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Human Resource Development

Importance: Total of 10 Questions

1. 1 Question on Job Specification – 1 mark

2. 1 Question on 360 degree feedback – 1 mark
3. 1 Question on Jon Enrichment – 1 mark
4. 1 Question on Performance Appraisal – 1 mark
5. 3 Questions on Job Enrichment + Performance Appraisal – 2 marks each
6. 2 Questions on HRM Functions– 2 marks each

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 Contents
1 Concept of HRD...................................................................................................................................4
2 Difference between HRD and HRM.....................................................................................................5
3 Importance of HRD..............................................................................................................................5
4 Goals of HRD........................................................................................................................................6
5 Job Analysis and Design.......................................................................................................................7
5.1 Purpose of Job Analysis...............................................................................................................7
5.2 Job Analysis Method....................................................................................................................8
5.3 Job Description and Job Specification..........................................................................................8
5.4 Job Design..................................................................................................................................10
5.5 Job Evaluation............................................................................................................................12
5.6 Job Rotation...............................................................................................................................14
5.7 Job Enrichment..........................................................................................................................16
5.8 Job Enlargement........................................................................................................................17
6 Performance Appraisal......................................................................................................................18
6.1 Importance or Use of Performance Appraisal............................................................................18
6.2 Biases/Errors Performance Appraisal........................................................................................19
6.3 Steps in Performance Appraisal.................................................................................................20
6.4 Techniques of Performance Appraisal.......................................................................................21
7 Potential Appraisal.............................................................................................................................29
7.1 Requirements for Potential Appraisal........................................................................................29
7.2 Techniques for Potential Appraisal............................................................................................30

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 WHAT WILL YOU GET IN THE COURSE?
Our course material is comprehensive and consists of:

1. Concept notes for each topic of ESI and FM. Download the sample material from here. You
can also view the sample lessons as well as MCQs at http://www.edutap.co.in/learn/Free-
Lessons-on-Finance-and-Management
2. Awesome MCQs on each topic. What we have done is prepared MCQs based on the concept
notes so that you can practice questions as soon as you are done with one concept document.
Then you move on to the next concept document and after reading it, you again practice MCQs
based on that document and so on. This helps you in assessing your understanding and is very
useful in improving retention.
3. All important reports like HDR, WDR, Economic Survey, Budget, important RBI circulars,
notices and the like are being integrated into the material itself so that an aspirant does not
have to read them separately.
4. Before the actual examination, we would also provide online full length tests so that the aspirant
gets the feel of the real examination and can assess his/her preparation.
5. We have also prepared a document covering all important government schemes,
programmes and policies important for this exam.

IS THE MATERIAL PROVIDED BY EDUTAP ENOUGH FOR CLEARING THE

EXAM?
We have prepared our material strictly keeping in mind the syllabus and pattern of RBI Phase 2
examination 2015 and 2016. For analysis videos, click here
We expect atleast 60-70% of the questions directly from our notes, however, if RBI springs up a
surprise, there may be a chance that questions wont be directly from the notes provided by us. But
since it is a competitive exam, you would again be much better placed than the others in tackling
such a situation.

WILL EDUTAP UPDATE THE MATERIAL TILL THE TIME THE EXAM IS
ACTUALLY CONDUCTED FOR 2017?

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 Yes! The course contents will be updated regularly till the Phase 2 exam of 2017 is over. You
don’t have to worry about a thing, we will take care of all updates.

HOW MUCH WILL THE COURSE COST ME? IS THERE ANY DISCOUNT
AVAILABLE?
We have 3 courses

1. ESI @ Rs 3499
2. FM @ Rs 3499
3. Bundle course containing ESI as well as FM at a discounted price of Rs 5999
WHERE CAN YOU FIND THE ANALYSIS OF 2016 PAPER?
Here: https://www.youtube.com/playlist?list=PL5Eyazk6CS3bd5vc6g3Sdx117FDi3SrPk

1 Concept of HRD
HRD is basically concerned with the development of human resources in the organization for improving
the existing capabilities and acquiring new capabilities for achievement of the corporate and individual
goals. HRD should help employees increasing their knowledge, skills, and capabilities and create positive
attitude towards work

Larson and Tubro was the first company in India to set up practices of HRD.

According to T.V. Rao who is father of HRD in India, Human Resource Development in the organization
context refers to the process whereby the workers are continuously helped in a planned way to –
1. Acquire or sharpen capabilities required to perform various tasks and functions associated with
their present or future expected roles.
2. Develop their general enabling capabilities as individuals so that they are able to discover and
exploit their own inner-potential for their own and/ or Organizational development purposes
3. Develop an organizational culture where ‘superior/ subordinate’ relationships, ‘team-work’ and
‘collaboration’ among different sub-units, are strong and contribute to the professional well- being
and motivation

Companies now days see people as the most important asset. People also have high aspirations and they
want to learn and grow. There has been paradigm shift in the ways companies have started managing their
employees over the last decade. Employees are accepted as partners in the progress of a company. They
should have a feeling that the organization is their own. To this end, managers must offer better
quality of working life and provide opportunities to people to exploit their potential fully. There should be
opportunities for self-fulfillment in one’s work.

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 2 Difference between HRD and HRM

HRD and HRM are closely related. HRD is also basically one of the functions of HRM. In the above figure all
the functions (including functions of HRD) are part of HRM but specifically 4 functions listed below are
part of HRD
1. Training and Development
2. Organization Development
3. Career Development
4. Job Design

In the RBI Syllabus – the unit is on HRD but many sub-parts in this unit are related to HRM. But regardless
of that we will discuss all the parts given in RBI syllabus. We might touch (not in detail) up on other parts
also which are not in syllabus but are important for exam or from which questions have been asked in the
previous year and we expect this tear also

3 Importance of HRD
1. Develops Hidden potential for the resources as they are motivated and trained to realize their
potential
2. Improves the communication system to open the channel of communication so that everyone
understands the other person in a better way and there is no chance of ambiguity
3. Enhances the employee morale as well as develops the sense of belongingness

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 4. It helps in bringing Innovation in the company as resources are given the environment in which
their skills and knowledge is increased and they are able to realize self-actualization
5. Makes employees ready to change and undergo transformation and relearn after unlearning
what they had already learnt

Henry Ford once said that “Take out my building, take out my machines and all capital but leave my men
with me I will become Henry Ford again ”. This statement puts emphasis on the importance of Human
resources in an organization and hence importance of HRD.

4 Goals of HRD
HRD aims at developing

1. The capabilities of each employees as individuals

2. The capabilities of each individual employee in relation to his/her present job
3. The capabilities of each individual employee in relation to his/her expected future role
4. The superior-subordinate (dyadic) relationship
5. A cohesive and congenial atmosphere of working
6. Collaboration among different units of an organization
7. To develop the constructive mind and overall personality of employees
8. The organization’s overall health and self-renewing capabilities
9. Increase the organizational capabilities in a comprehensive manner
10. To humanize the work in an organization
11. To ensure better quality work, higher productivity and higher profits.
12. Equal opportunities to all irrespective of cast, color and creed

In this Unit we will discuss the following topics

1. Job Analysis and Design
2. Performance Appraisal
3. Potential Appraisal
4. Feedback and Performance Counselling
5. Employee Welfare
6. Rewards
7. Career Planning
8. Training and Development

First three points – Job Analysis and Design, Performance Appraisal and Potential Appraisal would be
discussed in this Part and rest would be discussed in Part 2

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 5 Job Analysis and Design
Job Analysis is a procedure, by which information is obtained about a job, i.e., it gives us
information about the skills, knowledge, abilities and responsibilities required from the worker
for a successful performance of the Job‖. Job Analysis helps us in identifying
1. Job Identification: Its title, including its code number. For Example -JOB2341: Special
Data Analyst. Here JOB2341 is the code number and Data Analyst is the title
2. Significant Characteristics of a Job : It location, physical settings, hazards and
discomforts
3. Actual Work to be performed: What needs to be done in the job? Like job requires
person to analyze the financial data and find the gaps
4. Skills Required for the Job: Like Analytical skills, proficiency in MS excel etc.

5.1 Purpose of Job Analysis

The main purposes of conducting a job analysis process is to use this particular information to
create a right fit between job and employee, to assess the performance of an employee, to determine
the worth of a particular task and to analyze training and development needs of an employee
delivering that specific job

1. Recruitment and Selection: Job Analysis helps in determining what kind of person is required to
perform a particular job. It points out the educational qualifications, level of experience and
technical, physical, emotional and personal skills required to carry out a job in desired fashion. The
objective is to fit a right person at a right place.

2. Performance Analysis: Job analysis is done to check if goals and objectives of a particular job are
met or not. It helps in deciding the performance standards, evaluation criteria and individual’s
output. On this basis, the overall performance of an employee is measured and he or she is
appraised accordingly.

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 3. Training and Development: Job Analysis can be used to assess the training and development needs
of employees. The difference between the expected and actual output determines the level of
training that need to be imparted to employees. It also helps in deciding the training content, tools
and equipments to be used to conduct training and methods of training.

4. Compensation Management: Of course, job analysis plays a vital role in deciding the pay packages
and extra perks and benefits and fixed and variable incentives of employees. After all, the pay
package depends on the position, job title and duties and responsibilities involved in a job. The
process guides HR managers in deciding the worth of an employee for a particular job opening.

5. Job designing and Redesigning: The main purpose of job analysis is to streamline the human
efforts and get the best possible output. It helps in designing, redesigning, enriching, evaluating
and also cutting back and adding the extra responsibilities in a particular job. This is done to
enhance the employee satisfaction while increasing the human output

5.2 Job Analysis Method

1. Conducting an interview with the person doing the Job
2. Sending a questionnaire to the person doing the job
3. Observing the employee doing the job and recording the analysis

5.3 Job Description and Job Specification

Job Analysis is a primary tool to collect job-related data. The process results in collecting and
recording two data sets including job description and job specification

1. Job Description: Job Description is about the Job. For example Job requires candidate to do
financial analysis on daily basis for the transactions conducted in the bank. As part of Job

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 description the title and code of the Job is identified. The title and Code of the job are also
called Job Identification.
Example- JOB1002: Data Analyst. Here JOB2341 is the code number and Data Analyst is title.
This when combined is called Job Identification

2. Job Specification: Also known as employee specifications, a job specification is a written

statement of educational qualifications, specific qualities, level of experience, physical,
emotional, technical and communication skills required to perform a job. For example
Analytical skills required, proficiency in MS excel, go-getter attitude etc.

WHAT WILL YOU GET IN THE COURSE?

Our course material is comprehensive and consists of:

6. Concept notes for each topic of ESI and FM. Download the sample material from here. You
can also view the sample lessons as well as MCQs at http://www.edutap.co.in/learn/Free-
Lessons-on-Finance-and-Management
7. Awesome MCQs on each topic. What we have done is prepared MCQs based on the concept
notes so that you can practice questions as soon as you are done with one concept document.
Then you move on to the next concept document and after reading it, you again practice MCQs
based on that document and so on. This helps you in assessing your understanding and is very
useful in improving retention.
8. All important reports like HDR, WDR, Economic Survey, Budget, important RBI circulars,
notices and the like are being integrated into the material itself so that an aspirant does not
have to read them separately.
9. Before the actual examination, we would also provide online full length tests so that the aspirant
gets the feel of the real examination and can assess his/her preparation.
10. We have also prepared a document covering all important government schemes,
programmes and policies important for this exam.

