Module I – Introduction to HRM & Human resource Planning

Introduction

For any production of goods or services 6 M’s are required. The six M’s are Manpower (Human Resource) , Material, Machinery, Money, Method & Market.

6 M's of production

Of all the 6M’s of production human resource is the most important ‘M’, as Manpower (Human resources) as it makes all the decision as to how the other M’s will be utilized. i.e. manpower decides to start the organization , it decides which material to use, which machinery to use, where the money (capital) would be spent, the method (process) to be followed, to which market (customers) will they cater too. These decisions taken by the human resource decides if the company would be successful in the long run or not. If the human resource (employees) are well recruited , trained and motivated. They become the competitive edge of the organization, which cannot be easily copied or replicated by completion.

Production of goods & services

Manpower(Human

Resource)

Material

Machinery Money

Method

Market

Explain the concept of HRM (Nov 2001) (Nov 2012)

How can organization Plan for Human resources in an effective Manner? (NOV 2001)

Define ‘Human Resource Management’. Explain its functions and objectives.(Nov 2002) (Nov 2007) (Nov 2009)

What is the current status of HRM in India? What are the factors that have contributed to change in HRM? (Nov 2005)

“Human Resource Management is advancement over traditional personnel management”- If so explain its significance in organizational set up. (Nov 2003)

External Forces affecting HRM (Nov 2007)

Short note on – Role of personnel manager as a specialist (Nov 2002)

Role of HR manager in today’s scenario (Nov 2014)

Compare HRM with personnel Management. Do you think it is old wine in new bottle? Justify your stand? ( Nov 2013)

Explain the functions of HRM and the future scope of HRM? (April 2011)

Explain the importance of HRM in today’s Global scenario? (Apr 2012)

Describe the nature and scope of Personnel(HRM) function in an organization . What are the indicators that they are working in the organization ? (Nov 2006)

Human Resource Management (HRM)

HRM is management of people working in the organization. It is concerned with the people dimension in management. Every organization irrespective of its type (government , private, NGO etc) is made up of people and thus managing them in order to achieve the organizations goal becomes very vital

HRM is concerned with

1. Getting the right people (recruitment & selection)2. Developing them (training & development)3. Maintaining them (compensating & Performance appraisal )

So that the organizations goal is achieved

HRM was earlier known as personnel management, it is old wine in new bottle.

Definition of HRM as per David Deconzo & Stephen Robbins – “HRM is concerned with the people dimension in management. Since every organization is made up of people , acquiring their services, developing their skills, motivating them to higher level of performance and ensuring that they continue to maintain their commitment to the organization are essentials to achieving organization objectives.”

Objectives of HRM (What does HRM wants to achieve)

1. To attain maximum individual development2. To attain good working relationship between employer and employee and between

different groups of employees3. To ensure workers are satisfied4. To ensure that the required number of employees to run the organization are available at

any given point. 5. To help organization achieve its goal by providing well trained , motivated employees6. To maintain high morale and good human relationships within organization7. To integrate individuals / group goals with organizations goals.8. To satisfy individual needs of the employees through monetary and non- monetary

benefits and incentives.

Scope of HRM (what are the types of work HRM department have to do)

The scope of HRM can be classified under three heads

Scope of HRM

Functions of HRM

The function of HRM can be classified in 5 parts

1. Managerial functions Planning – includes planning for having the size of employees, preparing human

resource budget Organizing – implementing the plan. Allocating task amongst the team ,

establishing authority – responsibility relationship between them Directing –motivating, activating, leading and supervising people. Controlling – if there is deviation from the result that has been planed, then

control measures are implemented.2. Operational functions

Procurement function

Job analysis – deciding the details of the job in terms of description & job specification

Human Resource aspect

Concerned with all activities from taking the employee in organization till he/ she leaves the organization which includes the followingHRP (human resource planningrecruitment & selectionplacementtraining and developmentpromotion & demotionsalary management incentives

Welfare aspect

Concerned with working condition amenties for employees which includes the followingcanteenrestroomhousing transportaionhealth facilitiesmedical facilitiesrecreational facilities

