counsellinghasvastpotentialforaccomplishinganeffectiveperformancein industries. It can foster superior-subordinate relationships, help themanagementtounderstandthelimitationsofseniorsandproblemsofjuniors,improvecommunicationsandthusqualityofdecisions,helpemployeestorecognizetheirstrengthsandweaknesses,accomplishgoalclarity,andassesstheimpactofmanagementdecisions.AlthoughseveralIndianorganizationsencouragecounselling,mostofthemgoaboutitincorrectly.Itisusualtocomeacrossmanagerswhomistakenlyregardcounsellingas‘givingfeedbackinathreateningway’,correctingtheundesirableorunsatisfactorybehaviourofemployees by pointing it out and warning them not to repeat these behaviours further.Asdescribedearlier,counsellingishelpingtheemployeetorecognizehis own strengths, weaknesses and potentials with a view to prepare action plansforhisowndevelopmentandnotforthecounsellortoabuseinformationthusgleanedbygivingfeedbackandwarningandpointingoutandenforcingnormsofperformance,whichrelatetofunctionsofotherexecutives.

Findingsof a survey

The above observations are based on a survey conducted by Rao and Abraham on thecurrent statusofcounsellingpractices in Indian industries.As thesurveyindicates,outof53organizationsunderstudy,41(80percent)requiredtheirexecutivestocounseltheirsubordinates,and12(20percent)didnothavesucharequirement.Thirteen(32percent)ofthese41organizationsrequiredtheirexecutivesto counsel their subordinates once a year. Two (5 per cent) organizationsrequiredtheirexecutivestocounseltwiceayear,andone(2.5percent)organizationrequiredcounsellingfourtimesayear.Twenty-seven(61percent)organizationsreportedthattheirexecutiveswererequiredtocounseltheirsubordinatesasoftenasitwaspossiblyneededandthattheydidnothaveanyestablishedpatternofcounselling.However,RaoandAbrahamremarkthatitisaverydeceptivefactorofthecounsellingpractice.Itwascommonforsomeorganizationstoassertthattheyrequiredtheirexecutivesto‘correct’theirsubordinatesthroughcounsellingasoftenaspossible.Theseorganizationsdidnotreallyhaveperformancecounsellingwhichnecessitatesareviewoftheperformanceofanemployeeonallaspectsperiodically.Itisessential to have the time schedule stated and to adhere to it.

Inconjunctionwiththeobjectivesofcounselling,theextentoftimeand attention devoted to it also deserves mention. It provides the counsellor

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withanopportunitytoknowandunderstandtheemployee’sstrengths,hisperceptions,hisabilitytointerprettheorganization,itsprocessandalliedissues.Thereisneedtohelpeachindividualtoidentifyhisstrengthsandweaknessesratherthantellhimaboutthem.Alackofproperunderstandingofcounsellinganditsskillsformsavitalreasonwhysomeemployeesdonot take counselling seriously. In response to a question about how many employees take counselling seriously, only7 (17per cent) organizationsindicatedintheaffirmative,27(64percent)organizationsassertedthatonlysomeoftheemployeestookitseriously,and8(19percent)organizationsdeclaredthatveryfewtookitseriously.

12.5 MANAGING GRIEVANCE

Experienceshowsthatintheday-to-dayrunningofbusiness,thedisputesbetween the employer and workman are resolved by administrative processes referredtoasgrievanceprocedures.TheIndianLabourConferencehasalsoadoptedasimilarconceptofagrievanceinitsfollowingrecommendations:

MeaningandConceptofLabourGrievance

Complaints,affectingoneormoreindividualworkersinrespectoftheirwagepayments,overtime,leave,transfer,promotion,seniority,workassignment,workingconditionsandinterpretationofserviceagreement,dismissalanddischargeswouldconstitutegrievance.Wherethepointsofdisputeareofgeneralapplicabilityorofconsiderablemagnitude,theywillfalloutsidethescopeofgrievanceprocedure.

TheaforesaidconcepthasalsobeenadoptedintheguidingprinciplesforagrievanceprocedureappendedtotheModelGrievanceProcedureinIndia.Further,clause15oftheModelStandingOrdersinScheduleIoftheIndustrialEmployment(StandingOrders)CentralRules,1946,specifiesthat‘allcomplaintsarisingoutofemploymentincludingthoserelatingtounfairtreatmentorwrongfulexactionon thepartof theemployerorhisagent,shallbesubmittedtothemanagerortheotherpersonspecifiedinthisbehalfwiththerighttoappealtotheemployers.’Moreover,theStateGovernmentshaveframedrulesundertheFactoriesAct,1948,requiringawelfareofficertoensurethesettlementofgrievances.

TheVoluntaryCodeofDisciplineadoptedbytheSixteenthSessionoftheIndianLabourConferencein1958alsoprovidesthat:(a) the management and unions will establish, upon a mutually agreed basis, a grievance procedure whichwill ensure a speedy and full investigation leading to settlement,and (b) they will abide by the various stages in the grievance procedures. However,thereisnolegislationinforcewhichprovidesforawell-definedandadequateprocedureforredressalofday-to-daygrievancesinindustrial

NOTES


Employee Relations establishment. In order to meet the shortcoming, the Industrial Disputes (Amendment)Act,1982,providesforsettingupofGrievanceSettlementAuthoritiesandreferenceofcertainindividualdisputestosuchauthorities.Section9CoftheamendedActprovides: (1) The employer in relation to every industrial establishment in

which 50 or more workmen are employed or have been employed on anyday in the preceding12months, shall provide for, inaccordancewiththerulesmadeinthatbehalfunderthisAct,aGrievanceSettlementAuthorityforthesettlementofindustrialdisputes connected with an individual workman employed in the establishment.

(2) Where an industrial dispute connected with an individual workmanarises in an establishment referred to in sub-section(1),aworkmanoranytradeunionofworkmenofwhichsuchworkmanisamember,refer,insuchmannerasmaybeprescribed,suchdisputetotheGrievanceSettlementAuthorityprovidedforbytheemployerunderthatsub-sectionforsettlement.

(3)TheGrievanceSettlementAuthorityreferredtoinsub-section(1)shallfollowsuchprocedureandcompleteitsproceedingswithinsuch period as may be prescribed.

(4)NoreferenceshallbemadeunderChapterIIIwithrespecttoanydisputereferredtointhissectionunlesssuchdisputehasbeenreferredtotheGrievanceSettlementAuthorityconcerned,andthedecisionoftheGrievanceSettlementAuthorityisnotacceptabletoanyofthepartiestothedispute.

TheIndustrialDisputes(Amendment)Act,1982excludeshospitals,educational institutions, institutions engaged in any charitable, social or philanthropic service, khadi or village industries and every institution performingsovereignfunctions.Fortheseinstitutions,theHospitalsandotherInstitutions(SettlementofDisputes)Bill,1982,enjoinsuponanemployertoconstitute,withinaspecifiedperiod,aGrievanceSettlementCommitteefortheresolutionofindividualdisputesandConsultativeCouncilandaLocalConsultativeCouncilfortheresolutionofindustrialdisputesofacollectivenature.TheBillalsoprovidesforthearbitrationofdisputesnotresolvedbytheGrievanceSettlementCommitteeortheLocalConsultativeCouncilorConsultativeCouncil.However,theseprovisionsoftheIndustrialDisputes(Amendment)Act,1982,havenotyetbeenenforcedpresumablybecausetheHospitalsandotherInstitutions(SettlementofDisputes)Bill,1982,hasnotsofarbeenpassed.Further,noruleshavebeenframedundertheunenforcedSection9C.The(Second)NationalCommissiononLabourhasrecommendedthataGrievanceRedressalCommitteefororganisationemploying20ormoreworkers be constituted.

Employee Relations

NOTES


GrievanceRedressalProcedures

In 2010, the Industrial Disputes (Amendment) Act, 2010 inserted new chapterIIBongrievanceredressalmachinery.Section9CoftheAmendmentActprovidesasfollows: 1.Everyindustrialestablishmentemploying20ormoreworkmenshall

haveoneormoregrievanceredressalcommitteesfortheresolutionofdisputesarisingoutofindividualgrievances.

2.Thegrievanceredressalcommitteeshallconsistofequalnumberofmembersfromtheemployerandtheworkmen.

3.Thechairpersonofthegrievanceredressalcommitteeshallbeselectedfrom the employer and fromamong theworkmen alternatively onrotation basis every year.

4.Thetotalnumberofmembersofthegrievanceredressalcommitteeshallnotexceedsix:

Providedthatthereshallbe,asfaraspracticable,onewomanmemberifthegrievanceredressalcommitteehastwomembersandincasethenumberofmembersaremorethantwo,thenumberofwomenmembersmay be increased proportionately.

5.Notwithstandinganythingcontainedinthissection,thesettingupofgrievanceredressalcommitteeshallnotaffecttherightoftheworkmantoraiseindustrialdisputeonthesamematterundertheprovisionsofthis Act.

6. The grievance redressal committee may complete its proceedings within30daysonreceiptofawrittenapplicationbyoronbehalfofthe aggrieved party.

7.Theworkmanwho is aggrieved of the decision of the grievanceredressalcommitteemaypreferanappealtotheemployeragainstthedecision of grievance redressal committee and the employer shall,withinonemonthfromthedateofreceiptofsuchappeal,disposeofthesameandsendacopyofhisdecisiontotheworkmanconcerned.

8.Nothing contained in this section shall apply to theworkmen forwhom there is an established grievance redressal mechanism in the establishment concerned.

CheckYourProgress

4. What is counselling? 5.Listthesixfunctionsofcounselling.

NOTES


Employee Relations 12.6 ANSWERS TO CHECK YOUR PROGRESS

QUESTIONS

1. Industrial relations deal with the relationship between labour and management,andtheirorganization.

2. Discipline means systematically conducting the business by the organizationalmemberswhostrictlyadheretotheessentialrulesandregulations.

3.TheneedforVoluntaryCodeofDisciplinewasfeltin1957inordertocreate awareness among the parties to industrial relations about their obligations under labour laws.

4.Counsellingisdefinedasadiscussionofanemotionalproblemwithanemployeewiththegeneralobjectiveofminimizingit.

5.Thesixfunctionsofcounsellingareadvice,reassurance,communication,releaseofemotionaltension,clarifiedthinking,andreorientation.

12.7 SUMMARY

· Industrial relations deal with the relationship between labour and management,andtheirorganization.

·AccordingtotheEncyclopaediaBritannica,‘theconceptofindustrialrelationshasbeenextendedtodenotetherelationsofthestatewithemployers,workersandtheirorganizations’.

· Discipline means systematically conducting the business by the organizationalmemberswhostrictlyadheretotheessentialrulesandregulations.

· According to Spriegel, ‘positive discipline enables an employee to have agreaterfreedominthatheenjoysagreaterdegreeofself-expressioninstrivingtoachievethegroupobjective,whichheidentifiesashisown.’

·Negativedisciplineconnotesthatpersonnelareforcedtoobserverulesandregulationsonaccountoffearorreprimand,fine,demotion,ortransfer.

· In Ravi Yashwant Bhoir v. District Collector, Raigad, the Supreme Court observedthat‘theword“misconduct”thoughnotcapableofprecisedefinition,receivesitsconnotationfromthecontextofdelinquencyinitsperformanceanditseffectonthedisciplineandnatureoftheduty.

·TheneedforVoluntaryCodeofDisciplinewasfeltin1957inordertocreate awareness among the parties to industrial relations about their obligationsunderlabourlaws,asalsotocreateinthemanattitudeof

Employee Relations

NOTES


willingacceptanceoftheirresponsibilitiesandareadinesstodischargethem.

· ItwasinthiscontextthattheCodeofDisciplinefoundapprovalatthesixteenthIndianLabourConference,andwasformallyannouncedinJune1958.

· The Code applies to all public-sector undertakings run as companies andcorporationsexceptindefense,railwaysandportsanddocks.

· Ingeneral,asahumanrelationstechnique,counsellingisessentialforeffectivenessinmanaginghumanresources.

·Counsellingreferstotheprocessofadvisinganemployeeorpreferablyinmostcases,listeningtohisproblemandenablinghimtofindfromhisownthinkingandtalkingasolutionforitwhichissatisfactorytohimself.

·Theneedforcounsellingstemsfromthecomplexityofhumanbeings. · Counselling accomplishes the objectives discussed earlier by

performingoneormoreofthefollowingsixfunctions:(i) advice, (ii) reassurance, (iii) communication, (iv)releaseofemotionaltension,(v) clarifiedthinking,and(vi) reorientation.