IS THE MATERIAL PROVIDED BY EDUTAP ENOUGH FOR CLEARING THE

EXAM?
We have prepared our material strictly keeping in mind the syllabus and pattern of RBI Phase 2
examination 2015 and 2016. For analysis videos, click here

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 We expect atleast 60-70% of the questions directly from our notes, however, if RBI springs up
a surprise, there may be a chance that questions wont be directly from the notes provided by us.
But since it is a competitive exam, you would again be much better placed than the others in
tackling such a situation.

WILL EDUTAP UPDATE THE MATERIAL TILL THE TIME THE EXAM IS
ACTUALLY CONDUCTED FOR 2017?
Yes! The course contents will be updated regularly till the Phase 2 exam of 2017 is over. You
don’t have to worry about a thing, we will take care of all updates.

HOW MUCH WILL THE COURSE COST ME? IS THERE ANY DISCOUNT
AVAILABLE?
We have 3 courses

4. ESI @ Rs 3499
5. FM @ Rs 3499
6. Bundle course containing ESI as well as FM at a discounted price of Rs 5999
WHERE CAN YOU FIND THE ANALYSIS OF 2016 PAPER?
Here: https://www.youtube.com/playlist?list=PL5Eyazk6CS3bd5vc6g3Sdx117FDi3SrPk

5.4 Job Design

Job Design follows Job analysis. While Job analysis gives the description of the job, Job duties at high
level etc., the job design lays out the process of deciding on the contents of a job in terms of its duties
and responsibilities in depth, on the methods to be used in carrying out the job, in terms of techniques,
systems and procedures. It helps in

1. What tasks are required to be done or what tasks is part of the job?
2. How are the tasks performed?
3. What amount of tasks are required to be done?
4. What is the sequence of performing these tasks?

Approaches to Job Design

There are three approaches to Job Design.

A pproach Name Founder Details

H uman Approach Theorists who The human approach of job design laid emphasis on designing a job around the peop le
laid down or employee. According to this approach jobs should gratify an individual’s need fo
r
Motivational recognition, respect, growth and responsibility. Employees should feel motivated
theories
Engineering FW Taylors This introduced the idea of the task that gained prominence in due course of time.
Approach According to this approach the work or task of each employee is planned by the
management a day in advance.
Work, according to this approach should be scientifically analyzed and fragmented in to
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 logical tasks. Due emphasis is then laid on organizing the tasks so that a certain logical
sequence is followed for efficient execution of the same
Job Characteristics Hackman and
Approach Oldham This puts emphasis on the Job Satisfaction. They laid down five core dimensions that
can be used to describe any job - skill variety, task identity, task significance, autonomy
and feedback.

 Skill variety: The employees must be able to utilize all their skills and develop
new skills while dealing with a job.
 Task Identity: The extent to which an identifiable task or piece or work is
required to be done for completion of the job.
 Task Significance: How important is the job to the other people, what impact
does it create on their lives?
 Autonomy: Does the job offer freedom and independence to the individual
performing the same.
 Feedback: Is feedback necessary for improving performance.

Aspects/Techniques of Job Design

There are three main aspects of Job Design
1. Job Rotation
2. Job Enrichment
3. Job Enlargement

We will discuss about them later in detail in this unit

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 5.5 Job Evaluation
In simple words, job evaluation is the rating of jobs in an organization. This is the process of establishing
the value or worth of jobs in a job hierarchy. The principle upon which all job evaluation schemes are based
is that of describing and assessing the value of all jobs in the firms in terms of a number of factors, the
relative importance of which varies from job to job

Why do organizations undertake Job Evaluation?

1. Designing new organization and roles/jobs

2. Changing the organizational design or roles
3. Aligning roles and pay to organizational changes
4. Defining interdependencies among different jobs
5. Clarifying accountabilities of jobs
6. Managing succession in organization
7. Reviewing the existing pay structure
8. Auditing legal compliance of pay policies
9. Implementing benchmark pay structures

Primary reason for Job evaluation is for developing equitable salary structure in which salary is paid for a
job as much as it deserves.

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 Methods of Job Evaluation

1. Ranking Method: The ranking method is the simplest form of job evaluation. In this method, each job
as a whole is compared with other and this comparison of jobs goes on until all the jobs have been
evaluated and ranked. All jobs are ranked in the order of their importance from the simplest to the
hardest or from the highest to the lowest. The importance of order of job is judged in terms of duties,
responsibilities and demands on the job holder. The jobs are ranked according to “the whole job”
rather than a number of compensable factors.

2. Grading Method (Mostly used in Government Jobs): Under this method, job grades or classes are
established by an authorized body or committee appointed for this purpose. A job grade is defined as a
group of different jobs of similar difficulty or requiring similar skills to perform them. Job grades are
determined on the basis of information derived from job analysis. The grades or classes are created by
identifying some common denominator such as skills, knowledge and responsibilities. The example
of job grades may include, depending on the type of jobs the organization offers, skilled, unskilled,
clerical, Managerial

3. Points Rating: Under this method, jobs are broken down based on various identifiable factors such as
skill, effort, training, knowledge, hazards, responsibility, etc. Weights are given to factors depending on
their importance to perform the job. Thereafter, points are allocated to each of these factors. Points so
allocated to various factors of a job are then summed. Then, the jobs with similar total of points are
placed in similar pay grades

4. Factor Comparison Method: This method is a combination of both ranking and point methods in the
sense that it rates jobs by comparing them and makes analysis by breaking jobs into compensable
factors. This system is usually used to evaluate white collar, professional and managerial positions

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 5.6 Job Rotation
Job Rotation is a management approach where employees are shifted between two or more assignments
or jobs at regular intervals of time in order to expose them to all verticals of an organization. Job rotation is
a well-planned practice to reduce the boredom of doing same type of job every day and explore the hidden
potential of an employee. The process serves the purpose of both the management and the employees. It
helps management in discovering the talent of employees and determining what he or she is best at. On
the other hand, it gives an individual a chance to explore his or her own interests and gain experience in
different fields or operations

During Job Rotation it must be taken care that

Employees are given proper training

Their performance is monitored
They are given proper feedback

WHAT WILL YOU GET IN THE COURSE?

Our course material is comprehensive and consists of:

11. Concept notes for each topic of ESI and FM. Download the sample material from here. You can also view

Lessons-on-Finance-and-Management
12. Awesome MCQs on each topic. What we have done is prepared MCQs based on the concept
notes so that you can practice questions as soon as you are done with one concept document.
Then you move on to the next concept document and after reading it, you again practice MCQs
based on that document and so on. This helps you in assessing your understanding and is very
useful in improving retention.
13. All important reports like HDR, WDR, Economic Survey, Budget, important RBI circulars,
notices and the like are being integrated into the material itself so that an aspirant does not
have to read them separately.

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 14. Before the actual examination, we would also provide online full length tests so that the
aspirant gets the feel of the real examination and can assess his/her preparation.
15. We have also prepared a document covering all important government schemes,
programmes and policies important for this exam.

IS THE MATERIAL PROVIDED BY EDUTAP ENOUGH FOR CLEARING THE

EXAM?
We have prepared our material strictly keeping in mind the syllabus and pattern of RBI Phase 2
examination 2015 and 2016. For analysis videos, click here
We expect atleast 60-70% of the questions directly from our notes, however, if RBI springs up a
surprise, there may be a chance that questions wont be directly from the notes provided by us. But
since it is a competitive exam, you would again be much better placed than the others in tackling
such a situation.

WILL EDUTAP UPDATE THE MATERIAL TILL THE TIME THE EXAM IS
ACTUALLY CONDUCTED FOR 2017?
Yes! The course contents will be updated regularly till the Phase 2 exam of 2017 is over. You
don’t have to worry about a thing, we will take care of all updates.

HOW MUCH WILL THE COURSE COST ME? IS THERE ANY DISCOUNT
AVAILABLE?
We have 3 courses

7. ESI @ Rs 3499
8. FM @ Rs 3499
9. Bundle course containing ESI as well as FM at a discounted price of Rs 5999
WHERE CAN YOU FIND THE ANALYSIS OF 2016 PAPER?
Here: https://www.youtube.com/playlist?list=PL5Eyazk6CS3bd5vc6g3Sdx117FDi3SrPk

Objectives of Job Rotation

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 5.7 Job Enrichment
Job enrichment adds new sources of job satisfaction by increasing the level of responsibility of the
employee in organization. Job enrichment is a way to motivate employees by giving them increased
responsibility and variety in their jobs. It is an idea that was developed by the American psychologist
Frederick Hertzberg in the 1950s (You will read about Frederick in the Motivation Unit)

In Job Enrichment, this increase in responsibility is often vertical. Vertical means that Employee is
given the responsibility of work earlier done by his superior.

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 Research studies on job enrichment found out decreased levels of absenteeism among the employees,
reduced employee turnover and a manifold increase in job satisfaction

5.8 Job Enlargement

Job enlargement is a job design technique wherein there is an increase in the number of tasks
associated with a certain job. In other words, it means increasing the scope of one’s duties and
responsibilities but these new duties and responsibilities are the ones which earlier use to be
taken up by your peers and not your boss. It is also known as horizontal loading in that the
responsibilities increase at the same level and not vertically

Job Enlargement helps in increasing flexibility and reducing monotony of the job

Difference between Job Enrichment and Enlargement

1. The difference between job enrichment and job enlargement is essentially of quantity and quality.
Whereas job enlargement means increasing the scope of job quantitatively by adding up more tasks,
job enrichment means improvement in the quality of job such that employees are more satisfied and
fulfilled.
2. Through job enrichment an employee finds satisfaction and contentment in his job and through job
enlargement employee feels more responsible and worthwhile in the organization.
3. Job enrichment entails the functions of planning and organizing and enlargement involves execution of
the same. Both complement each other, in that job enrichment empowers and enlargement executes.
4. Job enrichment depends upon job enlargement for success and the reverse in not true.
5. Job enrichment means a vertical expansion in duties and responsibilities and span of control whereas
in job enlargement the expansion is horizontal in nature.
6. Job enrichment has been found to have greater impact in terms of motivation when compared to
job enlargement. Since enrichment gives employee greater insights in managerial functioning and a
better work profile, it is looked upon as an indicator of growth and development. The same is not true
in case of job enlargement which is seen as an employer tactic to increase the workload

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 6 Performance Appraisal
Performance Appraisals is the assessment of individual’s performance in a systematic way. It is a
developmental tool used for all round development of the employee and the organization. The
performance is measured against such factors as job knowledge, quality and quantity of output,
initiative, leadership abilities, supervision, dependability, co-operation, judgment and versatility.
So it does not only evaluate knowledge but also evaluates behavioral qualities

Objectives of Performance appraisal

1. To maintain records in order to determine compensation packages, wage structure, salaries

raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on right job.
3. To maintain and assess the potential present in a person for further growth and development.
4. To provide a feedback to employees regarding their performance and related status.
5. To review and design the training and development programmes at the organization level
6. To find the areas where employees need individual development and design future plan
for them
7. To take feedback from employees regarding company policies

6.1 Importance or Use of Performance Appraisal

1. Helps in Deciding Promotion: It is in the best interest of the management to promote the
employees to the positions where they can most effectively use their abilities. A well-
organized, development and administered performance appraisal programme helps in
determining whether an individual should be considered for promotion because the system

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 not only appraises the performance on the present job but also evaluates his potentialities for
higher job

2. Help in Wage and Salary Administration: The wage increase given to some employees on the
basis of their performance may be justified by the performance appraisal results.

