STRATEGIC HUMAN RESOURCE MANAGEMENT

INTRODUCTION

The term, Strategic Human Resource Management, conveys the sense of human resource management in a
strategic context. In order for this to take place there has to be some connection made with the strategic
process through which the aims of an organization are managed, that is, its strategic management.

If a global company is to function successfully, strategies at different levels need to inter-relate. Throughout
the first half of our century and even into the early eighties, planning with its inevitable companion, strategy-
has always been a key word, the core, and the near-ultimate weapon of good and true management. In this
lecture we examined the theoretical debates on the nature and significance of the new HRM model.

SHRM

Strategic Human Resource Management is an approach to making decisions on the intentions of the
organization concerning people-essential components of the organization’s business strategy. It is about the
relationship between HRM and Strategic management in the organization. Strategic HRM refers to the overall
direction the organization wishes to pursue in achieving its objectives through people.

Strategic HRM can be regarded as an approach to dealing with longer-term people issues as part of the
strategic management thrust of the business. It covers macro-organizational concerns relating to structure
and culture, organizational effectiveness and performance, matching resources to future business
requirements, and the management of change.

Defined by Wright and Snell (1989):

SHRM deals with `those HR activities used to support the firms competitive strategy.

Miller (1989):

Strategic Human Resource Management encompasses those decisions and actions, which concern the
management of employees at all, levels in the business and which are directed towards creating and
sustaining competitive advantage.

Walker (1992):

The means of aligning the management of human resources with the strategic content of the business.

THE AIMS OF SHRM

SHRM aims to provide a sense of direction in an often-turbulent environment so that organizational and
business needs can be translated into coherent and practical policies and programmers. SHRM should
provide guidelines for successful action, and the ultimate test of the reality of strategic HRM is the extent to
which it has stimulated such action.

THE CONCEPT OF STRATEGIC HUMAN RESOURCE MANAGEMENT

1. Human Resources – a strategic issue

• There is an overall corporate purpose and that the human resource dimensions of that
purpose are evident.
• A process of developing strategy within the organization exists and is understood, and that
there is explicit consideration of human resource dimensions.
• The organization at all levels establishes responsibility and accountability for human resource
management.
• It includes the responsibility to identify and interact in the social, political, technological and
economic environments in which the organization is and will be doing business.
 2. The need for a Concept

Much of the literature provides evidence that strategic integration is not well developed and advances reasons
why to achieve it would be beneficial to organizations. Organization advocated an increase in the input of
human resource considerations at strategic planning, an attitude of treating employees as assets, more
participation and involvement for employees, effective and open communications, less rule-oriented policies
and practices, better training and career development opportunities, reward and recognition tied to
performance.

3. Models and frameworks of strategic human resource management

a) The Fomburn, Tichy and Devanna model of HRM: The early HRM model
developed by Fombrun (1984) emphasizes the interrelatedness and the coherence
of human resource management activities. He wrote that three core elements are
necessary for firms to function effectively:

• Mission and strategy

• Organization structure
• Human resource management

They defined strategy as a process through which the basic mission and objectives of the organization are
set, and a process through which the organization uses its resources to achieve its objectives. They also
made a distinction between the three levels of managerial work:
• Strategic levels: policy formulation and overall goal setting
• Managerial levels: concerned with the availability and allocation of resources to carry out the strategic
plan.
• Operational levels: day-to-day management

But their most important conclusion war that:

HR systems and organizational structures should be managed in a way, which is congruent with
organizational strategy.

b) The Harvard Model of HRM

The analytical framework of the Harvard model offered by Beer consists of six basic components:
• Situational factors
• Stakeholders interests
• Human resource management policy choices
• HR outcomes
• Long-term consequences
• Feedback through which the outputs flow directly into the organization and to the stakeholders

C) The Guest model of HRM

David Guest (1989) has developed a more prescriptive theoretical framework, reflecting the view that a
core set of integrated HRM practices can achieve superior individual and organizational performance.

The central hypothesis of Guests model is that if an integrated set of HRM practices is applied in a coherent
fashion, with a view to achieving the normative goals of high commitment, high quality and task flexibility,
then superior individual performance will result. The Guest model has six components:

• An HRM strategy
• A set of HRM policies
• A set of HRM outcomes
• Behavioral outcomes
• A number of performance outcomes
• Financial outcomes.

THE MEANING OF STRATEGIC HRM

According to Hendry and Pettigrew (1986), strategic Human resource Management has four meanings:
 • The use of planning
• A coherent approach to the design and management of personnel systems based on an employment
policy and manpower strategy and often underpinned by a philosophy.
• Matching HRM activities and policies
• Seeing the people of the organization as a strategic resource for the achievement of competitive
advantage.

STRATEGIC INTEGRATION: INTEGRATING BUSINESS AND HR STRATEGIES

The whole concept of strategic HRM is predicted on the belief that HR strategies should be integrated with
corporate or business strategies. Strategic integration is necessary to provide congruence between business
and human resource strategy so that the latter supports the accomplishment of the former and indeed, helps
to define it. The aim is to provide strategic fit and consistency between the policy goals of human resource
management and the business.

THE REQUIREMENTS FOR STRATEGIC HRM

Strategic HRM is most likely to be practiced in organizations with the following characteristics:
• Strong, visionary and often charismatic leadership from the top.
• Well articulated missions and values.
• A clear expressed business strategy which had been implemented successfully.
• A positive focus on well understood critical success factors
• The organization offers a closely related range of products or services to customers.
• A cohesive top management team.
A personnel/HR director who plays an active part in discussing corporate/business issues as well as making
an effective and corporate/business-oriented contribution

What is Human Resource Development?

HRD Deals with development and up gradation of human capital.

HRD is a process for developing and unleashing human expertise through organization development and
personnel training and development for the purpose of improving performance.

HRD tries to bring about qualitative changes in human capital in accordance with the needs of the
organization and corporate objectives. It tries to mould the organization as per requirements.

HRD Core Beliefs

Organizations are human-made entities that rely on human expertise to establish and achieve their goals.
Human expertise is developed and maximized through HRD processes and should be done for the mutual
long- and/or short-term benefits of the sponsoring organization and the individual involved. HRD professionals
are advocates of individuals/group, work process, and organizational integrity

Beliefs about the Role of HRD

 Helping and facilitating

 Learning is the heart of HRD
 Change is a learning process
 Learning occurs on multiple levels
 Learning and performance are both valued roles of HRD
 Strong commitment to the development of people
 Development of systems is important

HRD Discipline – Field of Practice

 Training
 T& D
 Employee development
 Technical training
 Management development
 Executive and leadership development
 Organization development
 Organizational learning

HRD Points of Agreement

 Goal of improvement
– Making things better for the future
 Problem / Opportunity orientation
– HRD is problem oriented
– It is going to “improvement opportunity” thinking
 System Thinking
– System thinking allows HRD to view things as a system

AREAS DISCUSSED UNDER HRD

Human Resource Planning

Manpower planning and human resource planning are synonyms. The basic idea of manpower planning is,
we look at the numbers we are likely to need because of growth or contraction, promotion and wastages. In
other words, it simply means ensuring availability of right numbers of men , right kinds [types in terms of skill],
at the right point of time, at the right places for utilizing the most economically and effectively and develop
their potentials in terms of skills, performance and capacity.

Recruitment and Selection

Recruitment is the process of generating of applications or attracting applicants for specific positions through
four common sources, viz. Advertisement, state employment exchange agencies , present employees and
campus recruitment. Having identified the potential applicants the next step is to evaluate their experience
and qualification for ascertaining their suitability for a job and make selection. Selection refers to the process
of offering job to one or more applicants from the applications. Selection is thus a means of selecting the
”best-fit” for a job by using multiple hurdles such as screening, short listing based on marks, tests,
interviewing ,and an equal opportunity dispenser.

Performance & Potential Appraisal

Performance appraisal also called “merit rating” or “employee rating is a means of helping supervisors to
evaluate the work of employees. It is the name given to the regular formalized and recorded review of the way
in which an individual performs in his or her job. This is normally carried out by the job holder’s immediate
boss. Performance appraisal focuses of helping the individual to develop his or her present role capabilities
and to assume more responsibility for that role. Potential appraisal focuses primarily identifying the
employee’s future likely roles within the organization.” Potential appraisal is done for placement as well as for
development purposes keeping in mind futuristic requirement of the organization.

Counseling

“Counseling is helping the employee to recognize his own strengths, weaknesses and potential and potential
and helping him to prepare action plans for own development.” Giving feedback in a “threatening way” or
correcting the undesirable or unsatisfactory behavior of employees by pointing it out the deficiencies or other
malfunctioning and warning them not to repeat these behaviors are all integral parts of a manager’s role and
are not the same as counseling.

Career Planning

Career planning involves identifying the right potential well in time, for development to take over higher
responsibilities. This includes promotion and planned job rotation under various conditions and environments
of challenge. In this process, attention is focused on individual’s style of working than his current performance
results. Current results can provide reasonable clues of future potential, but they are not the sole criterion;
current results only, could be misleading in judging one’s potential. A person’s achievements are invariably
affected by the forces outside his control. Similarly, a person may be highly successful in one situation, but he
may not continue to be a high achiever when transferred to another job or situation.

Succession Planning
Succession planning entails in identifying the key jobs in an organization and ensuring that , if anything,
planned or unplanned were to remove the present job holder from his post, there would be some one ready to
take the place. This benefits the company by ensuring that there are no expensive gaps, or panic measures
to fill them. It benefits the individual by providing him with opportunities for advancement. Three broad steps
are required in this context (I) to decide which are the key jobs in the organisation; (ii) to identify the potential
incumbent who can fit the position; & (iii) to make necessary records in the organization chart. Therefore, a
succession plan to indicate who can succeed whom in the hierarchy.

Training

Training comprises an integral part of HRD process. The purpose of training is to improve the capabilities of
the human resources in order to increase their efficiency and effectiveness on the job. Training is expected to
indicate positive changes in knowledge, skill and attitudes. Training is job oriented and fulfills the current
needs of an individual to overcome job difficulties. Training won’t solve all problems, not all problems are
training problems. As we all know Training aims at development of the people in an organization. HR
Department analyses and develops various Training programs

Job Evaluation

Job evaluation is concerned with establishing the relative worth of a job compared to other jobs within an
organization. In job evaluation one attempts to consider and measure the inputs required of employees
(know-how, accountability and problem solving etc.) for minimum job performance and to translate such
measures into specific monetary returns.

Transfer, Promotion & demotion.

Transfer is a lateral movement within the same grade, from one job to another. A transfer may result in
changes in duties and responsibilities, supervisory and working conditions, but not necessarily salary.

Promotion is the advancement of an employee from one job level to a higher one,
with increase in salary.

Demotion is the opposite of promotion. It is a downward movement from one job

level to another, leading to a reduction in rank, status, pay and responsibility
Job Analysis

Job analysis is the process of studying and collecting department information relating to operations and
responsibilities of a specific job. The immediate products of this analysis are job description and job
specification. Job description is an organized factual statement of duties and responsibilities of a specific job,
whereas, job specification is a statement of the minimum acceptable qualities necessary to perform a job
properly.

Rewards

Rewards are the positive reinforcements given by the organization. Rewards act as effective motivators and
help people to increase productivity and efficiency. Rewards include:

• Promotion
• Incentives
• Increments, etc

PHASES FOR ADOPTING HRD

Learning and HRD

 Maximizing learning and creating a learning environment is essential for building HRD in organization
 Individual differences in the learning process should be recognized and treated differently accordingly.
Making full use of individual skills and knowledge is the core essence of HRD
 Learning strategies and styles.Adopting strategic planning and adopting leadership according to the
situation so to have effective decision making

Assessing HRD needs

Strategic organizational analysis.

Conducting a strategic analysis and assessing what organization needs are and how they are to be dealt with.
Keeping in focus the external pressure that may effect the organization such as:

• Political pressure
• Technology
• Economic factor
• competition

 Task analysis

This involves the task and guidelines needed to manage HRD practices. The organization must follow SOP’s
to effective implement HRD practices. Must evaluate each alternative so to have a better view of how to
manage.

 Person analysis.

Conducting a persosn analysis of individuals who are responsible for implementing HRD. Evaluating whether
they would be able to manage and implement practices.

 Prioritizing HRD needs.

Giving priority to HRD resource as to when which practice is to be focused first. In case of technological
change it would be necessary to provide effective training first. Similarly in case of increasing performance
conducting performance appraisal and provided incentives would be the first priority.

Designing Effective HRD Programs

 Defining the objectives of HRD interventions.

 Creating or purchasing HRD programs.
 Selecting the trainer.
 Preparing a lesson program.
 Scheduling the HRD program.