Industrial relationship aspect

Concerned with companies relationship with employees which includesTrade-Union Managementjoint consultaioncollective bargaininggreviance managementsettlement of disputesdisiplinary procedures

Recruitment – ensuring eligible candidates apply for the job Selection – selecting the right candidate for the job Placement – placing the selected candidate as per his skill & aptitude Induction & orientation- familiarize the newly recruited employee with

organization and make him feel comfortable

Development Function

Performance and potential appraisal – evaluating the employees performance against their predefined goals & also assessing the growth potential of the employee

Training – upgrading the skill , knowledge & attitude of the employee Career planning & development – planning how the employee would achieve

his long term growth in the organization3. Compensation function

Job evaluation – deciding the worth of a job in context to the organization Wages & salary administration Bonus administration- follow statutory rules in giving bonus to employees

4. Integration function – integrating individual goals with that of the organization5. Maintenance function – protect and promote the physical & mental well being of the

employees through health safety & welfare schemes

Write a short note on Present Challenges and the future opportunities of Human Resource Management in India(Nov 2004)

Define HRM. What are the modern day challenges faced by today’s HR Manager? (Nov 2010) (Dec 2011)

Challenges faced by the HR Manager in today’s global scenario

Qualities required in a HR Manger

Educational qualification – o Degree from recognized college

o Masters Degree (post graduate degree) in HR, Labour Laws, psychology etc

Personal Qualitieso Intelligence

o Communication skills

o Decisiveness

o Human skills

o Teaching skills

o Executing Skills

o Leadership skills

Training & experience – should have training & experience in human psychology, labour laws

Professional attitude – should have professional attitude towards work

Challenges faced by HR manager in today’s global scenario

1. Outsourcing of HR activity - Today in large organizations HR activities are being outsourced. HR activities such recruitment, training , maintaining statutory records are being performed by outside contractors. The Challenge of the HR Manager is prove that his department is as important as the other departments in the organization.

2. Call Centers & BPO - With majority of MNC are transferring their routine jobs including customer care call centers to India. The major challenges in front of HR managers in these call centers & BPO’s

a. Retention of employeesb. Managing high attrition ratesc. Managing the employees transportation due to odd working hoursd. Safety & security of women employeese. Preventing early burnouts of employees (burnout means the employee is no

longer motivated to work, this loss of motivation happens due to high stress felt by them over a long period of time)

3. Balancing Work with life – with both husband & wife taking jobs , it becomes difficult to give adequate attention to the family. HR manger needs to ensure that the employees get enough time that they can take care of their family obligation. The HR manger needs to start programs like flexi time , work from home option, so that the employee can balance his / her work with his family obligation.

4. Making HR Activities ethical – The HR manager needs to build ethical climate in the organization. He needs to ensure that the right type of people are selected. The screening process must ensure that people without integrity are not selected, this can be done by reference checks, third party verification, aptitude test, graphology etc

5. Managing diversity – with opening up of economy there is free movement of manpower, which increases the diversity in the organization. With increased diversity the HR manager should deal all issues with open mind.

6. Changing demographic – there is change in the composition of workforce, like dual carrier couples, with older generation unable to quickly adapt to technology, decline in blue collared jobs preference etc

7. Changed employee expectation – traditional methods (job security, higher salary, other monetary benefits ) no longer completely satisfy the employees .They are looking for

opportunities for taking additional responsibility, learning new skills , recognition. The HR manager has the challenge to fulfill these requirements.

8. Corporate reorganization – with opening of the economy , Indian companies need to face stiff competition from MNC’s which leads to reorganization (transfer, retrenchment). Such situations create a anxiety and fear among the employees. The HR manager needs to keep motivating the employees.

9. Integration of workforce after merger or acquisition - Also companies with mergers and acquisition becoming common, the HR manager has a huge task of integrating the work force of both the organization. The two workforce main have different values and integrating the workforce would be a challenging job.

Role of HR manager The HR manager has to perform the following roles

1. Specialist – The HR manager has to be an expert in his field, as he would interact with the Head of departments (HOD) and give them advice as to the recruitment, selection , training and other requirement for employees reporting to them. If the quality of advice given by the HR manager is not up to the mark, the decision taken by the HOD would be faulty and the company would suffer , thus the HR manger should be a specialist in his field.