·Dependingupon theextentofdirectionprovidedby thecounsellortoacounselee,Davisclassifiescounsellinginthreeforms:directive,non-directive and cooperative.

·Somepracticalconsiderationsincounsellingrelatetoresponsibilityofcounselling;lengthandnumberofsessions;timeandplaceofsessions;andneedforkeepingconfidence.

12.8 KEY WORDS

·Penalty:Itisapunishmentimposedforbreakingalaw,rule,orcontract. ·Socio-Economic:Itisrelatingtoorconcernedwiththeinteractionof

socialandeconomicfactors. ·Demotion: It means to lower someone or something in rank or position.



1.Brieflydiscusstheconceptofinternationalrelations. 2.Whatcausesindisciplineinanorganization? 3.Listthestepsofdisciplinaryaction.

NOTES


Employee Relations 4.Discussthecharacteristicsofcodeofconduct. 5.Whatiscounselling?Whyisitsignificant? 6.Writeanotediscussingtheaccomplishmentsofcounselling.

LongAnswerQuestions

1. What is discipline? Discuss its aspects and objectives in detail. 2.Writeadetailednoteoncodeofdiscipline.Giveexamples. 3.Explainthefunctionsofcounsellingindetail. 4.Describethevarioustypesandprocessesofcounselling.Assesstheir

merits and demerits. 5.Discuss the concept and applicability of counselling in the Indian

scenario.






Employee Empowerment

NOTES


UNIT 13 EMPLOYEE EMPOWERMENT

Structure 13.0 Introduction 13.1 Objectives 13.2 ConceptandProcessofEmployeeEmpowerment 13.3 EmpowermentinIndianScenario 13.4 EmpowermentinGlobalScenario 13.5 Answers to Check Your Progress Questions 13.6 Summary 13.7 Key Words 13.8 SelfAssessmentQuestionsandExercises 13.9 Further Readings

13.0 INTRODUCTION

Inthisunit,youwilllearnaboutempowermentofemployees.Theconceptofempowermentofemployeesisaninnovativeapproach.Itisthemostvisibleoutcomeoftherecentglobalizationandliberalizationofthemarketeconomyand a corresponding competitive and rapidly changing market economy. Theconceptofempowermenthasdifferentmeaningsfordifferentpeople.However, at itsmost practical level, it canbedefined as the recognitionandproper channelizationof the existing strength, skills andknowledgeofthepeopleforthebenefitoftheorganization.Thisunitwillalsoexplaintheprocessofempowerment.Employeeempowermentcanbeachievedbydeveloping multiple skills, by giving people more authority and responsibility ontheirjobs,bygivingthemaccesstoinformationondevelopmentsandgenuinely involving them in decision-making.

13.1 OBJECTIVES

Aftergoingthroughthisunit,youwillbeableto: ·Discusstheconceptofemployeeempowerment ·Explaintheprocessofempowerment · Assess empowerment in the Indian scenario · Analyse empowerment in global scenario.

NOTES


Employee Empowerment13.2 CONCEPT AND PROCESS OF EMPLOYEE

EMPOWERMENT

Notwithstandingitsculture-specificnature,empowermenthasbeendefinedinvariedwaysinbehaviouralscienceliterature.Itcanbesuccinctlydefinedastheauthorityofsubordinatestodecideandact.Peopleempowerthemselvesbydiscoveringapositivewayofbeingpolitical.Theyhavetobecomepoliticalwithout being manipulative. Thus, empowerment involves positive political skills at work. People can also be empowered by involving themselves in workthroughaprocessofinclusion.Empoweredpeoplebelievethattheyarecompetent and valued, that their jobs have meaning and impact, and that they haveopportunitiestousetheirtalents.Likewise,fromthestandpointoftheassumptionthatpowerlessnessgivesrisetolowself-efficacy,attemptshavebeenmadetodefineitasaprocessofidentifyingandremovingtheconditionsthatcausepowerlessnesswhileincreasingfeelingsofself-efficacy.Fromthisperspective, empowered people are encouraged to use their initiative as well as assigned resources to ensure that their decisions are implemented.

Asabasisfortheredistributionofpowerinworksettings,theprocessofempowermentcanbedefinedasthereorientationofallforces,valuesandbeliefsthatdeterminehumanbehaviourinorganizationssothattheysupportandliberatetheindividualratherthanreducetheirrangeofthoughtandaction.Thisprocessreleasesthefullpotentialofeveryindividualtocontributetothecommonenterprise.Anotherapproachdefinesempowermenttherecognitionandproperchannelizationoftheexistingstrength,skillsandknowledgeofthepeopleforthebenefitoftheorganization.

Empowerment:FacilitatorsandBarriers

The concept of empowerment has recently been applied in differentorganizationalsettingsacrosstheglobewithvariedsuccessandfailure.InUSA,ChryslerCorporation,JohnsonvilleFoodsandthestateofKentuckyhaveaccomplishedsignificantresultsfromempowerment.However,availableresearchliteraturealsoreportthefailureofempowermentefforts.

Theanalysisofdifferentempowermenteffortsprovidesanunderstandingofitsfacilitatorsandbarriersinorganizationalsettings.Theprerequisitesof empowerment areparticipation, innovation, access to informationandaccountability.Likewise,delegation,whichinvolvesthedistributionofpower,is more about truly empowering people than participation, which involves only sharing of power.Barriers to empowerment include incongruencebetweenempowerment’sgoalofinclusionandorganizationalculture,lowneedforautonomyamongpeople,managerialfearrelatedtodistributionofpower,andneedformorepoweramongmanagers.


NOTES


TheProcess ofEmpowerment

It can be done via developing multi-skills, by giving people more authority and responsibility in their jobs,bygiving themaccess to informationondevelopments and genuinely involving people in decision-making. An empoweringleaderhastogothroughfourstages:(i)empoweringyourself,(ii) demonstrating empowerment, (iii) giving management guarantees, and (iv) taking risks.

Based on their research experience, several researchers suchas Blanchard describe the process of empowerment andwhatmakesempowerment work. The keys to empowerment are apparently simple to understand, but frequently difficult to implement.The change fromabureaucraticsystemtoanempoweringorganizationinvolvesmassiveefforts.Itnecessitatesadequateunderstandingofthenatureofanempowermentaswellastechniquesofshiftingfromabureaucraticmanagementtoempoweringleadership.The journey frombureaucracy to empowerment is long andchallenging,involvingagreatdealofvaluechangesandcontroversies.Itcannotoccurjustbyannouncement;thetopmanagementmustfirstchangeitself.

Keys toEmpowerment

Therearethreekeystoempoweringpeopleandorganizations:(a)informationsharing, (b) creating autonomy through structure, and (c) replacing the hierarchy with teams.

1. Information sharing

(i)Needforinformation: Whydopeopleneedinformation?Theyneeditto know how they are doing, how their company is doing, and whether theireffortsmakeanydifference.Experiencehasinvariablyshownthatinformationisinstrumentalininitiatingtheprocessofempowerment.Informedpeopleareboundtoactwithresponsibility.Iftheemployeesunderstandclearlythecriticalfinancialpositionofthecompany,theytendtoprovideideasforsavingmoneyaswellasenhancingrevenuethroughbettercustomerservice.Liketheowner,everyoneattemptstodowhateverhecantohelptheorganization.Evenwherethesituationisnotacriticalone,theemployeesprovideideasforexpandingthebusiness.Theymayfurnishideasfornewventures.Theymayalsocomeforwardtosatisfycustomers’needsincreativeways.

(ii)Building trust: Themostcrucialcontributionofsharinginformationisofbuildingtrust.Bureaucraticorganizationsarebankruptintermsoftrust.Hence,alotoftheirenergyiswastedinprotectingthemselves.Thesharingofsensitiveinformationitselfpromotestrust.

NOTES


Employee Empowerment (a) Handling mistakes:Thefirstissueisthewaymanagementhandlesmistakes.Asking‘whodidit?’isnotthewayofanempoweringculture. Information is usedhere forfixingblame rather thansolvingproblems.This is a situationof trust-breakdown.Themost appropriate question would be, ‘what went wrong and how to correct it?’This is indicative of an empowering culture; itempowerspeopletotakerisks;tolearnandtogrowinatrustingclimate.

(b) Perception of goals: The second issue is related to where the goals fitintotheempowermentprocess.Goalsaremerelymilestonesofgrowthontherouteofcontinuousbetterment.Informationhelpsinclarifyingtheleveloftheirachievement.Peoplewithinformationaboutcurrentperformancelevelshappentosetchallenginggoals;and they enjoyed breaking these records.

(c) Blockage of information: The third issue is concerned with the question:‘Istheactofsharinginformationblockedsomewhereintheorganization?’Yes,itis.Somemanagersmaybeafraidoflosingcontrol.They tend towithholdpart of the information.Despitetheirovertsinceritytoempowerment,theydivertfromits implementation.

Thefinalissueis‘doesinformationsharingalonecauseempowermentofpeopleandorganizations?’Certainly,not.Itismerelyafirststeptowardsit.Assoonasinformationisshared,andtrustisbuilt,themanagementhasto move towards the second and third keys to empowerment simultaneously.

2.Creatingautonomy through structure

Empowerment is initiatedwith increased rather than no structuring.Organizationsthatstarttheprogrammewithaparticipativeandsupportiveleadershipstyleinviteproblems.Successfulcompaniesusestrongleadersto show the path, teach themnew skills and clarify different parametersof empowerment.However, as soon as people become familiarwith thenewculture,thereislessneedforstructure.Thereareseveralproblemsinorganizationsstartingwithlittleinitialstructure.Peopleareonlyfamiliarwithbureaucraticwaysofworking,andthustheyfeeldiscomfortinthehierarchy-lessstructure.Thereisneedtochangetheirhabitsandexpectations.

Whatarethestructuralelementsofempowerment?Itisnotmerelytheorganizationalchart.Theparametersofoperationmustbeclarified.Theseparametersorelementsofstructureincludevisionstatements,goal-setting,decision-makingrules,performanceappraisalprocessandtraining. (i)Vision statement: The vision statements should be so simple that every

employeecanunderstandtheminthecontextoftheirjobs.Companies


NOTES


whichusethe‘bigpicture’vision,failtocommunicateanythingrealto them. There is need to convert it into action. So, when they obtain informationintermsoftheir‘littlepicture’,theyhaveaclearvisionto which they become committed.

(ii)Goal-setting: Goals are the milestones rather than the ends. Goal-setting involves a collaborative relationship. It has been observed that most employeesarenotawareofhowtocollaborateintheprocessofgoal-setting. Without this understanding, the goals and responsibilities are notcleartothem.Successfulcompaniestendtocoachthepeopleintheprocessofsettingspecific,measurableandrealisticgoalslinkedwiththecompany’svision.Inaddition,managershelptheempoweringpartnershipsleadingtooutstandingperformance.Thesegoalsareseton a continuous improvement basis.

(iii)Decision-making rules: It is mistakenly assumed that empowerment will provide people with power to make all decisions. This causes frustrationwhen theyfind that they are required tomakeonly theoperationaldecisions.Theytendtobackofffrommakingevensuchdecisionswhen they learn that theywould be accountable for theoutcome.Therefore,successfulcompaniesmakeitclearattheoutsetthatthestrategicdecisionswillalwaysbethedomainofmanagement.

(iv)Performanceappraisal:Thetypicalperformanceappraisal,whichisdisempowering, needs to be redesigned. It can be oriented towards collaboration and continuous improvement. Companies that have been successfulinmanagingtheirculturesembodythreeelementsintheirperformance reviewprocess: (a) performance planning (includingcollaborativegoal-setting anddiscussionof appropriate leadershipstyle),(b)continuouscoachingforemployeegrowth,and(c)focusonbothmanagerandemployee.Now,performancemanagement iseachindividual’sresponsibility.Ithasbecomeacollaborativeratherthanatop-downsystem.Thus,itembracesassessmentofemployee’sachievementandthemanager’sleadership.

(v)Training: There is a need to provide continuous training to people so thattheyacquirethedesiredempowermentskills,i.e.negotiationofperformanceplans,decision-making,conflictmanagement,leadership,budgetingandtechnicalcompetenceinmultiplejobs.Ofcourse,beforethey can learn these skills, they must unlearn bureaucratic habits. Successfulcompaniesprovideintensetrainingtobothmanagersandemployees that are linked with their jobs.