3. Help in Training and Development: An appropriate system of performance appraisal helps the
management in devising training and development programmes and in identifying the areas of
skill or knowledge in which several employees are not at par with the job requirements. Thus
the appraisal system points out the general training deficiencies which may be corrected by
additional training

4. Employee Development: The systematic procedure of performance appraisal helps the

supervisors to frame training policies and programmes. It helps to analyse strengths
and weaknesses of employees so that new jobs can be designed for efficient
employees. It also helps in framing future development programmes

5. Motivation: Performance appraisal serves as a motivation too

6.2 Biases/Errors Performance Appraisal

Managers commit mistakes while evaluating employees and their performance. Biases and
judgment errors of various kinds may spoil the performance appraisal process

1. First Impression (primacy effect): Raters form an overall impression about the employee on the
basis some first impression. The identified qualities and features may not provide the correct
information about the employee

2. Halo Effect: The individual’s performance is completely appraised on the basis of a perceived
positive quality, feature or trait. In other words this is the tendency to rate a man uniformly high in
other traits if he is extra-ordinarily high in one particular trait. If a worker has few absences, his
supervisor might give him a high rating in all other areas of work.

3. Horn Effect: The individual’s performance is completely appraised on the basis of a negative quality
or feature perceived. This results in an overall lower rating than may be warranted. “He is not
formally dressed up in the office and therefore he cannot be a good worker.

4. Central Tendency: Appraisers rate all employees as average performers. That is, it is an attitude to
rate people as neither high nor low and follow the middle path. For example, a professor, with a
view to play it safe, might give a class grade near the equal to B, regardless of the differences in
individual performances.

5. Personal Biases: The way a supervisor feels about each of the individuals working under him -
whether he likes or dislikes them has a tremendous effect on the rating of their performances.

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 Personal Bias can stem from various sources as a result of information obtained from
colleagues, considerations of faith and thinking, social and family background and so on.

6. Spillover Effect: The present performance is evaluated much on the basis of past performance.
“The person who was a good performer in distant past is assured to be okay at present also”.
Example would be employee being given high rating because he has good ratings in the past
too.

Recent Effect: Rating is influenced by the most recent behavior ignoring the commonly
demonstrated behaviors during the entire appraisal period. For example if a person has performed good in the last one m

Stereotyping: This implies forming a mental picture of a person on the basis of his age, sex, caste or religion. It result

6.3Steps in Performance Appraisal

1. Setting Performance Standards: The process of evaluation begins with the establishment of
Performance Standards. While designing a job and formulating a job description, performance
standards are usually developed for the position. These standards should be very clear and
not vague, and objective enough to be understood and measured.

2. Communicating Performance Expectations to Employees: The next important step is to

communicate the aforesaid standards to the concerned employees. Their jobs and jobs-

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 related behavior should be clearly explained to them. The employee should not be presumed to
guess what is expected of him. It should be noted that here communication means that the
standards have been transmitted to the employee and he has received and understood them

3. Measuring Actual Performance: The third step is the measurement of actual performance. To
determine what actual performance is, it is necessary to acquire information about the
performance and we should be concerned with how we measure and what we measure. Four
sources of information are frequently used to measure actual performance : personal
observation, statistical reports, oral reports and written reports

4. Comparing Actual Performance with Standards: The next step is comparison of actual
performance with the standards. By doing so the potentiality for growth and advancement of an
employee can be appraised and judged. Efforts are made to find out deviations between
standard performance and actual performance.

5. Discussing the Appraisal with the Employee: After comparing actual performance with
standards, the next step is to discuss periodically the appraisal with the employee. Under this
discussion good point, weak points, and difficulties are indicated and discussed so that
performance is improved. The information that the subordinate receives about his performance
assessment has a great impact of his self-esteem and on his subsequent performance. Therefore
care must be taken while communicating bad news.

6. Initiating Corrective Action: The final step is the initiation of corrective action whenever
necessary. Immediate corrective action can be of two types. One is immediate and deals
predominantly with symptoms. The other is basic which is detailed. Immediate corrective
action is often described as putting out fires whereas basic corrective action gets to the source of
deviation and seeks to adjust the difference permanently. Coaching and counseling may be done
or special assignments and projects may be set. Persons may be deputed for formal training
courses, and decision making responsibilities and authority may be delegated to the
subordinates.

6.4 Techniques of Performance Appraisal

Numerous methods have been devised to measure the quantity and quality of performance appraisals.
Broadly all methods of appraisals can be divided into two different categories.

 Past Oriented Methods (Traditional Methods)

 Future Oriented Methods (Modern Methods)

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 Traditional Methods
1. Ranking Method: Here, each employee is compared with all others performing the same job and
then he is given a particular rank i.e. First Rank, Second Rank etc. It states that A is superior to B.
B is superior to C and so on. This method ranks all employees but it does not tell us the degree
or extent of superiority i.e. by how much one employee is superior to another. Secondly, this
ranking is based on only mental assessment so it is not possible to give any objective proof about
why the rater has ranked one employee as superior to another. In this method, the performance
of individual employee is not compared with the standard performance. The ranking method is
highly subjective. Similarly, here the employees are compared as a whole rather than the
individual factors

2. Paired Comparison: In this method, each employee is compared with other employees on one-
on one basis, usually based on one trait only. The rater is provided with a bunch of slips each
coining pair of names; the rater puts a tick mark against the employee whom he thinks the
better of the two. The number of times this employee is compared as better with others
determines his or her final ranking. This method is not useful for Large number of employees

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 3. Grading Method: In this method, certain categories of worth are established in advance and
carefully defined. There can be three categories established for employees: outstanding,
satisfactory and unsatisfactory. There can be more than three grades. Employee performance is
compared with grade definitions. The employee is, then, allocated to the grade that best
describes his or her performance. Such type of grading is done in Semester pattern of
examinations and in the selection of a candidate in the public sector. Major drawbacks of this
method is that the rater may rate most of the employees on the higher side of their
performance

4. Forced Distribution Method: This method was evolved by Tiffen to eliminate the central
tendency of rating most of the employees at a higher end of the scale. The method assumes that
employees’ performance level confirms to a normal statistical distribution i.e., only 10 percent
employees can be higher performer and only 10 percent can be poor performer and like this for
every rating a certain percentage is predefine. This is useful for rating a large number of
employees’ job performance and promo ability. The drawback is that there is chance that
sometimes more than 10% of people are exceptional performers but then only 10% of them
would get the best rating

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 5. Forced Choice Method: Forced-choice method is developed by J. P. Guilford. It contains a series
of groups of statements, and rater is forced to select a statement which describes each
individual being evaluated. Common method of forced-choice method contains two statements,
both positive and negative Examples of positive statements are:
1. Gives good and clear instructions to the subordinates.
2. Can be depended upon to complete any job assigned.

A pair of negative statements may be as follows:

1. Makes promises beyond his limit to keep these.

2. Inclines to favor some employees.

Each statement carries a score or weight, which is not made known to the rater. The human
resource section does rating for all sets of statements— both positive and negative. The final
rating is done on the basis of all sets of statement. The only problem associated with this
method is that the actual constructing of several evaluative statements also called ‘forced-
choice scales’, takes a lot of time and effort

6. Checklist: Under this method, checklist of statements of traits of employee in the form of Yes or
No based questions is prepared. Here the rater only does the reporting or checking and HR
department does the actual evaluation. It is difficult to assemble, analyse and weigh a number of
statements about employee characteristics and contributions

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 7. Critical Incidents Method: In this method, the rater focuses his or her attention on those key or
critical behaviors that make the difference between performing a job in a noteworthy manner
(effectively or ineffectively). The basic idea behind this rating is to apprise the workers who can
perform their jobs effectively in critical situations. This is so because most people work alike in
normal situation but actual capability is known in case of critical situations. Its drawbacks are to
regularly write down the critical incidents which become time-consuming and burdensome for
evaluators. It is rater’s inference that determines which incidents are critical to job performance
which makes it subjective assessment

8. Graphic Rating Scale Method of Performance: Under this method, scales are established for a
number of fairly specific factors. A printed form is supplied to the rater. The form contains a
number of factors to be rated. Employee characteristics and contributions include qualities
like quality of work, dependability, creative ability and so on. These traits are then evaluated on
a continuous scale, where the rater places a mark somewhere along the scale. The scores are
tabulated and a comparison of scores among the different individuals is made. These grades may
be as follows : (i) Excellent; (ii) very good; (iii) Good; (iv) Average; (v) Bad; (vi) Worst

WHAT WILL YOU GET IN THE COURSE?

Our course material is comprehensive and consists of:

http:// 25 | P a g http://
 16. Concept notes for each topic of ESI and FM. Download the sample material from here. You
can also view the sample lessons as well as MCQs at http://www.edutap.co.in/learn/Free-
Lessons-on-Finance-and-Management
17. Awesome MCQs on each topic. What we have done is prepared MCQs based on the concept
notes so that you can practice questions as soon as you are done with one concept document.
Then you move on to the next concept document and after reading it, you again practice MCQs
based on that document and so on. This helps you in assessing your understanding and is very
useful in improving retention.
18. All important reports like HDR, WDR, Economic Survey, Budget, important RBI circulars,
notices and the like are being integrated into the material itself so that an aspirant does not
have to read them separately.
19. Before the actual examination, we would also provide online full length tests so that the aspirant
gets the feel of the real examination and can assess his/her preparation.
20. We have also prepared a document covering all important government schemes,
programmes and policies important for this exam.

IS THE MATERIAL PROVIDED BY EDUTAP ENOUGH FOR CLEARING THE

EXAM?
We have prepared our material strictly keeping in mind the syllabus and pattern of RBI Phase 2
examination 2015 and 2016. For analysis videos, click here
We expect atleast 60-70% of the questions directly from our notes, however, if RBI springs up a
surprise, there may be a chance that questions wont be directly from the notes provided by us. But
since it is a competitive exam, you would again be much better placed than the others in tackling
such a situation.

WILL EDUTAP UPDATE THE MATERIAL TILL THE TIME THE EXAM IS
ACTUALLY CONDUCTED FOR 2017?
Yes! The course contents will be updated regularly till the Phase 2 exam of 2017 is over. You
don’t have to worry about a thing, we will take care of all updates.