2. Information source – HR manger due to his expertise in Labour laws & labour market, becomes a source of information. He also maintains all records in regard to employees , which also used for statutory requirements.

3. Change agent – Many times an organization needs to make drastic changes, here the HR manager needs to convince the employees that this change is necessary and would benefit the organization and employees in the long run . e.g. During the last decade (2003- 2008) a lot of Nationalized banks implemented any where banking , which required all employees to learn working on computers, most of the employees were in their 40’s resisted to this change. Here the HR department played a vital part in convincing the employees and the trade union for implementation.

4. Controller – HR manger need to ensure that HR policies and procedure is followed. He acts as a controller incase of any deviation.

5. Liaison man- he acts as a link between departments6. House keeper- he has to look after the safety and welfare of employees7. Fire fighter – he has to manage aggressive trade unions , and when matter

escalate between the trade union and management, he acts as firefighter to cool the situation.

Write a short note on characteristics of Work force today (Nov 2007) (Nov 2008) (Nov 2009)

Traits / Characteristics of workforce

Workforce refers to the people who are selling their labour to the employer. The workforce has mainly three categories , agricultural workers, Industrial workers & office workers. In India majority of workforce has been employed in Agriculture and Industry. The following are some of the traits of Indian workforce

Composition of Work force - The composition of the workforce is changing very fast there is a influx of educated people joining the workforce. These new entrants are no longer fascinated by government sector or job security, there are more keen in joining private sector as it provides better compensation and challenging opportunities.

Women at work – The percentage of women employees is also increasing drastically. The new generation women are getting themselves educated and joining the workforce. They are not limiting their selves to the traditional role of managing the family.

Changes in employee values – With change in composition there have been changes in values. The workforce today will not hesitate to change the organization, if they are not given the opportunities; also there is a drop in ethical values, which has lead to increase in (white collared frauds) corporate frauds.

Level of education – with increase in standard of living , the new entrants to the workforce are educated. They are reluctant to accept blue collared jobs (manual / physical labour)

Dual career couples – With entrance of women in the workforce, there is rise with dual career couples. These couples are career minded but, they are not flexible in changing taking transfers.

Size of workforce – The size of organizations have increased, so is the demand for quality employees which has lead to higher pay packages to employees.

Employee’s expectation – the employees list of both monetary & noon- monetary expectations is rapidly growing

Life style changes – employees are ready to change jobs, join start up companies, work at different locations, or at odd times.

Personnel Philosophy

Personal Philosophy – revolves around management’s belief about people in terms of their nature , need , values and approach to work.

Personal philosophy gives rise

to the style of management followed and it also creates operational goals

Approaches for treating people (

Commodity approach – considers people as commodity where labour can be bought & sold

Machine approach – considers employees as part of machinery and can be fitted anywhere

Humanistic Approach – treats every individual differently as per each individuals character

Ideally all organizarion should base their personnel philosophy on the following beliefs

Humans are most important asset of the organization Humans have great potential which can be developed Employees cannot be just retained by giving higher salary It is managements responsibility to create a healthy and motivating environment

Explain the concept of personnel Manual (Nov 2003) (Nov 2006) (Nov2009) (Nov 2010) (Apr 2012) (Apr 2013)

Personnel Manual

Personnel manual is a booklet containing the details of personnel policies of the organization. It should be provided to every employee of the organization. Every supervisor, manager should use personnel manual as a guidebook. When these managers are faced by a situation, they can refer to the personnel manual and take the decision. So when all supervisor/ managers use personnel manual to make decision , then the decision taken by them would be similar and thus all employees will be equally and fairly treated. As personnel manual is available with all employees , they are aware of the organizations rules and regulations and thus are aware of the consequences if the rules are broken.

Objective of Personnel manual

1. It acts as a communication tool2. It helps in consistent application of rules throughout the organization3. Helps in being just and fair to all employees4. Helps in maintaining cordial relationship

Explain the concept of Personnel Policies (Nov 2004) (Nov 2012)

Personnel Policies also known as Human resource Policies are statements of the human resource objectives of an organization. They provide a broad frame work within which matter relating to employees can be made.

