Unit 1

Concept and Scope of Human Resource Management (10)

1.1. Meaning and Definition of Human Resource Management.

1.2. Personnel Management v/s Human Resource Management.
1.3. Aims & Objectives of Human Resource Management.
1.4. Importance & Scope Human Resource Management.
1.5. Strategic Human Resource Management.
1.6. Role of H.R. Manager and HRM in Indian Context.

1.1.Meaning and Definition of Human Resource Management.

Concept of HRM

HRM is concerned with the human beings in an organization. “The management of man” is a very
important and challenging job because of the dynamic nature of the people. No two people are similar
in mental abilities, tacticians, sentiments, and behaviours; they differ widely also as a group and are
subject to many varied influences. People are responsive, they feel, think and act therefore they
cannot be operated like a machine or shifted and altered like template in a room layout. They
therefore need a tactful handing by management personnel.”
HRM is the process of managing people of an organization with a human approach. Human resources
approach to manpower enables the manager to view the people as an important resource. It is the
approach through which organization can utilize the manpower not only for the benefits of the
organization but for the growth, development and self-satisfaction of the concerned people. Thus,
HRM is a system that focuses on human resources development on one hand and effective
management of people on the other hand so that people will enjoy human dignity in their
employment.
Definition of HRM

The definition of HRM encompasses “The management of people in organizations from a macro perspective,
i.e. managing people in the form of a collective relationship between management and employees.” This
approach focuses on the objectives and outcomes of the HRM functions. It means that the HR function in
contemporary organizations is concerned with the notions of people enabling, people development and a focus
on making the
“employment relationship” fulfilling for both the management and employees.

In simple words, Human resource management is management function that helps manager to recruit,
select, train and develop organization members. Or HRM is a process of making the efficient and
effective use of human resources so that the set goals are achieved.
“HRM is a distinctive approach to employment management which seeks to achieve competitive
advantage through the strategic deployment of a highly committed and capable workforce, using an array
of cultural, structural and personnel techniques.” Storey(1995).
“HRM is a managerial perspective which argues the need to establish an integrated series of personnel
policies to support organizational strategy.” Buchanan and Huczynski(2004).

1.2 : Personal management v/a HRM

 Personnel Management Human Resource Management
Personnel means persons employed. Human resource management is the management
Personnel management is the management of of employees' skills, knowledge, abilities, talents,
people employed. aptitudes, creative abilities etc.

Employee in personnel management is mostly Employee in human resource management is

treated as an economic man as his services are treated not only as economic man but also as social
exchanged for wage/salary. and psychological man. Thus, the complete man is
viewed under this approach.

Employee is viewed as a commodity or tool or Employee is treated as a resource.

equipment which can be purchased and used.
Employees are treated as cost centre and Employees are treated as a profit centre and
therefore management controls the cost of therefore, invests capital for human resource
labour. development and future utility.

Employees are used mostly for organisational Employees are used for the multiple mutual benefit
benefit. of the organisation, employees and their family
members.

Personnel function is treated as only an Human resource management is a strategic

auxiliary. management function.

1.2 Nature of HRM

HRM is a management function that helps managers to recruit, select, train and develop members for an
organization. HRM is concerned with people’s dimension in organizations. The following aspects
constitute the core of HRM:

1. HRM Involves the Application of Management Functions and Principles. The functions and principles
are applied for acquiring, developing, maintaining and providing remuneration to employees in
organization.

2. Decision Relating to Employees must be integrated. Decisions on different aspects of employees

must be consistent with other human resource (HR) decisions.

3. HRM Functions are not confined to Business Establishments Only but applicable to non-
business organizations such as education, health care, recreation and like.
1.3 Objective of HRM

The primary objective of HRM is to ensure the availability of competent and willing workforce for an
organization. Beyond this, there are other objectives too. Specifically, HRM objectives are four fold:
Societal, Organization, Functional and personal.

 Personal Objectives: To assist Employees in achieving their personal goals, at least in so far as
these goals enhance the individual’s contribution to the organization. Personal objectives of
employees must be maintained, retained and motivated.
 Functional Objectives: To maintain the contribution of department at an appropriate level
organization should fulfill the needs. Resources are wasted when HRM is either more or less
sophisticated to suit the organizations demands.
 Organizational Objectives: To recognize the role of HRM in bringing about organizational
effectiveness, HRM is not an end in itselfbut it is only a mean to assist the organization with its
primary objectives organization.
 Societal Objectives: To be ethically & socially responsible for the needs and challenges of society
while \ minimizing the negative impact of such demands upon the organization to use their
 resources for society’s
benefits in ethical ways may lead to restriction.

 Other objectives:
 Accomplish the basic organizational goals by creating and utilizing an able and motivated
workforce.
 To establish and maintain organizational structure and desirable working relationships among all
the members of the organization.
 Develop co-ordination among individual and group within organization to secure the
integration of organization.
 To create facilities and opportunities for individual or group development so as to match it
with the growth ofthe organization.
 To attain an effective utilization of human resources in the achievement of organizational goals.

1.4 Importance of HRM

People have always been central to organisations, but their strategic importance is growing in today's
knowledge-based industries. An organisation's success increasingly depends on the knowledge, skills and
abilities (KSAs) of employees, particularly as they help establish a set of core competencies that
distinguish an organisation from its competitors. With appropriate HR policies and practices an
organisation can hire, develop and utilise best brains in the marketplace, realise its professed goals and
deliver results better than others.
Human Resource Management helps an organisation and its people to realise their respective goals
thus:

1) At the enterprise level:

a) Good human resource practices can help in attracting and retaining the best people in the
organisation. Planning alerts the company to the types of people it will need in the short, medium
and long run.
b) It helps in training people for challenging roles, developing right attitudes towards the job and the
company, promoting team spirit among employees and developing loyalty and commitment
through appropriate reward schemes.
2) At the individual level:
Effective management of human resources helps employees thus:
a) It promotes team work and team spirit among employees.
b) It offers excellent growth opportunities to people who have the potential to rise.
c) It allows people to work with diligence and commitment.
3) At the society level:
a) Society, as a whole, is the major beneficiary of good human resource practices.
b) Employment opportunities multiply.
c) Scarce talents are put to best use. Companies that pay and treat people well always race ahead of
others and deliver excellent results.
4) At the national level:
a) Effective use of human resources helps in exploitation of natural, physical and financial resources
in a better way. People with right skills, proper attitudes and appropriate values help the nation
to get ahead and compete with the best in the world leading to better standard of living and
better employment.
1.5 Scope of HRM:

The scope of HRM is indeed vast. All major activities in the working life of a worker - from the time of
his or her entry into an organization until he or she leaves the organization comes under the preview of
HRM.

The major HRM activities include HR planning, job analysis, job design, employee hiring, employee and
executive remuneration, employee motivation, employee maintenance, industrial relations and
prospects of HRM.
The scope of Human Resources Management extends to:

 All the decisions, strategies, factors, principles, operations, practices, functions, activities and
methods related to the management of people as employees in any type of organization.
 All the dimensions related to people in their employment relationships and all the dynamics
that flow from it.
1.6 Strategic Human Resource management
Strategic human resource management is the connection between a
company’s human resources and its strategies, objectives, and goals. The
aim of strategic human resource management is to:
 Advance flexibility innovation, and competitive advantage.
 Develop a fit for purpose organizational culture.
 Improve business performance.
In order for strategic human resource management to be
effective, human resources (HR) must play a vital role as a strategic partner when company
policies are created and implemented. Strategic HR can be demonstrated throughout different
activities, such as hiring, training and rewarding employees.
Strategic HR involves looking at ways that human resources can make a direct impact on a
company’s growth. HR personnel need to adopt a strategic approach to developing and
retaining employees to meet the
needs of the company’s long-term plans.
HR issues can be a difficult hurdle to cross for many companies, there are all kinds of different
components that can confuse business owners and cause them to make ineffective decisions that
slow down the operations for their employees as well as their business. HR departments that
practice strategic human resource management do not work independently within a silo; they
interact with other departments within an organization in order to understand their goals and
then create strategies that align with those objectives, as well as those of the organization. As a
result, the goals of a human resource department reflect and support the goals of the rest of the
organization. Strategic HRM is seen as a partner in organizational success, as opposed to a
necessity for legal compliance or compensation. Strategic HRM utilizes the talent and
opportunity within the human resources department to make other departments stronger and
more effective.

1.7 Role of HRM

The role of HRM is to plan, develop and administer policies and programs designed to make optimum
use of an organizations human resources. It is that part of management which is concerned with the
people at work and with their relationship within enterprises.
Current Classification of HR roles:

According to R.L Mathis and J. H. Jackson (2010) several roles can be fulfilled by HR management. The
nature and extent of these roles depend on both what upper management wants HR management to
do and what competencies the HR staff have demonstrated. Three roles are typically identified for HR.