Whatarethekeyissuesofstructuring?Theprocessofstructuringisgradual because people cannot handle all the changes at one time. It isalsonotfeasibletodeterminewhatarethestructuralelementstobe altered. Companies learn this by trial and error. As soon as people

NOTES


Employee Empowermentunderstand where the company is and where it intends to reach, they consider the new structure as a help rather than a barrier. With growth oftrust,employeestendtoinformthemanagementwhatboundaries,procedures and decision-making patterns in the old structures hampered them in becoming responsible. As soon as the people are tuned to the new attitude and behaviour involved in empowerment, they change to the new structure.

3.Replacinghierarchywith teams

While the above structural measures are taken to create autonomy, there is aneedforminimizingdependenceonhierarchy.Thisleadsustothethirdkey.Avacuumiscreatedbydownsizingmanagementlayersandenhancingspansofcontrol.Thequestionstillremains:‘Whohastomakeimportantmanagementdecisions?’Thecomplexityofthepresentsituationnecessitatescollaborativedecision-making.Empoweredpeoplecanbeprovidedsupportaswellassynergybytheempoweredteams.Theseteamsarequitedifferentfromparticipativeteams,qualitycirclesorsemi-autonomousteams.Insteadofmerelyrecommendingideas,theymakedecisions,implementthem,aswell as accept accountability. In one particular company, these teams were provided training on effective teamwork.Thereafter, they started actingwith autonomy and took responsibilities earlier held by their managers. In anothercompany,afterseveralyearsoftraining,theteamsstartedworkingasmanagers.Thus,asself-managedteams,theytendedtomakerecruitment,performanceappraisal,workschedule,budgetaryandotherdecisions.Thisarrangementprovidedanoutstandingbottom-lineaswellassatisfactiontothe people. (i)Key steps: Thenthequestionarises,whatarethekeystepsforteams

tobecomethehierarchy?Thesestepsinclude:extensiveteamtraining,theleadershipvacuumandthefearfactor.

(a) Extensive team training: People have problems in working as effectivemembersofhigh-performingteams.Thisproblemhasbeenhandledbycompaniesthroughextensiveteamtraining.Itexposedthemtosuchissuesasteamdecision-making,conflictsas a positive element, teamgoal-setting, self-monitoring andresponsibility in leading themselves.

(b) Leadership vacuum: The most complicated situation arises when teams start replacing the hierarchy. There is disillusionment during the development phase towards empowered teams. At this phase,theteamshaveafeelingofincompetenceandlowlevelsofmotivationtoworktowardsempowerment.Thus,attheveryoutsetoftheirjourney,theyareexposedtoseveresetbacks.Thereisanurgentneedforastrongleaderwhocouldprovidesupport,guidance, encouragement and help.


NOTES


(c) Fear factor: Thereisalsoahighleveloffearamongmanagerswithrespect to empowerment. Indeed, when they do not know what to do, they resort to their bureaucratic mentality. This worsens the problem and leads to delays.

(d) Conclusion: Companiesdonotbecomeempoweredovernight;ittakesseveralyearstoattainthedesiredlevelofempowerment.Itisatoughtask,andmanycompaniesfalloutbythewayside.However,inayearorso,theystartgettingflashesofempowermentthatpropelthemtocontinuethejourney.Itisnotasoftattitudetowardspeople.Rather, it isexpectingmorefrompeoplewhocomewiththeirbestbecauseofownership.

13.3 EMPOWERMENT IN INDIAN SCENARIO

The legal provisions and gazette notifications of the Indian governmentenable indirect empowerment ofworkers by the representatives of theworkers who are usually elected by the workers. Since independence, the Indiangovernmenthasinitiatedmanyschemeswhichprovideforemployeeempowerment both at the enterprise and shop-floor level. Such schemesincludethefollowing: · Workscommittee:TheIndustrialDisputesActof1947providesfor

limited participation ofworkers representatives in bipartiteworkscommittee in order to ensure good relations between employers and employees.Committees like the canteen committee and the safetycommittee are statutory.

· JointManagementCouncil(JMC):JMCswereintroducedin1958toadministeremployeewelfare,training,changesinworkpractices,formulationofstandingorders,organisationalproductivityandsoon.

· Employeedirectorsinnationalisedbanks: Banks were nationalised in1969.TheIndiangovernmentmadeitmandatoryfornationalisedbanks to have employee directors representing both workers and officers.TheBoardofHindustanAntibiotics(Pune),HMT(Bangalore),the Tatas and DCM, also have adopted this practice.

· Amendmentof the IndianConstitution: The Indian Constitution was amended in 1976 and Section 43A was inserted in the Directive Principles.Thisenabledworkers’participationinmanagementatfloorandplantlevelsinmanufacturingandminingindustrieswhichemploy500 or more workers. Councils were given powers to deal with issues relating toproduction,wastemanagement, absenteeism, safetyandresource utilisation.

NOTES


Employee Empowerment · Schemeforworkers’participationinmanagement: This scheme was introduced in 1977 and was applicable to commercial and services organisations which have 100 or more employees.

· Schemeof1983: The 1983 scheme regulating employee participation was applicable to all central public-sector enterprises. It set up a tripartite committee.

· Workers’ share in equity:TheUnionBudget of 1985–1986hadprovisionsforofferingstockoptionsuptofivepercentofthetotalsharesinordertoincreaseworkers’participationinmanagement.

· ParticipationofworkersinManagementBillof1990: According to this Bill, every industrial enterprise needs to constitute one or more ‘Shop-FloorCouncils’ at the shopfloor level and ‘EstablishmentCouncil’attheestablishmentlevel.Thesecouncilsmusthaveequalrepresentationofemployersandemployees.In India, the twinprocessesofglobalisationand liberalization, that

beganin1990andgatheredmomentumin2000,haveincreasedtheneedforaflexible,morequalifiedandaversatileworkforce.Nowadays,managementshavestartedusingJapanesemethodsofdirectparticipation like two-waycommunication,kaizen,suggestionschemes,qualitycircles,5Sandsoon.BHEL,MahindraandMahindra,GodrejandBoycehaveimplementedqualitycircle groups.

Directmethodsof employee empowerment

Thedirectmethodsofemployeeparticipationincludethefollowing: · Newsletters: These communicate the latest happenings and events

within a company to the employees and the clients, both potential and existing,ofthecompany.

· Employeereviews: These are conducted by the immediate supervisor oftheemployeestoreviewemployeeperformance.

· Self-managed teams:These require higher levels of autonomy,satisfaction,jobsecurity,andsupportfrommanagement.

· Teambriefings: These are regular meetings between the managers andtheirteamstoexchangeinformationandideas.

· Teammeetings:These provide a forum for problem solving, anddecision-making.Managersalsoprovideimportantinformationtotheteam members in these meetings.

· Suggestionschemes:Theseareinformalwaysofobtainingideasfromemployees.

· Qualitycircles: These are mechanisms which develop and utilise the potentialofpeopleinordertoenhanceproductqualityandproductivity.


NOTES


Theserequirethedevelopmentofskills,capabilities,confidenceandcreativityofthepeoplethroughthecombinedprocessoftraining,onthejobexperienceandparticipation.Theworkconditionsneedtofacilitatean environment which creates and sustains employee motivation and commitmenttowardsworkexcellence.

· Profitsharing:Thisisanarrangementbywhichtheowner(s)ofacompanysharesapercentageoftheprofitearnedwiththeemployees.

· Problem-solving groups:These focus on understanding issues,consideringallpossiblefactorsandfindingasolution.

· Employee surveys:These are formalmechanisms for collectingemployee opinions.

Indirectmethodsof employee empowerment

Thedifferentformsofindirectparticipationareasfollows: · JointConsultationCommittee (JCC): These are commonly used

in public sector companies in India. Both managers and employees value this as a useful formof participation.Theflexibility of theJCCsenablesaconsultativeapproach.Theycaneitherbedominatedbythemanagementorenableemployeerepresentativestoinfluenceorganisational decisions. JCCs are based on the three followingprinciples: (a) A clear separation between consultation and negotiation issues;(b)Regularparticipationofmanagersandimplementationofdecisions;and(c)Legitimateemployeerepresentation

· Workcouncils: These are used by the management to consult with the employee representatives on issues related to production and employeerelations.Theyprovideaforumfordiscussingcontentiousissues.WorkCouncils aremore formal than JCCs and often havesome rules regulating them. Work Councils appoint employee directors.Themanagementinformstheworkcouncilaboutimportantissues.Employeerepresentativescanconsultexpertstogetabetterunderstandingoftheissues.

· Workerdirectorsschemes: Worker directors represent the workers in theboardof thecompany.Thisenablesworkers tohaveastakeinformulatingthelong-termgoalsofthebusiness.Workersbecomemorecommittedwhentheyparticipateinsettingtheobjectivesoftheorganization.

Empowermentandperformance

Theresultsofempowermentonemployeeperformanceareasfollows: · Itmakesemployeesresponsibleforperformanceoutcomes · Ithelpsinmaintainingconsistentperformancesofteams

NOTES


Employee Empowerment · Itenablesemployeestoidentifyandresolveobstaclesandhenceachievejobperformance

· Itimprovesjobefficiency · It makes employees more knowledgeable about their work and hence

they are able to plan and schedule their activities in a better way · It makes employees work harder as they view themselves as able to

influenceorganisationaloutcomes · Itenablesemployeestofacedifficultsituationsinabetterwayand

thusincreasestheirperformance · Itimprovestheemployeesfeelingsofself-worthandconfidenceand

thistranslatesintohigherlevelsofperformance

CheckYourProgress

1. Name the stages an empowering leader has to go through. 2.WhenwereJMCsintroducedandwhy?

13.4 EMPOWERMENT IN GLOBAL SCENARIO

Empowerment is theprocessofenablingworkers to set theirowngoals,makedecisionsandsolveproblemswithin their spheresof responsibilityandauthority.Inrecentyears,manyorganizationshaveactivelysoughtwaystoempowertheiremployees.Onemethodsomefirmsusetoempowertheirworkersistheuseofwork teams.ThismethodgrewoutofearlyattemptstousewhatJapanesefirmscalledqualitycircles.

Aqualitycircleisagroupofemployeeswhovoluntarilymeetregularlytoidentifyandproposesolutionstoproblemspertainingtoquality.Thisuseofqualitycirclegrewtoencompassawiderarrayofworkgroups,nowgenerallycalled‘workteams’.Theseteamsarecollectionsofemployeesempoweredtoplan,organize,directandcontroltheirownwork.Theirsupervisor,ratherthanbeingatraditional‘boss’,playstheroleofafacilitator.

Theothermethodsthatsomeleadersusetofacilitateempowermentaretochangetheiroverallmethodoforganizing.Thebasicpatternforanorganizationistoeliminatelayersfromitshierarchy,therebyturningmoredecentralized.Power,responsibilityandauthorityaredelegateddowntheorganizationasmuchaspossibleandthecontrolofworkissquarelyinthehandsofthosewhoactuallydoit.

Irrespectiveoftheprecisepracticesused,empowermentenhancesanorganizationifcertainconditionsexist.Theseconditionshavebeendefinedas:


NOTES


· Companiesmust behonest in their efforts to spreadpower andself-governanceattheirlowerlevels.Nominaleffortstopromoteempowerment in just a small number of areas are not likely tosucceed.

· Organizationsmust be dedicated tomaintain empowerment. Ifworkers are given more power only to later have it reduced or taken away altogether, they will become indignant.

· Organizationsmustbemethodicalandenduringintheireffortstoempower employees. Passing over much control rapidly can result in disaster.

· Organizationsshouldgearuptoincreasetheircommitmenttowardstraining.Employeeswho are givenmore liberty in their sphereofworkwouldprobablyrequireadditionaltrainingtohelpthemexercisethatlibertyeffectively.

When people are provided with the power and responsibility to take decisionsthataffecttheirworkwithaminimumoflevelofinterference,theygetempowered.Empowerment isanexpressionwhich ishackneyedandunder-practised. People bring their minds to work when they are provided withempowerment.Theyareoccupiedindecidingonareasthataffecttheirworkinthebusiness.Theyaccepttheonusfortheiractivities.Theykeepthemselvesawayandoutofpettybureaucratichasslesthatresultinweakeningofvaluesandwastageoftime.Valueisaddedtotheorganizationwhentheyembracetheprinciplesofqualityandservice.

Themajority of organizations require knowledgeworkers—menand women whose prime resource is their aptitude to think and act on their knowledge. Computer programmers, system analysts, accountants, lawyers,managers,salesteamandevenfactoryworkersutilizetheirfinestjudgments to resolve problems and use opportunities. This makes the issue ofempowermentmorecritical.

Mostoftheemployeeswantafewbasicthingsfromtheirwork: (i)Meaning:Theywanttheirworktobemeaningfulsothatthey

areabletoderivesatisfactionfromit. (ii)Results:Employeesaremotivatedbytheoutcomeoftheirefforts.