HOW MUCH WILL THE COURSE COST ME? IS THERE ANY DISCOUNT
AVAILABLE?
We have 3 courses

10. ESI @ Rs 3499

11. FM @ Rs 3499
12. Bundle course containing ESI as well as FM at a discounted price of Rs 5999
WHERE CAN YOU FIND THE ANALYSIS OF 2016 PAPER?
Here: https://www.youtube.com/playlist?list=PL5Eyazk6CS3bd5vc6g3Sdx117FDi3SrPk

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 9. Essay Method: Essay method is the simplest one among various appraisal methods available. In
this method, the rater writes a narrative description on an employee’s strengths, weaknesses, past
performance, potential and suggestions for improvement. Its positive point is that it is simple in
use. However, essay method, like other methods, is not free from drawbacks. In the absence of
any prescribed structure, the essays are likely to vary widely in terms of length and content.
Moreover, because the essays are descriptive, the method provides only qualitative information
about the employee. In the absence of quantitative data, the evaluation suffers from subjectivity
problem

10. Confidential Report: It is the traditional way of appraising employees mainly in the Government
Departments. Evaluation is made by the immediate boss or supervisor for giving effect to
promotion and transfer. Usually a structured format is devised to collect information on
employee’s strength weakness, intelligence, attitude, character, attendance, discipline, etc. report

Modern Methods
1. MBO: MBO is Management by Objectives. The concept of “Management by Objectives‟ (MBO)
was first given by Peter Drucker in 1954. It can be defined as a process whereby
I. The employees and the superiors come together to identify common goals
II. The employees set their goals to be achieved
III. The standards to be taken as the criteria for measurement of their performance and
contribution

For more details on MBO Please refer our notes on the Unit – “Management – Nature and Scope”

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 3. Assessment Centers: This concept was first applied to military situations by Simoniet in the
German Army in the 1930s. In business field, assessment centers are mainly used for
evaluating executive or supervisory potential. By definition, an assessment center is a central
location where managers come together to participate in well-designed simulated exercises.
They are assessed by senior managers supplemented by the psychologists and the HR
specialists for 2-3 days. Assesse is asked to participate in basket exercises, work groups,
simulations, and role playing which are essential for successful performance of actual job.
Having recorded the assesse’s behavior the raters meet to discuss their pooled information
and observations and, based on it, they give their assessment about the assesses. At the end
of the process, feedback in terms of strengths and weaknesses is also provided to the assesse’
s

Advantages are more accurate evaluation, minimum biasedness, right selection and promotion of
deserving executives, and so on

2. 360 degree Feedback: Another method used to appraise the employee’s performance is 360 –
degree appraisal. This method was first developed and formally used by General Electric Company
of USA in 1992.
Under 360 – degree appraisal, performance information such as employee’s skills, abilities and
behaviors, is collected “all around” for an employee, i.e., from his/her supervisors, subordinates,
peers and even customers and clients

3. Cost Accounting Method: This method evaluates an employee’s performance from the
monetary benefits the employee yields to his/her organization. This is ascertained by
establishing a relationship between the costs involved in retaining the employee, and the
benefits an organization derives from Him/her.

4. Behaviorally Anchored Rating Scales (BARS): It was developed by Smith and Kendall to provide
a better method of rating employees .The problem of judgmental performance evalu- ation
inherent in the traditional methods of performance evaluation led to some organizations to go
for objective evaluation by developing a technique known as “Behaviorally Anchored Rating
Scales (BARS)”. BARS are descriptions of various degrees of behavior with regard to a specific
performance dimension. It differs from "standard" rating scales in one central respect, in that it
focuses on behaviors that are determined to be important for completing a job task or doing the
job properly, rather than looking at more general employee characteristics (e.g. personality,
vague work habits).So, rather than having a rating item that says: Answers phone promptly and
courteously, a BARS approach may break down that task into behaviors: For example:
 Poor: Answers phone within five rings.
 Good: Greets caller with "Hello, This is the Dingle Company, how may I help you?"
 Excellent: Wishes the Customer Good Morning and offers help

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 For example the below BAR is to gauge the behavior-involvement in the job. The performance
dimension here is ‘involvement in job’

Potential Appraisal
The potential appraisal refers to the appraisal i.e. identification of the hidden talents and skills of a person. The person m

The purposes of a potential appraisal are:

To inform employees of their future prospects;

7 To enable the organization to draft a management succession programme;

3. To update training and recruitment activities;

4. To advise employees about the work to be done to enhance their career opportunities.

7.1 Requirements for Potential Appraisal

1. Role Description: A good potential appraisal system would be based on clarity of roles and
functions associated with the different roles in an organization. This requires extensive job
descriptions to be made available for each job. These job descriptions should spell out the
various functions involved in performing the job.

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 2. Qualities Required: Besides job descriptions, it is necessary to have a detailed list of qualities
required to perform each of these functions. These qualities may be broadly divided into four
categories

I. Technical Knowledge and Skills

II. Managerial Capabilities and Skills
III. Behavioral Capabilities
IV. Conceptual Capabilities

3. Indicators of Qualities: A good potential appraisal system besides listing down the functions and
qualities would also have various mechanisms for judging these qualities in a given individual.
Some of the mechanisms for judging these qualities are:
I. Rating by Others
II. Psychological tests
III. Simulation games and exercises
IV. Performance appraisal records

4. Organizing the System: After covering the above preliminaries, we must set up a system that
will allow the introduction of the scheme smoothly giving answers to some puzzling questions:

i. How much weightage to merit in place of seniority in promotions?

ii. How much weightage to each of the performance dimensions – technical, managerial,
behavioral qualities?

4. Feedback: If the organization believes in the development of human resources it should attempt
to generate a climate of openness. Such a climate is required for helping the employees to
understand their strengths and weaknesses and to create opportunities for development. A good
potential appraisal system should provide an opportunity for every employee to know the results
of assessment.

7.2 Techniques for Potential Appraisal

1. Self – appraisals: It allows an employee complete freedom in accessing his or her strengths
objectively and identifying the areas of development. The employees get a chance to share
the development areas with their seniors based on their self-appraisal and jointly worked out a
plan in tune with the organizational realities like the availability of resources and time. It also
gives a chance to the employee to express his career plans which is in the interest of the
organization as it knows beforehand the aspirations of its employee
2. Peer appraisals (Discussed in 360 degree feedback)
3. Superior appraisals (Discussed in 360 degree feedback)
4. MBO (Discussed in Techniques of Appraisal)
5. Management games like role playing (Discussed in Assessment Centers)

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 6. Leadership exercises etc. (Discussed in Assessment Centers)

We have discussed all methods in the Modern Techniques of Appraisal. So we can say that modern
methods of appraisal also evaluates the future potential of the candidate i.e. they also do potential
appraisal

WHAT WILL YOU GET IN THE COURSE?

Our course material is comprehensive and consists of:

21. Concept notes for each topic of ESI and FM. Download the sample material from here. You
can also view the sample lessons as well as MCQs at http://www.edutap.co.in/learn/Free-
Lessons-on-Finance-and-Management
22. Awesome MCQs on each topic. What we have done is prepared MCQs based on the concept
notes so that you can practice questions as soon as you are done with one concept document.
Then you move on to the next concept document and after reading it, you again practice MCQs
based on that document and so on. This helps you in assessing your understanding and is very
useful in improving retention.
23. All important reports like HDR, WDR, Economic Survey, Budget, important RBI circulars,
notices and the like are being integrated into the material itself so that an aspirant does not
have to read them separately.
24. Before the actual examination, we would also provide online full length tests so that the aspirant
gets the feel of the real examination and can assess his/her preparation.
25. We have also prepared a document covering all important government schemes,
programmes and policies important for this exam.

IS THE MATERIAL PROVIDED BY EDUTAP ENOUGH FOR CLEARING THE

EXAM?
We have prepared our material strictly keeping in mind the syllabus and pattern of RBI Phase 2
examination 2015 and 2016. For analysis videos, click here
We expect atleast 60-70% of the questions directly from our notes, however, if RBI springs up a
surprise, there may be a chance that questions wont be directly from the notes provided by us. But
since it is a competitive exam, you would again be much better placed than the others in tackling
such a situation.

http:// 31 | P a g http://
 WILL EDUTAP UPDATE THE MATERIAL TILL THE TIME THE EXAM IS
ACTUALLY CONDUCTED FOR 2017?
Yes! The course contents will be updated regularly till the Phase 2 exam of 2017 is over. You
don’t have to worry about a thing, we will take care of all updates.

HOW MUCH WILL THE COURSE COST ME? IS THERE ANY DISCOUNT
AVAILABLE?
We have 3 courses

13. ESI @ Rs 3499

14. FM @ Rs 3499
15. Bundle course containing ESI as well as FM at a discounted price of Rs 5999
WHERE CAN YOU FIND THE ANALYSIS OF 2016 PAPER?
Here: https://www.youtube.com/playlist?list=PL5Eyazk6CS3bd5vc6g3Sdx117FDi3SrPk

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 Human Resource Development

Importance: Total of 10 Questions

1. 1 Question on Training 2 questions – 2 marks each

2. 1 Question on HR outsourcing – 2 marks
3. 1 Question on Fringe Benefits – 2 marks
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 Contents
1 Introduction.........................................................................................................................................4
2 Feedback and Performance Counselling..............................................................................................4
2.1 Conditions for Effective Counselling............................................................................................6
2.2 Types of Counseling.....................................................................................................................6
2.3 Steps of Counselling.....................................................................................................................7
3 Employee Welfare...............................................................................................................................8
3.1 Types of Employee Welfare Schemes..........................................................................................9
3.2 Types of Employee Welfare Theories........................................................................................10
4 Rewards.............................................................................................................................................12
4.1 Types of Rewards.......................................................................................................................13
4.2 Qualities of Effective Reward System........................................................................................14
4.3 Importance of Rewards..............................................................................................................15
5 Career Planning.................................................................................................................................15
5.1 Career Anchors..........................................................................................................................15
5.2 Nature of Career Planning.........................................................................................................16
5.3 Objectives of Career Planning....................................................................................................16
5.4 Steps in Career Planning............................................................................................................16
6 Training and Development................................................................................................................17
6.1 Benefits of Training and Development......................................................................................17
6.2 Distinction between Training and Development.......................................................................18
6.3 Steps in Training and Development cycle..................................................................................19
6.4 Kirkpatrick Model of Training Evaluation...................................................................................21
6.5 Types of Training........................................................................................................................21
6.5.1 On the Job Training Methods.............................................................................................22
6.5.2 Off the Job Training Methods............................................................................................24
7 Fringe Benefits...................................................................................................................................26
7.1 Types of Fringe Benefits.............................................................................................................26
8 HR Outsourcing..................................................................................................................................27
8.1 Advantages of Outsourcing HR Functions..................................................................................27
9 Edward De Bono Role in Training......................................................................................................28
9.1 Six Thinking Hats........................................................................................................................28
9.2 Lateral Thinking.........................................................................................................................29
9.2.1 Methods of Lateral Thinking..............................................................................................30
10 MCQ’s (Multiple Choice Questions).................................................................................................31
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 WHAT WILL YOU GET IN THE COURSE?
Our course material is comprehensive and consists of:

1. Concept notes for each topic of ESI and FM. Download the sample material from here. You
can also view the sample lessons as well as MCQs at http://www.edutap.co.in/learn/Free-
Lessons-on-Finance-and-Management
2. Awesome MCQs on each topic. What we have done is prepared MCQs based on the concept
notes so that you can practice questions as soon as you are done with one concept document.
Then you move on to the next concept document and after reading it, you again practice MCQs
based on that document and so on. This helps you in assessing your understanding and is very
useful in improving retention.
3. All important reports like HDR, WDR, Economic Survey, Budget, important RBI circulars,
notices and the like are being integrated into the material itself so that an aspirant does not
have to read them separately.
4. Before the actual examination, we would also provide online full length tests so that the aspirant
gets the feel of the real examination and can assess his/her preparation.
5. We have also prepared a document covering all important government schemes,
programmes and policies important for this exam.