• Administrative
• Operational Actions.
• Strategic HRM
 Unit 2

Human Resource Planning

2.1. Meaning and Definitions, Steps in HRP.

2.2. Objectives, functions of Human Resource planning.
2.3. Factors affecting to Human Resource planning.
2.4. Process of Human Resource planning.
2.5. Human Resource Forecasting Techniques.
2.6. Human Resource planning- problems and Limitations.

2.1 Meaning and Definitions, Steps in HRP CONCEPT OF

HUMAN RESOURCE PLANNING

Most of us are fairly familiar with the term 'planning' in our everyday life. We do often plan in advance
about the things to be done on a busy working day. Parents make advance decisions on the education of
their children. As students, you also may think in advance how to go ahead with the preparation of your
forthcoming examination, how to make use of your time in the best possible manner. In fact, planning
has been an omni present phenomenon in our all walks of life. This holds true of organisations also.
The quality of an organisation is, to a large degree, considered merely the summation of the quality of
people it hires and keeps. Therefore, before actually selecting the right people for right jobs,it becomes a
prerequisite to decide on the quantity and quality of people required in the organisation. This is done
through human resource planning. Human Resource Management, thus, begins with human resource
Planning (HRP).
Definition of Human Resource planning

What is HRP? In simple words, HRP is a process of stricking balance between human resources required
and acquired in an organisation In other words, HRP is a process by which an organisation determines
how it should acquire its desired manpower to achieve the organisational goals. Thus, HRP helps an
organisation have the right number and kind of people at the right places and right times to successfully
achieve its overall objectives. Let us also consider a few important definitions of HRP:
According to Terry L. Leap and Michael D. Crino, “HRP includes estimation of how many qualified people
are necessary to carry out the assigned activities, how many people will be available and what, if
anything, must be done to ensure that personnel supply equals
personnel demand at the appropriate point in the future.”
In the words of Beach," Human resource planning is a process of determining and assuming that the
organisation will have an adequate number of qualified persons, available at the proper times,
performing jobs which meet the needs of enterprise and which provide satisfaction for the individual
involved"2
Geisler3 opines, "HRP is the process- including forecasting, developing and controlling-by which a firm
ensures that it has the right number of people and the right kind of people at the right places at the right
time doing work for which they are economically most useful."

HRP could be seen as a process, consisting of the following series of activities:

 1. Forecasting future personnel requirements, either in terms of mathematical projections of trends in
the economy and developments in the industry, or of judgements and estimate based upon specific
future plans of the company.
2. Inventorying present manpower resources and analysing the degree to which these resources
are employed optimally.
3. Anticipating Manpower Problems by projecting present resources into the future and comparing
them with the forecast of requirements, to determine their adequacy, both quantitatively and
qualitatively.
4. Planning the necessary programmes of recruitment, selection, training, employment, utilization,
transfer, promotion, development, motivation and compensation so that future manpower
requirements will be duly met.
Human Resource Planning: Human resource planning is the term used to describe how companies
ensure that their staffs are the right staff to do the jobs. Sub topics include planning for staff retention,
planning for candidate search, training and skills analysis and much more.
Human Resources Planning is defined as the process of assessing an organization’s human resources
needs in the light of organizational goals and changing condition and making plans to ensure that a
competent, stable workforce is employed. The actual planning process will vary a great deal from
organization to organization
Fayana (2002) emphasized that human resource planning deals with the systematic and continuing
process of analyzing a firm’s human resources needs under mutating conditions and developing
workforce policies suitable to the long-term effectiveness of the organization. It is a vital part of
corporate planning and budgeting procedure since human resources costs and forecasting both effect
and are affected by long-term corporate plans. Pattern states that Human Resource Planning is the
process by which a firm ensures that it has the right number of people and the right kind of people in
the right place at the right time doing things for which they economically most useful.

Steps in Human Resource Planning (explained with diagram)!

Human resource planning is a process through which the right candidate for the right job is ensured. For
conducting any process, the foremost essential task is to develop the organizational objective to be
achieved through conducting the said process.
Six steps in human resource planning are presented in Figure 5.3.
1. Analyzing Organizational Objectives:

The objective to be achieved in future in various fields such as production, marketing, finance,
expansion and sales gives the idea about the work to be done in the organization.
2. Inventory of Present Human Resources:

From the updated human resource information storage system, the current number of employees, their
capacity, performance and potential can be analysed. To fill the various job requirements, the internal
sources (i.e., employees from within the organization) and external sources (i.e., candidates from various
placement agencies) can be estimated.
3. Forecasting Demand and Supply of Human Resource:

The human resources required at different positions according to their job profile are to be estimated.
The available internal and external sources to fulfill those requirements are also measured. There
should be proper matching of job description and job specification of one particular work, and the
profile of the person should be suitable to it.
4. Estimating Manpower Gaps:

Comparison of human resource demand and human resource supply will provide with the surplus or
deficit of human resource. Deficit represents the number of people to be employed, whereas surplus
represents termination. Extensive use of proper training and development programme can be done to
upgrade the skills of employees.
5. Formulating the Human Resource Action Plan:

The human resource plan depends on whether there is deficit or surplus in the organization. Accordingly,
the plan may be finalized either for new recruitment, training, interdepartmental transfer in case of
deficit of termination, or voluntary retirement schemes and redeployment in case of surplus.
6. Monitoring, Control and Feedback:

It mainly involves implementation of the human resource action plan. Human resources are allocated
according to the requirements, and inventories are updated over a period. The plan is monitored strictly
to identify the deficiencies and remove it. Comparison between the human resource plan and its actual
implementation is done to ensure the appropriate action and the availability of the required number of
employees for various jobs.

2.2 Human Resource Planning – Objectives:

The main objectives of HRP are:

1. Proper assessment of human resources needs in future.

2. Anticipation of deficient or surplus manpower and taking the corrective action.
3. To create a highly talented workforce in the organization.
4. To protect the weaker sections of the society.
5. To manage the challenges in the organization due to modernization, restructuring and re-
engineering.
6. To facilitate the realization of the organization’s objectives by providing right number and types
of personnel.
7. To reduce the costs associated with personnel by proper planning.
8. To determine the future skill requirements of the organization.
9. To plan careers for individual employee.
10. Determining the training and development needs of employees.

2.3 Function of Human Resource Planning:

Human resource planning involves planning to satisfy a firm’s needs for employees. It consists of
three tasks:
1. Forecasting staffing needs
2. Job analysis
3. Recruiting

Function # 1. Forecasting Staffing Needs:

If staffing needs can be anticipated in advance, the firm has more time to satisfy those needs. Some
needs for human resources occur as workers retire or take jobs with other firms. Retirement can be
forecasted with some degree of accuracy, but forecasting when an employee will take a job with
another firm is difficult.
Additional needs for employees result from expansion. These needs may be determined by assessing the
firm’s growth trends. For example, if the firm is expected to increase production by 10 percent (in
response to increased sales), it may prepare for the creation of new positions to achieve the projected
production level. Positions that handle accounting and marketing-related tasks may not be affected by
the increased production level.
If the firm foresees a temporary need for higher production, it may avoid hiring new workers, since it
would soon have to lay them off. Layoffs not only affect the laid-off workers but also scare those workers
who are still employed. In addition, firms that become notorious for layoffs will be less capable of
recruiting people for new positions.
If firms avoid hiring during a temporary increase in production, they must achieve their objective in
some other way. A common method is to offer overtime to existing workers. An alternative
method is to hire temporary workers for part-time or seasonal work.
Once new positions are created, they must be filled. This normally involves job analysis and recruiting.

Function # 2. Job Analysis:

Before a firm hires a new employee to fill an existing job position, it must decide what tasks and
responsibilities will be performed by that position and what credentials (education, experience, and so
on) are needed to qualify for that position.
The analysis used to determine the tasks and the necessary credentials for a particular position is
referred to as job analysis. This analysis should include input from the position’s supervisor as well as
from other employees whose tasks are related.
The job analysis allows the supervisor of the job position to develop a job specification and job
description. The job specification states the credentials necessary to qualify for the job position. The
job description states the tasks and responsibilities of the job position.
People who consider applying for the job position use the job specification to determine whether they
could qualify for the position and use the job description to determine what the position involves.

Function # 3. Recruiting:
Firms use various forms of recruiting to ensure an adequate supply of qualified candidates. Some firms
have a human resource manager (sometimes called the “personnel manager”) who helps each specific
department recruit candidates for its open positions. To identify potential candidates for the position,
the human resource manager may check files of recent applicants who applied before the position was
even open.
These files are usually created as people submit their applications to the firm over time. In addition, the
manager may place an ad in local newspapers. This
increases the pool of applicants, as some people are unwilling to submit an application unless they
know that a firm has an open position.
Increasingly, companies are also listing positions on their websites. Dell, Inc., uses the Internet
extensively in its human resource planning. For example, the company allows potential employees to
search for a specific job at its website. Dell also allows applicants to submit their resumes over the
Internet.
Furthermore, Dell uses its website to provide potential employees with information about
benefits and about the areas where its plants and employment sites are located, such as cost-of-
living estimates.
Most well-known companies receive a large number of qualified applications for each position. Many
firms retain applications for only a few months so that the number of applications does not become
excessive.