Iftheresultsarepositiveandrewardsfollow,thereisagreatdealofsatisfactionfromthework.

(iii)Challengeandanopportunitytolearn: Work should be seen as challenging and it should give them a scope to grow and learn.

(iv)Respectandrecognition:Employeesseekrespectandrecognitionfromwhatevertheyareexpectedtodointheirorganizations.

NOTES


Employee Empowerment (v)Autonomy and control over their ownwork: Employeesdesire to have autonomy and control over whatever they do in theirorganization.Thisprovides themwitha senseofgreatersatisfaction.

(vi)Affiliation or knowing that they are part of a big team: Employees inanyorganizationhavesocialneedsandwant toaffiliatewithothers.Theawareness that theyareapartof thelargerteamprovidesthemwithasenseofsecurity.

Empowerment inAction

Thesixitemslistedintheprecedingparagraphformthefoundationoftheeffortspertainingtogoodempowerment.Iftheleadertriestoremoveanyoneofthem,theemployees’commitmenttoworktendstogetweakened.Forempowermenttoworkeffectively,theleaderneedstoconsiderthefollowingactions: (i)Clearvisionanddirection:Hemustknowthereasonforwantof

empowerment.There shouldbevery clear vision anddirection forimplementingempowermentwithinorganizations.Therearecertainissueswhichneedtobeaddressedbytheleaderbeforehebeginstoimplementtheprocessofempowermentintheorganization.Theseare:

(a)Theleaderneedstoclarifythemotiveforempowermentintheorganization.Heneedstobeclearwhethertheempowermentisbeneficialtohimortothecompleteorganization.

(b)Theleaderalsoneedstoemphasizewhethertheempowermentisforafew,selectedpeopleintheorganizationorfortheentireorganization.Theeffectivenessofempowermentwoulddependuponthescopeandrangeoftheempoweredemployeesintheorganization.

(c)The commitment of the leader for empowerment affects itseffectiveness.Someleadersmaywanttousethispracticeasalipservice only and may not be totally committed to it. The leader needstoclarifywhetheritisactuallyrequiredbytheorganizationor is it simply something that would be nice to have.

(ii)Examiningcorporateactions:Toexpectbeneficialoutcomesfromempowerment,leadersneedtoexaminetheircorporateactionsintermsof:

(a) Policies:Leadersneedtokeepanaccountofmajorpoliciesoftheorganization.Forexample,itissaid,‘whatgetsrewardedgetsdoneandwhatgetspunishedgets avoided’.Businesspoliciesandeventssuchasreviewofperformancesandincreaseofmerit


NOTES


showpeoplewhatreallymatterstothetop-levelmanagement.Ifpeopleareaskedtoworkincollaborationbuttheirperformancereview pitches them against each other in an appraisal ranking whichisforced, theywilldefendtheirowninterests.Ifcross-functionalteamworkispromotedandsupported,butperformancereviewsonlyrecognizethetargetsachievedwithinadepartment,interdepartmentalalliancewillsuffer.

(b) Unwrittenrules: These norms advise people about the way the work is actually carriedout in organizations.Peoplefind thattheserules,thoughnotwritten,areassignificantasanyguidelinesthatarewritten.Forexample,amanagermayinstructhisstaffto speak the truth always but punish the messenger who delivers bad news.

(c) Structure: Structure of the organization should be such thatit gives autonomy and control to employees to perform theirtasks according to their approach. The structure should provide employeessituationswheretheyareencouragedtolearndifferenttaskswhichcouldaddvaluetotheirperformanceinorganizationandenhancetheirsatisfaction.Insuchsituations,theyaresaidtobe empowered.

UseofEmpowerment

Corporationsareundergoingarevolutionwhichhavebeenexperimentingwithwaystoincreasetheempowermentforemployees.Evengovernmentsaretryingtorecreatethemselveswiththehelpoftheprinciplesofempowerment.Someassociationssucceedwhileothersfail,butallofthemprovidelearningfactors.Weseesomeexamplesofthewaysinwhichorganizationsusetheprinciplesofempowerment. (i)Largesystemchange:Organizationsfocusonbringingeveryone(or

atleastonesamplerepresentativefromeveryleveloftheorganization)inaroomtorestructuretheirdomainofthecompany.Thisplanningprocess involves those who must implement changes. It causes a decreaseinresistance,anincreaseincommitment,compressionofthedurationofplanningandimplementationandexceedingofthequalityoftheplanoverthatcreatedbyexternalconsultantsorasmallteam.

(ii)Cross-functional team:Organizationscollectcapablepeoplefromwithinandempowerthemfortacklingvitalbusinesschallenges.Thesesquadsarenotjusttaskforcesbuttheyhavetheauthoritytosuggestand implement changes.

(iii)Accesstoinformation:Manyorganizationsareinvestigatingthewayworkisdoneinanefforttoprovidemoreefficientservicetocustomers.They are developing new procedures that would ensure that people

NOTES


Employee Empowermenthaveinstantaneousaccesstothetoolsandinformationtheyrequire.Inconventionalorganizations,informationispowerandthosewhoneeditmostareoftennotprovidedaccesstoit.

(iv)Promotethebest: InGeneralElectric’s1991AnnualReport,JackWelch introducedhis theory of leadership: ‘GEneeds peoplewhokeepcommitments(meetdeadlinesandfinancialtargets)aswellaspeoplewhopromotevaluesofthecompany(empowerment)’.Inthepasttheyonlygavelipserviceto‘value’goals.Welchwentonrecordto say that those days are over. He wanted men and women who could accomplish both these goals.Itisimportanttorememberthatempowermentdoesnotcomefroma

wandthattheleaderwavesoverafirm,orfromamemohewrites.Itcannotresult from the systems,andcommandsandcontrol structuresalone thatexistintheorganization.

Empowermentdoesnothappenbecausetheleaderwishesittobeso.It occurs when the leader delegates, as well as when he consistently and repeatedly transfers ownership and responsibilities for issues, problems,solutionsandgoalstoemployees.TheMay–June1995Harvard Business Reviewmakesthefollowingstatement:

“Empowermentisnotanovernighttransferoranabdicationofresponsibilityfromabosstoasubordinate.Itisagradualdelegationprocessthatrequiressubstantialtop-managementinvolvement.”

Peoplewanttolearnandaregreatlymotivatedandsatisfiedwhentheydoso.Thetopmanagement’schallengeisnotonlytohelppeopledevelopthemselves, but also to ensure that they do so in way that supports and reinforcesthecompany’sobjectives.

Reasons forSlowAdoptionofEmpowerment

Employeeinvolvementcouldbeanothertermforempowerment.AccordingtoarecentsurveycarriedoutbyUniversityofCalifornia’sCentreforEffectiveOrganizations,American companies have been slow in integrating suchexercisesintotheirbusinessprocesses.Afewofthekeyconclusionsofthisstudy are listed below: (i)About 37 per cent of theworkforce is not involved in activities

pertainingto theinvolvementofemployeesandhavenosayin theprocessofdecision-making.

(ii)While31per centof the employees are answerable for suggestingimprovements to management, they have not been given any informationortrainingtohelptheminmakingdecisions.

(iii)Ofthe12percentemployeeswhotakepartingroupsandaregivensomelevelofcontroloverdailydecisionsapplicabletotheirwork,mostreceiveinformationlinkedtotheirresponsibilities.


NOTES


Unless they are motivated to change, people do not change easily. Business transitionsof transferringempowerment toworkforce,workonthesamelines.Unlessemployeesknowthereasonforempowerment,theadvantage itholds for themand theadvantage itholds for thecompany,themomentumtodoingthingsdifferentlywillneverarise.Thingswillnotchangeonlyiftheleaderwantsthemto.Theonlythingthatmattersiswhetheremployeeswant tochangeandbelieve theycan influence thecompany’sperformance.

Therearefivemajorreasonsbecauseofwhichleadershavebeenslowin adopting employee-centred management or empowerment. These are: (i)Complacency and inertia:Till date,many executives never

venturedtoquestionorchangethemoderatelycomfortablestatusquobecauseofcomplacencyandinertia.

(ii)Short-termfocus:Theshort-termfocalpointofthemanagementsystems in general and reward systems in particular, restrains the procedureofempowerment.Executiveperformancebonusesandincentiveplansareattached tooneyearandaredefinitelynotmeanttobuildadedicatedworkforceoverthelongterm.

(iii) Inabilitytomeasuretheimpactofhumanresourcepractices: Schuster contends: ‘Until recently, little attention has been paid toexecutiveperformanceregardingeffectiveutilizationofhumanresources,inpartbecausethestandardsforcomparisondidnotexist.Ourlackofcontroloverefficientutilizationofthemostexpensivesinglecostofoperationinmanyorganizationsisindeedremarkable’.

(iv)Fearoflosingstatus: Reluctance to give up their special status, executive privileges andmanagerial power hamperswith theprocessofempowerment.

(v)Lackofsurety:Possibly,themostnoteworthyexplanationofallisthatalotofmanagerswouldprefertobringinhigh-improvementpractices but are not sure how to start or proceed.

Leaders need to chalk out programmes and define processes thatenlightenandengageemployees.Leadersmustbesupportivetowardsthemthrough words and deeds. A business leader must be spending as much time withseniorhumanresourceprofessionalstodiscusswaystoconnectandalign employees to business targets and objectives, as they must do with top-levelfinancialpersons.Theleaderwillthenunderstandtheessenceofempowerment.

There are certain characteristics of the leaderswho believe inempoweringtheiremployeesandorganizations.Someoftheseare:

NOTES


Employee Empowerment (i)Theyhousethebeliefthatleadershipbelongstoeveryemployeeandnotonlytosomeofthem.

(ii)Theyareawarethat theorganizationis likelytobesuccessfulwhen employees are equipped, trained and possess the authority toperforminthebestway.

(iii)Theybelievethatknowledgeispowerandarethereforereadytoshare it with all employees.

(iv)Theyvaluetheworkforceenoughtobuildaculturethatrespectsandissupportiveofindividuals.

(v)Theycreateopportunitiestofindsolutions.They comprehend that nurturing empowerment is an uninterrupted

effort.

Motivation throughEmpowerment

Yearsago, leadershadstarted todiscover themotivational supremacyofempowerment. Some leaders have always empowered people through the delegationofextensiveautonomy,byprovidingsufficientinformationandby supporting projects that were creative or depicted initiatives. Similarly, manypeoplehavelearnedtobeself-motivatedandself-empowered.Theygrabholdofopportunities to render theirworkmoremeaningfulandarepreparedtochoose,experimentandcreateanimpactontheorganization.Butuntilempowermentfounditswaytotheleader’sdictionary,scarceeffortswerecarriedouttoencourageitasapracticeforpromotingself-motivation,innovationandsystem-wideimprovements.Theprocessofempowermentplaysavitalroleinmotivatingemployeesofthecompany.Someofthewaysbywhichtheprocessofempowermentmotivatesemployeesinorganizationsare discussed below.

Enhancing self-perceptionsandbehaviours empowerment

Conditionsthatfacilitatepeopletofeelcompetent,incontrol,energizedtotakeinitiativesandpersevereatmeaningfultasks,aredefinedasempowerment.Empowermentisamany-sidedandextremelypersonalforcethatmotivatespeople.Empowermentcanrisefromwithintheindividual,fromapeerorfrommanagers.Itseekstobringaboutconstructiveself-perceptions(self-concept,self-esteemandself-efficacy)andbehavioursthatdirecttasks.Figure13.1graphicallydisplaysthesefactorsandthetextbelowdefinessomeofthe relationship among them.

Modifiedself-perceptionsareimportantmanifestationsofempowerment.Self-conceptishowapersonthinksabouthimselforseeshimselfinarole.Self-concept changes as roles shift, for example, from friend student or


NOTES


employee.Self-esteemisageneralfeelingaboutone’sownworthiness.Aprecisefeatureofself-esteemisself-efficacy,anotiondirectlyassociatedtoempowerment. Self-efficacyisaperson’sperceivedcapacitytoperformacertaintypeoffunction.One’sfeelingsofself-efficacyareessentialsincetheymanipulateperformanceandbringsinasenseofpersonalwell-being.

Individualsbuildupa feelingof self-efficacy thatdependsonpastexperiencewithauthenticorcomparabletaskswithothersandfeedbackfromthem.Aperson’s self-realizationof capacity (informationandexpertise),common physical and emotional state and personality (including overall self-esteem), influencehis feelingof task-specificself-efficacy.The levelofskillsandeffortwithwhichanindividualapproachesataskinfluenceshispersonal featand thesuccessive feelingofself-efficacy.Empoweringconditionsrenderself-efficacystrong.