Implementing HRD Programs

 Training delivery methods.
o
On the job training method.
o
Classroom training approach.
o
Self-Paced/computer-based training.
o
Media and methods.
 Some final Issues concerning training.
o
Post-training evaluatio

HUMAN RESOURCES DEVELOPMENT1

HRD is a profession today. It has a body of knowledge and this knowledge is transferred to younger
generations through management institutes in India. By now HRD is a well-recognized function in
organizations. HRD has professional bodies supporting its knowledge generation, knowledge dissemination
and capacity building in organizations. HRD has also generated consulting firms which provide exclusive HRD
services for organizations in need. Thus HRD is a well-recognized profession in India today.

The subsequent topics of this chapter take the readers through various aspects of this
profession.
A. WHAT IS HRD?

HRD is based on the two assumptions: HRD makes sense only when it contributes towards business
improvement and business excellence. HRD also strongly believe that good people and good culture make
good organizations.

HRD means building:

 Competency in people
 Commitment in people
 Culture in the organization

HRD means building competencies. The most important HRD function is to build competencies in each and
every individual working in an organization. Competencies are to be built and multiplied in roles and
individuals.

HRD means building commitment in people. Competencies will not make sense without commitment. Think of
an organization where all the employees are competent but not willing to put into use their competencies.
Hence, competencies without commitment will not contribute towards effectiveness.

HRD is all about building a development culture in an organization. HRD ensures that culture-building
practices are adopted from time to time to create a learning environment in the organization. It builds such a
culture that the built-in culture in turn will build competencies and commitment in the people who work with the
organization.

HRD can be defined as the branch of human resources management function that endeavors to build
competencies, commitment and a learning culture in organizations with the purpose of bringing in competitive
advantages to achieve
business excellence in all its operations.

B. HRD SYSTEMS

HRD functions are carried out through its systems and sub systems. HRD has five major systems and each of
the systems has sub systems as elaborated below: the first three systems viz., Career system, Work system
and Development system, are individual and team oriented while the fourth and the fifth systems viz. Self
renewal system and Culture Systems are organization based.

1. Career system: As an HRD system, career system ensures attraction and retention of human
resources through the following sub-systems.

• Manpower planning
• Recruitment
• Career planning
• Succession planning
• Retention

2. Work system: Work-planning system ensures that the attracted and retained human resources are utilized
in the best possible way to obtain organizational objectives. Following are the sub systems of the work
planning system.
• Role analysis
• Role efficacy
• Performance plan
• Performance feedback and guidance
• Performance appraisal
• Promotion
• Job rotation
• Reward

3. Development system: The environmental situation and the business scenario is fast

changing. The human resources within the organization have to raise upto the occasion and change
accordingly if the organization wants to be in business. The development system ensures that the retained
(career system) and utilized (work system) human resources are also continuously developed so that they are
in a position to meet the emerging needs of the hour. Following are some of the developmental sub - systems
of HRD that make sure that human resources in the organization are continuously developed.

• Induction
• Training
• Job enrichment
• Self-learning mechanisms
• Potential appraisal
• Succession Development
• Counselling
• Mentor system

4. Self-renewal system: It is not enough to develop individuals and teams in the organizations but
occasionally there is a need to renew and re-juvenate the organization itself. Following are some of the sub
systems that can be utilized to renew the organization.

• Survey
• Action research
• Organizational Development interventions
• Organizational Retreats

5. Culture system: Building a desired culture is of paramount importance in today’s

changed business scenario. It is the culture that will give a sense of direction, purpose, togetherness, and
teamwork. It is to be noted that whether an organization wants it or not along with the time common ways of
doing things (culture) will emerge. If not planned carefully and built systematically such common traits may
not help the business but may become a stumbling block. Hence it is very important to have cultural practices
that facilitate business. Some of the culture building subsystems are given below:

• Vision, Mission and Goal

• Values
• Communication
• Get-togethers and celebrations
• Task forces
• Small Groups

C. HRD PROCESSES

HRD is a process-oriented function. HRD functions in many organizations fail because the processes
involving the systems are not adequately addressed. The concept of process essentially concerns the
question of “how” and to a great extent the question of “why “. It emphasises the behavioural and interactional
dimensions. All the HRD processes are centred around four constituents of an organization viz, the employee,
role, teams and the organization itself. Each of the unit has its own behavioural patterns and framework,
which, if not addressed adequately may not bring in the desired outcomes. It is through these processes that
the HRD systems are effectively implemented. Implementations of the HRD systems are, in turn indented to
bring in right processes in organizations. Hence HRD systems and HRD processes are closely linked. Their
relationships are well explained by Rao (1990).

1.Individual: Individual is the basic constituent of an organization. All the

behavioural pattern and dynamisms emerge from individuals. Hence individual based HRD process explained
below are vital for HRD function and for implementation of the HRD systems.

• Efficacy
• Effectiveness
• Styles
• Leadership

2.Role: Role is a dynamic entity which involves the expectations of significant others

and self from the position of the role holder. A large number of behavioural patterns and dynamism in
organizations are centred around the roles. The role occupier and all others who have some linkage or
relationship to that role form a constituent. Following are some of the role related, HRD processes in
organizations.

• Competencies for job performance

• Commitment
• Motivation
• Frustration,

Stress & Burnout

3.Teams:Work in organizations are performed through teams or groups. When

individuals begin to work in team, behavioural patterns and dynamisms emerge. Following HRD processes
are to be addressed if team work should bring in the desired results.

Communication
Feedback
Conflict resolution
Collaboration

4.Organization: A large number of HRD processes are organization related. Unless

and until these processes are in place, HRD cannot take off. However, in a number of organizations as a
result of implementation of HRD systems, these processes were set right. HRD systems can contribute
towards the development and maturity of these processes.

• Organizational Climate
• Communication
• Learning Organization
• Organizational Change
• Organizational Development

Definition of HRM and HRD

HRM deals with the day to day operations of the human resources department. This curriculum
would include bus. law, compensation, employee relations, benefits, and medical etc.
HRD : Human Resource Development deals with the training and the developmental aspect of
employees. Most HRD curriculum include classes like T & D, organizational dev., industrial psy.
2. Difference of HRM and HRD
HRD focuses on training and optimizing work performance. HRM focuses on whom you hire,
whom you fire and remediation to employees who need discipline and retooling to continue their
employment.

•HRD is more proactive; it copes with the changing needs of the people as well as anticipate these needs and
HRD is function more independent with separate roles to play.

• HRD is sub-system of a large system, more organizational oriented and HRD is function
more independent with separate roles to play.
•HRD is developing the whole organization and HRM is concerned with people only.

• HRD is continuous process and HRM is a routine and administrative function.

• HRD is involvement of the entire work force from top to bottom is more and a must in
most of the cases and HRM is basically the responsibilities of the HR department.
 1. PERFORMANCE APPRAISAL
2. GREIVANCE
3. DISCIPLINE
4. RECURITMENT
5. SELECTION
6. CAREER PLANNING AND DEVELOPMENT
7. EMPLOYEE TRAINING
8. COLLECTIVE BARGAINING
9. INDUSTRIAL CONFLICTS
10. PROMOTION, TRANSFER, DEMOTION
11. PARTICIPATIVE MANAGEMENT

PERFORMANCE APPRAISAL

MEANING OF PERFORMANCE APPRAISAL

performance appraisal may be understood as the assessment of individual’s performance in a systematic

way, the performance being measured against factors such as job knowledge, quality and quantity output,
initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility, health and the
like. Assessment should be confined to past performance alone. Potentials of the employee for future
performance must also be assessed.
Performance appraisal is a method of evaluating the behavior of employees in the work spot, normally
including both the quantitative and qualitative aspect of job performance. Performances here refer to the
degree of accomplishment of the tasks that make up an individual’s job. It indicates how well an individual is
fulfilling the job demands. Often the term is confused with effort, but performance is always measured in
terms of result and not efforts.
A formal definition of performance appraisal is “it is the systematic evaluation of the individual with respect to
his or her performance on the job and his or her potential for development.”

FEATURES OF PERFORMANCE APPRAISAL

Performance appraisal is the systematic description of an employee’s job relevant strengths and weaknesses.

The basic purpose is to find out how well the employee is performing the job and establish a plan of
improvement.

Appraisals are arranged periodically according to a definite plan.

Performance appraisal is not job evaluation. It refers to how well someone is doing the assigned job. Job
evaluation determines how much a job is worth to the organization and there for, what range of pay should be
assigned to the job.

Performance appraisal is a continuous process in every large scale organization.

PROCESS OF PERFORMANCE APPRAISAL
Performance appraisal is planned, developed and implemented through a series of steps:

ESTABLISHING PERFORMANCE
STANDARD

CONNUNICATION OF
PERFORMANCE STANDARDS

COMPARISON OF ACTUAL
PERFORMANCE WITH THE
STANDARDS
MEASUREMENT OF ACTUAL
PERFORMANCE
FOLLOW UP ACTIONS
1) Establish Performance Standards.
Appraisal systems require performance standards, which serve as benchmarks against which performance is
measured. In order to be useful, standards should relate to the desired results of each job. Appraisals must
have a clear- cut criteria. Performance standards must be both to the appraiser and the appraise. The
performance standards of goals must be developed after a thorough analysis of the job. Goals must be
written down. They must be measurable within certain time and cost considerations.

2) Communicate the Standards.

Performance appraisal involves attract two parties; the appraiser who does the appraisal and the appraise
whose performance is being evaluated. Both are expected to do certain things. The appraiser should prepare
job descriptions clearly, help appraise set his goals and targets; analysis results objectively; offer coaching
and guidance to appraise whenever required and reward good results. The appraiser should be very clear
about what he is doing and why he is doing. For this purpose, the performance standards must be
communicated to appraise and their reactions are noted initially. These standards must be revised or modified
as and when required.

3) Measure Actual Performance.

After the performance standards are set and accepted, the next step is to measure actual performance. This
requires the use of dependable performance measures, the ratings used to evaluate performance.
Performance measures in order to be helpful must be easy to use, reliable and report on the critical behaviors
that determine performance. Generally, managers regarding how to measure actual performance use four
common sources of information: personal observation, statistical reports, oral reports and written reports.

4) Compare Actual Performance with Standards and Discuss the Appraisal.

Actual performance may be better than expected and sometimes it may even go off the track. The
assessment of another person's contribution and ability is not an easy task. It has serious emotional
overtones as it affects the self-esteem of the appraise. Any appraisal asked on subjective criteria is likely to
be questioned by the appraisers and leave him quite dejected and unhappy when the appraisal turns out to
be negative.

5) Taking Corrective Action, if Necessary.

Corrective action is of two types: The one, which puts out the fires immediately and the other one, which
strikes at he root of the problems permanently. Immediate action sets things right and get things back or
track, whereas the basic corrective action gets to the source of deviations and seems to adjust the difference
permanently. Basic corrective step seek to find out how and why performance deviate.
METHODS OF PERFORMANCE APPRAISAL:

Methods of Performance Appraisal

A) Traditional Methods B) Modern Methods

Confidential report
Ranking
Graphical rating scale
Checklists
Forced distribution
Critical incidents
Essay evaluation
Group appraisals
1. Human resource accounting
2. management by objective
3. Assessment centre
4. BARS( Behaviorally
anchored rating scale )

Traditional methods:
Confidential report method
It is mostly used in government organizations. It is a descriptive report generally prepared at the end of the
year, by the employee’s immediate superior. The report highlights the strengths, weaknesses, major
mistakes, merits, good work done etc. of the subordinate. The impression of the superior about the superior is
merely recorded here. It does not offer any feedback to appraise. It is a narrative method of performance
appraisal since the report is not made public and hence no freedom is available, the subjective analysis of the
superior is likely to be hotly contested.

Ranking method
This is relatively easy method of performance evaluation. In it, the ranking of an employee in a work group is
against that of another employee. The relative position of each employee is tested in terms of his or her
numerical rank, for example, when there are five employees (A,B,C,D,E) to be compared, then A’s
performance is compared with that of B’s and decision is arrived at as to whose is the better or worst. Next, B
is also compares with all others. Since A is already compared with B, this time B is to be compared with only
C, D, and E In this evaluation is asked to rate the employees from highest to lowest on some overall criterion.
It is easier to rank the best and the worst employee, it is very difficult to rank the average employees.

Graphical rating scale

It is the oldest and the most commonly used method of performance in this, a printed form is used to evaluate
the performance of an employee. Four to twelve factors are selected, depending upon the category to which
the employee belongs. Some of these factors are quantity of out put, quality of out put, initiative, integrity,
dependability etc. these factors and their degrees are marked on a graph paper provided in the form. The
rater has merely to check on the scale where he thinks the employee belongs.