2.3 Factors Affecting to Human Resource Planning

Several factors affect HRP. These factors can be classified into external factors and internal factors.

External Factors:

1. Government Policies – Policies of the government like labour policy, industrial relations policy,
policy towards reserving certain jobs for different communities and sons-of the soil, etc. affect the
HRP.
2. Level of Economic Development – Level of economic development determines the level of HRD in
the country and thereby the supply of human resources in the future in the country.
3. Business Environment – External business environmental factors influence the volume and mix of
production and thereby the future demand for human resources.
4. Level of Technology – Level of technology determines the kind of human resources required.
5. International Factors – International factors like the demand for resources and supply of human
resources in various countries.
6. Outsourcing – Availability of outsourcing facilities with required skills and knowledge of people
reduces the dependency on HRP and vice-versa.
Internal Factors:
1. Company policies and strategies – Company policies and strategies relating to expansion,
diversification, alliances, etc. determines the human resource demand in terms of quality and quantity.
2. Human resource policies – Human resources policies of the company regarding quality of human
resource, compensation level, quality of work-life, etc., influences human resource plan.
3. Job analysis – Fundamentally, human resource plan is based on job analysis. Job description and job
specification determines the kind of employees required.
4. Time horizons – Companies with stable competitive environment can plan for the long run whereas
the firms with unstable competitive environment can plan for only short- term range.
5. Type and quality of information – Any planning process needs qualitative and accurate information.
This is more so with human resource plan; strategic, organizational and specific information.
6. Company’s production operations policy – Company’s policy regarding how much to produce and
how much to buy from outside to prepare a final product influence the number and kind of people
required.
7. Trade unions – Influence of trade unions regarding number of working hours per week, recruitment
sources, etc., affect the HRP.

2.4 Process of Human Resource Planning

HRP essentially involves forecasting personnel needs, assessing personnel supply and matching
demand supply factors through personnel-related programmes. The planning process is influenced
by overall organisational objectives and the environment of business. Figure illustrates the planning
process.
Environmental Scanning

Environmental scanning refers to the systematic monitoring of the external forces influencing the
organisation. Managers monitor several forces but the following are pertinent for HRP:

 Economic factors, including general and regional conditions,

 Technological changes, including robotics and automation.
 Demographic changes, including age, composition and literacy,
 Political and legislative issues, including laws and administrative rulings,
 Social concerns, including child care, and educational facilities and priorities,

By scanning the environment for changes that will affect an organisation, managers can anticipate
their impact and make adjustments early.
Organisational Objectives and Policies

HR plans need to be based on organisational objectives. In practice, this implies that the objectives of
the HR plan must be derived from organisational objectives. Specific requirements in terms of number
and characteristics of employees should be derived from the organisational objectives.
Organisational objectives are defined by the top management and the role of HRP is to subserve the
overall objectives by ensuring availability and utilisation of human resources.

Once the organisational objectives are specified, communicated and understood by all concerned, the
HR department must specify its objectives with regard to HR utilisation in the organisation. In
developing these objectives, specific policies need to be formulated to address the following
questions:

1. Are vacancies to be filled by promotions from within or hiring from outside?

2. How do the training and development objectives interface with the HRP objectives?
3. What union constraints are encountered in HRP and what policies are needed to handle these
constraints?
4. How to enrich employee's job? Should the routine and boring jobs continue or be
eliminated?
5. How to downsize the organisation to make it more competitive?
6. To what extent production and operations be automated and what can be done about those
displaced?
7. How to ensure continuous availability of adaptive and flexible workforce?

Demand Forecast

Demand forecasting is the process of estimating the future quantity and quality of people required. The
basis of the forecast must be the annual budget and long-term corporate plan, translated into activity
levels for each function and department. In a manufacturing company, the sales budget would be
translated into a production plan giving the number and type of products to be produced in each period.
From this information the number of hours to be worked by each skilled category to make the quota for
each period, would be computed. Once the hours are available, determining the quality and quantity of
personnel will be the logical step.

Demand forecasting must consider several factors—both external as well as internal. Among the external
factors are competition (foreign and domestic), economic climate, laws and regulatory bodies, changes in
technology, and social factors. Internal factors include budget constraints, production levels, new
products and services, organisational structure, and employee separations. Demand forecasting is
common among organisations, though they may not do personnel-supply forecasting. There are several
good reasons to conduct demand forecasting. It can help:

i. quantify the jobs necessary for producing a given number of goods, or offering a given
amount of services;
ii. determine what staff-mix is desirable in the future;
iii. assess appropriate staffing levels in different parts of the organisation so as to
avoid unnecessary costs;
iv. prevent shortages of people where and when they are needed most; and
v. monitor compliance with legal requirements with regard to reservation of jobs.
 2.5 Human Resource forecasting Techniques

Forecasting Techniques vary from simple to sophisticated ones. Before de scribing each technique, it
may be stated that organisations generally follow more than one technique. The techniques are:

1. Managerial judgement
2. Ratio-trend analysis
3. Regression analysis
4. Work study techniques
5. Delphi technique
6. Flow models
7. Others (See Fig. 4.4)
1. Managerial Judgement This technique is very simple. In this, managers sit together, discuss and
arrive at a figure which would be the future demand for labour. The technique may involve a 'bottom-up'
or a top down' approach. In the first, line managers submit their departmental proposals to top
managers who arrive at the company forecasts. In the 'top-down' approach, top managers prepare
company and departmental forecasts. These forecasts are reviewed with departmental heads and
agreed upon. Neither of these Approaches is accurate—a combination of the two could yield positive
results. In the 'bottom-up' and 'top down' approaches, departmental heads are provided with broad
guidelines. Armed with such guidelines, and in consultation with the HRP section in the HRM
department, departmental managers can prepare forecast! for their respective departments.
Simultaneously, top HR managers prepare company forecasts. A committee comprising departmental
managers and HR managers will review the two sets of forecasts, arrive at a unanimity which is then
presented to top managers for their approval. This technique is used in smaller organizations’ or in those
companies where sufficient data base is not available.

2. Ration Trend Analysis This is the quickest forecasting technique. The technique involves studying past
ratios, say, between the number of workers and sales in an organisation and forecasting future ratios,
making some allowance for changes in the organisations or its methods. Table 2.2shows how an analysis
of actual and forecast ratios between the number of routine proposals to be processed by an insurance
company's underwriting department and the number of underwriters employed could be used to
forecast future requirement.1''
Year No. of Employees Ratio
Production Supervisor Supervisor : Production

Actual

Forecas
t

3. Regression Analysis This is similar to ratio-trend analysis in that forecast is based on the relationship
between sales volume and employee size. However, regression analysis is more statistically
sophisticated. A firm first draws a diagram depicting the relationship between sales and workforce size.
It then calculates regression line—a line that cuts right through the center of the points on the diagram.
By observing the regression line, one can find out number of employees required at each volume of
sales (see also Fig. 4.5).
 Sales (Rs) Sales
Regression line Showing Relationship between Sales and Employee Size

4. Work-study Techniques Work-study techniques can be used when it is possible to apply work
measurement to calculate the length of operations and the amount of labour required. The starting point
in a manufacturing company is the production budget, prepared in terms of volumes of saleable products
for the company as a whole, or volumes of output for individual departments. The budgets of productive
hours are then compiled using standard hours for direct labour. The standard hours per. unit of output
are then multiplied by the planned volume of units to be produced to give the total number of planned
hours for the period. This is then divided by the number of actual working hours for an individual
operator to show the number of operators required. Allowance will have to be made for absenteeism
and idle time. Following is a highly simplified example of this procedure

1. Planned output for next year 20,000 units

2. Standard hours per unit 5
3. plannd hours for the year 1,00,000
4. productive hours per man/year
(allowing normal overtime, absenteeism and idle time) 2,000
5. Number of direct workers required (4/5) 50