OTHERS

Accepting Modeling Mentoring

MANAGERS

Job designs

Goal reward

Leadership

SELF

Predisposition

Competence

Expectations

PRECEPTIONS Self-concept

Self-esteem

Self-efficacy

BEHAVIOURS

Self-initiatedPersistent

Adaptive

OUTCOMES

Fig. 13.1 Forces Enhancing Empowerment

This sense of empowerment can emanate froma set of sources asgiven below. (a)Self-initiated empowerment:A person can initiate self-

empowermentandafeelingofself-efficacythroughapositivechange in his behaviour. Individualswho are fundamentallymotivatedmostoftenmakeeffortstoexpandthenatureoftheirjobs.Theyareenthusiastictotakeonfurtherresponsibilitiesandcreativelyworkonmeanstoimproveorganizationalprocessesandproducts. Self-initiated empoweredpeople are, in reality,entrepreneurswhoworkactivelytoaltertheorganizationinwaysthatmakethemproudoftheirresults.

(b)Empowermentbyothers:Colleagues and co-workers hugely impact self-perceptions related towork. Peerswho promoteempowerment, influence theway peoplewithin a group feel

NOTES


Employee Empowermentabout themselves and the group. Within groups, people get the feelingofbeingempoweredwhentheyarevaluedandtreatedas professionals.Co-workers are encouraged by them to beaccountable and be sponsored by a personal mentor. Individuals areempoweredwhenpeers lookfor theirsuggestions,confidein them and involve them in projects which help them learn and come in contact with others who might help their careers.

(c)Empowermentbymanagers:Themostwidespread basis ofempowermentisthebehaviourofmanagersorleaderswhentheyinteractwiththestaff.Theempoweringleaderenergeticallygivespowertoindividualsandallowsthemtobeself-motivated.Thisisdonethroughashiftintheexpectationsofemployeessothattheyfeelthattheyareincontroloftheirfutureandcanoutlinetheirworkandmake itmeaningfulwithin theirorganizations.Empoweringleadersalsoshareknowledgesothattheirteamscanperformtheirjobswithahigherrateofaccuracyandconfidence.Information technology and systems providing access ondemandtoemployeesforwhateverinformationtheyneedarebythemselvesakeyempoweringfactor.

As a management application, empowerment also allows leaders to communicate,delegateauthority,shareinformationandaltertheincapacitatingknots of corporate bureaucracy.The leaderwho consciously strives toempower his employees provides them with the drive to pursue their visions, winprojects and toprogressonpractices in tunewith theorganization’smission and goals. The leader who shares tasks with subordinates and treats themasassociatesislikelytogetthebestfromthem.Duetothis,itislogicaltothinkofempowermentasthemostimportantqualityofleaders.

Empowerment results inpersonal changes

Theempoweredindividualundergoestwotypesofspecialtransformations.One is motivational enhancement, particularly when the supply ofempowerment is a positive change instigated by amanager.Empoweredpeopletypicallydeepenthefocusoftheirmissionandareeagertobecomemore dedicated to a cause or goal.They experience self-efficacy,whichinspiresmotivationbyfacilitatingpeopletoseethemselvesasproficientandcapableofhighperformance.

Empowermentisalsopatentedinactivebehaviourtoresolveproblemsandconcentratesitsforceonanobjective.Theempoweredpersonismoreelastic in behaviour, tries alternate means when one is blocked and actively beginsnewtasks.Behaviourbecomesself-motivatedwhentheindividualseeks to shape out a greater personal autonomy in undertaking tasks without thesupportofthemanager.


NOTES


W.L.Gore andAssociates, a privately held firm of over 6,000associates,notedforitsGore-TexandotherproductsmadefromTeflon,hasanunusualorganizationculturethatsupportsempowerment.Allactivitiesarestructuredaroundteams,thefirmhassponsorsratherthanmanagersandhiring decisions are a team-based process. Once a team decides that another person is needed, they recruit, interview and select and then assign that person a sponsor who acts as a mentor. ‘Usually we choose the person (or the team) whohasinvestedthemostinmakingthenewpersonsuccessful’saysSallyGoreShefurtherremarks:‘Ifyousponsorsomeone,youwanthimorhertobesuccessful.Youwillofferthemappropriateopportunitiestositinmeetingsandseminarsanddothingssothattheywillbesuccessful.Thenteamsandindividualsarerewardedwithprofitsharingbasedonthevaluetheyaddtothe company. Seniority and education are not the criteria. The criterion is contribution, pure and simple (to create) an atmosphere where associates are motivatedtoinnovate’.

EmpoweringToday’sOrganizations

As scientificmanagementwas a suitable philosophy to organizing andcontrolling themassive bureaucracies of the 1920s and1930s, similarly,empowermentisthephilosophyforrunningorganizations.The21stcenturyorganizations are learning organizations.Most organizations are goingthrougharapidtransformation,changingtheirstyleandthewaytheywork,in response to the changed environment in which they have to operate. Competition in the new environment will be intense, both at home and in abroad.PartofthechallengewillcomefromdevelopingindustriesoftheFarEastwhichwilltakefulladvantageoflowlabourrates,thenewcomputertechnologyandimprovedglobalcommunications.Everyorganizationwillhavetoinnovateandcreatenewproductsandmarketsorbeleftbehind.

Change,whichisbothrapidandprofound,willbombardeverypartof an organization’s activity. Products, customers, competitors, suppliersandotherswillchange.Someofthesefactorswillchangealmostinstantlywhileotherswillhavelongertimescales.Organizationswillhavetorespondeffectivelytothechange,otherwise,theywillbeatadisadvantagewiththeircompetitors.

Another important feature of the today’s organizations is that theyhavetodealwithfarmorecomplexenvironments.Themarketdemandsamorediverserangeofproductswhichhaveshorterlifespan.Thelengthoftimerequiredtorespondtocustomers’needsisshorter.Thesefactorsrequiresystems andmanagementprocedures that are efficient and responsive tocustomers’needs.

Thechangeintheenvironmentandthegreaterdemandsofcustomerswillhaveanimpactonthestructureoforganizations.Tocopewithshorterresponse times and the requirement formore rapid communication,

NOTES


Employee Empowermentmanagement hierarchieswill be reduced.Therewill be fewer layers inorganizationsenablingfasterdecision-making.Organizationswillhavetobemoreflexibletocopewiththeprioritieschangingrapidly.Allemployeeswillhavetopossessawiderrangeofskillssothattheycanbetransferredquicklyfromonejobtoanother.Thenewdemandsofthemarketandincreasedtechnologywillresultinamoreskilledandeducatedworkforce.Peoplewillhavehigherexpectationsanddemandasatisfyingjobandworthwhilecareers.Rewards and recognition will also have to be increased to match the new skillsandpersonalexpectations.Table13.1depictssomeofthecommonlyfeltdifferencesbetweentheempoweredandunempoweredorganizations.

Table 13.1 Behaviour Descriptions of Empowered and Unempowered Organization

EmpoweredOrganization UnempoweredOrganization Shemadethemistake;wewillhelpherclear it up.

She made the mistake, she can clear it up.

Totryandfailisapplauded. Totryandfailispunished. Everypersonhas latent talents thatcanbe developed.

Some people are dumb and will never do anything.

The criteria for success and promotionin this organization are talent and jobperformance.

If you are not in the club, you will never succeedinthisorganization.

There are motivated and creative people atalllevelswithintheorganization.

The only innovators and creative people are in the marketing and research departments.

Work is as enjoyable and exhilaratingastherestofmylife.

You work from 9.00 to 5.00 and then youescape.

Enterprise, initiative and the challenge oftryingnewthingsarethenorm.

You keep your head down and your nose clean.

We thrive on new ideas. Wehaveseenitallbefore. Most people try to be open and genuine. Youhavetobecynicalinthisorganization. Volunteeringforspecialassignments isthe pathway to growth.

Nevervolunteerforanything.

The products and services we give to our customers are world class.

What we produce is no better or worse than anyoneelse’s.

There is genuine concern for anindividual’swelfareanddevelopment.

No one takes an interest—you just swim around in your own cul-de-sac.

CheckYourProgress

3. What is empowerment? 4. What is a quality circle?


1.Anempoweringleaderhastogothroughfourstages:(i) empowering yourself,(ii) demonstrating empowerment, (iii) giving management guarantees, and (iv) taking risks.


NOTES


2. JMCswere introduced in 1958 to administer employeewelfare,training,changesinworkpractices,formulationofstandingorders,organisational productivity and so on.

3.Empowerment is the process of enablingworkers to set their owngoals,make decisions and solve problemswithin their spheres ofresponsibility and authority.

4.Aqualitycircleisagroupofemployeeswhovoluntarilymeetregularlytoidentifyandproposesolutionstoproblemspertainingtoquality.

13.6 SUMMARY

·Notwithstanding itsculture-specificnature,empowermenthasbeendefinedinvariedwaysinbehaviouralscienceliterature.

· Itcanbesuccinctlydefinedastheauthorityofsubordinatestodecideand act.

·Theanalysisofdifferentempowermenteffortsprovidesanunderstandingofitsfacilitatorsandbarriersinorganizationalsettings.

·Theprerequisitesofempowermentareparticipation,innovation,accesstoinformationandaccountability.

·Anempoweringleaderhastogothroughfourstages:(i) empowering yourself,(ii) demonstrating empowerment, (iii) giving management guarantees, and (iv) taking risks.

· .TheIndiangovernmentmadeitmandatoryfornationalisedbankstohaveemployeedirectorsrepresentingbothworkersandofficers.

· InIndia, the twinprocessesofglobalisationandliberalization, thatbegan in 1990 and gathered momentum in 2000, have increased the needforaflexible,morequalifiedandaversatileworkforce.

·Empowerment is the process of enablingworkers to set their owngoals,make decisions and solve problemswithin their spheres ofresponsibilityandauthority.Inrecentyears,manyorganizationshaveactively sought ways to empower their employees.

·Onemethodsomefirmsusetoempowertheirworkersistheuseofwork teams.ThismethodgrewoutofearlyattemptstousewhatJapanesefirmscalledqualitycircles.

·Aqualitycircleisagroupofemployeeswhovoluntarilymeetregularlytoidentifyandproposesolutionstoproblemspertainingtoquality.

·Employeeinvolvementcouldbeanothertermforempowerment. ·AccordingtoarecentsurveycarriedoutbyUniversityofCalifornia’s

CentreforEffectiveOrganizations,Americancompanieshavebeenslowinintegratingsuchexercisesintotheirbusinessprocesses.

NOTES


Employee Empowerment ·Thechangeintheenvironmentandthegreaterdemandsofcustomerswillhaveanimpactonthestructureoforganizations.

·Tocopewithshorterresponsetimesandtherequirementformorerapidcommunication, management hierarchies will be reduced.

13.7 KEY WORDS

·Globalization: It is the process by which businesses or other organizationsdevelopinternationalinfluenceorstartoperatingonaninternational scale.

·Liberalization:Itreferstotheremovalorlooseningofrestrictionsonsomething, typically an economic or political system.

·Bureaucracy:Itisasystemforcontrollingormanagingacountry,company,ororganizationthatisoperatedbyalargenumberofofficialsemployedtofollowrulescarefully.

·Empowerment:Amanagement practice of sharing information,rewards, and power with employees so that they can take initiative and make decisions to solve problems and improve service and performance.



1. Describe the keys to empowerment. What makes empowerment work? 2.Howdoesempowermentimpactemployeeperformance?Discuss. 3.Howdoesempowermenthelpinenhancingself-perceptions? 4.Whatarethetypesoftransformationsthatanempoweredemployess

goes through?

LongAnswerQuestions

1. What do you understand by employee empowerment? Discuss its facilitatorsandbarriersindetail.

2.Discuss employee empowerment in India. Explain the direct andindirectmethodsofemployeeempowermentindetail.

3.Giveadetailedanalysisofempowermentintheglobalscenario.Whatarethereasonsforslowadoptionofempowerment?


NOTES








NOTES


International HRM

UNIT 14 INTERNATIONAL HRMStructure 14.0 Introduction 14.1 Objectives 14.2 International HRM: An Introduction 14.3 ComparisonofDomesticandInternationalHRM 14.4 Challenges in International HRM 14.5 Answers to Check Your Progress Questions 14.6 Summary 14.7 Key Words 14.8 SelfAssessmentQuestionsandExercises 14.9 Further Readings

14.0 INTRODUCTION

Anybusinessisdoneinenvironmentsofdifferenttextures—social,cultural,economic,political,technical,etc.Internationalbusinessisnotanexceptionto this impingement of environment.The context inwhich internationalhumanresourcemanagement(IHRM)hastofunction,therefore,isdecidedbytheseenvironmentalflows.IHRMprofessionalshavetheirhandsfullwiththedifferenttypesofinfluencestheyaresupposedtofacewhilecarryingouttheirresponsibilities.Thisunitispoisedtotracethecontextualframeworkin IHRM.