Checklists and weighted checklists

The checklist is a simple rating technique in which the supervisor is given a list of statement or world and ask
to check statement representing the characteristic and performance of each employee a checklist represents
a set of objective statement about the employee and his behavior. A more recent variation of the checklist is
weighted list. Under this the value of each question may be weighted more heavily than others.

The following are sample questions in the checklist:

- Is the employee is really interested in the task assigned? Yes/ No
- Is he respected of his colleagues? Yes/ No
- Does he follow instructions properly? Yes/ No
- Does he give respect to his superiors? Yes/ No
- Does he make mistakes frequently? Yes/ No

A rating score from the checklist helps the manager in evaluation of the performance of the employee.

Forced distribution method

It was developed to eliminate the bias and the preponderance of high ratings that might occur in some
organizations. Its primary purpose is the correct tendency of the rates to give consistently high and low ratings
to all employees. This method makes those of several sets of pair phases, two of which are positive and two
of them are negative and the rates is asked to indicate which of the four phrase is the most or least
descriptive of a particular employee. Actually the statement items are grounded in such a way that the rater
cannot which statement applies to the most effective employee. The favorable qualities earn a plus credit and
the unfavorable ones earn the severest. In this the overall objectivity is increased in the employee’s
performance because the rater does not know how high or low he is evaluating the individual, as he has no
access to the storing key.

Critical incident method

The manager prepares test of statements of every effective and ineffective behavior of an employee.
These critical incidents or events represent the outstanding poor behavior of the employees. The manager
prepares records of the critical incidents of the worker’s behavior. At the end of the rating period, the recorded
critical incidents are used in the evaluation of the workers’ performance.

Essay Appraisal
Under this method the rater is asked to express the strong as well as the weak points of the employee’s
behavior. This technique is normally used with a combination of the graphical rating scale because the rater
an elaborately present the scale by sustaining an explanation for his rating. In it, the rater considers the
following factors:
Job knowledge and potential of the employee.
Employees understanding about the company’s programmes, policies, objective, etc.
The employees general planning, organizing and controlling ability.
The employee’s relation with the co-workers and superiors.
The attitude and perceptions of the worker, in general.

Group appraisal
In this method an employee is appraised by a group of appraisers. This group consists of the immediate
supervisor of the employee, other supervisors who have close contact with employee’s work, manager or
head of department or consultant. The head of department or manager may be the chairman of the group and
the supervisor may act as the coordinate for the group activities. The immediate supervisor enlighten other
members about the job characteristics, demand, standards or performance etc. then the group appraise the
performance of the employee, compares the performance with the standards, finds out the deviation,
discusses the reasons, therefore suggests ways for improvement of performance, prepares an action plan,
studies the need for change in the job analysis and standards and recommends changes, if necessary. This
method eliminates “personal bias” to a large extent, as performance is evaluated by multiple rates. However,
it is very time consuming process.

B) Modern Methods:
Human resource accounting
HRA is a sophisticated way to measure in financial terms the effectiveness of the personal manager activities
and the use of people in an organization. It is process of accounting people as an organization resource. It
tries to place a value on the organizational human resources as assets and not as expenses. This method
shows the investment the organization makes in the people and how the value of these people change over a
time. The acquisition of employee is compared with the replacement cost from time to time. In brief, in this
method the employees’ performance is evaluated in terms of costs and contributions of employees.
Management by objectives
It is the modern method of evaluating the performance of personnel. Managers have become increasingly
aware that the traditional performance evaluation systems are characterized by facing goals. The concept of
MBO is actually the outcome the pioneering work of Drucker, Mcgreger and Odioine in management science.
MBO can be described as the process whereby the superior and subordinate manager of an organization
jointly identify its common goals, each individual’s areas of operations, responsibility in terms of results
expected of him and use these measures as a guide for operating the unit and assessing the contributions of
each of its members. MBO thus represents more than an evaluation process.

The MBO can be described in four steps:

The first step is to establish the goals each subordinate is to attain. The goals typically refer to the desired
outcome to be achieved. The goals can be then used to evaluate the employee performance
The second step involves setting of the performance standard fro the subordinates in a previously arranged
time period.
In the third step, the actual level of goal attainment is compared with the goals agreed upon. The evaluator
explores the reasons or the goals that were not met and the goals that were exceeded. This step helps to
determine the training needs. It also alerts the superior of the conditions that may affect but over which the
subordinate has no control.
The final step involves establishing new goals and, possibly, new strategies for goals that previously not
attained. At this point, subordinate and superior involvement in the goal setting may change. Subordinates
who successively reach the established goals may be allowed to participate more in the goal setting process
the next time. The process is repeated.
Assessment center
In this approach individuals from various departments are brought together to spend two or three
days working on an individual or a group assignment similar to the ones they would be handling when
promoted. Observers rank the performance of each and every participant in order to merit since assessment
centers are basically meant for evaluating the potential of candidates to be considered for promotion, training
on development, they offer an excellent means for conducting evaluation process in an objective way. All
assesses get an equal opportunity to show their talents and capabilities based on merit.

Behaviorally anchored rating scale

This method is also known as behavioral expectation scale. This method represent he latest innovation in the
performance appraisal. It is the combination of the rating scale and critical incident techniques of employee
performance evaluation. The critical incidents serve as the anchor statement on a scale and the rating form
usually contains six to eight specifically defined performance dimensions.

360° PERFORMANCE APPRAISAL

The appraisal may be any person who has thorough knowledge about the job contents, contents to be
appraised, standards of contents and who observes the employee's by performing a job. The appraisal should
be capable of determining what is more important and what is relatively less important. He should prepare
reports and made judgments without bias. Typical appraisals are supervisors, peers. Subordinates,
employees themselves, user of service and consultants. Performance Appraisal by all these parties is called
360° Performance Appraisal.

Supervisors
Supervisors include superiors of the employee, other superiors having knowledge about the work of the
employee and department head or manager. General practice is that immediate superior appraises the
performance, which in turn is reviewed by the departmental head/ managers. This is because superiors are
responsible free managing their subordinates and they have the opportunity to observe, direct and control the
subordinate continuously. Moreover, they are accountable for the successful performance of their
subordinates. Sometimes other supervisors, who have close contact with employee work also appraise with a
view to provide additional information.
Peers
Peer appraisal may be reliable of the workgroup is stable over a reasonably long period of time and performs
tasks that require interaction.

Subordinates
In developed countries, the concept of change superiors rated by subordinates in being used in most
organizations. Such a method can be useful provided the relationships between superiors and subordinates
art cordial. Subordinate's ratings in such cases can be quite useful in identifying competent superiors.

Self-Appraisal
If individuals understand the objectives they are expected to achieve and the standards by which they are to
be evaluated, they are to a great extent in the best position to appraise their own performance. Also, since
employee development means self-development, employees who appraise their own performance may
become highly motivated.

Users of Services/Customers
The customers on users of services can, better judge employee performance in service organizations relating
to behaviors, promptness, speed in doing the job and accuracy. Example, students better judge a teacher’s
performance.
Consultants
Sometimes consultants may be engaged for appraisal when employees or employers do not trust the
supervisory appraisal and management does not trust the self-appraisal and the appraisal done by
subordinates. In such situation, the consultants are trained and they observe the employee at work for
sufficiently long periods for the purpose of appraisal.

When to appraise?
Informal appraisals are conducted whenever the supervisor or personnel manager feel it necessary. However,
systematic appraisals are conducted on a regular basis; say for example, every six month or annually.
PURPOSES OF PERFORMANCE APPRAISAL
To create and maintain a satisfactory level of performance.
To contribute to the employee growth and development thought training, self and management development programmes.
To help the superior to have a proper understanding about their subordinates.
To guide the job changes with help to continuous ranking.
To facilitate fair and equitable compensation based on performance.
To provide information for making decision regarding lay off, retrenchment etc.

REQUIREMENTS OF A GOOD APPRAISAL SYSTEM:

It must be easily understandable:

If the system is too much complex or to time consuming, it may be anchored to the ground by its own dead weight of
complicated forms which nobody but the experts understand.

It musty has support of all line people who administer it:

If the line people think that there role is not very important then they will not consider the system seriously. Similarly, if the
people find that the system is too theoretical, too ambitious, or that has been foisted on them by the ivory-tower staff
consultants who have no comprehension of the demand then they will recent it.

The system should be sufficiently grounded in the requirement of the organization:

It should reflect the value system of the organization. In fact functioning as a definition of performance, it should tell he
employee what set of activities or what qualities are considered desirable by the organization. As such it should have
linkage with the job description.
The system should be both valid and reliable:
The validity of the ratings is the degree to which they are truly indicative of the intrinsic merit of the employees. The reliability
of the ratings is the consistency with which the ratings are made, either by different sectors, one by one rater at different
times. Both validity and reliability result from objectivity. The appraisal system of many organizations lacks this objectivity
and bunches all employees into one or two top ranks without taking into account their merits. This raises outstanding
performances but also raises doubts about the validity of the system.

The system should have built-in incentive:

This means that the reward should follow satisfactory performance. Many authors however, advocate against the direct
linkage between the appraisal and rewards. In their opinion, such a connection throttles downward communication of
performance appraisal because superiors do not like being questioned by disgruntled subordinates.

The system should be open and participative:

It should involve employees in goal-setting process. This helps in planning performance better.

The systems should focus more on the development and growth:

Of the employee than on generating data for administrative decision making related to promotions, increments, etc. the
system must help in identifying employee’s strengths and weaknesses and indicate corrective actions. For example it may
reveal that goals need to be modified on; there is need for classification of duties or for additional training or job rotation or
job enrichment.
RECURITMENT

Recruitment means to estimate the available vacancies and to make suitable arrangements for their selection and
appointment. Recruitment refers to “Discovering potential applicants for actual or anticipated organizational vacancies.
Recruitment is a process “To discover the source of manpower to meet the requirements of staffing, to employ effective
measures for attracting potential manpower in adequate number”. Recruitment is the process of identifying the sources for
prospective candidates and to stimulate them to apply for the job. It’s linking activity bringing together those with jobs and
those seeking jobs. It locates the source of manpower to meet the requirements and job specifications. In recruitment
process available vacancies are given wide publicity and suitable candidates are encouraged to submit application so as to
have a pool of eligible candidates for scientific selection.
In recruitment, information is collected from interested candidates. For these different sources of recruitment such as
newspaper advertisement, employment exchange, internal promotions, etc. are used. In the recruitment, a pool of eligible
and interested candidates is created for the selection of most suitable candidate. Recruitment represents the first contact
that a company makes with potential employees.
Recruitment is a positive function in which publicity is given to the jobs available in the organization and interested
candidates (qualified job applicants) are encouraged to submit applications for the purpose of selection.

DEFINITION OF RECREUITMENT
According to Edwin Flippo, “Recruitment is the process of searching for prospective employees and stimulating them to
apply for jobs in the organization.

OBJECTIVES OF RECRUITMENT
The objectives of recruitment are as follows:
(i) To attract people with multi-dimensional skills and experiences that suit the present and future organizational
strategies,
(ii) To induct outsider with a new perspective to lead the company,
(iii) To infuse fresh blood at all levels of the organization,
(iv) To develop an organizational culture that attracts competent people to the company,
(v) To search or head hunt/head pouch people whose skills fit the company’s values,
(vi) To search for talents globally and not just within the company.

PURPOSE OF RECRUITMENT
Recruitment has three major purposes:
1) to increase the pool of job applicants with minimum cost.
2) To meet the organization’s legal and social obligations regarding the demographic composition of its workforce.
3) To help increase the success rte of the selection process by reducing the percentage of applicants who are either
poorly qualified or have the wrong skills.

NEED FOR RECRUITMENT

The need for recruitment may be due to the following reasons/situations:
(a) Vacancies due to promotions, transfers, retirement, termination, permanent disability, death and labour turnover.
(b) Creation of new vacancies due to growth, expansion and diversification of business activities of an enterprise. In
addition, new vacancies are possible due to job respecification.

SOURCES OF RECRUITMENT
The sources of recruitment may be grouped into:

Internal sources
External sources

INTERNAL SOURCES: As the term implies internal source of recruitment is for those who are currently members or the
organization. Whenever any vacancy arises, somebody from within the organization may be looked into, following are the
internal sources of recruitment.
 1) Promotions: - In order to motivate the existing employees, management follows the policy of internal promotions.
Promotion means shifting of an employee to a higher position carrying higher responsibilities, facilities, status and
salaries. Various positions in the organization are usually filled up by promotions of existing employees on the basis
of merit or seniority or a combination of both.
2) Transfers: - Transfer refers to a change in job assignment. It may involve a promotion or demotion, or no change in
terms of responsibility or status. A transfer may be either temporary or permanent, depending the necessity of filling
jobs. E.g. transfer from head office to branch office.
3) Retirements: - At times, management may not find suitable candidate in place of the one who had retired, after
meritorious service. Under this circumstances management may decide to call retired manager with new extension.
4) Recalls: - When management faces a problem, which can be solved only by a manager who has proceeded on
long leave, it may be decided to recall that person. After the problem is solved, his leave may be extended.
5) Former employees: - Individuals who left for some other job, might be willing to come back for higher wages
incentives. An advantage with these sources is that the performance of the person/employee is already known.