Work study techniques for direct workers can be combined with ratio-trend analysis to forecast for
indirect workers, establishing the ratio between the two categories. The same logic can be extended
to any other category of employees.
5. Delphi Technique Named after the ancient Greek oracle at the city of Delphi, the Delphi technique is a
method of forecasting personnel needs. It solicits estimates of personnel needs from a group of experts,
usually managers. The HRP experts act as intermediaries, summarise the various responses and report
the findings back to the experts. The experts are surveyed again after they receive this feedback.
Summaries and surveys are repeated until the experts' opinions begin to agree. The agreement reached is
the forecast of the personnel needs. The distinguishing feature of the Delphi technique is the absence of
interaction among experts.
6. Flow Models Flow models are very frequently associated with forecasting personnel needs. The
simplest failed the Markov model. In this technique, the forecasters will: 21
1. Determine the time that should be covered. Shorter lengths of time are generally more accurate
than longer ones. However, the time horizon depends on the length of the HR plan which, in
turn, is determined by the strategic plan of the organisation.
2. Establish categories, also called states, to which employees can be assigned. These categories
must not overlap and must take into account every possible category to which an individual can
be as- signed. The number of states can neither be too large nor too small.
3. Count annual movements (also called 'flows') among states for several time periods. These states
are defined as absorbing (gains or losses to the company) or non-absorbing (change in position
levels or employment status). Losses include death or disability, absences, resignations and
retirements. Gains include hiring, rehiring, transfer and movement by position level.
4. Estimate the probability of transitions from one state to another based on past trends. Demand
is a function of replacing those who make a transition. There are alternatives to the simple
Markov model. One, called the semi-Markov, takes into account not just the category but
 also the tenure of individuals in each category. After all, likelihood of movement increases with
tenure. Another method is called the vacancy model, which predicts probabilities of movement
and number vacancies. While the semi-Markov model helps estimate movement among those
whose situations and tenure are similar, the vacancy model produces the best results for an
organisation.
Markov analysis is advantageous because it makes sense to decision makers. They can easily
understand its underlying assumptions. They are, therefore, likely to accept results. The
disadvantages include:
(i) Heavy reliance on past-oriented data, which may not be accurate in periods of turbulent change, and
(ii) Accuracy in forecasts about individuals is sacrificed to achieve accuracy across groups.
𝐸𝑛 = (Laggn + G)
𝑦
2.6 Problem of Human Resource Planning
Though HRP is beneficial to the organisation, employees and trade unions, some problems crop up
in the process of HRP.
Important among them are:
1. Resistance by Employers and Employees:
Many employers resist HRP as they think that it increases the cost of manpower as trade unions
demand for employees based on the plan, more facilities and benefits including training and
development. Further, employers feel that HRP is not necessary as candidates are/will be available as
and when required in India due to unemployment situation. Employers’ version may be true about
unskilled and clerical staff but it is not true in the case of all other categories as there is shortage for
certain categories of human resources.
Trade unions and employees also resist HRP as they view that it increases the workload of employees
and prepares programme for securing the human resources mostly from outside. The other reason for
their resistance is that HRP aims at controlling the employees through productivity maximization, etc.
2. Uncertainties:
Uncertainties are quite prominent in human resource practices in India due to absenteeism, seasonal
employment, labour turnover, etc. Further, the uncertainties in industrial scene like technological
change, marketing conditions also cause uncertainties in human resource management. The
uncertainties make the HRP less reliable.
3. Inadequacies of Information System:
Information system regarding human resources has not yet fully developed in Indian industries due to
low status given to personnel department and less importance attached to HRP. Further, reliable data
and information about the economy, other industries, labour market, trends in human resources, etc.,
are not available.
Limitations of Human Resource Planning
The Human Resource Planning is concerned with maintaining and recruiting the human resources with
the requisite quantity and the quality, to fulfill the demand and supply arising in the near future.
1. The future is uncertain. There are several external factors viz. Technological, political, cultural, etc. that
affects the employment opportunities. Therefore, the management can consider the human resource
planning as a guiding factor and cannot rely completely on it.
2. With the surplus manpower, the companies try to remove this imbalance using termination, layoff,
removal of the existing employees. This could create a sense of insecurity among them, and that would
result in the loss of their faith in the company.
3. The human resource planning is time-consuming since it collects the complete information regarding the
personnel requirements of each department and then finds the suitable sources to satisfy the needs.
4. The human resource planning is an expensive process. All the activities carried out from the time the
manpower need arises till the final placement of employees, consumes lot of time and is very expensive.
Thus, the firm must carry out the human resource planning cautiously since it is accorded with several
 limitations that can adversely affect the overall functioning of the firm.
Unit 3

Recruitment and Selection

3.1. Meaning, introduction, objectives of recruitment.

3.2. Internal and external sources of recruitment with merits and demerits.
3.3. Factors affecting recruitment.
3.4. Process of recruitment and selection.
3.5. Techniques of recruitment, traditional and modern techniques.
3.6. Interviews: Types of interviews, limitations of interview.

3.1. Meaning, introduction, objectives of recruitment.

Meaning and Definition

Recruitment is the generating of applications or applicants for specific positions to be filled up in the
organisation. In other words, it is a process of searching for and obtaining applicants for jobs so that the
right people in right number can be selected.
Go through the following definitions of recruitment. These will help you understand the meaning
of recruitment in a better manner.
According to Dale Yoder, "Recruitment is a process to discover the sources of manpower to meet the
requirements of the staffing schedule and to employ effective measures for attracting that manpower
in adequate numbers to facilitate effective selection of an efficient working force".'
In the words of Werther and Davis, "Recruitment is the process of finding and attracting capable
applicants for employment. The process begins when new recruits are sought and ends when their
applications are submitted. The result is a pool of applicants from which new employees are selected"2.
Flippo3 has defined recruitment as "a process of searching for prospective employees and
stimulating and encouraging them to apply for jobs in an organisation".
According to Bergmann and Taylor4, "Recruitment is the process of locating, identifying, and attracting
capable applicants".
Recruitment can now easily be defined as the process of searching for and securing applicants for the
various job positions which arise from time to time in the organisation.

Objectives of Recruitment Policy

Recruitment policy asserts the objectives of the recruitment and provides a framework of the
implementation of the recruitment program.

It may involve the organization system to be developed for implementing recruitment programs
and procedures to be employed.

According to Memoria, a good recruitment policy must contain elements such as

1. organization’s objective (short term and long term),

2. identification of the recruitment needs,
3. the preferred source of recruitment,
4. criteria of selection and preferences, and
5. The cost of recruitment and its financial implications of the same. Objectives are targets and goals.

According to Yoder (1996), the following are the main objectives of recruitment policy:

 To find and employ the best-qualified person for each job.

 To minimize the cost of recruitment.
 To offer promising careers and security.
 To provide facilities for growth and development.
 To retain the best and most promising ones.
 To reduce the scope of favouritism and malpractice.
Purpose of Recruitment
The general purpose of recruitment is to provide a pool of potentially qualified job candidates.
Specifically the purposes are to:

1. Determine the present and future requirements of the firm in conjunction with its personnel-
planning and job-analysis activities.

2. Increase the pool of job candidates at minimum cost.

3. Help increase the success rate of the selection process by reducing the number of visibly under
qualified or over qualified job applicants.

4. Help reduce the probability that job applicants, once recruited and selected, will leave the
organisation only after a short period of time.

5. Meet the organisation's legal and social obligations regarding the composition of its
workforce.

6. Begin identifying and preparing potential job applicants who will be appropriate candidates.
7. Increase organisational and individual effectiveness in the short term and long term.
8. Evaluate the effectiveness of various recruiting techniques and sources for all types of job
applicants.
3.3 Factors Affecting Recruitment

Internal External
Size of organisation Demographic Factors
Recruitment Policy Image of Labour Market
Organisation Image & status Unemployment Situation
of Job Labour Laws Legal
consideratio
 3.4 Sources of recruitment

Two types of sources of recruitment are available such as;

 Internal sources (present employees, employee referrals, former employees and previous applicants),
and
 External sources (trade associations, advertisements, employment exchanges, campus recruitment,
walk-ins and write-ins, consultants, radio and television, competitors and E-recruiting, etc.).
There are basically two sources of supply from where potential employees can be drawn. These are
internal sources and external sources. Internal sources indicate recruiting qualified people from within
the organization itself (from the present working force).
When reference is made to the number of employees already employed by the organization, we speak
of the internal supply. Whenever any vacancy occurs, someone from within the organization is
upgraded, promoted or transferred to another department also goes into the category of an internal
source of recruitment.

External recruitment is concerned with generating a pool of qualified candidates through external
sources of employment.

The external sources of recruitment include – employment at the factory gate, advertisements,
employment exchanges, employment agencies, educational institutes, labor contractors,
recommendations, etc.

Advantages and disadvantages are associated with promoting from within the organization and
hiring from outside the organization to fill openings.

Advantages of internal recruiting

 The people responsible for selecting internal candidates for vacant positions have access to more
comprehensive information relating to their abilities, track record and potential achievement than they
would have if they were selecting people originating from the external source.
 It is motivating to employees, as they are preferred over outsiders when the vacancies occur.
Employees tend to be committed to firms under the circumstances.
 It provides an opportunity for advancement.
 It is economical in terms of time and money.
 It improves employee morale.
 It improves the image of the organization.
 It improves the probability of better performance as the candidate is in a better position of knowing the
objectives and expectations of the organization.

The demerits of the internal source

 The promotion may be biased in nature and may be based on seniority rather than merit.
 Possible morale problems emerged for them who have not been promoted.
 Political infighting for promotions.
 An option may be limited in locating the right talents.
 This channel of recruitment discourages new blood from entering the organization.
 Inhibits innovation and creativity.
 Establishes subjectivity in the promotion.

Promotion from within should be aided by careful employee selection. The employment process
should favor those applicants who have potentials for promotion.

Effective promotion from within also depends on other HR actions. It depends on providing the education
 and training needed to help employees identify and develop their promotion potential. It also requires a
career-oriented appraisal.

Advantages of external sources

Recruiting from outside the organization is known as an external source.