IS THE MATERIAL PROVIDED BY EDUTAP ENOUGH FOR CLEARING THE

EXAM?

http:// 3|Page http://

 We have prepared our material strictly keeping in mind the syllabus and pattern of RBI Phase 2
examination 2015 and 2016. For analysis videos, click here
We expect atleast 60-70% of the questions directly from our notes, however, if RBI springs up a
surprise, there may be a chance that questions wont be directly from the notes provided by us. But
since it is a competitive exam, you would again be much better placed than the others in tackling
such a situation.

WILL EDUTAP UPDATE THE MATERIAL TILL THE TIME THE EXAM IS
ACTUALLY CONDUCTED FOR 2017?
Yes! The course contents will be updated regularly till the Phase 2 exam of 2017 is over. You
don’t have to worry about a thing, we will take care of all updates.

HOW MUCH WILL THE COURSE COST ME? IS THERE ANY DISCOUNT
AVAILABLE?
We have 3 courses

1. ESI @ Rs 3499
2. FM @ Rs 3499
3. Bundle course containing ESI as well as FM at a discounted price of Rs 5999
WHERE CAN YOU FIND THE ANALYSIS OF 2016 PAPER?
Here: https://www.youtube.com/playlist?list=PL5Eyazk6CS3bd5vc6g3Sdx117FDi3SrPk

1 Introduction

In this Unit for HRD we plan to discuss the following topics

1. Job Analysis and Design
2. Performance Appraisal
3. Potential Appraisal
4. Feedback and Performance Counselling
5. Employee Welfare
6. Rewards
7. Career Planning
8. Training and Development

First three points – Job Analysis and Design, Performance Appraisal and Potential Appraisal have already
been discusses in Part 1 and rest would be discussed in this part

2 Feedback and Performance Counselling

Feedback is an informal process which is about the performance of the employee and how the
employee can work together with everyone to achieve the goals of the company. Feedback can be
oral comments, written reports like performance appraisal etc. Feedback should be

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  Feedback should be descriptive and non- evaluative. Rather than putting the employee in a
defensive position by telling him” Your coming in late convinces me that you are not serious
about your work”, a manager may say, “I notice that you have been regularly coming late and I
am deeply concerned about this”.

 It should be two-way process where employee is also given a chance to express his/her
views on the performance

 It should be constructive. Rather than focusing on the drawbacks the discussion should be
around how to improve going forward

 It should be focused on the behavior of the person rather than on the person himself. It is
necessary to distinguish between the individual and his behavior in conveying the negative
feedback. It should be clear to the employee that what is being rejected or criticized is some
specific behavior of his. The intent is not to condemn the employee as an individual.

 When conveying feedback, it is generally desirable to back it up with few examples of actual
events.

 Feedback should be given timely. It should be given at the first opportunity when the employee
is in the receptive mood.

 Feedback should be continuous. It should become a regular practice so that the subordinate
develops an ability to accept and act upon the feedback.

 Feedback should be checked and verified. This will ensure that the subordinate has not
misinterpreted the feedback received from his superior.

Performance Counselling is a formal process, initiated when the person has not responded to the
informal advice and assistance. Performance Counseling is very important for employees to know
the level of their performance and the area in which they need to improve. Performance counseling
is a very useful activity provided both the counselor and the counselee take it in the right spirit. It
helps the employee as well as the organization to identify weaknesses and then to formulate
strategies to improve the performance. It attempts to help the employee in

I. Understanding himself - his strengths and weaknesses.

II. Improving his professional and interpersonal competence by giving him feedback about
his behavior.
III. Setting goals and formulating action plans for further improvement

When to do Counselling

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 Mostly counseling is done for work performance issues but counseling can also be done if a
person has some personal problems like alcohol abuse or death of dear one. So counseling should be
done when we have following issues
1. Excessive workload
2. Absenteeism and Late coming
3. Lack of awareness of policies
4. Performance issues
5. Lack of Team Spirit
6. Family problems
7. Problems with peers
8. Behavioral issues

2.1 Conditions for Effective Counselling

1. Climate of trust, confidence and openness is essential for effective counseling. Counseling cannot
be effective if the subordinate does not trust his boss.
2. It is necessary that the subordinate should feel free to participate without fear or inhibition as it
is a dialogue between supervisor and subordinate and hence should be a two way communication.
3. The main purpose of counseling is employee development and not criticism

2.2 Types of Counseling

1. Directive Counselling:
a. This is Counselor Centered. In this approach Counselor directs the client to take certain
steps to resolve the conflict.
b. This assumes that client cannot solve the problems by himself
c. It gives more importance to intellectual aspects than emotional aspect
d. “Put that cigarette out now as this is a nonsmoking area” is a form of directive counseling

2. Non-Directive Counselling
a. It is client Centered. The idea is to create an atmosphere in which client can resolve the
problem by himself
b. Also known as Permissive Counselling
c. Gives more importance to emotional aspects than intellectual aspect
d. Example would be: So the reason you are not effective is that you stayed up late last night.
What are you going to do to ensure that this does not affect your performance again
3. Eclectic Counselling
a. This is neither Counselor Centered nor client Centered but in between both of them
b. Here both the client and Counselor tries to resolve the problem

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 2.3 Steps of Counselling

1. Identify the Need: One should be clear why counseling is needed. Is it due to bad behavior or
not coming to office on time or due to bad performance etc.?

2. Preparation for Counselling: During the preparation phase one must

a. Select the place for Counseling. It should be private not public place
b. Notify in advance to the employee so that he can also prepare
c. List the points you want to discuss

3. Conduction the session

I. Rapport Building: In the rapport building phase, a good counselor attempts to establish a
climate of acceptance, warmth, support, openness and mutuality. This phase involves

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 generating confidence in the employee to open up frankly, share his perceptions,
problems, concerns, feelings etc.

II. Exploration: In this phase, the counselor should attempt to help the employee understand
and appreciate his strengths and weaknesses. Questions should be asked which help the
employee focus on his problem. For example, if an employee feels that his problem is that
others do not co-operate with him, the counselor may ask questions to narrow down the
problem to the employee’s relationship with a few individuals. Then the superior may ask
questions to help the employee understand what he does (or says) to his colleagues that is
making it difficult for him to win their co-operations. Problem identification is a critical step
in planning for improvement.

III. Action Planning: Counseling interviews should end with specific plans of action for
development of the employee. The main contribution of the superior in this phase is in
helping the employee think of alternative ways of dealing with a problem. Finally
the superior may render some assistance in helping the employee implement the agreed
upon action plan. Often good counseling sessions fail to produce effective results due to
lack of follow up

4. Follow Up: Counselor should provide support to the employee and should review his
performance on regular basis. If required there might be change in action plan

3 Employee Welfare
Employee welfare is understood to include such services, facilities and amenities which enable the persons
employed to perform their work in healthy, congenial surroundings and to provide them with amenities
conducive to good health and high morale.

Welfare includes anything that is done for the comfort and improvement of employees and is provided
over and above the wages. Welfare helps in keeping the morale and motivation of the employees high so
as to retain the employees for longer duration. The welfare measures need not be in monetary terms only
but in any kind/forms such as better drinking facilities, benefits post retirement etc.

The Factories act was enacted in the year 1948. The main objective of this law is to maintain healthy,
safety and welfare of every employee at workplace in factory. According to this law any factory with above
500 workers should have separate welfare officer, factory with 1000 above workers should have separate
safety officer, for 500 workers should have ambulance facility and for above 250 workers canteen facility
with concession should be provided.

Objectives of Employee Welfare

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 1. To provide better life and health to the workers
2. To make the workers happy, motivated and satisfied
3. To relieve workers from industrial fatigue and to improve intellectual, cultural and material
conditions of living of the workers

Benefits of Employee Welfare

The very logic behind providing welfare schemes is to create efficient, healthy, loyal and satisfied labor
force for the organization. The purpose of providing such facilities is to make their work life better and also
to raise their standard of living. The important benefits of welfare measures can be summarized as follows:

1. They provide better physical and mental health to workers and thus promote a healthy work
environment

2. Facilities like housing schemes, medical benefits, and education and recreation facilities for workers’
families help in raising their standards of living. This makes workers to pay more attention towards
work and thus increases their productivity.

3. Employers get stable labor force by providing welfare facilities. Workers take active interest in their
jobs and work with a feeling of involvement and participation.

4. Employee welfare measures increase the productivity of organization and promote healthy industrial
relations thereby maintaining industrial peace and absence of strikes etc.

3.1 Types of Employee Welfare Schemes

The employee welfare schemes can be classified into two categories based on compulsory or mandatory
viz. statutory and non-statutory welfare schemes. The statutory schemes are those schemes that are
compulsory to be provided by an organization as compliance to the laws governing employee health and
safety. The non-statutory schemes are voluntary schemes implemented by the industry.

Another way to categorize is on the basis of internal or external facilities. Facilities provided inside the
organization are called Intra-mural facilities but those provided outside the organization are called extra-
mural facilities

1. The statutory welfare schemes include the following provisions:

a. Drinking Water:
b. First aid appliances
c. Latrines and Urinals
d. Canteen facilities
e. Lighting

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 f. Washing places
g. Changing room
h. Rest rooms

2. The non-statutory welfare schemes are the following

a. Personal Health Care facilities like Doctors on duty
b. Flexible timing for the workers
c. Employee Assistance Programs like counseling for stress
d. Harassment Policy to protect employees from harassment especially sexual harassment to
Women.
e. Maternity & Adoption Leave
f. Medi-claim Insurance Scheme: This insurance scheme provides adequate insurance
coverage of employees for expenses related to hospitalization due to illness, disease or
injury or pregnancy.

3. The facilities provided inside the organization are known as intra-mural facilities. These facilities
include activities relating to minimization of industrial fatigue, provision of safety measures like
fencing and covering of machines, good layout of the plant and machinery, sufficient lighting
conditions, provision of first aid appliances etc.

4. The facilities provided outside the organization are known as extra-mural facilities. They include
better housing accommodations, indoor and outdoor recreation sports, educational facilities
etc.

3.2 Types of Employee Welfare Theories

The approaches and their brief descriptions are:

1. The policing theory of labor welfare.

2. The religion theory of labor welfare.
3. The philanthropic theory of labor welfare.
4. The paternalistic theory of labor welfare.
5. The placating theory of labor welfare.
6. The public relations theory of labor welfare.
7. The functional theory of labor welfare.
8. The social theory of labor welfare.

1. Policing Theory: According to this view, the factory and other industrial workplaces provide ample
opportunities for owners and managers of capital to exploit workers in an unfair manner. This
could be done by making the labor work for long hours, by paying workers low wages, by keeping
the workplaces in an unhygienic condition, by neglecting safety and health provisions, and by
ignoring the provision of elementary human amenities, such as drinking water, latrines,

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 rest rooms and canteens. But government under this condition takes some steps and enacts
laws for employee welfare. So government acts as a policemen

2. Religion Theory: The religion theory has the investment aspects. The investment aspect of the
religion theory implies that the fruits of today's deeds will be reaped tomorrow. Any action,
good or bad is therefore treated as an investment. Inspired by this belief, some employers plan and
organize canteens and crèches.

3. Philanthropic Theory: Philanthropy means affection for mankind. The philanthropic theory of labor
welfare refers to the provision of good working conditions, crèches and canteens out of pity on the
part of the employers who want to remove the disabilities of the workers. The philanthropic theory
is more common in social welfare. Student hostels, drinking water facilities, the rehabilitation of
crippled persons, donations to religious and educational institutions, and so forth are examples of
philanthropic deeds.