EXTERNAL SOURCES
As the term implies the external source of recruitment is of potential workers who are not currently member of the
organization. It usually includes new entrants to the labour force the unemployed and people employed in the other
organization seeking the change. Company managements have to use eternal sources for the recruitment of supervisory
staff and managers as and when necessary. This may be with a view to introducing the ‘new blood’ in the organization.
External recruitment is one way of bringing into the organization that has new skills or abilities and different way of
approaching job task. Following are the most common external source of managerial recruitment.

1) Newspaper Advertisement:-Newspaper advertisements are overwhelmingly popular source of recruitment. A

message containing general information about the job and the organization is placed in various newspapers.
Newspaper advertising typically generates a large applicant flow. Though costly, it provides wide choice as it
attracts a large number of suitable candidates from all over the country. The best example for newspaper
advertisement is the Times of India’s Asscent supplement which comes on every Wednesday and contains both
domestic as well as international jobs.
2) Campus Recruitment: - College Campuses are another very popular recruitment source. The growth of
Management institutes, IIts and Regional Engineering Colleges has provided a popular source of recruitment.
Private sector is able to attract many aspirants. It is an excellent source of recruiting management trainees. The
promising students get job security immediately after securing degrees due to such campus interviews/recruitment.
3) Recruitment through internet: - The Internet has quickly become a very popular source of employment
advertising. This source is quickly growing in popularity. Currently employers can post their openings to any of
several newsgroups for free. Most employment advertisement firms can also post the jobs on the Internet; however,
they charge a fee. A large and fast growing proportion of employers use the internet as a recruitment tool. More and
more organizations are placing information about open positions on the World Wide web. There are many web sites
through which recruitment takes place. Some of the examples are www.naukri.com, www.monster.com, etc.

4) Job Fairs: - Job fairs are very effective. A job fair is an event sponsored by a "job fair" company who charges a fee
to participating employers. The "job fair" company will typically advertise in local media to attract qualified
applicants. Hiring managers can meet multiple candidates and conduct on-the-spot interviews. Because the
applicants may be interviewing with multiple employers, it is imperative to respond quickly with invitations for in-
plant interviews of qualified candidates. If a job fair results in just one hire it is usually cost effective.
5) Employment Agencies: - The firm contacts an organization whose main purpose is locate job seekers. The
company provides the agency with information about the job, which the agency then passes along to its clients.
Clients may be either employed or unemployed. Agencies can either be public or private. Fees may be charged to
either or both the client seeking a job and the company seeking applicants.
6) Walk-ins, Write-ins and Talk ins:- The most economical approach for recruitment of candidates is direct
applications. The job seekers submit applications or resumes directly to the employer. The advertisement mentions
date, day and timing during which the applicant can ‘walk in’ for an interview. Write-ins are those who send written
inquiries. These applicants a raked to complete application forms for further processing. Talk-ins is now becoming
popular and the applicants are required to meet the employer for detailed talks. The applicant is not required to
submit any applications.

ADVANTAGES OF INTERNAL RECRUITMENT

1) Internal recruitment is economical.
2) The present employees already know the company well and are likely to develop a loyalty for the same.
 3) It tends to encourage existing employees to put in greater efforts and to acquire additional qualification. This means
there is motivation to employee to develop and reach to higher positions.
4) It provides security and continuity of employment.
5) Internal recruitment helps to raise the morale of employees and develop cordial relations at the managerial levels.
6) It reduces labour turnover as capable employees get promotion within the organizations.
7) Internal recruitment is a quick and more reliable method.
8) People recruited from within the organization do not need induction or training.

DISADVANTAGES OF INTERNAL RECURITMENT

1) Internal promotions create a feeling of discontent among those who are not promoted.
2) It prevents the entry of young blood in the organization.
3) Promotion to certain key post may not be possible due to non-availability of competent persons.
4) The organization will not be able to attract capable persons from outside if internal sources are used extensively.
5) It may encourage favoritism and nepotism.
6) Promotions by seniority may not be always beneficial to the organization.

In brief, internal methods of recruitment should be used to extent possible but too much dependence on internal methods is
undesirable and may prove costly to the organization in the long run.

ADVANTAGES OF EXTERNAL SOURCE OF RECRUITMENT

1) Entry of young blood in the organization is possible.
2) Wide scope is available for selection. This facilitates selection of people with rich and varied experience.
3) Selection can be made in an impartial manner as large number of qualified and interested candidates are available.
4) Scope for heartburn and jealousy can be avoided by recruiting from outside.
5) The management can fulfill reservation requirements in favour of the disadvantaged section of he society.

DISADVANTAGES OF EXTERNAL SOURCE OF RECRUITMENT

1) External recruitment leads to labour turnover particularly of skilled, experienced and ambitious employees.
2) The relations between employer and employee deteriorate leading to industrial disputes and strikes.
3) The present employees may lose their sense of security. Their loyalty to the organization may be adversely
affected.
4) Employees feel frustrated due to external recruitment and their morale is adversely affected.

SELECTION

MEANING AND DEFINITION OF SELECTION

Selection is one of the most important of all functions in the management of personnel. Selection is more closely related
to recruitment because both are concerned with processing individuals to place them in a job. Selection is next to
recruitment. After identifying the sources of human resources, searching for prospective employees and stimulating
them to apply for jobs in an organization, the management has to perform the function of selecting the right employees
at the right time. “Right man at the right job” is the basic principle in selection. Selection is the process of collecting and
evaluating information about an individual in order to extend an offer of employment. It is the process of logically
choosing individuals who posses the necessary skills, abilities and personality to successfully fill specific jobs in the
organization.
Selection means a process by which the qualified personnel can be choosen from the applicants who have offered their
services to the organization for employment. Thus selection process is negative function because it attempt to eliminate
applicants, leaving the best to be selected. In the words of Dale Yodev, “Selection is the process in which candidates for
employment are divided into two classes – those who are to be offered employment and those who are not”. In short,
selection is the process of choosing a person suitable for the job out of several persons.
The objective of the selection decision is to chose the individual who can most successfully perform the job from the
pool of qualified candidates. The selection procedures are the system of functions and devices adopted in a given
company to ascertain whether the candidate’s specification is matched with the job specification and requirements or
not. The selection procedures cannot be effective until and unless:
1) Requirements of the job to be filled, have been clearly specified (job analysis, etc)
2) Employee specifications (physical, mental, social, and behavioral, etc) have been clearly specified.
3) Candidates for screening have been attracted.
Thus, the development of job analyses, human resource planning and recruitment are necessary prerequisites to the
selection process. The breakdown in any of these processes can make even the best selection system ineffective.

IMPORTANCE OF SELECTION
The importance of selection may be judged from the following facts:-
 1) Procurement of Qualified and Skilled Workers: - Scientific selection facilitates the procurement of well qualified
and skilled workers in the organization. It is in the interest of the organization in order to maintain the supremacy
over the other competitive firms. Selection of skilled personnel reduces the labour cost and increases the
production. Selection of skilled personnel also facilitates the expansion in the size of the business.

2) Reduce Cost of Training and Development:- Proper selection of candidates reduces the cost of training because
qualified personnel have better grasping power. They can understand the technique of work better and in less time.
Further, the organization can develop different training programmes for different persons on the basis of their
individual differences, thus reducing the time and cost of training considerably.

3) Absence of Personnel Problems: - Proper selection of personnel reduces personnel problems in the organization.
Many problems like labour turnover, absenteeism and monotony shall not be experienced in their severity in the
organization. Labour relation will be better because workers will be fully satisfied by the work. Skilled workers help
the management to expand the business and to earn more profits and in turn management compensates, the
workers with high wages, benefits etc.

SELECTION PROCEDURE

Selection procedure employs several methods of collecting information about the candidate’s qualification, experience,
physical and mental ability, nature and behaviour, knowledge, aptitude and the like for judging whether a given applicant is
or is not suitable for the job. Therefore, the selection procedure is not a single act but is essentially a series of methods or
stages by which different types of information can be secured through various selection techniques. At each step, facts may
come to light which are useful for comparison with the job requirement and employee specifications.
Selection procedure is lengthy and time consuming particularly in the case of supervisory post.
Following are the steps/ procedures of selection:

1) Job Analysis: - Job analysis is the basis for selecting the right candidate. Every organization should finalize the job
analysis, job description, job specification and employee specification before proceeding to the next step of
selection.

2) Application Form: - Application Form is also known as application blank. The technique of application blank is
traditional and widely accepted for securing information from the prospective candidates. Where application forms
are use, the data become a part of the employee’s record. The information is generally required on the following
items in the application forms: Personal background information, Educational information, Work experiences, salary,
personal details, expected salary and allowances etc.

3) Preliminary Interview: - Preliminary or initial interview is often held in case of “at the gate” candidate. This
interview usually of short duration and is aimed at obtaining certain basic information with a view to identifying the
obvious misfits or unqualified. Thus preliminary interview is useful as a process of eliminating the undesirable and
unsuitable candidate. If the candidate seems to possess the basic minimum requirements for efficient job
performance, he is given an application form for being filled out by him.

4) Screening Application Form: - Information given in the application form is used for selection purposes. The
applicant who seems to be not fit for the job on the basis of information given in the application blank is rejected out
rightly at this stage. The applicants who have not furnished the required information may also be rejected.
Applications will not be accepted after the close date. After the close date of the recruitment, the Job Expert for the
hiring department and Human Resources will screen the application forms for minimum education and qualification
requirements. A recruitment date may be extended if there are no qualified candidates. Recruitments can also be
open until the position is filled; in this situation, applicants are reviewed and interviewed on a regular basis until an
eligible candidate can be selected and appointed to the available position.

5) Written test:- The organization have to conduct written examination for the qualified candidates after they are
screened on the basis of the application blanks so as to measure the candidate’s ability in arithmetical calculations,
to know the candidate’s attitude towards job, to measure the candidates aptitude, reasoning, knowledge in various
disciplines, general knowledge and English language. Intelligence test measures the individuals capacity or
reasoning, verbal comprehension, numbers, vocabulary, word fluency etc. aptitude test measures individuals
capacity or talent ability to learn a job if he is given adequate training.

6) Final interviewing: - Final interview is usually followed by testing. This is the most essential step in the process of
selection. In this step the interviewer matches the information obtained about the candidate through various means
 to the job requirements and to the information obtained through his own observation during the interview. The basic
objective of the interview is to measure the applicant against the specific requirements of the job. Interview must be
conducted in a friendly atmosphere and the candidate must be made to feel at ease. The interviewer should not ask
unwarranted questions which make the candidate nervous. It being the two way communication, the interviewee
should also be given a chance to ask questions if he so likes, about the job and the organization.

7) Reference Checks: - After completion of the final interview, the personnel department will engage in checking
references. Candidates are required to give the name of reference in their application forms. These references may
be from the individuals who are familiar with the candidate’s academic achievement or from the applicant’s previous
employer, who is well versed with the applicant’s job performance, and sometime from co-workers. If reference is
checked in the correct manner, a great deal can be learned about a person that an interview or tests cannot elicit. A
good reference check used sincerely fetches useful and reliable information to the organization.

8) Physical Examination: - The candidates who have crossed the above hurdles are required to go for the medical
examination. This is very important because of a person of poor health cannot work competently and the investment
in him may go waste. Thus, a thorough medical examination is essential.

9) Selection: - If a candidate successfully overcomes all the obstacles or tests given he would be declared selected. A
appointment letter will be given to him mentioning the terms of employment, pay scales, post on which selected etc.
MEANING AND DEFINITION OF PLACEMENT
Placement means offering of the job to the finally selected candidate. One the employee is selected he should be
placed on a suitable job. According to Pigors and Myres, placement may be defined as “the determination of the job to
which an accepted candidate is to be assigned, and his assignment to that job. It is matching of what the supervisor has
reason to think he can dos with the job demands(job requirements); it is matching of what he imposes(in strain, working
condition) and what offers is the form of pay roll, companionship with other promotional possibilities etc.” A proper
placement reduced the employee turnover, absenteeism and accident rate and improves the morale. Placement is not
an easy process. It is very difficult for a new employee who is quite unknown to the job and environment. For this
reason, the employee is generally put on a probation period ranging from one year to two years. At the end of the
probation period, if the employee show a good performance, he is confirmed as a regular employee of the organization.
 Thus, the probation period or trial period is a transition period at the end of which management has to take decision
whether the employee should be made regular or discharged from the job.