Example of Human Resource policies

Promotion policy Minimum performance policy Transfer policy Policy for employees taking other employment discipline policy Policy for taking leave. Training & development policy

The main objective of having personnel policy are

Prevent misunderstanding amongst the employees as to what is expected from them Helps supervisors / managers to deal with a situation in a fair manner Ensures equity and justice to all employees Provides opportunity to employees to develop Provides job security

Explain the concept of HRD (Nov 2011)

It is known that all human being have huge potential to grow and perform. Based on this assumption, HR department tries to train and develop all employees.

HRD (Human Resource Development) can be explained as continuous process by which the employees are helped to

• Acquire and Sharpen capabilities required to perform various functions for present

• Develop general capabilities as individual for exploiting their individual capabilities

• Develop an organization culture which good relationship with superior & subordinate , better team work and collaboration among sub units

Objectives of HRD

• Provide an opportunity and framework for development of Human Resources

• Develop constructive mind and overall personality

• Develop individual Capabilities to perform their present and future assignments

• Develop and maintain high motivation level

• Strengthen Superior subordinate relationship

• Develop a sprit of team work, team spirit and collaboration

• Generate systematic information about employees.

Define Human Resource Planning. Explain the process of Human Resource planning with the help of a diagram. (Nov 2004) (Nov 2011) (Apr 13)

‘Failure in Planning and developing HR could be a limiting factor in attaining organizational goals’ - explain the statement in reference to objective and importance of HR planning. (Nov 2008)

Personnel Planning (Nov 2007)

Short note on HRP (Nov 2002)

Write a short note on Objectives of HRP (Nov 2005)

Explain HRP Demand forecasting techniques (Nov 2014)

Define HRP & explain the steps involved in HRP?

Human resource planning

Human resource planning can be defined as the process of identifying the number of people required by an organization in terms of quantity and quality. All human resource management activities start with human resource planning. So we can say that human resource planning is the principle/primary activity of human resource management. From human resource planning the organization identifies how many people it has currently and how many people will be required in future. Based on this information major human resource decisions are taken. Human resource planning consists of analysing and identifying the need for and availability of human resources required by an organisation to meet its objectives. It is a process by which an organisation ensures that it has the right number and kinds of people, at the right place, at

Organizational Objectives Plans and policies

Human Resource Planning

the right time, capable of effectively and efficiently completing those tasks that will help the organisation achieve its overall goals and objectives.

WHY IS HRP IMPORTANT?

Human resource planning serves many purposes. Specifically, planning enables an organisation to

Reduce costs, by anticipating and correcting labour shortages and surpluses before they become unmanageable and expensive.

Make optimum use of workers' aptitudes and skills. Improve the overall business planning process. Identify the specific employee skills available and needed. Promote sound human resource management throughout all levels of the organisation Evaluate the effect of alternative HR actions and policies Enhance continuous quality improvement.

Steps in Human Resource Planning

1. Determination of objectives of human resource planning – In HRP the future requirements of Human resources are arranged. It is absolutely vital that the person making the plan understands the objectively clearly.

2. Assessing current human resource situation- Here the present human resource situation is processed by doing a human resource inventory. The inventory would consist of all the details of all the employees . Details that will be captured includes age , experience, qualification, salary , skills. The inventory will basically try to capture the quality and quantity of human resource.

3. Forecasting future human resource need - In this step the future human resource requirement is assessed, which includes their number sat various levels, their qualification , their place of posting.

4. Projecting supplies of future human resources – Here the supply is forecasted. Which includes the present strength of employees . The inventory which was made at the time of assessments helps in providing the information.

5. Comparison of forecast needs with projected supply to determine net employees requirement – Based upon the demand forecast and the supply forecast, the human resource Gap is assessed. If the demand is more than the supply then there is a shortage and when the supply is more than the demand then there is a surplus human resource.

6. Planning policies and programs to meet human resource needs – Based upon the outcome of the comparison, programs and policies are implemented. If there is a shortage, the same is by fresh recruitment or by transfers wherever possible. In case there is surplus then, the present employees can be placed within the organization then transfers are done. In case of temporary surplus the excess staff can be layed –off, but if the surplus is for long-term then the excess staff are retrenched (permanently removed0

7. Evaluating HRP effectiveness – One the HRP is implemented then its effectiveness is assessed. If there are too many vacancies remaining or too many people are excess after the implementation then the HRP would be considered ineffective. The HR manager needs to assess the same.