4. Paternalistic Theory: According to the paternalistic theory, also called the trusteeship theory, of
labor welfare, the industrialist or the employer holds the total industrial estate, properties and the
profits accruing from them, in trust. The employees are weaker and cannot take care of
themselves. In paternalistic theory the employer acts as a parent to them and takes care of their
needs.

5. Placating Theory: This theory is based on the assumption that appeasement pays when the
workers are on strikes or angry. Peace can be bought by welfare measures. Workers are like
children who are intelligent, but not fully so. As crying children are pacified by sweets, workers
should be pleased by welfare works.

6. Public Relations Theory: According to this theory, welfare activities are provided to create a good
impression on the minds of the workers and the public, particularly the latter. Clean and safe
working conditions, a good canteen, crèche and other amenities, make a good impression on the
public and enhance their reputation.

7. Functional Theory: Also known as the efficiency theory of labor welfare, the functional theory
implies that welfare facilities are provided to make the workers more efficient. If workers are
fed properly, clothed adequately and treated kindly, and if the conditions of their work are
congenial, they will work efficiently.

8. Social Theory: The social obligation of an industrial establishment has been assuming great
significance these days. The social theory implies that a factory is morally bound to improve the
conditions of the society in addition to improving the condition of its employees. Employee
welfare, as mentioned earlier, is gradually becoming social welfare.

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 4 Rewards
Reward means a thing given to any one because of his contribution to organization. The most obvious
reward that individual gets from the job is his/her pay.

Every person asks for return from the organization before involving in any type of activities, which is
termed as the reward. It attracts a worker's attention and inspires him/her to perform the task. Moreover,
a reward is a pay-off for performance which is directly concerned with the level of motivation and job
satisfaction

Reward management is the process of creating, implementing and controlling an effective reward system
in the organization that helps to maintain and improve organizational performance. Reward management
basically focuses on how the employees can be retained or motivated at work

WHAT WILL YOU GET IN THE COURSE?

Our course material is comprehensive and consists of:

6. Concept notes for each topic of ESI and FM. Download the sample material from here. You
can also view the sample lessons as well as MCQs at http://www.edutap.co.in/learn/Free-
Lessons-on-Finance-and-Management
7. Awesome MCQs on each topic. What we have done is prepared MCQs based on the concept
notes so that you can practice questions as soon as you are done with one concept document.
Then you move on to the next concept document and after reading it, you again practice MCQs
based on that document and so on. This helps you in assessing your understanding and is very
useful in improving retention.
8. All important reports like HDR, WDR, Economic Survey, Budget, important RBI circulars,
notices and the like are being integrated into the material itself so that an aspirant does not
have to read them separately.
9. Before the actual examination, we would also provide online full length tests so that the aspirant
gets the feel of the real examination and can assess his/her preparation.
10. We have also prepared a document covering all important government schemes,
programmes and policies important for this exam.

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 IS THE MATERIAL PROVIDED BY EDUTAP ENOUGH FOR CLEARING THE
EXAM?
We have prepared our material strictly keeping in mind the syllabus and pattern of RBI Phase 2
examination 2015 and 2016. For analysis videos, click here
We expect atleast 60-70% of the questions directly from our notes, however, if RBI springs up a
surprise, there may be a chance that questions wont be directly from the notes provided by us. But
since it is a competitive exam, you would again be much better placed than the others in tackling
such a situation.

WILL EDUTAP UPDATE THE MATERIAL TILL THE TIME THE EXAM IS
ACTUALLY CONDUCTED FOR 2017?
Yes! The course contents will be updated regularly till the Phase 2 exam of 2017 is over. You
don’t have to worry about a thing, we will take care of all updates.

HOW MUCH WILL THE COURSE COST ME? IS THERE ANY DISCOUNT
AVAILABLE?
We have 3 courses

4. ESI @ Rs 3499
5. FM @ Rs 3499
6. Bundle course containing ESI as well as FM at a discounted price of Rs 5999
WHERE CAN YOU FIND THE ANALYSIS OF 2016 PAPER?
Here: https://www.youtube.com/playlist?list=PL5Eyazk6CS3bd5vc6g3Sdx117FDi3SrPk

4.1 Types of Rewards

1. Intrinsic Rewards And Extrinsic Rewards

a. Intrinsic rewards: Intrinsic rewards are the satisfactions that an individual obtains from the
job itself. It means, they are the factors of esteem and self-actualization needs of the

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 employees. These rewards consists of having a pride on work, having a feeling of
accomplishment, or being a part of team etc. The techniques of flex time, job enrichment,
shorter work weeks, and job rotation, can offer intrinsic rewards by providing interesting and
challenging jobs and allowing the employee greater freedom

b. Extrinsic Rewards: Extrinsic rewards are the benefits provided externally. These rewards are
provided in term of money, promotions and fringe benefits. Their common thread is that
extrinsic rewards are external to the job and come from an outside source, mainly,
management. These rewards are necessary to fulfill physiological and safety needs of the
employees. Such rewards are the results of management policies and procedures of the
organization.

Thus, if an employee experiences feelings of achievement or personal growth from a job, we would
label such rewards as intrinsic. If the employee receives a salary increase or a write up in the company
magazine, we would label those rewards as extrinsic.

2. Financial versus Non Financial Rewards: Rewards may or may not enhance the employee’s
financial well-being. If they do they can do this directly through wages, bonuses, profit sharing, and
the like, or indirectly through supportive benefits such as pension plans, paid vacations, paid sick
leaves and purchase discounts then they are called Financial rewards

Non financial rewards are potentially at the disposal of the organization. They do not increase the
employee’s financial position but instead emphasize making life on the job more attractive like club
facilities, health facilities etc.

Note: Intrinsic rewards are always Financial but extrinsic rewards can be financial or non-financial. For
example increase in salary which is extrinsic is financial but praise which is also extrinsic is non-
financial

4.2 Qualities of Effective Reward System

An effective reward system should possess the following qualities

1. Equitable: Equitable is concerned with the fairness in distributing rewards to the employees. It means
rewards should be perceived as equitable and fair.

2. Visibility: Rewards, to be effective, must be visible and seen by the employees because visible rewards
help to motivate employees for higher level of performance. They help to satisfy individual's esteem
and recognition needs.

3. Flexibility: Rewards, to be effective, should be flexible to vary with changes in the performance. This
means, rewards should vary as per the changes in actual performance of the employees.

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 4. Low Cost: An effective reward should be less costly because rewards are not free gifts they have some
costs. Hence, the costs and benefits of reward should be taken into account in order to maintain
organizational effectiveness.

5. Use of Team Rewards for Interdependent Job: An interdependent job holds the philosophy that the
tasks are interrelated with each other, and is performed step-by-step. The overall completion of such
jobs is not the credit of single individual; rather it is due to the combined effort of all team members
involved in the entire process of the job. Hence, in such situation it is advisable to use team rewards
such as gain sharing and bonuses.

4.3 Importance of Rewards

1. Rewards help improve productivity
2. Rewards help in motivation of employees
3. Rewards help in Job satisfaction
4. It helps in achieving organization goals and objectives

5 Career Planning
Career planning is an individual’s lifelong process of establishing personal career objectives and acting in a
manner intended to bring them about. The term career denotes all the jobs that are held during one's
working life. It is viewed as a sequence of positions held by an individual during the course of his
lifetime. Edwin B. Flippo defined a career as a sequence of separate but related work activities that provide
continuity, order and meaning in a person's life

5.1 Career Anchors

Career anchors denote the basic drives that create the urge to take up a certain type of a career. These
drives are as follows:

1. Managerial Competence: Person having this drive seeks managerial positions that provide
opportunities for higher responsibility, decision making, control and influence over others.

2. Technical Competence: People having this anchor seek to make career choices based on the
technical or functional content of the work. It provide continuous learning and updating one's
expertise in a technical or specialized area such as quality control, engineering, accounting,
advertising, public relations etc.

3. Security: If one's career anchor is security than he is willing to do what is required to maintain
job security (through compliance with organizational prescriptions), a decent income and a
stable future.

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 4. Creativity: This drive provides entrepreneurial and innovative opportunities to the people.
People are driven by an overwhelming desire to do something new that is totally of their own
making.

5. Autonomy: These people seek a career that provides freedom of action and independence.

5.2 Nature of Career Planning

1. A Process: Career planning is a process of developing human resources rather than an event.

2. Upward movement: It involve upward movement in the organizational hierarchy, or special

assignments, project work which require abilities to handle recurring problems, human relations
issued and so on.

3. Mutuality of Interest: The individual's interest is served as his needs and aspirations are met to a
great extent and the organization’s interest is served as each of its human resources is provided
an opportunity to develop and contribute to the organizational goals and objectives to the
optimum of its ability and confidence.

4. Dynamic: Career planning is dynamic in nature due to an ever changing environment.

5.3 Objectives of Career Planning

1. To identify positive characteristics of the employees.
2. To develop awareness about each employee’s uniqueness
3. To respect feelings of other employees.
4. To attract talented employees to the organization
5. To train employees towards team-building skills.
6. To create healthy ways of dealing with conflicts, emotions, and stress.

5.4 Steps in Career Planning

Step 1: Self-Assessment: The first and foremost step in career planning is to know and assess yourself. You
need to collect information about yourself while deciding about a particular career option. You must
analyse your interests, abilities, aptitudes, desired lifestyle, and personal traits and then study the
relationship between the career opted for and self.

Step 2: Goal Setting: Set your goals according to your academic qualification, work experience, priorities
and expectations in life. Once your goal is identified, then you determine the feasible ways and objectives
how to realize it.

Step 3: Academic/Career Options: Narrow your general occupational direction to a particular one by an
informatory decision making process. Analyze the career option by keeping in mind your present
educational qualification and what more academic degrees you need to acquire for it.

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 Step 4: Plan of Action: Recognize those industries and particular companies where you want to get into.
Make the plan a detailed one so that you can determine for how many years you are going to work in a
company in order to achieve maximum success, and then switch to another. Decide where you would like
to see yourself after five years and in which position.

Step 5: Catch Hold of Opportunities: Opportunity comes but once. So, whenever you get any opportunity
to prove yourself and get into your desired career, try to convert it in every way for suiting your purpose.
Remember, a successful professional is also quite opportunistic in his moves, examining every opening to
turn to his favor.

6 Training and Development

Training and development is vital part of the human resource development. It is assuming ever important
role in wake of the advancement of technology which has resulted in ever increasing competition, rise in
customer’s expectation of quality and service and a subsequent need to lower costs.