PRINCIPLE OF PLACEMENT
Following principles are followed at the time of placement of an employee:

1) The man should be placed on the job according to requirements of the job. The job should not be adjusted
according to the qualifications or requirements of the man. “Job first, man next” should be the principle of
placement.

2) The job should be offered to the man according to his qualifications. Neither higher, nor lower job should be offered
to the new employee.
3) The employee should be made conversant with the conditions prevailing in the industry and all things relating to the
job. He should also be made aware of the penalties if he commits a wrong.

4) While introducing the job to the new employee, an effort should be mad to develop a sense of loyalty and
cooperation in him so that he may realize his responsibilities better towards the job and the organization.

CAREER PLANNING AND DEVELOPMENT

INTRODUCTION:-
The term career planning is frequently used in relation young boys and girls studying at the college level. College
students are expected to consider their qualities (physical and mental), psychological make-up, likes and dislikes,
inclinations, etc. and decide what they want to be in their life. In other words, they should decide what they want to achieve
in their life and adjust their education and other activities accordingly. This means they have to plan their career. In such
career planning, parents, family members and college teachers offer helping hand and guide young boys and girls in
selecting the most suitable career. Lot of literature, psychological tests etc. are also available on career planning. Even
lectures, workshops and TV programmes are arranged for guiding students on career selection (particularly after the
declaration of HSC results). Career planning enables them to use their abilities/qualities fully and make their life happy,
prosperous and rich in quality. At present, even experts are available to help youth in their career planning. IQ and other
tests are also conducted for this purpose.
The term career planning and development is used extensively in relation to business organizations. It is argued that if
the organizations want to get the best out of their employees, they must plan the career development programmes in their
organization effectively. Such programmes offer benefits to employees and also to the organizations. The employees will
develop new skills will be available to the organization. This type of career planning can be described as organizational
career planning.

MEANING OF CAREER (WHAT IS CAREER?):-

A career is a sequence of positions/jobs held by a person during the course of his working life. According to Edwin B.
Flippo “a career is a sequence of separate but related work activities that provide continuity, order and meaning to a
person’s life”. Career of an employee represents various jobs performed by him during the course of his working life. This is
described as career path. In the case of an ordinary worker, the career path includes the following job positions:
Unskilled worker – Semi-skilled worker – Skilled worker – Highly skilled worker –
Assistant foreman – Foreman.

Employees (of all categories) want to grow in their careers as this provides more salary, higher status and opportunity to
use knowledge, education and skills effectively. An individual with potentials joins a firm not for job but for career
development. An organization has to provide better opportunities to its employees in their career development and also use
their efficient services for the benefit of the organization.

MEANING OF CAREER PLANNING (WHAT IS CAREER PLANNING?):-

Career planning is one important aspect of human resource planning and development. Every individual who joins an
organization desires to make a good career for himself within the organization. He joins the organization with a desire to
have a bright career in terms of status, compensation payment and future promotions. From the point of view of an
organization, career planning and development have become crucial in management process. An organization has to
provide facilities/opportunities for the career development of individual employees.
If the organizations want to get the best out of their employees, they must plan regularly the career development
programmes in their organizations. In brief, career planning refers to the formal programmes that organizations implement to
increase the effectiveness and efficiency of the human resources available. Career planning and development is the
responsibility of the HR department of the organization. As already noted, every person joining an organization has a desire
to make career as per his potentiality, ability, skills and so on.

NEED/PURPOSE/OBJECTIVES OF CAREER PLANNING:-

1) To map out careers of employees as per their ability and willingness and to train and develop them for higher
positions.
2) To attract and retain the right type of persons in the organization.
3) To utilize available managerial talent within the organization fully.
4) To achieve higher productivity and organizational development.
5) To provide guidance and assistance to employees to develop their potentials to the highest level.
6) To improve employee morale and motivation by providing training and opportunities for promotion.

SCOPE OF ORGANISATIONAL CAREER PLANNING:-

The following activities/areas are covered within the scope of organizational career planning:
a) HUMAN RESOURCE FORECASTING AND PLANNING:-
Here, efforts will be made to identify the number of employees required in future. In addition, the selection
procedure will be adjusted with the overall strategic goals of the organization.
b) CAREER INFORMATION:-
Here, information relating to career opportunities (promotions, training for self development, etc) will be supplied to
employees. Supplying career information/opportunities has special significance as this motivates employees to grow
and reach to higher position.
c) CAREER COUNSELLING:-
Such counselling is next to supplying career information. Career counselling is possible by senior executives
through periodic discussions with their subordinates. Such career guidance encourages subordinate employees to
take interest in certain areas where suitable opportunities of career development are available. It is a type of internal
guidance and motivation of employees for the selection of possible career paths. Such counselling is needed when
employees have to plan their own careers and develop themselves for career progress.
d) CAREER PATHING:-
Management now plans job sequences for transfers and promotions of their employees. This makes transfers and
promotions systematically with advance information to employees. Career pathing creates suitable mental make up
of employees for self development.
e) SKILL ASSESSMENT TRAINING:-
Training is essential for career planning and also for manpower development. Along with job analysis,
organizational and job manpower requirement analysis should be undertaken by the management. This prepares
proper background for the introduction of career planning programmes for employees.

ADVANTAGES OF CAREER PLANNING:-

A properly designed system of career planning can provide the following benefits:
i. Career planning helps an employee to know the career opportunities available in an organization.
ii. Career planning encourages him to avail of the training and development facilities in the organization so as to
improve his ability to handle new and higher assignments.
iii. Career planning involves a survey of employee abilities and attitudes. It becomes possible, therefore to group
together people talking on a similar wavelength and place them under supervisors who are responsive to that
wavelength.
iv. Career planning anticipates the future vacancies that may arise due to retirement, resignation, death, etc. at
managerial level. Therefore, it provides a fairly reliable guide for manpower forecasting.
v. Career planning facilitates expansion and growth of the enterprise. The employees required to fill job vacancies in
future can be identified and developed in time.

DISADVANTAGES/LIMITATIONS OF CAREER PLANNING:-

The main problems in career planning are as follows:
i. Career planning can become a reality when opportunities for vertical ability are available. Therefore, it is not suitable
for a very small organization.
ii. In a developing country like India, environmental factors such as government policy, public sector development,
growth of backward areas, etc. influence business and industry. Therefore, career plans for a period exceeding a
decade may not be effective.
 iii. Career planning is not an effective technique for a large number of employees who work on the shop floor,
particularly for illiterate and unskilled workers.
iv. In family business houses in India, members of the family expect to progress faster in their career than their
professional colleagues. This upset the career planning process.
v. Systematically career planning becomes difficult due to favouritism and nepotism in promotions, political
intervention in appointments and reservations of seats for scheduled castes/tribes and backward classes.

HOW TO INTRODUCE CAREER PLANNING PROGRAMME? (PROCESS OF CAREER PLANNING):-

It is not easy to introduce career development programme at the level of an organization. Moreover, such career
development planning is a continuous activity. What is happening in most of the organizations is that this concepts is given
only lip service and theoretical importance. If the organization wants to get the best out of their employees, it must plan the
career developments programmes continuously and effectively in its organization.
DETAILS OF THE STEP IN CAREER PLANNING:-
1) ANALYSIS OF PERSONEL SITUATION:-
This is the first step which needs to be completed before the introduction of career planning programme. This
relates to a time from which career planning is to be introduced. Here, the base line will be prepared to help the
planners to make projections for the planning period and to help in the evaluation of plans. In order to analyze the
present career situation, the following information will be required:
i. Total number of employees – their age distribution, qualifications, positions, specializations, etc.
ii. Structure – broad as well as detailed and the qualifications required for each grade.
iii. Personnel need of the organization. (Category wise)
iv. Span of control available within the organization.
v. Field staff at head office with necessary details, and
vi. Facilitates available for training and development within and outside the organization.

The information collected on these aspects serves as the base for the preparation of career development plan for the
future period.
1. ANALYSIS OF PESONNEL SITUATION

2. PROJECTION OF PERSONNEL SITUATION

3. IDENTIFYING CAREER NEEDS

4. SELECTION OF PRIORITIES

5. DEVELOPMENT OF CAREER PLANS

6. WRITE UP OF FORMULATED CAREER PLANS

7. MANAGERIAL PLANNING

8. IMPLEMENTATION

9. REVIEW AND EVALUATION

10. FUTURE NEEDS

2) PROJECTION OF PERSONNEL SITUATION:-

In this second step, an attempt is being made to find out the situation likely to develop after the completion of
career development plan. This can be done on the basis of assumption which can predict what is likely to happen at
the close of the career development plan.
3) IDENTIFYING OF CAREER NEEDS:-
In this third step of career development plan, efforts are made to find out precisely the career development needs of
the future period. It is possible to identify the scope and limitations of career development needs on the basis of the
data collected (through personnel inventory of the organization, employee potentials, and appraisal of employees).
4) SELECTION OF PRIORITIES:-
It is rather difficult to meet all the needs of the employees and the organization for career development immediately
i.e. through one career development plan. Naturally, there is a need to select the pressing and urgent problems of
employees and organization. In addition, other factors such as technical, financial and administrative must be taken
into consideration while finalizing the priorities.
5) DEVELOPMENT OF CAREER PLAN:-
 This is the most important step in the whole process of career developing plan. Such plan must describe the
following in concrete form/forms:
a. What is to be attained/achieved?
b. The extent to which it is to be attained,
c. The employees involved,
d. The department in which the proposed plan will operate;
e. The length of time required the achieving the goals.
In order to execute the career development plan, the organization should:
a) Introduce systematic policies and programmes of staff training and career development for all categories of
employees so as to enable them to:
I. Improve their level of skill and knowledge;
II. Gain wider experiences; and
III. Assume higher responsibilities.
b) Establish and effectively implement a system of study leave;
c) Develop the experience of the employees by encouraging their rotation from one region to
another;
d) Take positive steps to encourage career development, such as:
I. Providing within the organization;
II. Giving priorities in the filling of vacancies in the following order for:
1. promotion within the organization;
2. Transfer within the organization;
3. Outside recruitment.
III. Removing artificial barriers to promotion;
IV. Establishing a register of employees for promotion on merit-cum-seniority basis;
6) WRITE-UP OF FORMULATED PLAN:-
After deciding the priorities of career development plan, the next major step is to prepare a write up (brief report) of
the career plan. This writ-up should contain all necessary details such as schedule (time sequence of plan),
procedures and other details so that the evaluation of the plan will be easy and meaningful.
7) MONITORING PLANNING i.e. MONITORING OF CAREER DEVELOPMENT PLAN:-
Monitoring of the plan is essential for its effective execution. Expected results/benefits will be available only when
the plan is implemented properly. Planned (expected) targets and targets actually achieved can be compared
through suitable monitoring of the plan. The gap between the two (i.e. short falls) can be located quickly. In addition,
suitable remedial measures can be taken to rectify the shortfalls.
8) IMPLEMENTATION (OF CAREER DEVELOPMENT PLAN):-
Implementation/execution of the plan is an integral aspect of planning process itself. For effective implementation,
co-operation and co-ordination at all levels is necessary. The implementation needs proper monitoring so as to
avoid possible shortfalls.
9) REVIEW AND EVALUATION OF CAREER PLANS:-
A plan needs periodical review. Such evaluation avoids mistakes, deficiencies, etc during the implementation stage.
It is built-in device to measure the effectiveness of the plan. Actual benefits available will be known only through
such review and evaluation. Such evaluation should be done by experts. It should be conducted systematically and
also impartially.
10) FUTURE NEEDS:-
This is the last step/stage of the current career development plan and the first step/stage of the next plan. Here, on
the basis of the achievements of the current plan, the career needs of the future period (of employees and also of
the organization) are estimated. The new priorities are decided and the details of the new career development plan
are prepared. Planning is a continuous process/activity. This rule is applicable to career development plans of an
organization.