14.1 OBJECTIVES

Aftergoingthroughthisunit,youwillbeableto: ·DiscussthecomparisonofdomesticandinternationalHRM ·ExplainthechallengesininternationalHRM

14.2 INTERNATIONAL HRM: AN INTRODUCTION

AmongthevariousactivitiesofHRM,thefollowingarethemostcommonones: 1. human resource planning 2. staffing(recruitment,selection,placement) 3. performancemanagement 4. talent management 5. knowledge management

International HRM

NOTES


6. training and development 7. job analysis 8. compensation(remuneration)andbenefits 9. industrial relations

P.Morgan(1986),whileacknowledgingthatmostoftheactivitiesarecommonforallHRM,presentsthreedistinctdimensionsofIHRM: 1. thebroadHRactivitiesofprocurement,allocationandutilization 2. the national or country categories involved in IHRM activities:

· the host country where the subsidiary is located · the home country or parent countrywhere the firm is

headquartered and · ‘other’/‘third’countriesthatmaybethesourceoflabour,

financeand/orotherinputs. 3. thethreecategoriesofemployeesofaninternationalfirm:

· host-country nationals (HCNs) · parent-country nationals (PCNs) · third-country nationals (TCNs)

HenceMorgan defines IHRMas the interplay among these threedimensions,namely,HRActivities,TypesofEmployeesandCountriesofOperation(ATECO).Broadly,domesticHRMisinvolvedwithinonenationalboundary while IHRM is concerned with HRM issues outside the boundaries ofonecountry.

PerhapsthedefinitionofferedbyPaulSparrowetal.isasimpleandpracticalone.Accordingtothem,globalmanagementofhumanresources(inotherwords IHRM) is thepossessionof the skills andknowledgeofformulatingandimplementingpoliciesandpracticesthateffectivelyintegrateandcoheregloballydispersedemployees,whileatthesametimerecognizingand appreciating local differences that impact the effectiveutilizationofhuman resources.

The term expatriate hasdifferent connotationsdependingupon theframeofreference.IntheeventofaPCNgoingouttoahostcountry,orinthecaseofaTCNgoingeithertoparentortohostcountry,theemployeewouldbecomeanexpatriate.EvenifaHCN/TCNmovestothehomecountry,thenalsohe/shecanbe termedasanexpatriate.However, terminologiessuchas‘impatriates’and‘transpatriates’arebeingusedoflatetodistinguishfromamongthevariouscombinationsofexpatriatesmentionedabove.Forexample,KoreanmultinationalHyundaimaydrawpersonnelfromoneofitssubsidiariesinIndiatomansomeofitsoperationsinKorea(homecountry),makingthem‘impatriates’.IfanIndianispostedtoanothersubsidiaryof

NOTES


International HRMHyundaiin,letussayChina,hewillbeknownasa‘transpatriate’.Well,allthesetermsarecoinedtomakemattersworse.Butsufficeittosaythatapersonwhoisdisplacedfromhisowncountrytoworkforhiscompanyinanothercountry—whetheritistotheparentcountryorthethirdcountry—isanexpatriate.

14.3 COMPARISON OF DOMESTIC AND INTERNATIONAL HRM

AsindicatedbyMorganearlier,themaincharacteristicofIHRMliesinthecomplexitiesofoperatingindifferentcountrieswithdifferentcategoriesofemployees.ThoughonthefaceofitHRMactivitiesremainthesamebothindomesticandinternationalarenas,therearevaryingdegreesofintensitywithwhichthecomplexitiesarisingoutofIHRMactivitieshavetobeaddressed.P.J.Dowling(1988)attributesthesecomplexitiestothefollowingsixfactors: · More HR activities ·Theneedforabroaderperspective ·Moreinvolvementinemployees’personallives ·Changesinemphasisastheworkforcemixofexpatriatesandlocals

varies ·Riskexposure ·Broaderexternalinfluences

MoreHRActivities

In order to operate in an international environment, the HR department should involveitselfinanumberofactivitieswhichotherwisewouldnotbenecessaryforadomesticenvironment:internationaltaxation,internationalrelocationandorientation, administrative services for expatriates, host-governmentrelations and language translation services.

International taxation

Asweshallelaborateinthechapteron‘Compensation’,amidstvariouslawsonehastoabidebyinaforeigncountrytocontinuethecompany’soperationthere,incometaxlawsarethosethatcannotobviouslybeevadedoravoided.Atthesametime,theexpatriatecannotaffordtodoawaywiththetaxationofhiscountryoforigin.Sometimesthismayleadtodoubletaxation.Thisisadisincentiveforanyonetotakeupaforeignassignment.Therefore,IHRMhastotakecareofcompensatingtheindividualadequatelysothathedoesnotfeelthepinchofdoubletaxation.Thismaygiverisetoanomaliesinthesalarystructureofemployeesinthehomecountry.Abalancingacthastobedone by the IHRM accordingly.

International HRM

NOTES


International relocationandorientation

WheneveratransferofanemployeeisaffectedwithinthecountrytheHRprofessionalisnotburdenedwiththeadditionalresponsibilityofarrangingfor theemployee’spassagefromonelocationtoanother.His jobisdoneby providing for expenses to the employee as per companypolicy.Butinthecaseofanexpatriate, thejobofarrangingpassports,visas, tickets,accommodation,etc.,notonlyfortheconcernedexpatriate,butalsoforhis/herspouseandfamily,fallsontheIHRMprofessional.Finalizingcompensationdetailssuchasdeliveryofsalaryoverseas,determinationofvariousoverseasallowances,etc.aretheextrasaddedontoIHRM.Further,theexpatriate’straining to prepare him to cope with the new environment and culture is an added activity. For domestic HRM personnel this is not an issue because theculturalimpactofworkers/employeeswillbehomogeneous.Oncetheexpatriatereachesforeignsoil,theorientationhehastobegiveniscertainlydifferentfromwhatitisathome.

Administrative services for expatriates

Providingtheseservicescanoftenbeacomplexandtime-consumingactivitybecause policies and procedures are not always clear-cut and may at times conflictwithlocalconditions.Forexample,ifinthehostcountrywhichisnotsecularthereisarequirementthataplaceofworshiphastobeprovidedfortheemployees,whereasintheparentcountrywhichisasecularstatesuch provisions may not be necessary, HRM has to address this dichotomy administrativelytosuitlocaldiktats.Theseissuesaddtothecomplexitiesofprovidingadministrativeservicestoexpatriates.

Hostgovernment relations

ThisaspectrepresentsanimportantactivityforanHRdepartment,particularlyindevelopingcountrieswhereworkpermits,andotherimportantcertificatesaremoreeasilyobtainedwhenapersonalrapportexistsbetweentherelevantgovernment officials andmultinationalmanagers.Having such rapporthelps resolveproblems thatmay arise fromambiguous eligibility and/orcompliancecriteriafordocumentationsuchasworkpermits.Butthiscanattimes become quite volatile.

TheNeed forBroaderPerspective

HR managers working in an international environment have to deal with morethanonenationalgroupofemployees(e.g.,PCN,HCNandTCN).Therefore,narrowdomesticwallshave tobe removedandparochialism,regionalismorevennationalismcannot,orshouldnot,finditswayintotheoperationofadministrationofprogrammesforthemultinationals.Sometimestheallowancesorincentivesforforeignservicepermittedtoparent-company

NOTES


International HRMexpatriates arewithheld from third-country expatriates.This is a narrowoutlookwhichshouldbeeliminatedby theHRmanager in IHRM.Evenin domestic HRM, partialities due to regionalism should be shunned. All the more so, IHRM should shun any such attitude and embrace a broader perspectivefortheemployees.

More Involvement inEmployees’PersonalLives

In the domestic environment theHRdepartment’s involvementwith anemployee’s family is limited.But in the international environment thedepartmentshouldbemuchmoreinvolvedinordertoprovidethelevelofsupportrequiredandtoknowmoreabouttheemployee’spersonallife.Forexample,despitethebesteffortofacompanytoavoidanydiscriminatoryselectionprocess,amarriedpersonmayberejectedjusttoescapesomeofthestringentlegislationsinthematterofimmigrationintothecountryofposting.Eveniftheemployeehastobesentsingletothehostcountry,thefamily’srequirementsintheabsenceoftheemployeeneedtobetakencareofbytheHRdepartment.Thesecanrangefromhousingtoeducationofchildrentotheirhealthbenefits.SometimestheHRdepartmenthastotakecareofthechildrenleftbehindinboardingschoolswhenbothhusbandandwifestaytogetherinthehostcountryonanassignmentfromparentcountry.InIndia,extendedfamilieswithdependantparentsorothereldersneedtobetakencareoftooinordertofacilitatetheemployeetocarryouthisassignmentabroadwithoutanyworriesbackhome.Foradomesticassignmentmostofthesematterseitherwouldnotariseorwouldbeprimarilytheemployee’sresponsibilityratherthanthatoftheHRdepartment.

ChangeinEmphasisastheWorkforceMixofPCNsandHCNsVaries

As foreign operations come of age and locals are able tomanage thesubsidiaries themselves, it becomes wise and prudent to withdraw PCNs and TCNsfromthescene.BeforethattheHCNsneedtobetrainedtohandlethe business all by themselves. Further, as activities hitherto connected to benefitsextendedtoexpatriatesarebeingwithdrawn,activitiespertainingtotheselectionandtrainingoflocaltalentemergeasthepredominantonesforinternationalHRmanagers.

RiskExposure

Moreoften thannot, thehumanandfinancial consequencesof failure inthe international arenaaremore severe than in thedomestic arena. If anemployeesentabroadtocarryoutanassignmentafterconsiderabletraininganddevelopment,travelandmaintenanceexpensesreturnstohisbaseeitherduetohisinabilitytoadjustphysicallyormentallytotheforeignenvironment,orduetohisfailuretodeliver,thefirmincursahugeloss,apartfromincurring

International HRM

NOTES


additionalexpenditureinrepatriationofsuchanemployee.Directcostsperfailuretotheparentfirmmaybeashighasthreetimesthedomesticsalaryplusrelocationexpenses,dependingontheexchangerateofcurrencyandlocationofassignments.Indirectcosts,suchaslossofforeignmarketshareand damage to host country relationships, may also be considerable.

RiskexposureishighindomesticHRM.UnfairhiringpracticesmayresultinafirmbeingchargedwiththeviolationofConstitutionalprovisionsandbeliableforpenalties.Failuretomaintaincordialrelationswithunionsmayresultinstrikesandotherformsoflabourunrest.InIHRM,theserisksexist, and, in addition, there are other hazards that are unique andmorethreatening. Depending on the countries where the MNC operates, the headquarters and subsidiary HR managers may also have to worry about the physicalsafetyoftheemployees.InonecasearepresentativeofaconsultingfirmdoinganoverseasprojectbecamecuriousaboutapistolhesawinagasstationownedbyapersonofIndianorigin.Hewasluredbythe‘owner’ofthepistoltotryhishandatitandhavethethrillofshooting.Whentherepresentative,outofcuriosity,firedacoupleofshotsandthepolicearrived,itbecameacomplicatedsituationandtheexpatriatefounditverydifficulttoextricatehimselffromit.Inmanycountries,kidnappingandterrorismarecommon and the international HR managers must learn to live with them. Intherecentpast,TalibanactivistsinAfghanistantookanIndianengineerhostage and killed him to press their demand that all Indians should leave their country within 24 hours. Terrorism poses a great risk to international operations.Thecostofkidnappingmaybeashighas$2-3million,andithas been seen that there are 10,000 to 15,000 kidnappings a year worldwide. Everydaynewspapers carry stories about Indiansworkingabroadgoingmissing.Firmsarethereforeforcedtospend1–2percentoftheirrevenueson protection against terrorism. The HR department may also be required to deviseemergencyevacuationproceduresforhighlyvolatilelocations.TheinvasionofKuwaitandtheensuingGulfWarin1991isanexampleofsuchasituation.Eveninourdomesticscenariosomepublic-sectorundertakings(PSUs) having operations in sensitive states insure their employees against terroristattacks.ItisallthemorenecessaryforinternationalHRmanagersto be alert in this respect.

