HRM CONCEPTS

1) HRM: HRM is a Management function concerned with hiring, motivating, &

Maintaining people in an Organisation. It focuses on people in an Organisation.
Organisations are made up of people & functions through people. People constitute the
most significant resource of Organisation. HRM is the manpower employed in an
Organisation.
For Example: The Companies Following HRM:-
i. TCS (Tata Consultancy Services) is truly a global company. TCS adopt the
unique system of hiring people. It starts its Human Resource right at college
level. TCS funds many events like conferences, seminars etc to increase the
knowledge. TCS finds it easy to hire the best talent in campus recruitment.
ii. Wipro has excellent Human Resource policies & practices one such is the way a
potential Job-hopper is handled.
2) Personnel Philosophy : Managements Attitude towards Employees is one major area
which relates to the personnel philosophy of the company. The personnel philosophy of
management is reflected in its outlook as regards the manner in which work is completed.
Here management may force people to work to achieve the results. Autocratic leadership
will be opted & the targets can be achieved by force. The other that can be done is by
Democratic leadership which means that involvement of Employees in Decision Making
Motivation of Employees & get the work done.
Personnel Philosophy of Management will be reflected in the personnel policies
introduced by the management from time to time.
3) Personnel Manual : A Document/Booklet containing the details of personnel policies of
an Organisation is called as personnel manual. It serves as a guide or reference book to
employees. All the line & staff manager can use such manual as a ready reckoner for
quick and consistent Decision making on various personnel matters. Reputed companies
publish personnel policies manuals for the convenience of their managers Supervisors &
employees. A personnel policy manual is companion volume to the employee handbook.
4) HRP: HRP is the process of forecasting an Organisations future demand for and supply
of the right type of people in right number. HRP is the sub-system in total Organisation
planning. HRP is integrated part of strategic management. HRP is variously called
strategic manpower planning or for Employment Planning.