All firms more or less rely on external sources. Advantages of external sources are: o it offers the
organization the opportunity to inject new ideas into its operations by utilizing the skills of external
candidates.

 Improves the knowledge and skill of the organization by recruiting from outside sources.
 Improves and helps in sustaining competitive advantage.
 Brings the economy in the long run.

Disadvantages of external sources

 It is costly.
 It causes brain drain due to fear of lack of growth potential.
 It contributes to a higher probability of employee turnover.
 Demoralization of existing employee for alleged double standard and favor shown towards new
recruitment from outside by offering better position and pay.
Process of Recruitment and Selection

Sales (Rs)

3.5 Techniques of recruitment

It’s time to know the recruiting techniques of all time. Keep up with global trends in the area.

1. Inbound recruiting -
Have you heard of inbound marketing? It is a marketing strategy that reverses the classic logic of the
market: Companies seek to attract customer interest rather than chase after them. To do this,
organizations create valuable content and use digital strategies to attract, nurture and convert leads
(potential customers who interact with the brand) into customers. By applying this method to
recruitment, we have inbound recruiting, which is the strategy of attracting, converting, and engaging
talent to participate in the selection process. You can do this by investing in creating rich materials that
interest your target candidates, constantly nurturing your audience with relevant information to spark
their desire to work for your company. Recruiting marketing is already a general trend, and inbound is
coming to bring talent even closer and improve the company's relationship with its potential candidates.

2. Talent Pool -
Talent pooling is another effective method of recruiting today, which is creating a database of the best
potential candidates. This new concept replaces the traditional talent bank, which is typically built on
applications received in other processes. The talent pool includes all professionals who have already
applied for vacancies and have had some interaction with the company's selection processes but do not
stop there. These complex foundations are also fed with candidate profiles found on the web, which the
company itself seeks to expand its talent catalog. Imagine being able to choose from several high-level
professionals at the company's base? In the book Work Rules! (Grand Central Publishing, 2015), Google's
former director of people management explains how the technology giant used the talent pool to hire
the geniuses in his area. This is the goal of the talent pool, which makes recruitment much more agile.

3. Social Recruitment -
At least 84% of companies already use social networks to find and attract candidates, according to the
survey. This is why social recruitment is among the innovative techniques of the moment to find the best
professionals. On social networks like Facebook and Linkedin, it is possible to post jobs with great reach,
free of charge (except for the advanced options of Linkedin). The site has over 560 million users. The
advantage of this type of recruitment is the possibility of tightening the relationship with the candidates
and searching based on criteria such as training, experience, and skills.

4. Data-Driven Recruitment and People Analytics -

In data-driven recruitment, decisions are made based on data collected, analyzed and interpreted by
technological tools. People analytics, in turn, is the data intelligence applied to people management that
enables you to analyze and predict employee behavior through data. Therefore, these two concepts
promise to transform recruitment by mapping candidates through algorithms, facilitating the entire
selection process.

Also, technologies in people analytics enable HR metrics to be evaluated instantly, processing a large
amount of data and reporting on the performance of the selection processes. For example, a company
can use analytical tools to identify changes in hiring quality, time to fill, and retention rate. According to
the Job Market Trends report Five Hiring Disruptions to Watch in 2019, recruitment is predicted to occur
by combining data. Thus, the algorithms will automatically identify the most matching vacancies and
generate matches to expedite recruitment.

5. Promotion of flexibility
When it comes to candidate attraction techniques, the number one trend is flexibility. Linkedin’s Global
Talent Trends 2019 report showed that 72% of HR professionals believe that job flexibility is the second-
largest global trend, behind soft skills only. Besides, the Ministry of Labor Statistics reported that more
than 35 percent of the Thai workforce is already made up of so-called gig workers, who are self-
employed and freelancers. These trends point to the strengthening of the gig economy, which goes hand
in hand with the concept of job flexibility. Employees want flexible hours, personalized hours and home
office inclusion to make it easier to reconcile their personal and professional lives. No wonder the
number of posts posted on Linkedin that mention flexibility has increased by 78% since 2016. This shows
that recruiters are already using their flexible environments with the argument to attract the talent of
new generations.

 Traditional recruitment methods:

 Putting print ads in newspapers with good circulation.

 Putting up vacancies at the gates of the factory.( Called gate hiring).
  Sourcing candidates from the database of employment exchanges set up in different states.
Employment exchanges maintained data base on the basis of educational qualification details
submitted to it by people seeking jobs.
 Asking existing to refer suitable candidates for existing vacancies.
 Campus hiring by visiting campuses for filling

Traditional selection methods:

 Candidates shortlisted from received application, were interviewed and those clearing
interview were selected. (In case of selection for managerial and higher posts final
interview was preceded by preliminary interview which in some organizations was
preceded by group discussion. Group discussions and preliminary interviews were tools to
screen eligible candidates in terms of job profile).
 Depending on the importance of the position to be filled, more than two number of
interviewers interviewed candidates before final selection.

Modern recruitment methods:

Besides the use of some of the above mentioned methods following methods are used keeping in mind
where the likely candidates can be reached:

 Posting vacancies on job portals and social media e.g. LinkedIn, Facebook. Some
organizations post vacancies on WhatsApp also.

3.6 Interview
There are a multitude of interview types that serve different scenarios.
Knowing what to expect can help you to meet your goals.
1. Informational Interview
In an informational interview the objective is to seek advice and learn more about a particular employer,
sector or job. Interviewing experts in their field is one more way to add to your employment knowledge
base. Gaining this information means you are more prepared. It is also an excellent way of networking
and adding to your contacts.

2. Screening or Telephone Interview

Phone interviews are proving to be a more cost effective way to screen candidates. Slots range from 10 to
30 minutes. Prepare for it as if it is an open book exam. Make sure you have your CV, the job description,
list of references and prepared answers noted in front of you. A large part of communication is
visual and as they can’t see your body language, it critical to have positive and sharp answers delivered
with enthusiasm. Don’t forget to ask what the next step will be.

3. Individual Interview
Often referred to as a “personal interview” this is the most common type of
interview and is usually held face to face at the company’s offices. Find out the approximate length of the
interview in order to prepare; they range from 30 to 90 minutes. Shorter interviews will mean delivering
concise answers that are to the point. Longer interviews allow you more time to go into detail and
support your answers with examples.

4. Small Group or Committee Interview

These interviews mean meeting a panel of decision makers at once. This can be daunting and intimidating
if you are not well perpared in advance. More than one interviewer means efficiency and an opportunity
for different opinions of the same answer. Try to build a rapport with each member of the panel and be
sure to make eye contact with everyone not just the person asking the question. It is also worth trying to
find out the names and roles of those on the panel.

5. The Second or On-Site Interview

The second interview means you have been successful on the first occasion and they would like to know
more. These interviews can be longer, some lasting half or a full-day. They often mean meeting three to
five people which can include Human Resources, the line manager, office staff and the head of
department. Be ‘on the ball’ and show enthusiasm! Try to find out as much as possible about the agenda
for the day as this will go some way to making you feel less anxious about the whole process. This is
usually the last stage before an offer of employment is made.

6. Behavioral-Based Interview
Known as Critical Behavioral Interviewing (CBI), the theory is that past performance in a similar situation
is the best predictor of future performance. This method of interview probes much deeper than the usual
interviewing techniques. Have specific examples ready that highlight your attributes in core areas such as
teamwork, problem-solving, communication, creativity, flexibility and organisational skills. Be structured
in your answers and explain your examples in terms of the situation, the task, the action you took, and
the outcome achieved.

7. Task Oriented or Testing Interview

These interviews are structured in a way that allows you to demonstrate your creative and analytical
abilities in problem solving through varied tasks or exercises. It may include a short test to evaluate your
technical knowledge and skills. Other tasks can be delivering a presentation to a group to determine your
communication skills. Relaxing is key!
8. Stress Interview
This method of interview is rare and involves the interviewer baiting you to see your response. The aim is
to highlight your weaknesses and see how you react under pressure. Tactics can vary from constant
interruptions and odd silences to provoking and challenging interrogation-type questions used to push
you to your limits. It is worth asking yourself do you want to work for an organisation that is willing to go
this far even before an offer is put on the table

Limitation of Interview

After reading this article you will learn about the advantages and disadvantages of the interview
method of conducting social research.