Besidestheserisks,ithasbeenestimatedthatanaverageexpatriatemanager,withfamily,costsanMNCnearlyUS$2,50,000peryear,andthetotalcompensationpackageAmericanexpatriatemanagershasrangedfrom25to40percentbetween1965and1985.Ifmanagersdonotperformwellandhavetoberecalledtothehomecountry,theirfailurerepresentshugefinanciallossesfortheiremployers.Therisksassociatedwithpoorselectiondecisions are high.

NOTES


International HRMMoreExternal Influence

CountriesliketheUSandUKarenowadaysoncarefulaboutoutsourcingtheiractivitiesforthefearthatpersonnelfromcountrieslikeIndiaorChinawilldisplacetheirownworkforceandcreateunemployment.Thatiswhytheyarecautiousaboutbeing‘bangalored’.Also,theyareimposingrestrictionson foreign nationals in their own countries.The recent threat to IndiandoctorsservinginEnglandisacaseinpoint.Legalframeworksinthehostcountries are another parameter within which HR managers need to operate. The subsidiary HR manager must spend more time learning and interpreting thelocalwaysofdoingbusinessandthegeneralcodeofconductregardingactivitiessuchasgivinggifts.Heshouldalsodoleoutbenefitsandfacilitiesnot readily available in the local economy, to his employees.

Variables thatModerateDifferencesbetweenDomestic andInternationalHRM

ApartfromthecomplexitiesinvolvedinIHRMmorethanindomesticHRM,P.J.Dowling enumerates four other variables thatmoderate differencesbetween domestic and international HRM. They are: · the cultural environment · the industry/industries with which the multinational is primarily

involved · theextentofrelianceofthemultinationalonthehomecountrydomestic

market · theattitudesofseniormanagement

TheCulturalEnvironment

Theword‘culture’manyatimeisconfusedwithnation.Butitshouldnotbeassumedthatnationaldifferencesnecessarilyrepresentculturaldifferences.Culturenormallydescribesashapingprocess,whichmeansthatmembersofagrouporsocietyshareadistinctwayoflifewithcommonvalues,attitudesandbehaviours that are transmitted over time in a gradual, yet dynamic, process.

Normally there is a tendency to believe that what has worked successfullyforsolonginonecultureshouldworkinanotherenvironmentalso.This is a generalizationwhichusually does not holdwater.This iswhat researchers call an etic approach to culture. According to them the emicapproach,onthecontrary,isculturespecific.Thismeansthereisnouniversalityofculture.Eachcultureisuniqueinnatureandtheemployeeshouldadapthim/herselftothenewculturerathertrytochangeit tosuitoneself.This iswhereguidelines for structuring teamworkcanbe linkedto thestrategic imperativesof localresponsiveness,globalefficiencyandorganizationallearning.

International HRM

NOTES


Beingawareof the localcultureandadaptingoneself to itenablesone to copewith the requirements of the localmarketwithmuchbetterresponsiveness than a person who thinks what is done back home is the best way todo it.Thisnaturally leads toglobal efficiencyandorganizationallearning. What is considered as nepotism in some cultural environments may not be so in others. Mumbai dabbawalas who have the remarkable reputation oftransportingabout2,00,000tiffincarrierseachwaywithinaradiusof60kminthecity(4,00,000transactionseveryday)fortheirclientstohavetheirownhome-cookedfoodforluncheverydayforthelastonecenturywithoutasinglemistakethusbeatingeventhesixsigmalevelofqualityserviceengagepersonnelfromwithintheirownclanandcommunitytoensurereliability.Moreover, they do this business more as a service. Hence this cannot be labeled as nepotism!

Just like perception in the behavioural science is in the eyeof thebeholder,soismeaningofpeople’sactions.Togreetapersonwithflowerscanhaveformidableconsequencesifthewrongcolourflowerispresentedtoaguestfromadifferentculture.Hencetowinorloseamarketmayfatallylieintheaccurateknowledgeoflocalculture.

IndustryType

Depending on the industry, global competition varies and accordingly HRM activities also vary. What is most talked about these days as a blue-chip industryisinformationtechnology(IT)whichhassuddenlytakenIndiansallovertheworld.ThisindustryhasdefinitelyearnedIndiaprideofplaceintheglobalarena.However,thesamecannotbesaidofallotherindustries,thoughIndianpresenceisfeltallovertheworldindiverseindustries.Eachoftheseindustrieshasitsownwayofmanagingtheirhumancapital.Portersuggeststhattheindustryinwhichamultinationalfirmisinvolvedisofconsiderableimportance because patterns of international competition varywidelyfromoneindustrytoanother.Atoneendofthecontinuumofinternationalcompetition is the multidomestic industry, that is, the one in which competition ineachcountryisessentiallyindependentofcompetitioninothercountriesexamplesbeingretailing,distributionandinsurance.Attheotherendofthecontinuum is the global industry, whereinafirm’scompetitive position in one countryissignificantlyinfluencedbyitspositioninothercountries,examplesbeingcommercialaircraft,semiconductorsandcopiers.Porteraccentuatesthekeydifferencebetweenthesetwoindustriesasfollows:

Theglobalindustryisnotmerelyacollectionofdomesticindustriesbutaseriesoflinkeddomesticindustriesinwhichtherivalscompeteagainsteach other on a truly worldwide basis … In a multidomestic industry, then, internationalstrategycollapsestoaseriesofdomesticstrategies.Theissuesthat are uniquely international revolve around how to do business abroad, how to select good countries in which to compete (or assess country risk),

NOTES


International HRMandmechanismstoachievetheone-timetransferofknow-how.Therearequestions that are relatively well developed in the literature. In a global industry, however,managing international activities like a portfoliowillunderminethepossibilityofachievingcompetitiveadvantage.Inaglobalindustryafirmmustinsomewayintegrateitsachievementsonaworldwidebasis to capture the linkage among countries.

ThemainrolefortheHRMfunctionwouldbetosupporttheprimaryactivities of the firm in each domesticmarket to achieve a competitiveadvantagethrougheithercost/efficiencyorproduct/servicedifferentiation.If themultinational is in a global industry, however, the ‘imperative forcoordination’ propounded by Porterwould require anHRM functionstructured to deliver the international support required by the primary activitiesofthemultinational.

TheIT/ITESsectorhasbeentheforerunnerinmaking‘IndiaShining’because Indian IT services exports (includingBPO services) touchedRs1,04,130crorefromamereRs250crorein1991andisslatedtobecomeRs2,70,000croreby2010.Inthemanufacturingdomainapartfromautomobiles,pharmaceuticals, leatherand leathergoods, textilesandgarments,capitalgoods,electronichardware,handicrafts,gemsandjewelleryhavethepotentialoftakingtheIndianmanufacturingsagatothenextlevel.ThisisanindicationthatindustrialclimatenecessarilydictatesdifferentapproachestoIHRMinthe ways discussed earlier.

Relianceof theMultinationalon itsHome-countryDomesticMarket

Itisoftenassumedthataglobalmarketperspectivewouldbedominantinafirm’scultureandthinkingbecauseofthelargesizeofitsoperations.Butsizeisnottheonlykeyvariablewhenlookingatamultinational;theextentofrelianceofthemultinationalonitshome-countrydomesticmarketisalsoveryimportant.Asamatteroffact,formanyfirms,asmallhomemarketisoneofthemajormotivesfor‘goinginternational’.Forexample,towardstheendoftwentiethcentury,manyoftheEuropeanPower-Generating-EquipmentManufacturesexperiencedapoordomesticdemandfortheirproductsandsotheywentlookingforinternationalmarketstodumptheirproductsevenifataverynominalpriceandextendedsoftloanfacilitiestotheirbuyersinAsian underdeveloped countries.

A very large domesticmarket influences all aspects of how amultinationalorganizesitsactivities.Itismorelikely,inthiscase,touseaninternationaldivisiontoorganizeitsinternationalactivitiesand,evenifitusesaglobalproductstructure,theimportanceofthedomesticmarketwillbe pervasive.

A large domesticmarketwill also influence theattitude of senior managers towards their international activities. It will help generate a large

International HRM

NOTES


numberofmanagerswithexperienceofpredominantly,orevenexclusively,thedomesticmarket.Thedemandsofalargesingle,nationalmarketpresentachallengetotheglobalizationeffortsofseniormanagersofmanyfirms.HenceseniormanagersneedtoaddressthetaskofdevelopingglobalHRmanagers.

CheckYourProgress

1.NameanytwoactivitiesofHRM. 2.DefineIHRM.

14.4 CHALLENGES IN INTERNATIONAL HRM

Trendsofglobalization,market liberalization,deregulationand technicalevolution are restructuring global markets and challenging traditional approachestogainingcompetitiveadvantage.Itisonlythepossessionofspecificcapabilitiesandresourcesthatnowenablesfirmstoconceiveandthenimplement strategies that can generate what the economists describe as above-averageratesofreturn.Theterm‘organizationalcapability’wasadoptedbyUlrichfortheHRfield.UlrichandLakebroughttogetherperspectivesfromthefieldsofthemanagementofchange,organizationaldesignandleadership,and argued that organizational capabilitywas about competing from theinsideout.Organizationalcapabilityfocusesontheabilityofafirm’sinternalprocesses, systems and management practices to meet customer needs and todirectboththeskillsandtheeffortsofemployeestowardsachievingthegoalsoftheorganization.

Theideaalsohasitsrootintheresource-basedviewofthefirmwiththeargumentthatinanenvironmentcharacterizedbytheglobalizationofmarkets, changing customer demands and increasing competition, it is the peopleandthewaytheyaremanagedthataremoresignificantthanothersourcesofcompetitiveadvantage.Thesenewermodelsofstrategyarguethatcompetitiveadvantageisderivedfrombothinternalknowledgeresourcesandthestrategicresourcesorcapabilitiesofthefirm.Itis‘bundlesofresources’ratherthananyparticularproduct-marketstrategythatprovideanorganizationwith thecapability tocompete.Thesebundlesof resourcesaregenerallyconsideredtobecomplex,intangibleanddynamic.

Inadditiontothemanagementofpeople,developingorganizationalcapability includes themeans throughwhich organizations implementpoliciesandprocedures.Thesemeansarecenteredaround—andrequireHRprofessionalstounderstand—economicandfinancialcapability,strategic/marketing capability and technological capability.As theHRprofessionbecomesmore involved indevelopingorganizationalcapability, ithas tobuildallianceswith—or,fromtheindividual’sviewpoint,hasbeenforced

NOTES


International HRMtoworkwith—thedictatesof the last twoof thesecapabilities.Strategicormarketingcapabilityisbasedaroundofferinguniquenesstocustomers.Themarketing perspective has been, in fact, a significant driver behindapproaches to talent management. The second alliance is based around technological capability. Perceived customer value is considered to result from responsiveness (meetingneedsmorequickly thancompetitors), theformationofendearingandenduringrelationships,andthepursuitofservicequalitythroughguarantees.Laterintheunitweshallseethatthedevelopmentofsharedservicemodelsandthee-enablementofHRsystemsarebuttwowaysofdeliveringthisorganizationalcapability.

OrganizationalCapability andGlobalization

Manycurrentmodelsofmultinationalfirmshavebeendescribedashavinga‘capability-recognizing’perspective.Thismeansthattheypossesssomeunique knowledge-based resources. However, these resources are typically treated as being based on the home country or somehow belonging to the corporatefunctionandtopteam.Thereisapossibilitythatforeignnationalunitscouldtakeamajorstrategicrolewithinthemultinationalfirm.Whatweneedisa‘capability-driven’perspective—anunderstandabletheoryofmultinationalstrategybasedonhowmultinationalfirmsattempttobuild,protectandexploitasetofuniquecapabilitiesonthreeaxes: · Strategiesofinternationalexpansionorglobalintegration · The necessity to continue generating competitive advantage or to

innovate through global learning · Skills and activities operating at the business level or corporate level

routines that integrate these skills across operationsTallmanandFladmoe-Lindquistmakeitevidentthatglobalizationisa

strategicefforttotreattheworld(orasignificantpartofit)asasinglemarket.This does not, however, imply creating single research and development or production centres, unitary logistic networks or, indeed, HR systems and processes. Rather, it is the international networking that surrounds these activities and the conduct of these activities in the global contextsthatprovidessignificantorganizationalcapability:‘Theworldbecomesanimportantsourcefornewknowledgeaswellasnewmarkets’.