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 HRP mainly Includes-
Manpower Allocation
Manpower Utilisation
Human Resource Development.
5) HRIS : Human Resource Information System has been derived from the concept
Management Information System (MIS). HRIS may be defined as
a systematic procedure for collecting, storing, maintaining and retrieving data needed
by an Organisation about its human resources and various activities that are relevant for
their management. The objective of HRIS is to provide accurate, relevant and timely
information about human resources and their functioning in the most cost effective way.
For Example: Bharat Heavy Electricals and ONGC have developed in house HR software
for HR Decision-making.
6) VRS: Voluntary Retirement Scheme is a type of voluntary separation of old and
unproductive employees from the Organisation. It is also called as GOLDEN HAND
SHAKE PLAN. VRS is used as a method for downsizing of manpower employed. VRS
involves separation of employees from the Organisation on the basis of mutual agreement
between the two. For example: companies like ACC, Blue star ,Sandoz , Mahindra and
Mahindra offer VRS to employees.
7) Outsourcing: Outsourcing means getting the work done by outside agencies on payment
basis. Several Organisations outsource part of their work to outside parties either in the
form of sub-contracting or ancillarisation. Outsourcing is regular feature both in Public as
well as Private sector. Most organisations have surplus labour and they do not want to
worsen the problem by hiring more people. Hence, the need for off-loading.
8) Pink slip: Pink slip is an American term that refers to being fired or laid off from ones
job. It is an unofficial notice sent to an employee informing him that you have been fired
from your job. Pink slip means dismissal or dismission. It means termination from the
service. In the USA, companies used to dismiss employees by distributing notices printed
on pink slips of paper.
9) Termination: Discharge or termination is a permanent sepration of employee from the
organisation for violation of Organisational rules ( dishonesty, carelessness,
drunkenness,etc).It is a drastic step and should be taken after careful thought. Such action
needs support of sufficient reasons.
10) Retrenchment: Retrenchment is sort of permanent separation by an employer with due
notice as per statutory provisions. The employees is also paid compensation.
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 Retrenchment of employee is quite common in India. The industrial dispute act 1947
defines retrenchment as the termination by the employer of the services of workmen for
any reason. Retrenchment creates a sense of fear and insecurity among industrial
employees.
11) Downsizing: Downsizing means trimming of excess/surplus manpower. Downsizing is
one challenging job before HR personnel. It is complicated as management wants
downsizing and while employees oppose to such downsizing as it leads to retrenchment
of staff. HR department needs cooperation of managers and trade unions for the execution
of downsizing strategy in an orderly and peaceful manner. For Example: Downsizing
plans in selected firms:-
i. Japan Airlines has plans to cut 4200 jobs.
ii. Ford motors has plan to cut 2000 jobs initially.
iii. Nearly 7000 employees of Motorola will lose their jobs.
12) Separation: Separation is step ahead of demotion. It involves cessation of services of
personnel from an Organisation. The Employment relationship between an Organisation
and its employee comes to an end. The contractual relationship comes to an end. A person
retires ( at age of sixty) from the service and this is one of type of sepration. However,
separation is also possible before the expiry of the period of contract.
13) Contracting & Sub-contracting: Along with outsourcing, contracting and sub-
contracting are two methods used for transferring certain jobs to outside agencies on
contract basis. Contracting is an agreement whereby the contractor undertakes to
complete a piece of work or perform a service for the commissioning party, organizing
his or her own resources and managing the work at his or her own risk, in return for a
financial payment. Subcontracting is a contract agreed between the contractor and another
contractor, so that the latter does the work or performs the service which the first
contractor has undertaken to provide for the commissioning party.
14) Promotion: Promotion of an employee means giving higher position, status and salary to
an employee. Promotions are normally given after few years of service and also when
posts are vacant at the higher level. Promotions are normally given in business enterprise
and also in banks and government departments. Promotion is rightly described as
advancement within the Organisation.
15) Transfer: In business Organisation employees are shifted from one post to other or from
one department to the other or from one unit/plant/branch of the company to the other.
This is called job transfer or transfer of an employee. This brings internal mobility of
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 human resources within the Organisation. Such transfers are also common in the case of
banks, government departments, manufacturing companies and other service
organisations. Finally it may be pointed that transfer is neither promotion nor demotion
but merely a horizontal or lateral movement of an employee from one job to another in
same Organisation.
16) Job Analysis: Clearly understanding of job is called as job study or job analysis. It is the
process of collecting all relevant info relating to the nature of job and the qualities and
qualifications required for performing the same efficiently. job analysis involves
collection of job related information. The focus is on the job not on the individual holding
the job. But individuals are consulted.
17) Job Description: Job description contains items such as job title, location , job summary,
duties, machines, tools and equipment, materials and forms used, supervision given or
received, working conditions.
18) Job Specification: Job specification is statement of human qualifications necessary for to
do the job it contains items such as Education, experience, training, judgment, initiative,
physical effort, physical skills, responsibilities etc.
19) Job Rotation: Job rotation refers to moving employees from job to job to add variety and
reduce boredom by allowing them to perform a variety of tasks. When an activity is no
longer challenging, the employee would be moved to another job at the same level that
has similar skill requirements. It reduces boredom and disinterest through diversifying the
employees activities.
20) Job Design: Job design involves continuous efforts to organize tasks, duties &
Responsibilities in to a unit of work to achieve certain objectives job design follows job
analysis. Job design is the process of deciding the contents of job.
21) Job Enlargement: Job enlargement refers to the expansion of the number of different
tasks performed by an employee in single job. Job enlargement attempts to add somewhat
similar tasks to the existing job so that it has more variety and be more interesting. An
enlarged job can motivate an individual for five reasons:
Task variety
Meaningful work modules
Ability utilization
Worker-paced control
Performance feedback

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22) Job Enrichment: Job enrichment means adding a few more motivators to job to make it
more rewarding. To be specific, a job is enriched when the nature of job is exciting,
challenging and creative or gives the job holder more decision making, planning and
controlling powers.
23) Job evaluation: Job evaluation means determining the relative worth of job in an
Organisation by comparing it with other jobs within the Organisation & with the job
market outside. It is the process of analyzing and assessing the available jobs. Job
evaluation helps in establishing job hierarchy. It suggests the comparative importance of
different jobs. In job evaluation the jobs are ranked not the job holder. For example:
wage/ salary hierarchy is based on evaluation of job.
24) Recruitment: HRP helps to determine the type of people a firm needs. Recruitment
involves attracting as many applications as possible from eligible job seekers.
Recruitment is the process of searching for and obtaining applicants for jobs, from whom
the right people can be selected. Theoretically it is said to end up with the receipt of
applications but in real the activity extends to the screening of applications. For example:-
Recruitment boards for railways, banks & other Organisations, campus recruitment from
b schools.
25) Selection: Selection is the process of picking individuals with requisite qualifications and
competence to fill jobs in the Organisation. Selection is picking the right candidate from
pool of applicants. It seeks to eliminate as many unqualified applicants as possible in
order to identify the right candidates. Selection is the process of choosing the suitable
candidates. Right man for Right job. The importance of selection of staff is now
accepted in the business world.
26) Application Blank: Application Blank is most commonly used to collect information
from the applicants. The information can be personal data, material data, educational data,
physical data, employment data, hobbies etc. Application Blank is the prescribed form
issued by the company for the collection of required information from interested
candidates. Proforma of an Application Blank is normally given along with the
advertisement for recruitment.
27) Induction/orientation: Induction is systematic and planned introduction of employees
to their jobs their co-workers and the Organisation. Induction is designed to provide
information to new employees so that the new employees needs to function comfortably
& effectively in the Organisation. It is planned introduction of new hires to their jobs,