Advantages of the Interview:

1. Easy correction of speech: Any misunderstanding and mistake can be rectified easily in an
interview. Because the interviewer and interviewee physically present before the interview
board.
2. Development of relationship: Relation between the interviewer and the interviewee can be
developed through an interview. It increases mutual understanding and co-operation
between the parties.
3. Selection of suitable candidate: Suitable candidates can be selected through interview
because the interview can know a lot about the candidate by this process.
4. Collection of primary information: Interviews can help to collect fresh, new and primary
information as needed.
5. Sufficient information: Sufficient information can be collected through the interview
process. Because the interviewer can ask any question to the interviewee.
6. Time-saving: Interview can help to save time to select the best suitable candidate. Within a
very short time communication can be accomplished with the interview.
7. Less costly: It is less costly than other processes of communication. It is very simple, prompt
and low-cost method of communication.
 8. Flexible: One of the major advantages of interview is feasible. That depends on the
situation it can be framed differently.
Major Limitations of the Interview:

1. Incomplete process: Suitable candidate can not be selected by interview only. The written
test is more important than the interview.
2. No record: In the case of the interview some confusion may be arisen in the future as, there is
no evidence actually that have been discussed at interview.
3. Lack of attention: Much attention is required for a good interview. But sometimes it is observed
that both the interviewer and the interviewee are less attentive. That is why real information
cannot be collected.
4. Disappointed: Interviewee may be disappointed while she or he faces the interviewer’s
questions which are not related to the field. That is why a suitable candidate may be
neglected.
5. Time-consuming: Time constrain is one of the major limitations of the interview process.
Preparation for the interview, taking interviews and interpretation of the responses required
much time, which makes the interview method time-consuming.
6. Biases of interviewer: Always there is a possibility that the interview process can be
influenced by the biases of the interviewer.
7. Costly: Generally interview method is expensive.
8. Inefficiency of the interviewer: Interview is a systematic process of data collection. The
success of an interview depends on the efficiency of the interviewer. This inefficiency of an
interviewer can lead to misleading results.
9. Not suitable for personal matters: Personal matters may not be revealed by interview
method.
 Unit 4

Placement, Training and Developing

4.1. Placement: Meaning and process.

4.2. Importance of Placement.
4.3. Concept and Meaning of training and development.
4.4. Need and importance of training and development.
4.5. Process of training and development.
4.6. Development Programmes.

4.1. Placement: Meaning and process.

When the candidate is selected for a particular post and when he reports to duty, the organization has
to place him or her in the job for which he or she is selected which is being done through placement.
Placement is the act of offering the job to a finally selected candidate. It is the act of finally assigning
the rank and responsibility to an employee, identifying him with a particular job.

In the words of Pigors and Myers, “Placement is the determination of the job to which an accepted
candidate is to be assigned and his assignment to that job. It is a matching of what the supervisor has
reason to think he can do with the job demands. It is a matching of what he imposes in strain, working
conditions and what he offers in the form of pay roll, companionship with others, promotional
possibilities etc.”
A well placed employee will be an asset to the organization. Proper placement makes the employee
happy and reduces absenteeism and labour turnover.
Proper placement increases morale and efficiency of the employees and builds a good relation with the
employer.
Increased production, improved quality of the product, regularity in work and attendance indicate proper
placement of an employee. It should be noted that, supervisor or an executive should always keep a
watch on newly recruited employee to ensure whether an employee is properly placed or misplaced.
4.2 Placement is an important HR function, and if properly handled, it does the following:
1. Improves the morale of the employees
2. Reduces employee turnover
3. Decreases accident rates
4. Enhances labour productivity
5. Clarifies expectations.

A person can contribute as per the predetermined objectives. Right placement improves employee
morale, and the employee contributes more; lower absenteeism enables achieving delivery targets;
reduced manpower attrition and turnover makes the recruitment cell, cost- and time-efficient.

4.3 Importance of Placement

1. If the employees are properly placed, they will enjoy their work and organisation will not
have to suffer the problem of employee turnover.
2. If employees don’t like their work, they start making excuses from the job and remain absent.
Effective placement will keep the absenteeism rate low.
3. Morale of workers increases because they get the work of their choice, if correctly placed.
4. Workers will work attentively and safety of workers will be ensured and lesser accidents will
happen.
5. Workers will be satisfied with their jobs and there will be no reasons for disputes, so human
relations will improve.
6. Through proper placement, misfit between the job and person can be avoided.
7. Efficient and effective performance of individual tasks will ensure the achievement of
organisational goals.
8. Productivity i.e., ratio of output to input increases as wastage and abnormal losses decrease.
Placement should be done keeping into view the job and social, psychological & emotional needs of
person.
 Principal of Placement

The following principles are required to be observed while making placement of an employee:

(i) Job requirement – Man should be placed on the job according to the requirement of the job rather
than qualification and requirement of the man.
(ii) Qualification – The job offered should match with the qualification possessed by an
employee.
(iii) Information – All the information relating to the job should be given to the employees along with
the prevailing working conditions. They should also be made known that they have to pay penalty for
wrong doing.
(iv) Loyalty and Co-operation – Every effort should be made to develop a sense of loyalty and co-
operation in employees to make them understand their responsibilities.

4.4 Process of Placement

4.5 Concept and Meaning of training and Development

Training and Development is a subsystem of an organization which emphasize on the improvement of the
performance of individuals and groups. Training is an educational process which involves the sharpening
of skills, concepts, changing of attitude and gaining more knowledge to enhance the performance of the
employees. Good & efficient training of employees helps in their skills & knowledge development, which
eventually helps a company improve.
Organizational Development is a process that “strives to build the capacity to achieve and sustain a
new desired state that benefits the organization or community and the world around them.” (From the
Organizational Development Network website).

 Relation between Training and Development

There is a relation between training and development, and there is clear difference between the two
based on goals to be achieved. Development is made to answer the training problems:

TRAINING DEVELOPMENT

Training is meant for operatives Development is meant for executives

It is reactive process It is pro- active process

AIM: To develop additional skills AIM: To develop the total personality

It is short term process It is continuous process

OBJECTIVE: To meet the present need OBJECTIVE: To meet the future need of an
of an employee employee

Initiative is taken by the Initiative is taken by an individual.

management
4.6 Importance of Training and Development
For companies to keep improving, it is important for organizations to have continuous training and
development programs for their employees.
Competition and the business environment keeps changing, and hence it is critical to keep learning and
pick up new skills. The importance of training and development is as follows:
• Optimum utilization of Human resources
• Development of skills like time management, leadership, team management
etc
• To increase the productivity and enhance employee motivation
• To provide the zeal of team spirit
• For improvement of organization culture
• To improve quality, safety
• To increase profitability
• Improve the morale and corporate image

 Need for Training and Development

Training and development of employees is a costly activity as it requires a lot quality inputs from trainers
as well as employees. But it is essential that the company revises its goals and efficiencies with the
changing environment. Here are a few critical reasons why the company endorses training and
development sessions.
• When management thinks that there is a need to improve the performances
of employees
• To set up the benchmark of improvement so far in the performance
improvement effort
• To train about the specific job responsibility and skills like communication management, team
management etc
• To test the new methodology for increasing the productivity.

4.7 Training and Development Process

Training and development is a continuous process as the skills, knowledge and quality of work needs
constant improvement. Since businesses are changing rapidly, it is critical that companies focus on
training their employees after constantly monitoring them & developing their overall personality.
Steps for training and development processes are:
1. Determine the need of training and development for individuals or teams
2. Establish specific objectives & goals which need to be achieved
3. Select the methods of training
4. Conduct and implement the programs for employees
5. Evaluate the output and performance post the training and development sessions.
6. Keep monitoring and evaluating the performances and again see if more training is required.
4.8 Development Programmes in India: An Evaluation!

After independence, the task for the national government was two-fold: dismantling the traditional and
colonial economy and erecting in its place the base for modern, independent and self-reliant economic
and social order. To achieve this goal, many schemes and programmes were launched by different
governments at the central and state levels from time to time.

At many times it was seen that only the names of the programmes were modified with just some minor
changes in the actual contents of the programme. The core objective of almost all programmes was to
bring change in the quality of human life and remove poverty. The history of modern systematic rural
development programmes in India starts from 1952 when GDP was launched as a part of the five-year
plans.
 Unit 5

Performance Appraisal

5.1. Introduction, meaning, need for performance appraisal.

5.2. Introduction to the Methods of performance appraisal.
5.3. Components and types of performance appraisal.
5.4. Process of performance appraisal.
5.5. Limitations of performance appraisal.
5.6. Making performance appraisal effective.

5.1. Introduction, meaning, need for performance appraisal. Meaning of

Performance Appraisal
Performance Appraisal is the systematic evaluation of the performance of
employees and to understand the abilities of a person for further growth and development.
Performance appraisal is generally done in systematic ways which are as follows:

1. The supervisors measure the pay of employees and compare it with targets and plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance.

Definition: Performance Appraisal is defined as a systematic process, in which the personality and
performance of an employee is assessed by the supervisor or manager, against predefined standards,
such as knowledge of the job, quality and quantity of output, leadership abilities, attitude towards work,
attendance, cooperation, judgment, versatility, health, initiative and so forth.
It is also known as performance rating, performance evaluation, employee assessment,
performance review, merit rating, etc.
Performance Appraisal is carried out to identify the abilities and competencies of an employee for future
growth and development. It is aimed at ascertaining the worth of the employee to the organization, in
which he/she works.

Objectives of Performance Appraisal

 To promote the employees, on the basis of performance and competence.