Factors affecting Human Resources Planning

External Factors

1. Government policies – Sudden change in Government policies can affect the HRP, e.g. if the government comes with a rule for having certain percentage of employees to be women or from local state or from reserved categories, then the original plan would be needed to change implement the same.

2. Level of economic development - HRP is highly affected with the level of economic development, e.g. if the HRP was made during a lean economic period and if the same was implemented when the economy is booming, the organization would find it difficult to recruit the right kind of employees.

3. Business environment – It affects the demand of the goods or services, thus would also affect the human resource demand.

4. Information technology – Information brings in sweeping changes in the ways business is done. It drastically changes the quality and quantity of human resource required. E.g. when Core Banking Software (CBS) was implemented by banks. The routine work of entries and tallying which was done by the operation staff of the bank was now being done by the software, thus thousands of bank employees became surplus.

5. Level of technology - Level of automation / technology decodes the human resource requirement.

6. International factors –International demand for labour also affect the HRP planning

Internal Factors

1. Strategy of company – Weather the company is planning for expansion / diversification then fresh employees would have to be recruited.

2. Human resource policies – Companies policies in terms of compensation , taking people on contract basis etc also affects the HRP

3. Type of quality of information – If the HR inventory (data of the quality and quantity of employees) is not made properly , then the planning will be badly affected.

4. Trade unions – Trade unions influence the working hours, timings (night shift or not), source of employees (on pay-roll, through contractors) affect HRP.\

5. Companies production & operation policies – the company need to decide what would be produced by them and what should be outsourced. The level of outsourcing would decide the number of people required

Limitations of HRP

1. Inaccuracy – As HRP is dependent on number of factors such including forecasting it is bound to be in accurate

2. Employees resistance – The assessment done by HRP may not always be employees favour, e.g. as per HRP of a particular company, there are surplus staff and excess employees needs to be retrenched , as such times, employees resist HRP. Another example when employees HRP is when it demands higher productivity from employees.

3. Uncertainties – HRP is highly affected by external environment which is not in its control e.g. change in government policy.

4. Inefficient HRIS – If HRIS (Human Resource Information system ) is updated regularly, the data on which HRP Is based becomes in accurate and does affect the HRP outcome. E.g. if the data of employees who have been taken on contract basis is not inputted in HRIS, it will show shortage of human resource and will make a prediction of hiring excess staff then required

5. Lack of top management support - If the top management lacks vision and do nt support complete implementation of HRP , then it bound to fail

6. Time and expensive - any planning including HRP need lot of energy time & money, which cannot be provided by all organization

7. Unbalanced focus - In HRP the main focus lies on the quantity factor and less on the quality factor.

Demand Forecasting Techniques

One of the steps in HRP include includes demand forecating

Some of the techniques include

1. Statistical Techniques a. Ratio Analysis- Ratios of the pat data is taken into consideration basis which the forecast

or future demand is predicted e.g. for selling 10000 unit of goods we require 5 salesmen, so for selling 20000 units we would require 10 sales men

b. Econometric Model - Econometric models for estimation of manpower requirement differ from the statistical methods. Past statistical data are analyzed in the hope that it will prove possible to describe precisely the relationships between a number of variables in mathematical and statistical terms.

c. Regression analysis -It identifies the movement of two or more inter-related series. It is used to measure the changes in a variable as a result of changes in other variables. Regression analysis determines the relationship between Y variables such as the number of employees and X variables such as service delivery by actually measuring the relationship that existed in the past. Use of the method begins with a series of observation each costing of a value for the Y variable plus a value for each X variable.

2. Work study technique - itis based on the volume operation and work efficiency of personnel. Volume of operation is derived from the organizational plan documents and increase/decrease in operation can be measured.

Planned output

Standard output per hour x standard hours per person

3. Managerial Judgment - This techniques is very simple. In this, manager sit together, discuss and arrive at a figure which would be the future demand for labor. The technique may involve a ‘bottom-to-top’ or ‘top-to-bottom’ approach.