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 their peers & the company. The other possibility of providing the orientation is to reduce
the anxiety of new employees.
28) Training: Training & Development may be understood as any attempt to improve
current or future employee performance by increasing an employees ability to perform
through learning usually by changing the employees attitude or increasing the employees
skills & knowledge. The need for training & development is determined by the
employees performance deficiency computed as follows:-
Training & Development = Standard performance Actual Performance.
For example: FEDEX Corporation is the company which takes training seriously. It
spends $155 million on training each year. Each employee spends 4 to 6 weeks a year in
compulsory training.
29) Performance appraisal :Performance is an objective assessment of an individuals
performance against defined benchmarks. Performance appraisal may be understood as
the assessment of individuals performance in a systematic way. The performance
appraisal being measured against factors such as job knowledge, quality & quantity of
output, initiative, and leadership abilities. Assessment should not be confined to past
performance alone potential of an employee for future performance must be assessed.
30) Compensation: Compensation is frequently directly tied to the labor market. The
compensation that an employee receives is return for the contribution to the Organisation.
It occupies an important place in the life of an employee. The standard of living status in
the society, motivation depends upon the compensation he / she receives. For example :
India compensation report 1998. Watson wyatt (India) is a reputed consulting firm having
its office in Mumbai. The firm conducts market studies regularly & brings out
comprehensive reports on the findings. The series titled India compensation Report is
brought out annualy and aims to provide info on compensation across a wide spectrum of
Indian industry.
31) Career Planning & Development: Career planning is the systematic process by which
one selects career goals and the path to reach these goals. Career planning & development
is the responsbilty of hr department. Career planning stands for forward looking
employment policies of Organisation.
32) Participative Management: Participative Management is yet another motivational tool
used by managers to motivate employees. It refers to association of workers and their
representatives with the decision making process. When subordinates are involved in
decision making at all levels, the resultant concept is Participative Management.
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33) Industrial Relations: It is concerned between the relationship between management and
workers & the role of regularity mechanism in resolving any industrial dispute. Another
relative term is Employee Relations or Human Relations. For Example: on May 19,
2004, TATA Steel completed 75 years of industrial harmony and this fact has contributed
to the competitive edge of steel makers.
34) Trade Unions: Trade unions are voluntary Organisations of employees or employers
formed to promote and protect their interest through collective action. For example: The
all India trade union council in 1920. With the objectives of representing the workers
interest to coordinate the activities of all labor Organisations in country.
35) Personnel policy: Policies are plans of actions Organisation need to evolve HR policies
as they ensure consistency and uniformity in treating people. They help motivate and
build loyalty. Policies becomes benchmarks to compare & evaluate Performance. A
policy does not spell out the detailed procedure by which it has to be implemented. A
policy should be broad enough for it to be applicable in varying situations. Difference
between a policy and procedure.
36) Empowered teams: Empowering refers to passing an authority and responsibility.
Empowerment occurs when power goes to employees who then experience a sense of
ownership and control over their jobs. Employees feel responsible & if they feel
responsible they are more initiative towards their work. For example: Titan, Reliance,
Tata information system, GE plastics India & Philips are empowering Employees and
Wipro too which is nowhere left behind.
37) Employee Empowerment: Empowerment is the process of enhancing feelings of self-
efficacy and a sense of owning a job Empowerment is something that young job
aspirants are looking for in Organisation more than monetary rewards it is the feeling that
Employee owns the job that motivates him/her. A process of enhancing feelings of self-
efficacy among Organisation members that foster powerlessness.
38) Assessment centers: Assessment centers is one of modern methods of performance
appraisal of supervisory staff. It is the system where Assessment of several individuals is
done by various experts using various techniques such as role playing, case study etc. It is
a group of employees drawn from different work units. The selected employees work
together on a similar assignment.
39) Placement: It refers to allocation of people to jobs. It includes initial assignment of new
employees and promotion, transfer or demotion of present employees. It is the assignment
or reassignment of an employee to a new or different job. If the no of individuals is large
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 in relation to the available jobs, only the best qualified jobs can be selected and placed.
On the other hand, when more jobs are available optimal placement is possible thus, the
number of people & no of jobs determine the placement process of company.
40) Incentives: Incentives are variable rewards granted to employees according to
variations in their performance. The other name of incentives is PAYMENY BY
RESULTS. But the word incentives is most appropriate because of its motivational
content.