 To identify the requirement for training and development of employees.
 To provide confirmation to those employees who are hired as probationary employees, upon
completion of the term.
 To take a decision regarding the hike in employees pay, incentives etc.
 To facilitate communication between superior and subordinate.
 To help employees in understanding where they stand in terms of performance.
Data obtained from the appraisal of performance, are documented and used for different
organizational purposes.
 5.2 Method of Performance Appraisal

In the process of designing performance appraisal process, it is important to identify the best method
for assessment. There are a number of methods introduced to gauge the quantity and quality of work
performed by an individual. These methods are broadly classified into two categories:

 Past-oriented Methods (Also known as Traditional Methods of Performance Appraisal)

1. Rating Scales
2. Checklists
3. Forced Choice
4. Forced Distribution
5. Critical Incident
6. Performance test and observation
7. Field review
8. Confidential Record
9. Essay method
10. Comparative Evaluation Approaches 11.Cost
Accounting Method
12. Behaviorally Anchored Rating Scales

 Future Oriented Methods (Also known as Modern Methods of Performance Appraisal)

1. Management by objectives
2. Psychological Appraisal
3. Assessment Centres
4. 360-Degree Feedback
5. 720-Degree Feedback
Performance Appraisal is a part of performance management. It helps in gaining the competitive
edge, by improving the performance level of the employees working in the organization, making
rational decisions regarding hike in salaries, promotions, transfers, discharge of the employees,
reducing job dissatisfaction and employee turnover.

5.3 Components of Performance Appraisal

There are several methods by which an employer/supervisor can evaluate the performance of its
employees. An individual in charge of supervising and evaluating employee performance can follow the
given chart to do his/her job effectively.
  Define expectations
For any kind of evaluation, there must be a standard tool to measure against. In the process of
performance appraisal, expectations work as the standard tool. Employers set expectations or target
that are meant to be achieved by the employees within a set period. The above example gives clear idea
about expectation in terms of job performance. Expectations can also be set in terms of behavior. An
employer expects good manners, discipline, ability to work calmly under pressure, flexibility and
punctuality in any employee.
 Measure and evaluate
An employer tracks the performance of its employees and compares them with the pre-set criteria. The
process of evaluation does not only focus on measuring how much work has been done. The true
purpose of appraising is to understand what influences their performance level and to recognize the
factors that contribute to motivating them.

 Provide feedback
Feedback is essentially a process wherein the employer and employee discuss possible ways to achieve
organizational goal effectively and efficiently. It is the ultimate opportunity where the employer can
coach each employee individually and build motivation and accountability in them.

A constructive feedback works as a mirror for employees which shows them where they actually
stand. It praises good performance, corrects poor performance and guides the employees to the right
path to their goals.

 Record performance
A responsible employer must always record employees’ performances post
feedback. It will help him/her in measuring the effectiveness of feedback.
5.4 Types of Performance appraisal

Managers are not very much in favor of performance appraisal techniques but still, it is required to have

the knowledge of various performance appraisal techniques so that we get to choose the best possible

option in the time of need. Here are a few different types of appraisal methods:

1. The 360-Degree Appraisal

This method involves giving out a questionnaire with questions regarding the performance of a colleague

and they need to fill it up. This feedback can be considered by the manager while evaluating the

performance at the end of the quarter/year.

2. General Performance Appraisal

This method involves continuous interaction between the employee and his manager continuous

setting of goals and achieving them. Whether the employee has been able to do justice the entire

process or not is evaluated at the end of the year.

3. Technological/Administrative Performance Appraisal

This appraisal technique concentrates on technical more than any other aspect of performance on the

job as the employees involved have specialized skills.

They’re judged on the skills they possess and the activity they complete.

4. Manager Performance Appraisal

The performance of a manager should also be appraised and this includes not just his/her performance

on the job but also relationship management with clients at his/her disposal. Generally, anonymous

feedback forms are received which are then considered for appraisal.
5. Employee Self-Assessment
This method is very unpopular among employees as nobody can deal with rating himself or herself. The

self-assessment sheet is compared with the one filled up by the manager and the differences are

discussed.

6. Project Evaluation Review

This method involves performance appraisal of the team members involved at the end of every project

and not at the end of every year. This helps the team and its members develop with each passing project.

7. Sales Performance Appraisal

A salesperson is evaluated on the basis of his/her sales skills and accomplishment of financial goals set

previously. Goals set in case of sales should be realistic and ways of achieving them should be decided

by the employee and the manager concerned.

5.5 Process of performance appraisal

The figure shown above is a standard performance appraisal process that takes place in an organization,
wherein each step is important and arranged in a systematic manner. The process is conducted
periodically, usually twice a year, i.e. semi-annually and annually called as mid-term review and annual
review respectively.

5.6 Limitation of performance appraisal

Performance appraisals are a part of career development and consist of regular reviews of employee
performance within organizations.Performance appraisal is defined by Wayne Cascio as “the systematic
description of employee’s job relevant, strength, weakness.

The following are the limitations of performance appraisal:

Halo effect :-

In this case the superior appraises the person on certain positive qualities only. The negative traits are
not considered. Such an appraisal will no give a true picture about the employee. And in some cases
employees who do not deserve promotions may get it.

Horn effect :-

In this case only the negative qualities of the employee are considered and based on this appraisal is
done. This again will not help the organization because such appraisal may not present a true picture
about the employee.

Central tendency :-

In this case the superior gives an appraisal by giving central values. This prevents a really talented
employee from getting promotions he deserves and some employees who do not deserve any thing
may get promotion.

Leniency and strictness :-

Some bosses are lenient in grading their employees while some are very strict. Employee who really
deserves promotions may loose the opportunity due to strict bosses while those who may not
deserve may get benefits due to lenient boss.

Fear of loosing subordinates and spoiling relations :-

Many bosses do not wish to spoil their relations with their subordinates. Therefore when they
appraise the employee they may end up giving higher grades which are not required. This is a n
injustice to really deserving employees.

Goodwill and techniques to be used :-

Sometimes a very strict appraisal may affect the goodwill between senior and junior. Similarly when
different departments in the same company use different methods of appraisal it becomes very
difficult to compare employees.

Paper work and personal biased :-

Appraisal involves a lot of paper work. Due to this the work load of HR department increases. Personal
bias and prejudice result in bosses favoring certain people and not favoring others.

5.7 Making Performance Appraisal Effective

If someone at work says, “You did a great job,” you’ll probably accept that comment without
question (and think “I’m glad someone noticed!”).
However, if another person comes to you and says, “You messed that one up,” you may reject that
comment (and think “how would you know?”). The problem is that neither judgment – praise or censure
– was supported with any valid information.
An ineffective performance appraisal can feel the same way. Most organizations use some process to
collect information to support an appraisal (employee self-assessment, feedback from clients and
colleagues, managerial observations, etc). Even when this information is valid, it is often not sufficient to
deliver an effective appraisal, because other key elements are often missing.

1. Make sure goals are explicit, descriptive, and shared.

This step is often the point where appraisal starts to derail. Unfortunately, most organizations do a pretty
poor job setting expectations – a task that is not really all that difficult. You can only set expectations
about three things – actions, work product, or impact on organization goals. The least useful and easiest
to measure is actions; the most useful and difficult to identify is impact on results.

2. Make sure measures are explicit, specific, and shared.

Once expectations are clear, the next step is to agree on measures. If you identify a link to organization
results, then that measure is clear. If not, then you must identify relevant performance measures.
Basically, there are four categories of performance measures (for either actions or work products) –
Quality, Quantity, Time, and Cost.
-quantity (how much, many?)
-time (elapsed time, touch time, intervals)
-cost (design, production, acquisition, maintenance, TCO)
-quality (more than 50 including accuracy, completeness, validity, reliability, simplicity, etc.)

3. Collect relevant, valid performance information.

Once goals and measures have been established, the next step is to collect relevant, valid information.
Unfortunately, this step can be difficult, especially with jobs where is work product is intangible
(information, influence, conflict resolution, etc.) When there is a tangible work product, make sure to
collect samples. When there isn’t a product, direct observation is the best standard. Finally, if nothing
else is available, use self and other behavioral reports – but make sure to link those reports to expected
goals and make sure to look for actions, and not just unsupported judgments (“he was great!?”)

4. Compare performance with goals.

Once you have the information, the next step is to analyze it. I think of analysis as comparing actual with
expected performance, for the purpose of understanding variance and its causes.

5. Make your judgment.

Once the analysis is complete, the next step is to judge the performance – meet, miss, or exceed
the goals. Simply, your judgment should be evident from your analysis.