Explain the concept of HRIS (Nov 2002) (Nov 2008)

HRIS (Human Resouce Information System)

The concept of HRIS is dereived from the concept of MIS(managemet information system), which tries the right type of information to the right type of employees so that proper decision can be made.

HRIS s a systematic procedure for collecting, storing maintainting and retrieving data needed by the organization about the human resources (employees) based on which the future requirements can be predicted.

It is not necessary tha HRIS should be a computerised system , there are huge advantage if they are computer aided as the data can be easily inpputed,updated and retreived by many people at the same timeand in the format as they require it.

HRIS has 3 components

1. Input – includes gathering and inputting of data2. Storage – stroring the data in ways, that it can be easily updated3. Output – the various users can easily be able to retrieve the data when required and in

format that they require it

Objectives of HRIS

To provide accurate and relevant data as and when required To provide information so that all statutory information can be provided and complied To input update and supply information in a cost effective way

Uses of HRIS

1. Personnel administration – to have all basic information of employee like name , address, DOB, martial status, date of joining , contact details of familymembers.

2. Salary administration3. Leave / absence administration & controll4. Skill inventory – to have data of people who can perform a particular job

5. Medical History – based on which the employee can be posted suitably6. Performance appraisal – can be done easily based on information available 7. Recruitment8. Manpower planning (HRP)9. Career Planning

Explain the concept of VRS (Nov 2002) (Nov 2008) (Nov 2010)

Explain the concept of downsizing (Nov 2009)

Explain the concept of Downsizing (Nov 2005)

Explain the concept of transfer (Nov 2006)

Explain the concept of promotion (Nov 2009) (Nov 2014)

Explain the concept of transfer (Nov 2009)

Explain the concept of Pink Slip (Nov 2012)

Explain the concept of Layoff (Apr 13)

Explain the concept of retrenchment (Apr 2011)

Explain the concept of outsourcing (Nov 2014)

Separation – Separation is a situation when the service agreement between the employee and the organization comes to an end. The separation can be due to organizational reasons such as downsizing , VRS , retrenchment , lay off.

Downsizing- Downsizing means elimination of certain type of jobs from the organization with a view to increase efficiency. The main of downsizing is to right size the organizations , i.e. have only the required number of people to run the organization. The excess staff is tried to be removed by VRS , retrenchment, layoff.

Reasons for downsizing

Faulty HRP leading to excess staff Technological up gradation which reduces manual labour , thus leading to excess staff Outsourcing of activities

Sepration

Organizational Reason

Downsizing

Voluntarily

VRS (Voluntary Retirement

scheme)

Non- Voluntarily

Retrenchment (permanent )

Lay-off (temporary

Personal Reasons

Voluntary

Resignation Death

Non-voluntary

Termination / Pink Slip

Suspension

Consequences

Insecurity amongst staff Competent staff (best employees) leaving Affects morale and efficiency

Role of HR manager in Downsizing is to keep the morale of the employees high, remove the feeling of insecurity , and to stop false rumors about the organization by continuously communicating.

Retrenchment – as per industrial dispute act when employees are permanently removed for any reason apart from disciplinary reasons is called retrenchment. The reasons for retrenchment thus can be surplus staff, poor demand, economic slowdown etc. Here the employee is paid compensation @ 15 days per year of service with the organization . So if the employee has worked for 10 years he would receive 150 days of wages as compensation . Also when the organization recruiting again , then first preference of employment is to be given to employees who have been retrenched.

Layoff – Lay off is temporary in nature and it is done when the circumstances are beyond the control of employees e.g. breakdown in machinery, natural disaster, shortage of raw material or electricity . The organization has to pay half the wages during the period of lay off.

Outsourcing – It means getting work done by outside agencies on payment basis. Buy rather than make is strategy used in outsourcing e.g. Bata which is in manufacturing of shoes used to make all the components of the shoes. Later they outsourced the manufacturing of the laces of the shoes. Here Bata does not find that the lace is such a critical part of the shoes so they asked another company to manufacture and supply laces. It decided to Buy rather than make laces.