UnderstandingandBuildingCentres ofExcellence

Inpractice,multinationalorganizationshaveincreasinglydispersedactivities.They have relied on specialized and often network-based structures tocoordinate these activities. The corporate headquarters typically adjusts its levelofcoordinationandcontroltoreflecttheroleofthesubsidiaryandthestrategicimportanceofitsmandate.Avarietyofmissionscanbeassignedtosubsidiaries.Oneparticulartypeofsubsidiary,thecentreofexcellence,

International HRM

NOTES


hasoflategainedmoreprominence.Thesetakeonastrategicroleintheglobalorganization that reachesbeyond their localundertakings.Centresofexcellencehavetobetightlyintegratedwiththeirsurroundingtechnicalor professional communities.They tend to be established as a generalconsequence of a long and slow internationalization processwithin theorganizationoraspartofadeliberatepartoforganizationaldesignwherethe managers at the headquarters decide to grant autonomy to units that havealsobeengivenaspecificstrategicmandate.Acentreofexcellencemusthavebothhighcompetenceandhighuseofitscompetencethroughoutsurrounding units.

Increasingly, small teams or units within subsidiaries are taking a lead roleinoneareaofthecentreofexcellence,withotherunitstakingtheleadindifferentareasofcapability.Indeed,althoughtheleadershipofacentreofexcellencemightstillbevestedinaphysicallocation,theactualcentreitselfmaybequirevirtual,spreadacrossnetworksofteamsinmanydifferentgeographies.Inmanycases,expertsarguethatthesecentresactuallyneedtobequitelooselytiedintotheorganizationandcoordinatedwithotherunitsiftheyaretohelpsearchfornewknowledgeandaugmentthecapabilityoftheMNC.Control typically varies between being direct or indirect and through personal orimpersonalmechanisms—whatHarzingcallscentralizedpersonalcontrol,formalbureaucraticcontrol,outputcontrolorcontrolthroughsocializationandnetworks.Recent research suggests that controlling these centres ofexcellencethroughsocializationprovestobedysfunctional.Understandingandbuildingthesemoregloballydistributedcentresofexcellenceintoviableoperationshas,therefore,becomeasignificantchallenge.

There is now quite some insight into how such centres should be fostered.Holm and Pedersen found that theymust bemore than justspecialized in theirknowledge.Theyhave tobe able tomaintainoneorseveral criticalfields of knowledge that have a long-term impact on thedevelopment of activity in the other subsidiaries andunits of theMNC.Inthelongterm,globalHRfunctionsthatthemselvesestablishtheirowncentresofexcellencewillbegintolearnfromtheresearchthathasalreadybeen conducted into research and development and other technical centres ofexcellencealreadyestablished.

DevelopingOrganizationalCapability

Anotheropportunityforamorestrategicroleinthisprocessofcapabilitydevelopment comes through process theories. Montealegre has developed amodel of the process skills needed to provide such development ofcapability.Fivekeyresourceswereusedthroughouttheprocess—allthingsthat international HR managers can help build. These are:

NOTES


International HRM ·Leadership, through the expression and subsequent articulation ofstrategic intent

·Organizationculture,throughthemobilizationofsupportingroutinesalready embedded in the culture

· Informationtechnology,notinthesenseoftechnicalinvestmentsbutmore in the way that these investments are leveraged to create unique resourcesandskillsthatimprovetheeffectivenessoftheorganization

·Long-termview—developingalonger-termviewofthestrategybydeveloping and nurturing commitment

· Socialnetworks,throughthecultivationofstrongrelationshipswithstakeholdersinsideandoutsidetheorganization.Wepickuponseveraloftheseprocessesalittlelater.However,atthis

stage,thekeymessageistorecognizethattheroleofHRmanagerscanbedrivenbythis‘patternedsequenceofphasesthattakesplacealongtheroadto capability development.

Inthecontextofsuchglobalization,organizationalcapabilityinvolvesmanagingtheconflictingdemandsofcorporatecontrol,globalcoordinationandstandardizationofHRprocesses.ThisdoesnotimplybuildingtotallystandardizedHRprocesses on a global scale but it does entail buildingadegreeof common insight into thenatureof sharedHRprocesses andadherencetoanoverarchingphilosophyin thedesignof theseprocesses.Themantraoforganizationcapability,supportedbydevelopmentsinboththeuseoftechnologicalcapability(servicecentres,e-enablementofHRandHRprocessstandardization)andmarketingcapability(talentmanagementand employee value propositions considered at a global level) has, in some firms,beguntodominatetheactivityofinternationalHRprofessionals.

StreamliningHRSupportFunctions:HRServiceCentres

Considerableattentionasbeenpaidtothedevelopmentofsharedservicesinthisregard.Sharedservicesarecreatedwhentheorganizationchoosestoconcentrateitsadministrativepersonnelactivitiesintoacentralized‘backoffice’ function.Administrative processing is carriedout separately fromthemainHRgroup.Although‘sharedservices’tendtodenotecentralizedprovision,abettertermtouseis‘commonprovision’.ThecentrestructuresaremorebalancedbythepresenceofmoreHRmanagersclosetothecustomer,bringinginelementsofdecentralizedservice.ThecentralorganizationofHR resources comes hand-in-hand with local (or in an international sense, more probably regional) tailored advice, policy and practice designed around businessneeds.Administrativefunctionsmaybecentralizedbutdecision-makingremainsdecentralized.Moreover,awiderangeofservicescanbe

International HRM

NOTES


consideredintermsofthisneedforcommonprovisiontorecipients—notjust administrative work.

The relevance of this development to international HRM isconsiderable.Sharedservicethinking—andtheassociatedtechnologiesusedtoenhancedelivery—representsaforceforafundamentalrealignmentoftheHRfunction.Itcarriesimplicationsforthelevelofcentralizationanddevolvement evidenced across countries, regions and corporate headquarters. Moreover,itchangestheeconomicsofHRserviceprovisionandintroducescompetingdynamicsnotonlyforthestandardizationofHRprocessesbutalsothepotentialformasscustomization.FewinternationalHRfunctionswill be able to ignore this development.

SeparatingoutthoseelementsoftheHRfunctionthatareconcernedwithbusinessstrategyfromthoseelementsoftherolethatareconcernedwithservicedelivery,willhavedeepimplicationsfortheskillsandcompetenciesofHRprofessionals.The radical perspective also links the developmentof shared service structures to parallel changes in technology that haveenabledgreateroutsourcingofHRactivity.Althoughtechnology(notablyorganizationalintranets,web-basedportal,interactivevoiceresponses,anddocumentandinformationmanagementsystems)hasbeenanimportantpartoftheequation,itisafacilitatorratherthanadriverofchange.Technicalinnovationhas enabledorganizations to consider amuchwider rangeofHRservicesonacommonbasisaroundtheglobe.However,thereasonsforintroducing shared service have been more to do with cost, quality and the generalnatureoforganizationalchange.

Issues that involvecross-nationalworkingand interpretationareofcourse more likely to be escalated upwards to international specialists or centresofHRexcellence.Sharedservices,then,canchangethewayinwhichinternationalHRprofessionalsaresourcedwithintheirwork,andcanalsobring with them new control systems to govern and monitor their response.

AnotherimplicationofthemovetosharedservicesisthatthestructuresofHRatthecountrylevelchange.Bytheendofthe1980s,mostmultinationalorganizationshaddecidedthatsplittinguptheHRfunctiononacountry-by-countrybasiswhentherestoftheorganizationwasincreasinglyalignedwithgloballinesofbusinesswasnothelpingHRtoachieveitsobjectives.However, concerns about diversity in employment law and the continuance of strongnational influences on the employment relationshipmeant thattotalalignmentoftheHRfunctionwithotherbusinessprocessesremainedproblematic.As a compromise,manyorganizations installed globalHRdirectorsasanextralayerinthereportingstructureinordertocreateapositionthat acted as a strategic business partner.

NOTES


International HRMOutsourcingor In-sourcingHR

The issue of outsourcing the transactional aspects ofHRMhas been asource of considerable debate in recent years.Advocates of outsourcingHR activities point to reduced costs, increased service quality produced bygreatereconomiesofscale,increasedincentivesandaccountabilityforserviceproviders,andincreasedaccesstoexpertsinspecializedareas.ThemostcommontargetsforoutsourcingarethoseHRactivitiesthatcanmosteasilybering-fenced,andinclude:payroll,training,recruitment,pensionsadministrationandbenefitsadministration.

In the global context, one can see host countrymanagers arguingthatmuchofthecorporateHRarmouryrequiresadeeptacitunderstandingof thenationalcultureandshould thereforenotbeacandidateeither foroperationthroughsharedservicesorindeedforanysubsequentoutsourcing.Organizationsmustmake sensible assessments of this tacit knowledgeconstraint.

CheckYourProgress

3.StatethefifthtypeofintegrationidentifiedbyScullionandStarkey. 4.Whatisthemostcommontargetofoutsourcing?


1.Two activities ofHRMare human resource planning and staffing(recruitment, selection, placement).

2.MorgandefinesIHRMastheinterplayamongthesethreedimensions,namely,HRActivities,TypesofEmployeesandCountriesofOperation(ATECO).

3.ThefifthtypeofintegrationasidentifiedbyScullionandStarkey(2000)istheeffectivemanagementofinternationalmanagementtalent.

4.ThemostcommontargetsofoutsourcingareHRactivitieslikepayroll,recruitment, pensions, and so on.

14.6 SUMMARY

·MorgandefinesIHRMastheinterplayamongthesethreedimensions,namely,HRActivities,TypesofEmployeesandCountriesofOperation(ATECO).

International HRM

NOTES


· IntheeventofaPCNgoingouttoahostcountry,orinthecaseofaTCN going either to parent or to host country, the employee would becomeanexpatriate.

·WheneveratransferofanemployeeisaffectedwithinthecountrytheHRprofessionalisnotburdenedwiththeadditionalresponsibilityofarrangingfortheemployee’spassagefromonelocationtoanother.

· HR managers working in an international environment have to deal withmorethanonenationalgroupofemployees(e.g.,PCN,HCNandTCN).

· InthedomesticenvironmenttheHRdepartment’sinvolvementwithanemployee’sfamilyislimited.

· But in the international environment the department should be much moreinvolvedinordertoprovidethelevelofsupportrequiredandtoknowmoreabouttheemployee’spersonallife.

·Asforeignoperationscomeofageandlocalsareabletomanagethesubsidiaries themselves, it becomes wise and prudent to withdraw PCNsandTCNsfromthescene.

·ApartfromthecomplexitiesinvolvedinIHRMmorethanindomesticHRM,P.J.Dowling enumerates four other variables thatmoderatedifferencesbetweendomesticandinternationalHRM.

·Manycurrentmodelsofmultinationalfirmshavebeendescribedashavinga‘capability-recognizing’perspective.

·TallmanandFladmoe-Lindquistmakeitevidentthatglobalizationisastrategicefforttotreattheworld(orasignificantpartofit)asasinglemarket.

· Issues that involvecross-nationalworkingand interpretationareofcourse more likely to be escalated upwards to international specialists orcentresofHRexcellence.

·Advocates of outsourcingHR activities point to reduced costs,increased service quality producedby greater economies of scale,increased incentives and accountability for service providers, andincreasedaccesstoexpertsinspecializedareas.

· Intheglobalcontext,onecanseehostcountrymanagersarguingthatmuchofthecorporateHRarmouryrequiresadeeptacitunderstandingofthenationalcultureandshouldthereforenotbeacandidateeitherforoperation throughsharedservicesor indeedforanysubsequentoutsourcing.

NOTES


International HRM ·Talentmanagementonaglobalbasis isa farbroaderconcept thanplottingaseriesofinternationalassignmentsforyounghigh-potentials.

·Thedevelopmentof intellectual integration through thecreationofsharedknowledgebasesisthenextintegrationactivitythattheIHRMfunctioncanpursue.

· To deliver these competencies, IHRM needs to be able to understand, developaninsightinto,andtakeanoverviewofthelinksbetweenHRprocessesandeffectivebusinessperformanceacrossaglobalnetworkofoperations.

14.7 KEY WORDS

·Expatriate:Itreferstoapersontemporarilyorpermanentlyresidingin a country other than their native country.

·Domestic:Itreferstosomethingexistingoroccurringinsideaparticularcountry;notforeignorinternational.

·Staffing:Itisthemanagerialfunctionofrecruitment,selection,training,developing,promotionandcompensationofpersonnel.

·Tax: It is a compulsory contribution to state revenue, levied by the governmentonworkers’incomeandbusinessprofits,oraddedtothecostofsomegoods,services,andtransactions.



1.WhatarethechallengesfacedbyinternationalHRM? 2.Writeadescriptivenoteoncentresofexcellence.

LongAnswerQuestions

1.Explain in detail themeaning of international human resourcemanagement.

2. Draw a comparative study between domestic and international HRM.

International HRM

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