Need for Training and Development

1. An increased use of technology in production

2. Need for additional hands to cope with an increased production of goods and services
3. Employment of inexperienced and unskilled workforce for whom training is mandatory
4. Old employees need refresher training to enable them to keep abreast of the changing methods,
techniques, and use of sophisticated tools and equipment
5. Need for enabling employees to do the work in a more effective way, to reduce learning time,
reduce supervision time, reduce waste and spoilage of raw material and produce quality goods,
and develop their potential.
6. To increase the morale and satisfaction

Apprentice Training Act, 1961:

1. During 1961 the Apprentice Training Act was passed. About 550 Industrial Training Institutes
were opened. More than 300 centers were set up established for Apprenticeship Training
2. There is an Advanced Training Institute in Chennai and Kolkata which has the Central Staff
Training and Research Institute
3. There is the Foreman Training Institute in Bangalore

6.1 Benefits of Training and Development

1. Increased Productivity of employees
2. Improved work quality as workers know the best way to do things
3. Growth for Organization and employees
4. Job satisfaction and Motivation
5. Employee Retention

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 6.2 Distinction between Training and Development

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 6.3 Steps in Training and Development cycle

1. Identify the training Needs/ Training Need Assessment: The process of training begins with the
needs assessment stage. The aim of the assessment stage is to understand whether or not
training is required. If the answer is yes; the next step is determining competency or skills gaps
and the appropriate training required to bridge the gap. Assessment is conducted at three stages
- at the level of organization, individual and the job, each of which is called as the organizational,
individual and job analysis
I. Organizational Analysis: The organizational analysis is aimed at short listing the focus
areas for training within the organization and the factors that may affect the same.
Organizational mission, vision, goals, people inventories, processes, performance data are
all studied. For example the analysis might show that organization needs training on
innovative methods of product design. The methods used at this level are Management
Interviews, Exit interviews, Management by Objectives etc.

II. Job Analysis: The job analysis of the needs assessment survey aims at understanding the
‘what’ part of the training development stage. The kind of intervention needed is what is
decided upon in the job analysis. For example the analysis might show that training is
needed on using new tools of product design which are in the market now. The methods
used at this level are Job description, Job specification, performance standards etc.

III. Individual Analysis: As evident from the name itself, the individual analysis is concerned
with who in the organization needs the training and in which particular area. Here
performance is taken out from the performance appraisal data and the same is compared
with the expected level or standard of performance. The individual analysis is also
conducted through questionnaires, 360 feedback, personal interviews etc. For example
based on performance reviews the company might pick up good performers first and give
them training on the new tool of product design. The methods at this level are
performance appraisal data, 360 degree feedback, Questionnaires etc.

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 2. Design of Training: Once the training needs analysis is complete, the next stage is that of
Design. This stage involves the development of content and the training material. Training
programs need to be designed, keeping in mind the needs and requirements of employees. For
effective designing one must
I. Know the Employees: Know your employees well before you begin designing training
programs for them. Sit with them and try to find out where all they need assistance.
Knowing employees well will help you figure out the skills you need to teach them.
Knowing your employees would also help you to find which training medium to use. Would
it be a lecture or through role play and games etc.
II. Interactive Content: The next step is to prepare the content of the training program. The
content needs to be informative but interesting. Include diagrams, graphs, flow charts,
pictures to make your training program interesting so that individuals do not lose interest
in the middle of the session.
III. Selecting the Technique: There are various techniques which can be used for training.
These are divided into Informational and Experiential techniques. Informational techniques
are one-way communication and are more of theoretical. Examples are lectures,
Audio/Video etc. Experiential techniques are based on learning by doing and it is two way
communications. Examples are Role Play, Games and Case Study etc. Appropriate
technique should be selected based on type of training and the target audience

3. Delivery of Training : Some keys things to remember when delivering training are:

I. Speak clearly and make sure that all learners are able to understand what you are
saying.
II. Ensure that the learner’s expectations are addressed early on in the training.
III. Explain the structure of the training at the start.
IV. Review regularly to ensure that the material covered has been understood.
V. Try to deal with questions as they arise but if you don’t know the answer, don’t be
afraid to say you will get back to the learner later.
VI. Give useful and constructive feedback to learners.
VII. Check your timing and have a contingency plan in case some parts of the training
take longer than you expected.
VIII. Give the audience ample opportunities to practice

4. Evaluation of Training: Evaluation involves the assessment of the effectiveness of the training
programs. This assessment is done by collecting data on whether the participants were satisfied
with the deliverables of the training program, whether they learned something from the
training and are able to apply those skills at their workplace. Donald Kirkpatrick model of
evaluation is widely used which we will discuss later in this unit

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 6.4 Kirkpatrick Model of Training Evaluation

1. Reaction of the Trainee - thoughts and feelings of the participants about the training
2. Learning - the increase in knowledge or understanding as a result of the training
3. Behaviour - extent of change in behaviour, attitude or capability
4. Results - the effect on the bottom line of the company as a result of the training.
5. ROI – Return on the investment i.e. benefits vs. the cost

6.5 Types of Training

Training Methods

On the Job Off the Job

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 A large variety of methods of training are used in business. Even within one organization different
methods are used for training different people. All the methods are divided into two classifications
for

1. On the Job Training Methods: This type of training is imparted on the job and at the work
place where the employee is expected to perform his duties. It enables the worker to get
training under the same working conditions and environment and with the same materials,
machines and equipment’s that he will be using ultimately after completing the training
2. Off the Job Training Methods: In these Training Methods Training is provided outside the
workplace

6.5.1 On the Job Training Methods

On the Job Training Methods

Coaching Mentoring Job Rotation Apprenticeship Understudy

1. Coaching: Coaching is a one-to-one training. It helps in quickly identifying the weak areas and
tries to focus on them. It also offers the benefit of transferring theory learning to practice. The
biggest problem is that it perpetrates the existing practices and styles. In India most of the
scooter mechanics are trained only through this method.

2. Mentoring: The focus in this training is on the development of attitude. It is used for
managerial employees. Mentoring is always done by a senior inside person. It is also one-to-
one interaction, like coaching.

3. Job Rotation: It is the process of training employees by rotating them through a series of
related jobs. Rotation not only makes a person well acquainted with different jobs, but it
also alleviates boredom and allows to develop rapport with a number of people. Rotation must
be logical.

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 4. Apprenticeship: It is a system of training a new generation of practitioners of a skill. This
method of training is in vogue for those in trades, crafts and technical fields in which a long
period is required for gaining proficiency. The trainees serve as apprentices to experts for long
periods. They have to work in direct association with and also under the direct supervision of
their masters.

The object of such training is to make the trainees all-round craftsmen. It is an expensive
method of training. Also, there is no guarantee that the trained worker will continue to work in
the same organization after securing training. The apprentices are paid remuneration
according the apprenticeship agreements

5. Understudy: In this method, a superior gives training to a subordinate as his understudy like an
assistant to a manager or director (in a film). The subordinate learns through experience and
observation by participating in handling day to day problems. Basic purpose is to prepare
subordinate for assuming the full responsibilities and duties.

WHAT WILL YOU GET IN THE COURSE?

Our course material is comprehensive and consists of:

11. Concept notes for each topic of ESI and FM. Download the sample material from here. You
can also view the sample lessons as well as MCQs at http://www.edutap.co.in/learn/Free-
Lessons-on-Finance-and-Management
12. Awesome MCQs on each topic. What we have done is prepared MCQs based on the concept
notes so that you can practice questions as soon as you are done with one concept document.
Then you move on to the next concept document and after reading it, you again practice MCQs
based on that document and so on. This helps you in assessing your understanding and is very
useful in improving retention.
13. All important reports like HDR, WDR, Economic Survey, Budget, important RBI circulars,
notices and the like are being integrated into the material itself so that an aspirant does not
have to read them separately.

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 14. Before the actual examination, we would also provide online full length tests so that the
aspirant gets the feel of the real examination and can assess his/her preparation.
15. We have also prepared a document covering all important government schemes,
programmes and policies important for this exam.

IS THE MATERIAL PROVIDED BY EDUTAP ENOUGH FOR CLEARING THE

EXAM?
We have prepared our material strictly keeping in mind the syllabus and pattern of RBI Phase 2
examination 2015 and 2016. For analysis videos, click here
We expect atleast 60-70% of the questions directly from our notes, however, if RBI springs up a
surprise, there may be a chance that questions wont be directly from the notes provided by us. But
since it is a competitive exam, you would again be much better placed than the others in tackling
such a situation.

WILL EDUTAP UPDATE THE MATERIAL TILL THE TIME THE EXAM IS
ACTUALLY CONDUCTED FOR 2017?
Yes! The course contents will be updated regularly till the Phase 2 exam of 2017 is over. You
don’t have to worry about a thing, we will take care of all updates.

HOW MUCH WILL THE COURSE COST ME? IS THERE ANY DISCOUNT
AVAILABLE?
We have 3 courses

7. ESI @ Rs 3499
8. FM @ Rs 3499
9. Bundle course containing ESI as well as FM at a discounted price of Rs 5999
WHERE CAN YOU FIND THE ANALYSIS OF 2016 PAPER?
Here: https://www.youtube.com/playlist?list=PL5Eyazk6CS3bd5vc6g3Sdx117FDi3SrPk

6.5.2 Off the Job Training Methods

Off the Job Training Methods

Lectures and Confrences Vestibule Training Simulation Exercises Sensitivity Training

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 1. Lectures and Conferences: Lectures and conferences are the traditional and direct method of
instruction. Every training programme starts with lecture and conference. It’s a verbal presentation
for a large audience. However, the lectures have to be motivating and creating interest among
trainees. The speaker must have considerable depth in the subject. In the colleges and universities,
lectures and seminars are the most common methods used for training.

2. Vestibule Training: It is a term for near-the-job training, as it offers access to something new
(learning). In vestibule training, the workers are trained in a prototype environment on specific
jobs in a special part of the plant. An attempt is made to create working condition similar to the
actual workshop conditions. After training workers in such condition, the trained workers may be
put on similar jobs in the actual workshop. This enables the workers to secure training in the best
methods to work and to get rid of initial nervousness

3. Simulation is any artificial environment exactly similar to the actual situation. There are four basic
simulation techniques used for imparting training: management games, case study, role playing,
and in-basket training

a. Management Games: Properly designed games help to ingrain thinking habits, analytical,
logical and reasoning capabilities, importance of team work, time management, to make
decisions lacking complete information, communication and leadership capabilities. Use of
management games can encourage novel, innovative mechanisms for coping with stress.
Management games orient a candidate with practical applicability of the subject. These games
help to appreciate management concepts in a practical way. Different games are used for
training general managers and the middle management and functional heads – executive
Games and functional heads.

b. Case studies are complex examples which give an insight into the context of a problem as well
as illustrating the main point. Case Studies are trainee centered activities based on topics that
demonstrate theoretical concepts in an applied setting. A case study allows the application of
theoretical concepts to be demonstrated, thus bridging the gap between theory and practice,
encourage active learning, provides an opportunity for the development of key skills such as
communication, group working and problem solving, and increases the trainees” enjoyment of
the topic and hence their desire to learn.

c. Role Play: Each trainee takes the role of a person affected by an issue and studies the impacts
of the issues on human life and/or the effects of human activities on the world around us from
the perspective of that person. It emphasizes the “real- world” side of science and challenges
students to deal with complex problems with no single “right” answer and to use a variety of
skills beyond those employed in a typical research project.

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 d. In-Basket Exercise: It is also known as in-tray training, consists of a set of business papers
which may include e-mail SMSs, reports, memos, and other items. Now the trainer is asked to
prioritize the decisions to be made immediately and the ones that can be delayed.

4. Sensitivity training is also known as laboratory or T-group training. This training is about
making people understand about themselves and others reasonably, which is done by
developing in them social sensitivity and behavioral flexibility. It is ability of an individual to
sense what others feel and think from their own point of view. It reveals information about his
or her own personal qualities, concerns, emotional issues, and things that he or she has in
common with other members of the group. It is the ability to behave suitably in light of
understanding.