CAREER STAGES:-
Education is thought of in terms of employment. People go for school and college education and prepare for their
occupation. Very few people stick to the same job throughout their life. Most of them switch job either within the organization
or in some other organization. Chances are they change jobs, depending on available opportunity, several times before
retirement. Where opportunity is restricted they continue with the same job. They go through the following stages:
1) EXPLORATION:-
Almost all candidates who start working after college education start around mid-twenties. Many a time they are not
sure about future prospects but take up a job in anticipation of rising higher up in the career graph later. From the
point of view of organization, this stage is of no relevance because it happens prior to the employment. Some
 candidates who come from better economic background can wait and select a career of their choice under expert
guidance from parents and well-wishers.
2) ESTABLISHMENT:-
This career stage begins with the candidate getting the first job getting hold of the right job is not an easy task.
Candidates are likely to commit mistakes and learn from their mistakes. Slowly and gradually they become
responsible towards the job. Ambitious candidates will keep looking for more lucrative and challenging jobs
elsewhere. This may either result in migration to another job or he will remain with the Same job because of lack of
opportunity.
3) MID-CAREER STAGE:-
This career stage represents fastest and gainful leap for competent employees who are commonly called “climbers”.
There is continuous improvement in performance. On the other hand, employees who are unhappy and frustrated
with the job, there is marked deterioration in their performance. In other to show their utility to the organization,
employees must remain productive at this stage. “climbers” must go on improving their own performance. Authority,
responsibility, rewards and incentives are highest at this stage. Employees tend to settle down inn their jobs and
“job hopping” is not common.
4) LATE CAREER:-
This career stage is pleasant for the senior employees who like to survive on the past glory. There is no desire to
improve performance and improve past records. Such employees enjoy playing the role of elder statesperson. They
are expected to train younger employees and earn respect from them.
5) DECLINE STAGE:-
This career stage represents the completion of one’s career usually culminating into retirement. After decades of
hard work, such employees have to retire. Employees who were climbers and achievers will find it hard to
compromise with the reality. Others may think of “life after retirement”.

HIGH EXPLORATION ESTABLISHMENT MID-CAREER LATE CAREER DECLINE

LOW 25 35 45 55 60
AGE
STAGES IN CAREER DEVELOPMENT

CONCEPT/INTRODUCTION TO CAREER DEVELOPMENT:-

Career development consists of the personal actions one undertakes to achieve a career plan. The terms ‘career
development’ and ‘employee development’ need to be differentiated at this stage. Career development looks at the long-
term career effectiveness of employees where as employee development focuses of effectiveness of an employee in the
immediate future. The actions for career development may be initiated by the individual himself or by the organization.

INDIVIDUAL CAREER DEVELOPMENT:-

Career progress and development is largely the outcome of actions on the part of an individual. Some of the important
steps that could help an individual cross the hurdles on the way ‘up’ may include:
 I. PERFORMANCE:-
Career progress rests largely on performance. If the performance is sub-standard, even modest career goals can’t
be achieved.

II. EXPOSURE:-
Career development comes through exposure, which implies becoming known by those who decide promotions,
transfers and other career opportunities. You must undertake actions that would attract the attention of those who
matter most in an organization.
III. NETWORKING:-
Networking implies professional and personal contacts that would help inn striking good deals outside (e.g.,
lucrative job offers, business deals, etc.). for years men have used private clubs, professional associations, old-boy
networks to gain exposure and achieve their career ambitions.
IV. LEVERAGING:-
Resigning to further one’s career with another employer is known as leveraging. When the opportunity is irresistible,
the only option left is to resign from the current position and take up the new job (opportunity in terms of better pay,
new title, a new learning experience, etc.). however, jumping the jobs frequently (job-hopping) may not be a good
career strategy in the long-run.
V. LOYALTY TO CAREER:-
Professionals and recent college graduates generally jump jobs frequently when they start their career. They do not
think that career-long dedication to the same organization may not help them further their career ambitions. To
overcome this problem, companies such as Infosys, NIIT, WIPRO (all information technology companies where the
turnover ratios are generally high) have come out with lucrative, innovative compensation packages in addition to
employee stock option plans for those who remain with the company for a specified period.
VI. MENTORS AND SPONSORS:-
A mentor is, generally speaking, an older person in a managerial role offering informal career advice to a junior
employee. Mentors take junior employees under their protégé and offer advice and guidance on how to survive and
get ahead in the organization. They act as role models. A sponsor, on the other hand, is someone in the
organization who can create career development opportunities.

ORGANISATIONAL CAREER DEVELOPMENT:-

The assistance from managers and HR department is equally important in achieving individual career goals and meeting
organizational needs. A variety of tools and activities are employees for this purpose.
a) SELF-ASSESSMENT TOOLS:-
Here the employees go through a process in which they think through their life roles, interests, skills and work
attitudes and preferences. They identify career goals, develop suitable action plans and point out obstacle that
come in the way. Two self-assessment tools are quite commonly used in the organizations. The first one is called
the career-planning workshop. After individuals complete their self-assessment, they share their findings with
others in career workshops. These workshops throw light on how to prepare and follow through individual career
strategies. The second tool, called as a career workbook, consists of a form of career guide in the question-answer
format outlining steps for realizing career goals. Individuals use this company specific, tailor-made guide to learn
about their career chances. This guide, generally throws light on organization’s structure, career paths,
qualifications for jobs and career ladders.
b) INDIVIDUAL COUNSELLING:-
Employee counselling is a process whereby employees are guided in overcoming performance problems. It is
usually done through face-to-face meetings between the employee and the counselor or coach. Here discussions
of employees’ interests goals, current job activities and performance and career objectives take place. Counselling
is generally offered by the HR department. Sometimes outside experts are also be called in. if supervisors act as
coaches they should be given clearly defined roles and training. This is, however, a costly and time-consuming
process.

c) EMPLOYEE DEVELOPMENT PROGRAMMES:-

These consist of skill assessment and training efforts that organizations use to groom their employees for future
vacancies. Seminars, workshops, job rotations and mentoring programmes are used to develop a broad base of
skills as a part of such developmental activities.
d) CAREER PROGRAMMES FOR SPECIAL GROUPS:-
In recent years, there is growing evidence regarding dual career families developing tensions and frictions owing to
their inability to reconcile the differences between the family roles and work demands. When we talk of dual career
couples (a situation where both husband and wife have distinct careers outside the home) certain puzzling
questions arise naturally: whose career is important; who takes care of children; what if the wife gets a tempting
promotion in another location; who buys groceries and cleans the house if both are busy, etc. realizing these
 problems, organizations are providing a place and a procedure for discussing such role conflicts and coping
strategies. They are coming out with schemes such as part-time work, long parental leave, child care centers,
flexible working hours and promotions and transfers in tune with the demands of dual career conflicts.

CAREER DEVELOPMENT ACTIONS:-

a) JOB PERFORMANCE:-
Employee must prove that his performance on the job is to the level of standards established, if he wants career
progress.
b) EXPOSURE:-
Employee’s desire for career progress should expose their skills, knowledge, qualifications, achievements,
performance etc., to those who take the decision about career progress.
c) RESIGNATIONS:-
Employees may resign the present job in the organization, if they find that career opportunities elsewhere are better
than those of the present organization.
d) CHANGE THE JOB:-
Employees who put organizational loyalty above career loyalty may change the job in the same organization are
better than those in the present job.
e) CAREER GUIDANCE:-
And counselling provides information, advice and encouragements to switch over to other career or organization,
where career opportunities are better.

EMPLOYEE TRAINING

INTRODUCTION:-
Training plays an important role in human resource development. It comes next to recruitment and selection. In fact, the
main purpose of training is to develop the human resources present within the employees. In brief, training is the watchword
of present dynamic business world. Training is necessary due to technological changes rapidly taking place in the industrial
field. New machines, new methods and new techniques are introduced in the production, marketing and other aspect of
business.
Training is for developing overall personality of an employee. It also creates positive attitude towards fellow employees,
job and the organization where he is working. Training is the responsibility of the management as it is basically for raising
the efficiency and productivity of employees.
The purpose of training is to achieve a change in the behaviour of those trained and to enable them to do their jobs in a
better way. The trainees will acquire new manipulative skills, technical knowledge, problem solving ability or attitudes etc.
training is not a one step process but is a continuous or never-ending process. Training makes newly recruited workers fully
productive in the minimum of time. Even for old workers, training is necessary to refresh them and enable them to keep up
with new methods and techniques. In short training is the act of improving or updating the knowledge and skill of an
employee for performing a particular job.

DEFINITION OF TRAINING:-
According to Edwin Flippo, training is “the act of increasing the knowledge and skill of an employee for doing a
particular job”.

PRINCIPLES OF EMPLOYEE TRAINING:-

A sound training programme must possess the following characteristics:
1. Training programme should be less expensive.
2. Training programme should be developed for all in the organization and not for a particular group.
3. The programme should be conducted by a senior and experienced supervisor or executive of the concern or by the
training director who is incharge of the training section under personnel department.
4. Training programme should be designed taking in view the interests of both employer and employees.
5. It is not essential to follow the single method of training for all the employees. The purpose of training is to develop
the men and therefore more than one method may be followed for different groups.
6. Training should be followed by a reward. A reward should be provided at the conclusion of the training such as
promotion or a better job so that employees may be motivated.
7. Sufficient time should be provided to practice what has been learned by the employees.

MEANING AND IMPORTANCE:-

After an employee is selected, placed and introduced he or she must be provided with training facilities. Training is the
act of increasing the knowledge an skill of an employee for doing a particular job. Training is a short-term educational
process and utilizing a systematic and organized procedure by which employees learn technical knowledge and skills for a
definite purpose. In other words training improves, changes, moulds the employee’s knowledge, skill, behaviour, aptitude,
and attitude towards the requirements of the job and organization. Training refers to the teaching and learning activities
carried on for the primary purpose of helping members of an organization, to acquire and apply the knowledge, skills,
abilities and attitudes needed by a particular job and organization.
Training is the most important technique of human resource development. As stated earlier, no organization can get a
candidate who exactly matches with the job and the organizational requirements. Hence, training is important to develop the
employee and make him suitable to the job. Trained employees would be a valuable asset to an organisation.
Organizational efficiency, productivity, progress and development to a greater extent depend on training. Organizational
objectives like viability, stability and growth can also be achieved through training.

NEED FOR EMPLOYEE TRAINING:-

The need for training of employee is universally accepted and practical training in the form of information, instructions
and guidance is given to all categories of employees. It is a must for raising efficiency of employees. Training is necessary
in the present competitive and ever changing industrial world. Specifically, the need for training arises due to the following
reasons:
I. To match the employee specifications with the job requirements and organizational needs: Management
finds deviations between employee’s present specifications and the job requirements and organizational needs.
Training is needed to fill these gaps by developing and moulding the employee’s skill, knowledge, attitude,
behaviour etc. to the tune of the job requirements and organizational needs.
II. Organizational viability and the transformation process: The primary goal of most of the organizations is that
their viability is continuously influenced by environmental pressure. If the organisation does not adapt itself to the
changing factors in the environment, it will lose its market share. If the organisation desires to adapt these changes,
first it has to train the employees to impart specific skills and knowledge in order to enable them to contribute to the
organizational efficiency and to cope with the changing environment.
III. Technological advances: Every organization in order to survive and to be effective should adopt the latest
technology, i.e., mechanization, computerization and automation. Adoption of latest technological means and
methods, will not be complete until they are manned by employees possessing skill to operate them. So,
organization should train the employees to enrich them in the areas of changing technical skills and knowledge from
time to time.
IV. Organizational complexity: With the emergence of increased mechanization and automation, manufacturing of
multiple products and by-products or dealing in services of diversified lines, extension of operations to various
regions of the country or in overseas countries, organisation of most of the companies has become complex. This
creates the complex problems of co-ordination and integration of activities adaptable for and adaptable to the
expanding and diversifying situations. This situation calls for training in the skills of co-ordination, integration and
adaptability to the requirements of growth, diversification and expansion.
V. Human relations: Trends in approach towards personnel management has changed form the commodity approach
to partnership approach, crossing the human relations approach. So today, managements of most of the
organizations has to maintain human relations besides maintaining sound industrial relations although hitherto the
managers are not accustomed to deal with the workers accordingly. So training in human relations is necessary to
deal with human problems (including alienation, inter-personal and inter-group conflicts etc.) and to maintain human
relations.
VI. Change in the job assignment: Training is also necessary when the existing employee is promoted to the higher
level in the organisation and when there is some new job or occupation due to transfer. Training is also necessary
to equip the old employees with the advanced disciplines, techniques or technology.