41) ESOPS: An employee stock ownership plan (ESOP) is an employee-owner method that
provides a company's workforce with an ownership interest in the company. In an ESOP,
companies provide their employees with stock ownership, often at no up-front cost to the
employees. ESOP shares, however, are part of employees' remuneration for work
performed. Shares are allocated to employees and may be held in an ESOP trust until the
employee retires or leaves the company. The shares are then sold.
42) Exit interviews: An exit interview is a survey conducted with an individual who is
separating from an Organisation or relationship. Most commonly, this occurs between
an employee and an Organisation, a student and an educational institution, or a member
and an association. An Organisation can use the information gained from an exit
interview to assess what should be improved, changed, or remain intact. More so, an
Organisation can use the results from exit interviews to reduce employee, student, or
member turnover and increase productivity and engagement, thus reducing the high costs
associated with turnover. Some examples of the value of conducting exit interviews
include shortening the recruiting and hiring process, reducing absenteeism,
improving innovation, sustaining performance, and reducing possible litigation if issues
mentioned in the exit interview are addressed. It is important for each Organisation to
customize its own exit interview in order to maintain the highest levels of survey validity
and reliability.
43) Socialization: In order to reduce the anxiety that new employees may experience,
attempts should be made to integrate the person into the informal Organisation. The initial
T&D effort designed for employees is Socialization, the guided adjustment of new
employees to the company, the job, and the work group.
44) On the job training: Majority of industrial training is of on the job training type. OJT is
conducted at the work site and in context of the job. Often it is informal, as when an
experienced worker shows a trainee how to perform the jo task. It is the most effective
method as the trainee learns by experiencing, making him/her highly competent.
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45) Off the job training: This is any form of training which takes place away from the
immediate workplace. Off-the-job training includes more general skills and knowledge
useful for work, as well as job-specific training. Training may be provided by specialist
trainers working for National Grid or by an outside company hired to help with training.
Off-the-job training is particularly effective for non-technical skills, as employees can use
these across different areas of the company.
46) Management development: In addition to training of operating staff, an Organisation
has to take steps for training its managers, supervisory staff and executives such training
is called as Management development or executive development. Management
development programme (also called as Human Resource development HRD programme)
acts as key factor for the survival and growth of a business unit.
47) Sensitivity training: Sensitivity training uses small number of trainees, usually fewer
than 12 in group. They meet with a passive trainer and gain insight to their own and
others behavior. Meetings have no agenda and held away from work places and questions
deal with here and now of the group process. Sensitivity training results in increased
ability to empathize with others, improve listening skills , greater openness, increased
tolerance of individual differnces.
48) Simulation: Any training activity that explicitly places the trainee in an artificial
environment that closely mirrors actual working conditions can be considered a
Simulation. Simulation activities include case experiences, experiential exercises,
vestibule training, management games & role-play. For example: activities of an
Organisation may be simulated and the trainee must be asked to make a decision in
support of those activities. The results of those decisions are reported back to trainee with
an explanation of what would have happened had they actually been made in the
workplace. The trainee learns from this feedback and improves his/ her subsequent
simulation and work place decisions.
49) Role Play: - Its just like acting out a given role as in a stage play. In this method of
training, the trainees are required to enact defined roles on the basis of oral or written
description of a particular situation. For example : a male worker may assume the role of
female supervisor, and the supervisor may assume the role of male worker. Then both
may be given a typical work situation and asked to respond as they expects others to do.
The consequences is better understanding between individuals.

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50) Case study: Case study is written description of actual situation in business which
provokes in the reader, need to decide what is going on what the situation really is or
what the problems are and what can and should be done. Taken from the actual
experiences of the organisations these cases attempts to describe as accurately as possible
real problems that mangers have faced. Trainees study the cases to determine the
problems and develop alternative solutions select the best one and implement it.
51) Fringe benefits: Fringe benefits are forms of compensation you provide to employees
outside of a stated wage or salary. Common examples of fringe benefits include medical a
insurance, use of a company car, housing allowance, educational assistance, vacation pay,
sick pay, meals and employee discounts. Total compensation includes regular income and
all of these paid benefits.
52) HR Demand Forecasting and HR supply Forecasting: Refer notes of HRP process by
aswathappa.

HARD WORK BEATS TALENT WHEN

TALENT FAILS TO WORK HARD

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