7 Fringe Benefits
The term fringe benefits refer to the extra benefits provided to employees in addition to the normal
compensation paid in the form of wage or salary. Many years ago, benefits and services were labeled
“fringe” benefits because they were relatively insignificant or fringe components of
compensation. However, the situation now is different, as these have, more or less, become important
part of a comprehensive compensation package offered by employers to employees.

7.1 Types of Fringe Benefits

Organizations provide a variety of fringe benefits. The fringe benefits are classified under four heads as
given here under:

1. For Employment Security : Benefits under this head include unemployment, insurance, technological
adjustment pay, leave travel pay, overtime pay, leave for maternity, leave for grievances, holidays,
stock options, cost of living bonus, call-back pay, lay-off salary advance, retiring rooms, jobs to the
sons/daughters of the employees and the like.

2. For Health Protection: Benefits under this head include accident insurance, disability insurance, health
insurance, hospitalization, life insurance, medical care, sick benefits, sick leave, etc.

3. For Old Age and Retirement: Benefits under this category include- deferred income plans, pension,
gratuity, provident fund, old age assistance, old age counseling , medical benefits for retired employees,
traveling concession to retired employees, jobs to sons/daughters of the deceased employee and the like.

4. For Personnel Identification, Participation and Stimulation: This category covers the following benefits-
anniversary awards, attendance bonus, canteen, cooperative credit societies, educational facilities, beauty
parlor services, housing, income tax aid, counseling, quality bonus, recreational programs, stress
counseling, safety measures etc.

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 8 HR Outsourcing
HR Outsourcing is a process in which the human resource activities of an organization are outsourced so as
to focus on the organization`s core competencies. Often HR functions are complex and time consuming
that it will create difficulty in managing other important thrust areas. By HR outsourcing, this problem can
be avoided which will enhance effectiveness by focussing on what the organization is best at. It will also
improve the flexibility of the organization to the rapidly changing business needs. Usually businesses that
outsource HR are typically small to midsize firms with number of employees ranging from 25 to 1500.

There are HR outsourcing firms present so as to meet an organization`s HR requirements. Some HR

outsourcing firms are generalists, offering a wide variety of services, while others are specialists, focusing
on specific areas such as recruitment, payroll etc. Depending on the degree of outsourcing required, we
can either outsource the entire HR functions or contract for specific HR functions. Some of the services
provided by HR outsourcing firms are:

1. Recruiting, training, and development

2. Overseeing organizational structure and staffing requirements
3. Tracking department objectives, goals, and strategies
4. Employee orientation programs

HR outsourcing has become a popular solution for organizations to remain competitive and cut costs. It
also provides skilled professionals who are focused specifically on HR.

8.1 Advantages of Outsourcing HR Functions

1. Risk Management: Human resources outsourcing firms help businesses minimize risk.
Employment and labor laws change regularly, and it can be difficult for employers to remain up-
to-date on regulations that affect the workplace. Outsourcing firms employ HR professionals
whose purpose is to stay abreast on a variety of federal and state employment laws. HR staff helps
businesses comply with these laws to avoid costly lawsuits brought on by employees. HR firms
also maintain and audit company policies and practices to ensure the organization and its
employee's best interests remain protected.

2. Cost Savings: Outsourcing helps reduce the cost of maintaining nonrevenue-generating back-
office expenses. A fully functional human resources department requires additional office space
and highly trained and experienced HR staff. Many small businesses find it more cost-effective to
outsource HR functions rather than expand to a larger location to meet the space needs of

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 another department. Furthermore, outsourcing costs are variable and can be reduced when
business needs warrant.

3. Efficiency: Maintaining an efficient and productive workplace is critical. Outsourcing HR functions

create greater efficiency within human resources systems. Advanced human resources technology
utilized by outsourcing providers help streamline important HR functions, such as payroll, benefit
administration and compliance management. Outsourcing helps employers and managers spend
less time doing paperwork and more time dedicated to improving the efficiency and effectiveness
of the workforce.

4. Employee Development: Outsourcing HR functions help businesses manage employee

performance and development. Providers implement performance management plans to ensure
employees comply with company policies and procedures and successfully meet business goals.
Outsourcing firms periodically monitor employee performance and report findings to
management. This reduces the workload of managers by minimizing the amount of administrative
responsibilities they must focus on.

9 Edward De Bono Role in Training

Edward De Bono worked on six thinking hats and Lateral thinking. We will discuss both here

9.1 Six Thinking Hats

Edward De Bono devised a new thinking technique to solve any problems. This systematic method of
thinking is a completely new and different way will provide your employees with skills and tools that
they can apply immediately. It is a simple, effective technique that helps them become more productive.
You and your team members can learn how to separate thinking into six distinct categories. Each category
is identified with its own colored metaphorical "thinking hat." By mentally wearing and switching "hats,"
you can easily focus or redirect thoughts, the conversation, or the meeting

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 There's no such thing as THE right sequence for using the Six Thinking Hats. Sequences differ according to
subject and participating thinkers. Also remember that in reality every hat can be used as many times as is
desirable. For example

1. The meeting may start with everyone assuming the Blue hat to discuss how the meeting will be
conducted and to develop the goals and objectives.
2. The discussion may then move to Red hat thinking in order to collect opinions and reactions to
the problem.
3. This phase may also be used to develop constraints for the actual solution such as who will be
affected by the problem and/or solutions.
4. Next the discussion may move to the (Yellow then) Green hat in order to generate ideas and
possible solutions.
5. Next the discussion may move between White hat thinking as part of developing information
and Black hat thinking to develop criticisms of the solution set

Because everyone is focused on a particular approach at any one time, the group tends to be more
collaborative than if one person is reacting emotionally (Red hat) while another person is trying to be
objective (White hat) and still another person is being critical of the points which emerge from the
discussion (Black hat). The hats aid individuals in addressing problems from a variety of angles, and focus
individuals on deficiencies in the way that they approach problem solving.

9.2 Lateral Thinking

Lateral thinking is solving problems through an indirect and creative approach, using reasoning that is
not immediately obvious and involving ideas that may not be obtainable by using only traditional step-

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 by-step logic. The term was promulgated in 1967 by Edward de Bono. He cites the example of Judgment of
Solomon. It recounts that two mothers living in the same house, each the mother of an infant son, came to
Solomon. One of the babies had died, and each claimed the remaining boy as her own. Calling for a sword,
Solomon declared his judgment: the baby would be cut in two, each woman to receive half. One mother
thought the ruling fair, but the other begged Solomon, "Give the baby to her, just don't kill him!" The king
declared the second woman the true mother, as a mother would even give up her baby if that was
necessary to save its life. This judgment became known throughout all of Israel and was considered an
example of profound wisdom
On similar line De Bono encourages to think differently rather than following standard methods.

9.2.1 Methods of Lateral Thinking

Edward de Bono defines following of thinking tools

1. Random Entry Idea Generating Tool: The thinker chooses an object at random, or a noun from a
dictionary, and associates it with the area they are thinking about. De Bono gives the example the
randomly-chosen word "nose" being applied to an office photocopier, leading to the idea that the
copier could produce a lavender smell when it was low on paper, to alert staff.

2. Provocation Idea Generating Tool: A provocation is a statement that we know is wrong or impossible
but use to create new ideas. De Bono gives an example of considering river pollution and setting up the
provocation "the factory is downstream of itself"; this leads to the idea of forcing a factory to take its
water input from a point downstream of its output, an idea which later became law in some countries.
Provocations can be set up by the use of any of the provocation techniques— wishful thinking,
exaggeration, reversal, escape, distortion, or arising. The thinker creates a list of provocations and then
uses the most outlandish ones to move their thinking forward to new ideas.

3. Movement Techniques: One can move from a provocation to a new idea by the following methods:
extract a principle, focus on the difference, moment to moment, positive aspects, special
circumstances.

4. Challenge Idea Generating Tool: A tool which is designed to ask the question "Why?" in a non-
threatening way: why something exists, why it is done the way it is. The result is a very clear
understanding of "Why?" which naturally leads to fresh new ideas. The goal is to be able to challenge
anything at all, not just items which are problems. For example, one could challenge the handles on
coffee cups: The reason for the handle seems to be that the cup is often too hot to hold directly;
perhaps coffee cups could be made with insulated finger grips, or there could be separate coffee-cup
holders similar to beer holders, or coffee shouldn't be so hot in the first place.

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 5. Concept Fan Idea Generating Tool: Ideas carry out concepts. This tool systematically expands the
range and number of concepts in order to end up with a very broad range of ideas to consider.

6. Disproving: Based on the idea that the majority is always wrong as suggested by Henrik Ibsen and by
John Kenneth Galbraith, take anything that is obvious and generally accepted as "goes without saying",
question it, take an opposite view, and try to convincingly disprove it. This technique is similar to de
Bono's "Black Hat" of Six Thinking Hats, which looks at the ways in which something will not work.

10 MCQ’s (Multiple Choice Questions)

Click the next button on the bottom of your screen to attempt the Test containing quality
MCQ’s on this topic.

1. The Pattern of the test is based on the Real Examination Pattern

2. This helps you in assessing your understanding and is very useful in improving retention.
3. You will also get to know the correct answers and related explanation at the end of the
test.

So do not forget to attempt these MCQ’s.

Happy Learning!!!

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 WHAT WILL YOU GET IN THE COURSE?
Our course material is comprehensive and consists of:

16. Concept notes for each topic of ESI and FM. Download the sample material from here. You
can also view the sample lessons as well as MCQs at http://www.edutap.co.in/learn/Free-
Lessons-on-Finance-and-Management
17. Awesome MCQs on each topic. What we have done is prepared MCQs based on the concept
notes so that you can practice questions as soon as you are done with one concept document.
Then you move on to the next concept document and after reading it, you again practice MCQs
based on that document and so on. This helps you in assessing your understanding and is very
useful in improving retention.
18. All important reports like HDR, WDR, Economic Survey, Budget, important RBI circulars,
notices and the like are being integrated into the material itself so that an aspirant does not
have to read them separately.
19. Before the actual examination, we would also provide online full length tests so that the aspirant
gets the feel of the real examination and can assess his/her preparation.
20. We have also prepared a document covering all important government schemes,
programmes and policies important for this exam.

IS THE MATERIAL PROVIDED BY EDUTAP ENOUGH FOR CLEARING THE

EXAM?
We have prepared our material strictly keeping in mind the syllabus and pattern of RBI Phase 2
examination 2015 and 2016. For analysis videos, click here
We expect atleast 60-70% of the questions directly from our notes, however, if RBI springs up a
surprise, there may be a chance that questions wont be directly from the notes provided by us. But
since it is a competitive exam, you would again be much better placed than the others in tackling
such a situation.

WILL EDUTAP UPDATE THE MATERIAL TILL THE TIME THE EXAM IS
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 ACTUALLY CONDUCTED FOR 2017?
Yes! The course contents will be updated regularly till the Phase 2 exam of 2017 is over. You
don’t have to worry about a thing, we will take care of all updates.

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 HOW MUCH WILL THE COURSE COST ME? IS THERE ANY DISCOUNT
AVAILABLE?
We have 3 courses

10. ESI @ Rs 3499

11. FM @ Rs 3499
12. Bundle course containing ESI as well as FM at a discounted price of Rs 5999
WHERE CAN YOU FIND THE ANALYSIS OF 2016 PAPER?
Here: https://www.youtube.com/playlist?list=PL5Eyazk6CS3bd5vc6g3Sdx117FDi3SrPk

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