A lot of HRM activities is also being outsourced , which includes recruitment and selection, managing pay roll and salary management, training , employee benefit , employee welfare etc.

Advantages of outsourcing

1. It allows companies to focus on the more critical aspect such attrition level motivational level

2. Employees gets more timely and proper data because of greater efficiency3. Company need not invest in getting new technology or staff for the thinghs that are

outsourced e.g.if the training is outsourced then the company need not invest in equipment such as projectors laptops as the same would be bought by the company which is conducting the training.

4. If record keeping is outsourced (e.g. number of days absent, salary amount paid etc) , then such record keeping helps easy and quick access.

Problems in outsourcing HRM function

1. The department becomes highly dependent on outside agency2. The level of quality of the work done by an outsourced firm is yet not upto the mark

in India.3. Affects the morale of HR department employees

Contracting & Sub Contracting

Along with outsourcing , contracting and sub contracting are methods used for transferring certain jobs to outside agencies .

Contracting and subcontracting are very popular in both production and service sector. E.g. in the construction line , company may give of all the electrical air-conditioning work to a outside company on contract basis , this is known as contracting. If this companyto whom the contract has been given decides that the air-conditioning ducts should be made by another company, then this would mean sub-contracting.

The advantages and disadvantages remain the same as outsourcing.

Short Note on promotion

Promotion means advancement within the organization, which would include a

change in job (e.g from a team member to team leader) , better payment (increase in salary and other benefits), higher status (from sales executive to Manager) greater responsibility ( earlier as sale executive , you were responsible for your target

achievement , now as team leader , you are responsible for target achievement of the entire team)

Objectives of promotion

To develop healthy competition amongst the employees To develop internal source of talent To promote employee self development To develop morale, loyalty and sense of belonging towards the company To reward committed employees To create a feeling of contentment ( feeling of achievement) within the employees

Principles / essentials of sound promotion policy

The promotion policy must be writing and must be understood by all The management of the company should inform in advance the percentage of vacancies

to be filled by promotion Should inform all employees the basis on which promotion will be made i.e. meit or

seniority Promotion programs should be closely connected to training programs Scientific (proper) method should be followed judging employees performance Supervisor/ immediate boss should recommend promotion If an employee wants to challenge a promotion given to a colleague and not him / her,

then there should be process for such cases Promotion should be voluntary and not forced (e.g. a employee who is reluctant to take

additional responsibility should not be forced for promotion)

Should promotion be done basis seniority or basis merit?

Seniority means the length (duration) of service with the organization

Merit means knowledge , skill, and performance of the employee

Advantage of giving promotion basis seniority

Easy to judge There is no chance of favoritism Trade union prefer this method Promotes loyalty Minimizes scope of grievance / conflict

Disadvantages of giving promotion basis seniority

Not necessary that senior staff is the most capable in taking responsibility Will demotivate younger staff Will not promote competition Capable staff not getting promotion will leave

Advantages of Promotion basis merit

Motivates competent (capable) staff Retains young staff Promotes competition

Disadvantages of Promotion basis merit

Difficult to judge merit

Old employees feel insecure & leave organisation Past performance basis which promotion is being given may not be repeated Trade union may oppose such policy

A company should follow a mixture of both giving promotion basis seniority and merit. A senior staff who is performing well should be the first choice for promotion. If a choice has to be made between staff which senior and which is performing well, promotion should be given to staff who is performing better (merit), as this will lead to increased efficiency and staff would continuously try to improve themselves.

Short note on Transfer

Transfer is movement of an employee without any substantial change in his duties , responsibilities, skill requirement, status & compensation.

Objective/Purpose of transfer

To meet organization needs To satisfy employee needs To make better use of employee To make employee more versatile To provide relief to employee from stressful position To punish an employee To reduce conflict To accommodate family related matters

Principles of sound Transfer

Transfer policy should be writing When and why a transfer will be made should be known to all People who can initiate and approve transfer should be known to all It should be in organizations benefit The employee should know if the transfer is temporary or permanent Mutual transfer should be allowed( employees ready to swap position) Transfer should be intimated (informed) to the employee in advance Transfers should not be done frequently