6. Describe both analysis and judgment so any reader can understand.

IF you’ve done the previous steps effectively, the actual written appraisal is fairly easy to produce. When
I was a corporate manager, I always used the following format – news, analysis, and commentary. The
first section was the news – a simple and descriptive report of work product and behavior, described in
terms related to the agreed performance measures. The second section (typically the longest) was the
analysis – met/missed/exceeded and why, with descriptions of obstacles. The final section (always the
briefest) was the rating and judgment – this score for these reasons, with information always drawn
from the analysis section.
 Unit 6

Human Resource Information System (HRIS) and e-HRM

6.1. Introduction to HRIS as application in HRM.

6.2. Components of HRIS.
6.3. Advantages and Limitations of HRIS.
6.4. Nature of e-HRM.
6.5. e-HR Activities – e-Recruitment, e-Selection, e-Performance Management, eTraining and
Development, e-Compensation Management, e-Payroll

6.1. Introduction to HRIS as application in HRM. Introduction of HRIS

A human resource information system (HRIS) is an information system or managed
service that provides a single, centralized view of the data that a human resource management
(HRM) or human capital management (HCM) group requires for completing human resource (HR)
processes. Such processes include recruiting, applicant-t r a c k i n g , p a y r o l l , t i m e a n d a t t e n
d a n c e , p e r f o r m a n c e a p p r a i s a l s , b e n e f i t s administration, employee self service
and perhaps even accounting functions. A very basic HRIS is composed of a database and a
database management system. More complex systems include tools for human resource
analytics. (Michael, Mohan, 2011)The Human Resource Information System (HRIS) is a software or
online solution for the data entry, data tracking, and data information needs of the Human Resources,
payroll, management, and accounting functions within a business. Normally packaged as a data
base, hundreds of companies sell some form of HRIS and every HRIS has different
capabilities. (James, 2002) Pick your HRIS carefully based on the capabilities you need in your company.

Meaning of HRIS

A HRIS, which is also known as a human resource information system or human resource
management system (HRMS), is basically an intersection of human resources and information technology
through HR software. This allows HR activities and processes to occur electronically.

A HRIS may be viewed as a way, through software, for businesses big and small to take care of a
number of activities, including those related to human resources, accounting, management, and
payroll. A HRIS allows a company to plan its HR costs more effectively, as well as to manage them
and control them without needing to allocate too many resources toward them.

In most situations, a HRIS will also lead to increases in efficiency when it comes to making decisions in HR.
The decisions made should also increase in quality— and as a result, the productivity of both employees
and managers should increase and become more effective.

6.2 Components of HRIS

Explained below are the various components of the HRIS.

1. Database

HRIS core offering includes a database to store employee information. HR professionals can input all
personnel data into the system which can be accessed from anywhere, round the clock. Types of data
that HR professionals collect in the database include compensation history, emergency contact
information, and performance review. The core database can also be viewed as an online backup for
paper files.
2. Time and Labour Management

Activities like time and labour management can highly time consuming. HRIS package allows employees
to input their own hours worked and allows managers to immediately verify vacation requests, and the
data is directly fed to the payroll. Time and labour management also improves the HR
department’s ability to track punctuality and attendance.

3. Payroll Function

Payroll function is yet another major component of a HRIS model. HR can easily download or unload
employee hours, and issue cheques or payroll deposits to employees. Salaried employees can also be
paid with substantially reduced risk of errors. The HRIS payroll software usually improve tax compliance
for locations with multiple tax levels.

4. Benefits

Some HRIS employers allow employers to establish and maintain medical benefits and retirement
investments through their software. Such applications allow employers to have one-stop shopping
experience for all their human resources data management needs. Other HRIS packages facilitate
medical benefits and retirement investment deductions for payroll but not the establishment of those
benefits.

5. Employee Interface

Most HRIS packages allow for an employee to have limited user access. Employee users access a part of
the database where they can update their personal information, review pay scales, change retirement
benefit programs, update direct deposit information or download benefit election documents.

6. Recruitment and Retention

Finally, it can be said that recruitment and retention are the most important components of HRIS. It
goes without saying that it is the anchor of all HR policies and systems. Finding new talent, acquiring
them, keeping them engaged and finally being able to retain them are the major task of a HR person.
HRs also have to ensure that employees are not only able to do their work, but they are also provided
with the required training; receives proper compensation and benefits from the organization.

6.3 Advantages and Limitation of HRIS

Human Resources Information System, is a system that lets you keep track of all your employees and
information about them. It is usually done in a database or, more often, in a series of inter-related
databases.

Advantages of HRIS
 Specialist can manage:

 compliance with federal and state laws

 streamline processes for recruitment and selection produce
 analyses data and reports for internal and external use
 ease of use for qualification computer technology specialists,
 accuracy of information
 ability to perform HR audits using any combination of parameters
 Employees and managers can locate answers and information quickly without the need to
consult an HR representative every time.
 An HRIS can reduce the amount of paperwork and manual record keeping
 It retrieves information quickly and accurately
 It allows quick analysis of HR issues

Disadvantages HRIS

 human error during information input

 costly technology to update your system
 malfunctions or insufficient applications to support your human resources needs
 finding a qualified specialist with human resources functional area knowledge is difficult.
 Unauthorized Access
 Specialized Knowledge
 Data Entry Errors
 The cost per-hire for another employee in a specialized field may be a stretch for some small
businesses

6.4 Meaning of E-HRM

Processing and transmission of digitized HR information are called E-HRM or electronic human
resource management.

E-HRM is the application of IT for HR practices which enables easy interactions within the employee and
employers. It stores information regarding payroll, employee personal data, performance management,
training, recruitment, and strategic orientation.

Definition of E-HRM

E-HRM has been defined as “a way of implementing HR strategies, policies and practices in organizations
through a conscious and directed support of and/or with the full use of web-technology-based channels”
or more recently, and more broadly, as “the planning, implementation, and application of information
systems for both networking and supporting actors in their shared performing of HR activities”.

In the view of Michael Armstrong, e-HR provides the information required to manage HR processes.

In other words, E-HRM is a way of implementing HRM strategies, policies and practices in an organization
through directed support of web technology-based channels.

6.5 Types of E-HRM

There are three types of E-HRM.

1. Operational.
2. Relational.
3. Transformational.

These are described respectively as:

1. Operational

Operational E-HRM is concerned with administrative functions – payroll and employee personal data,
for example.

2. Relational

Relational E-HRM is concerned with supporting business processes by means of training, recruitment,
performance management and so forth.

3. Transformational

Transformational E-HRM is concerned with strategic HR activities such as knowledge management,

strategic re-orientation. An organization may choose to pursue E-HRM policies from any number of these
tiers to achieve their HR goals.

6.6 E- HR Activities-

 E-recruitment

Online recruitment has become a common and easily accessible method of recruitment nowadays.
Recruitment through traditional advertising, print media, booklets, and magazines are replaced or
working as a substitute for online recruitment at present (Parvin, 2013).

As the most significant internet revolutionary aspect, online recruitment has altered the inner
structure, processes, and competencies of many firms (Bell and Sutton 1998, Freeman 1999, Day Mar
2000). The words e-recruitment, online recruitment, cyber-recruiting, or internet recruiting are
synonymous. They imply formal sourcing of jobs online (Ganalaki, 2002). It is a complete process
which includes job advertisements, receiving resumes and building human resource database with
candidates and incumbents.

Online recruitment, also known as e-recruitment is one of the worldwide trends for HR functions (Bussler
& Davis, 2002). It has evolved into a sophisticated interactive engine with the ability to automate every
facet of the hiring process virtually (Joe Dysart, 2006). The internet can ease the selection of employees,
especially where long distances are involved (Galanaki, 2005).

 E-Selection

E selection begins where e-recruitment ends. Gueutal and Stone (2005) define e- selection as a process
of web-based testing, face to face interviews, and job offers.

Most organizations use e-selection to achieve some specific purposes, such as cost reduction, maximum
utilization of human resources and sustainability. To operate e- selection properly, organizations need to
consider few procedural requirements, including design upfront, vendor selection, and project steps,
assessment steps, and protocol for the test event, and feedback to candidates.

 E-performance management

E-Performance Management by its name indicates that performance management with the help of
electronic systems. E-Performance Management, a web-based tool, has been designed to make the
performance reviews easier than ever.

An online performance appraisal system is a software program that facilitates the completion of
performance evaluations online. It may be integrated with an employee position description module,
allowing managers to pull data from the employee’s position description and insert this information into
the evaluation.

 E-compensation

E-Compensation represents a web-enabled approach to an array of

compensation tools that enable an organization to “gather, store, manipulate, analyze, utilize, and
distribute compensation data and information”. Unlike previous compensation software, the e-
compensation tools are web-based, rather than a client-server-based or stand-alone PC-based.

This allows the individual’s access electronically distributed compensation software, databases, and
analytic tools by using an internet browser from literally anywhere on the earth.

E-Compensation tools can provide HR managers with the ability to effectively adapt compensation
systems to meet the current challenges, manage and maintain all aspects of equity in pay plan design,
and to align the compensation systems with the strategic management of the organization.

 E-learning/web-based training

Web-based training (sometimes called e-learning) is anywhere, anytime instruction delivered over the
Internet or a corporate intranet to browser- equipped learners. There are two primary models of
Web-based instruction: synchronous (instructor-facilitated) and asynchronous (self-directed, self-
paced). Instruction can be delivered by a combination of static methods (learning portals, hyperlinked
pages, screen cam tutorials, streaming audio/video, and live Web broadcasts) and interactive methods
(threaded discussions, chats, and desktop video conferencing).

Web-based instruction is the perfect solution to meet the needs of lifelong learners because it is available
on-demand, does not require travel, and is cost- efficient.