OBJECTIVES/PURPOSES OF EMPLOYEE TRAINING:-

1) To raise efficiency and productivity of employees and the organization as a whole. This means to maintain and
improve the work performance of employees.
2) To create a pool of well trained, capable and loyal employees at all levels and thereby to make provision to meet the
future needs of an organization.
3) To provide opportunities of growth and self-development (career planning) to employees and thereby to motivate
them for promotion and other monetary benefits. In addition, to give safety and security to the life and health of
employees.
4) To avoid accidents and wastages of all kinds. In addition, to develop balanced, healthy and safety attitudes among
the employees.
5) To meet the challenges posed by new developments in the field of science and technology.
6) To improve the quality of production and thereby to create market demand and reputation in the business world.
7) To develop positive attitude and behaviour pattern required by an employee in order to perform a given job
efficiently. In other words, the purpose of training is to improve the culture of the organisation.
 8) To develop certain personal qualities among employees which can serve as personal assets on long term basis.
TYPES OF EMPLOYEE TRAINING:-
1) INDUCTION (ORIENTATION) TRAINING:-
Induction training is basically for introducing the organisation to newly appointed employees. It is a very short
informative type of training given immediately after joining the organization. It creates a feeling of involvement in the
minds of newly appointed employees. For induction training, information booklets are issued and short informative
films are shown. In addition, lecture by personnel manger/HRD manger is also arranged. Induction training creates
favourable impression on the newly appointed employees and this impression remains in their mind over a long
period.
JOB TRAINING:-
Job training relates to specific job which the worker has to handle. It gives information about machines, process of
production, instructions to be followed, methods to be used and precautions to be taken while performing the job.
This training develops skills and confidence among the workers and enables them to perform the job efficiently.
3) TRAINING FOR PROMOTION:-
Promotion means giving higher position. Training must be given for performing duties at a higher level efficiently.
This facilitates easy and quick adjustment with the new job and also develops new insight into the duties and
responsibilities assigned. For this, training is given after promotion and before actually joining the new assignment.
This training is specific, precise and of short duration.
4) REFRESHER TRAINING:-
The purpose of refresher training is to refresh the professional skills, information and experience of persons
occupying important executive positions. It gives information about new developments and techniques to trainees
and enables them to use new methods, techniques and procedures for raising efficiency.
5) CORRECTIVE TRAINING:-
Corrective training is necessary when employees violate company rules and procedures. For example, absence
without prior sanction or smoking in a “No smoking” area or not using safety devices while operating dangerous
machines. Here, the behaviour of employee cannot be changes simply by disciplinary action. The manager should
handle the problem with treatment that corrects the outlook rather than giving punishment. The manager should
criticize the act and not the individual. He should motivate concerned individual to correct his behaviour.

SELECTION OF TRAINEES:-
Once you have decided what training is necessary and where it is needed, the next decision is who should be trained?
For a small business, this question is crucial. Training an employee is expensive, especially when he or she leaves your firm
for a better job. Therefore, it is important to carefully select who will be trained.
Training programs should be designed to consider the ability of the employee to learn the material and to use it
effectively, and to make the most efficient use of resources possible. It is also important that employees be motivated by the
training experience. Employee failure in the program is not only damaging to the employee but a waste of money as well.
Selecting the right trainees is important to the success of the program.

TRAINING GOALS:-
The goals of the training program should relate directly to the needs outlined above. Course objectives should clearly
state what behavior or skill will be changed as a result of the training and should relate to the mission and strategic plan of
the company. Goals should include milestones to help take the employee from where he or she is today to where the firm
wants him or her in the future. Setting goals helps to evaluate the training program and also to motivate employees.
Allowing employees to participate in setting goals increases the probability of success.

METHODS OF EMPLOYEE TRAINING:-

As a result of research in the field of training, a number of programmes are available. Some of these are new methods,
while others are improvements over the traditional methods. The training programmes commonly used to train operative and
supervisory personnel are discussed below. These programmes are classified into on-the-job and off-the-job training
programmes.
ON-THE-JOB TRAINING METHODS
This type of training, also known as job instruction training, is the most commonly used method. Under this method, the
individual is placed on a regular job and taught the skills necessary to perform that job. The trainee learns under the
supervision and guidance of a qualified worker or instructor. On-the-job training has the advantage of giving first hand
knowledge and experience under the actual working conditions. The problem of transfer of trainee is also minimized as the
persons learns on-the-job. On-the-job training methods include job rotation, coaching, job instruction or training through
step-by-step and committee assignments.
a) JOB ROTATION:-
 This type of training involves the movement of the trainee from one job to another. The trainee receives job
knowledge and gains experience from his supervisor or trainer in each of the different job assignments. Though this
method of training is common in training managers for general management positions, trainees can also be rotated
from job to job in workshop job. This method gives an opportunity to the trainee to understand the problems of
employees on other jobs and respect them.
b) COACHING:-
The trainee is placed under a particular supervisor who functions as a coach in training the individual. The
supervisor provides feedback to the trainee on his performance and offer him for suggestions for improvement.
Often the trainee share some of the duties an responsibilities of the coach and relieves him of his burden. A
limitation of this method of training is that the trainee may not have the freedom or opportunity to express his own
ideas.
c) JOB INSTRUCTION:-
This method is also known as training through step by step. Under this method, the trainer explains to the trainee
the way of doing the job, job knowledge and skills and allow him to do the job. The trainer appraises the
performance of the trainee, provides feedback information and corrects the trainee.
d) COMMITTEE ASSIGNMENTS:-
Under the committee assignments, a group of trainees are given and asked to solve an actual organizational
problem. The trainees solve the problem jointly. It develops team work.
OFF-THE-JOB METHODS
Under this method of training, the trainee is separated form the job situation and his attention is focused upon learning
the material related to his future job performance. Since the trainee is not distracted by job requirements, he can place his
entire concentration on learning the job rather than spending his time in performing it. There is an opportunity for freedom of
expression for the trainees. Off-the-job training methods are as follows:
a) VESTIBUTE TRAINING:-
In this method, actual work conditions are simulated in a class room. Material, files and equipments those are used
in actual job performance are also used in training. This type of training is commonly used for training personnel for
clerical and semi-skilled jobs. The duration of this training ranges from days to a few weeks. Theory can be related
to practice in this method.
b) ROLE PLAYING:-
It is defined as a method of human interaction that involves realistic behaviour in imaginary situations. This method
of training involves action, doing and practice. The participants play the role of certain characters, such as the
production manager, mechanical engineer, superintendents, maintenance engineers, quality control inspectors,
foreman, workers and the like. This method is mostly used for developing interpersonal interactions and relations.
c) LECTURE METHOD:-
The lecture is a traditional and direct method of instruction. The instructor organizes the material and gives it to a
group of trainees in the form of a talk. To be effective, the lecture must motivate and create interest among the
trainees. An advantage of lecture method is that it is direct and can be used for a large group of trainees. Thus,
costs and time involved are reduced.
d) CONFERENCE OR DISCUSSION:-
It is a method in training the clerical, professional and supervisory personnel. This method involves a group of
people who pose ideas, examine and share facts, ideas and data, test assumptions, and draw conclusions, all of
which contribute to the improvement of the job performance. Discussion has the distinct advantage over the lecture
method, in that the discussion involves two-way communication and hence feedback is provided. The participants
feel free to speak in small groups. The success of this method depends on the leadership qualities of the person
who leads the group.

ADVANTAGES OF EMPLOYEE TRAINING:-

Training is advantageous not only to the organization but also to the employees.
1. INCREASE IN WAGE EARNING CAPACITY:-
Training helps the employees in acquiring new knowledge and job skills. In this way, training increases their market
value and wage earning power. This increases their pay and status.
2. JOB-SECURITY:-
Continued training can help an employee to develop his ability to learn- adapting himself to new work methods,
learning to use new kinds of equipment and adjusting to major changes in job contents and work relationship.
3. CHANCES FOR PROMOTION:-
Training also qualifies the employees for promotion to more responsible jobs.
4. FOLLOW UP OF SELECTION PROCEDURE:-
Training is a follow up of selection procedure. It helps in choosing the most appropriate individuals for different jobs.
Training can be used in spotting out promising men and in removing defects in selection process.
5. BETTER PERFORMANCE:-
 Training brings about an improvement of the quality and quantity of output by increasing the skill of the employees.
Training makes the fresh and old employees more skilled and accurate in performance of their work.

6. REDUCTION IN COST OF PRODUCTION:-

If the employees are given proper training the need for supervision is lessened. Training does not eliminate the
need for supervision but it reduces the need for detailed and constant supervision. A well trained employee is self-
reliant in his work because he knows what to do and how to do it.

EVALUATION OF TRAINING PROGRAMME:-

The process of training evaluation has been defined as “any attempt to obtain information on the effects of training
performance, and to assess the value of training in the light of that information.” Evaluation leads to controlling and
correcting the training programme. Hamblin suggested five levels at which evaluation of training can take place, viz.,
reactions, learning, job behaviour, organization and ultimate value.
i. REACTIONS:-
Training programme is evaluated on the basis of trainee’s reactions to the usefulness of coverage of the matter, depth
of the course content, method of presentation, teaching methods etc.
ii. LEARNING:-
Training programme, trainer’s ability and trainee ability are evaluated on the basis of quantity of content learned and
time in which it is learned and the learner’s ability to use or apply, the content he learned.
iii. JOB BEHAVIOUR:-
This evaluation includes the manner and extent to which the trainee has applied his learning to his job.
iv. ORGANISATION:-
This evaluation measures the use of training, learning and change in the job behaviour of the department/organization
in the form of increased productivity, quality, morale, sales turnover and the like.
v. ULTIMATE VALUE:-
It is the measurement of ultimate result of the contributions of the training programme to the company goals like
survival, growth, profitability etc., and to the individual goals like development of personality and social goals like
maximizing social benefit.

ORGANISED TRAINING PROGRAMME IN AN INDUSTRY:-

It is not possible to suggest a training programme equally good for each and every organisation. Training programmes
differ on the basis of many individual characteristics of the organisations and the employees usually in the organisation of
training programmes. The following steps are taken to organise the training programme:
1) IDENTIFYING THE TRAINING NEEDS:-
Training programme should be set up only after having decided the decided the clear-cut objective in mind. A training
programme should be established only when it is felt that it would assist in the solution of specific operational problems.
The most important step is to make a thorough analysis of the entire organisation, its operations and manpower
resources available in order to find out “the trouble spots” where training may be needed.
a) ANALYSING JOBS AND MEN:-
If the men are less capable to perform the particular jobs they can be given training to increase their skills.
Jobs and worth of the men should be analysed through job analysis and performance appraisal.
b) IDENTIFYING PRODUCTION PROBLEMS:-
Production problems like low productivity, poor quality, high cost, high rate of absenteeism, labour turnover
etc. should be identified to indicate the need for training.
c) COLLECTING OPINIONS:-
Opinions should be obtained from the management and the working people through interviews or through
questionnaire regarding necessary and desirable training programmes.
2) GETTING READY FOR THE JOB:-
Following are the steps taken in this regard:
a) IDENTIFYING THE TRAINEE:-
Under this step it is to be decided who is to be trained. who is to be trained – the new comer or the older
employee or the supervisory staff or all of them selected from different departments. The proper selection of
trainees is very important to obtain permanent and gainful results of training. A trainee should be trained for
the kind of job he likes and is suitable to perform. Careful screening of candidates for training raises the
effectiveness of the training work. Trainee should be given the proper background information before he
starts learning new job skills and knowledge. Trainer should explain the trainee the importance of the job, its
relationship with the work flow and the importance of training.
 b) SELECTION OF TRAINING METHOD:-
Now it is advisable to lay down which method is to be adopted fro the training. Different methods of training
may be suggested for the different levels of personnel. Unskilled workers may be trained on the job. On-the-
job and apprenticeship training may be awarded, to skilled and semi-skilled workers. For supervisory and
executive personnel On-the-job and Off-the-job methods such as role-playing, lectures and seminars etc.
may be recommended.
c) PREPARATION OF TRAINER OR INSTRUCTOR:-
The success of the training programme much depends upon the instructor. Instructor must be well-qualified
and may be obtained from within or outside the organization. It should be decided beforehand what is to be
taught and how. He should be able to divide the job into logical parts so that he may teach one part at a
time without losing his perspective of the whole.
As because training must be based upon the needs of the organization therefore, the trainer must have a
clear-cut picture of the objectives of training in mind. It should not be in a vacuum. Trainer needs
professional expertise in order to fulfill his responsibility. He should also encourage the question from the
trainees.
d) TRAINING MATERIAL:-
There should always be the training material with the instructor. Training materials may include some text or
written materials as a basis for instruction, review and reference. This may be prepared in the training
section with the help of supervisors. The written material should be distributed among the trainees so that
they may come prepared in the lecture class and may be able to understand the operation quickly and
remove their doubts, if any.
e) TRAINING MATERIAL:-
The length of training period depends upon the skill of the trainees, purpose of the training, trainee’s
learning capacity and the training media used. Generally no single session should last longer than two
hours. The time of training whether before or after or during working hours should be decided by the
personnel manager taking in view the loss of production and benefits to be achieved by training.
2) PREPARATION OF THE LEARNER:-
This step consists:
i. The putting the learner at case so that he does not feel nervous because of the fact that he is on a new job,
ii. In stating the importance of ingredients of the job and its relationship towards flow,
iii. In explaining he is being taught,
iv. In creating interest and encouraging questions, finding out what the learner already knows about his job or
other jobs,
v. In explaining why of the whole job and relating it to some job the worker already knows,
vi. In planning the learner as close to his normal working position as possible, and
vii. In familiarizing him with the equipment, materials tools and trade terms.
3) PRESENTATION OF OPERATIONS AND KNOWLEDGE:-
This is the most important step in a training programme. The trainer should clearly tell, show, illustrate and question
I order to put over the new knowledge and operations. The learner should be told of the sequence of the entire job
and why each step in its performance is necessary instructions should be given clearly, completely and patiently.
Trainer should demonstrate or make use of audio-visual aids and should ask the trainee to repeat the operations
4) PERFORMANCE TRY-OUT:-
Under this, the trainee is asked to go through the job several times slowly, explaining him each step. Mistakes are
corrected and if necessary some complicated steps are taken for the trainee for the first time. Then the trainee is
asked to do the job, gradually building up skill and speed. The trainee is then tested and the effectiveness of a
training programme evaluated.
5) FOLLOW-UP:-
On the completion of training programme trainees should be placed to the job. The supervisor should have a
constant vigil on the person still facing any difficulty on the job, he must be given full guidance by the immediate
supervisor and should be initiated to ask questions to remove the doubts.

COLLECTIVE BARGAINING

INTRODUCTION
The phrase ‘Collective bargaining’ is coined by Sydney & Beatrice Webb. According to them collective bargaining is a
method by which trade unions protect & improve the conditions of their members’ working lives.
Before the Industrial Revolution, the employer, more or less, enjoyed unquestioned powers on matters relating to wage,
working conditions & other matters affecting employees. The week bargaining strength of employees tempted them, on
occasions, to exploit the vulnerable situation to their advantage. Workers as a result became restless & widespread protests
followed. Governmental intervention was of little help. Workers realized the importance of fighting jointly on all work-related
matters. This collective fighting spirit is behind the back of collective bargaining. With the growth of union movement all over
the globe & the emergence of employers’ associations, the collective bargaining process has undergone significant
changes. Both parties have, more or less, realized the importance of peaceful co-existence for their mutual benefit &
continued progress.

OBJECTIVES
The main objectives of Collective bargaining are given below:
 To settle disputes / conflicts relating to wages & working conditions.
 To protect the interests of workers through collective plan.
 To resolve the differences between workers & management though voluntary negotiations & arrive at a customer.
 To avoid third party intervention in matters relating to employment.

Functions of Collective Bargaining

Collective bargaining plays an important role in preventing industrial disputes, setting these disputes & maintaining industrial
peace by performing the following functions:
 Increase the economic strength of employees & management.
 Establish uniform conditions of employment.
 Secure a prompt & fair redressal of grievances.
 Lay down fair rates of wages & other norms of working conditions.
 Achieve an efficient functioning of the organization.
 Promote the stability & prosperity of the company.
 It provides a method of the regulation of the conditions of employment of those who are directly concerned
about them.
 It provides a solution to the problem of sickness in the industry & ensures old age pension benefits & other
fringe benefits.
 It builds up a system of industrial jurisprudence by introducing civil rights I the industry. In other words, it
ensures that the management is conducted by rules rather than by arbitrary decisions.

COLLECTIVE BARGAINING PROCESS

There are two stages in collective bargaining, viz., (i) the

negotiation stage & (ii) the stage of contract administration.
1. Negotiation
(a) Identification of Problems
The nature of the problem influences the whole process-
whether the problem is very important that is to be
discussed immediately or it can be postponed for some
other convenient time, whether the problem is minor that it can
be solved with the other party’s acceptance on its presentation &
does not need to involve the long process of collective bargaining process etc.
(b) Preparing for Negotiations
When it becomes necessary to solve the problem through collective bargaining process, both the parties prepare
themselves for negotiations.
(c) Negotiations of Agreement
Usually there will be a chief negotiator who is form the management side. He directs & presides over the process. The chief
negotiator presents the problem, its intensity & nature & the views of both parties. When a solution is reached at, it is put on
the paper, taking concerned legislations into consideration. Both parties concerned sign the agreement which, in tern,
become a binding contract for both the parties.
2. Contract Administration
Implementation of the contract is as important as making a contract. Management usually distributes the printed contract, its
terms & conditions throughout the organization. The union takes steps to see that all the workers understand the contract &
implement it. From time to time depending upon changing circumstances, both the parties can make mutually acceptable
amendments.

SUGGESTIONS FOR EFFECTIVE IMPLIMENTATION OF COLLECTIVE BARGAINING

 Unions should be made strong by creating awareness among workers.

 Interference of political leaders should be avoided. The unions should separate themselves from politics.
 Govt. should make efforts for the growth of collective bargaining. Adjudication should be used only as a last
resort. Govt. can make legislation for compulsory collective bargaining before resorting to adjudication.
 Management should develop a positive attitude toward unions. Much headway has already been made in
this direction. Presently, managers are mostly aware of the rights of workers. They are also realizing how important
cooperation between management & workers for the effective functioning of an organization. As such, they are now
encouraging negotiations & amicable solutions.

INDUSTRIAL CONFLICTS

All the issues refer to collective bargaining may not be settled to the satisfactions of both the parties. Such issues result in
Industrial Conflicts.

DEFINITION OF DISPUTE / CONFLICT

According to the Industrial Disputes Act, 1947, Section 2(k), “Industrial dispute means any dispute or difference between
employers & employers, or between employers & workmen or between workmen & workmen, which is connected with the
employment or non employment or term of employment or with the conditions of labour of any person.”
CAUSES OF INDUSTRIAL CONFLICTS
It is not easy to identify a single factor as a cause of industrial conflicts as multifarious causes blended together result in
industrial disputes. Deep seated & more basic causes of disputes can be identified through in depth probe, though surface
manifestations appear to be responsible for conflicts. The relative importance of these causes, when more than presents, is
often very difficult to gauge.
According to Mukherjee, “The development of capitalistic enterprise, which means the control of the tools of production by
the small entrepreneur class has brought to the fore the acute problem of friction between management & labour throughout
the world.”
Causes of industrial conflicts may be grouped into four categories,
⇒ Industrial factors,
⇒ Management’s attitude towards workers,
⇒ Government machinery &
⇒ Other causes.

TYPES OF INDUSTRIAL CONFLICT

Strike
A strike is a spontaneous and concerted withdrawal of the labour from production temporarily. It is a collective stoppage of
work by group of workers for pressuring their employer to accept certain demands. The industrial disputes act 1947 has
define a strike as “an assertion of work by a body of persons.” employed in an industry acting in combination, or a concerted
refusal or a refusal under a common understanding of any no of persons who are or have been so employed to continue to
work or to accept employment. Strikes are of several types,
 Sympathetic strike
When a strike is undertaken to show sympathy with workers in other industries, it is called as sympathetic strike.
 General strike
It is a strike by all or most of the unions in a industry or a region
 Unofficial strike
It is a strike undertaken without the consent of the unions.
 Sectional strike
It is refusal of a section of a given class of workers to perform their normal duties.
 Bumper strike
It is a strike when the unions plan to paralyse the industry, firm by firm, the order being chosen by the union. Such strikes
are supported by the contributions of those who are still in work.
 Sit down strike (also called stay-in, tool down, pen down strike)
It is a strike in which workers cease to perform this duties but do not leave the place of work.
 Slow-down strike
Known as a ‘go-slow’ tactic the workers do not stop working but put brakes to the normal way of doing things.
 Lightning strike
Out of provocation, workers may go on strike without notice or at very short notice. There is an element of surprise in such
cat-call strikes.
 Hunger strike
To gain sympathy from the public & get noticed by the employer, workers may decide to forego food for a specified period.
Small batches of workers may also go on a relay hunger strike in a sequential order. Such non-violence protests generally
bring moral pressure on employers to iron out the differences with quickly.
Lock-outs
Lock-out is the counterpart of strike. It is a weapon available to the employer to close down the factory till the workers agree
to resume work on the conditions lead down by the employer. The industrial Dispute Act of 1947 defined it as “the closing of
a place of an employment, or the suspension of work or the refusal of an employer to continue to employ any number of
persons employed by him”. If it is impossible to meet the demand of workers, employers may decide to go for lock-out. He
may also draw the shutter down so as to bring psychological pressure on the workers to agree to his condition or face
closure of the unit.
Gherao
Gherao means to surround. In this method a group of workers initiate collective action aimed at preventing members of the
management from leaving the office. This can happen outside the factory premises too. The persons who are ‘gheraoed’ are
not allowed to move for a long time, sometimes without food or water. The National Commission on Labour, while refusing
to accept it as a form of industrial protest, opined that gheraos tend to inflict physical duress (as against economic pressure)
on the persons affected & endanger not only industrial harmony but also create problems of law & order.

Picketing & Boycott

In picketing workers carry / display signs, banners & play card (in connection with the dispute) & prevent others from
entering the place of work & persuade others to join the strike.
Boycott aims at disrupting the normal functioning of an enterprise. Through forceful appeals & negative behavioral acts,
striking workers prevent others from entering the place of work & persuade them not to cooperate with the employer.

PREVENTION OF INDUSTRIAL
CONFLICTS
Prevention of industrial disputes may have different methods. These methods “cover the entire field of relations between
industry & labour & include enactment & enforcement of progressive legislation, works committees & councils, wage boards,
& trade boards, profit sharing & co-partnership, education, housing, welfare work & all such measures which can bridge the
gap between the employers & the employed.” The significant preventive measures may be broadly outlined as below:

Prevention Measures of Industrial Conflicts

Labour Standing Grievances Joint

Welfare Orders Procedure Consultation
Officer

Strong Joint Collective Labour Co-partnership

Trade Consultations Bargaining & Profit Sharing
Unions

Labour welfare Officer

Sec. 49 (1) & (2) of the factories act, 1948, specifies that every factory wherein 500 or more workers are ordinarily
employed, at least 1 officer must be appointed, where the number of workers are in excess of 2,500, the assistance & or
additional welfare officers are required to be appointed to assist the welfare officer.

Standing orders
Majority of the industrial disputes are related to conditions of employment. To prevent the industrial conflict relating to
employment conditions, standing orders are formulated. It was made obligatory that standing orders should govern the
conditions of employment under the industrial employment (standing orders) act of 1946. The standing orders regulate the
conditions of employment from the stage of entry to the stage of exit or retirement. Standing orders act as a code of conduct
for the employees during the working life of employees as they provide do’s & do nots.
Grievance procedure
Grievances generally arise from day – to – day working relations. Grievances of the employees are redressed by the
management. Management can prevent the occurrence of industrial disputes by solving the individual problems.
Collective bargaining
As discussed earlier, collective bargaining helps for settlement of issues & prevention of industrial disputes. Government
also helps trade unions & govt. to come closer to each other & come to an agreement.
Strong trade unions
Strong trade unions have the stability of membership, sound financial position & healthy polices. Such unions think & act
constructively for the mutual benefit of the employees & the management. These practices naturally prevent the industrial
conflicts.
Labour co – partnership & profit sharing
Labour co – partnership & profit sharing create a sense of belongness among the employees & they fill that they are the
partners in the company. As such, they think & act for the benefit of the company.
Joint consultations
A Joint consultation between the employees & employer are the differences between them & prevents industrial conflicts.

SETTLEMENT OF CONFLICTS

The methods of the settlement of conflicts generally include those mentions in the below
1. Investigation
This is conducted by a board or court appointed by the government. It may be voluntary or compulsory. If the investigation is
conducted on an application by either or both the parties to the dispute, it is voluntary. If the Government appoints a Court of
Inquiry to investigate into a dispute without the consent of the parties, it is compulsory. Investigations do not aim at bringing
about the settlement of disputes directly, but by analyzing the facts, they aim at bringing about an amicable solution. When
the investigation is compulsory, the strikes & lock-outs are required to be stopped & employers should not make any change
in the conditions of employment. The result of investigation has no serious effect on the dispute because the general public
is least bothered to make note of the dispute.
2. Meditation
Another attempt to settle disputes is Meditation. In this method, an outsider assists the parties in their negotiation. It takes
place with the consent of both the parties. The mediator performs the messenger’s job for both the parties & he neither
imposes his will nor his judgment upon them. The main aim of meditation is the settlement of disputes by brining about a
voluntary agreement. There may be three kinds of meditation:
a. The Eminent Outsider;
b. Non-Government Board; &
c. Semi-Government Board.
If meditation is conducted skillful & sympathetically along proper lines, it can bring about the adjustment of differences that
might otherwise contribute to stoppage of work.

3. Conciliation
The main objective of a condition & arbitration is to reunite the two conflicting groups in the industry in order to avoid
interruption of production, distrust etc.
Conciliation is a process by which representatives of both workers & employers are brought together before a third party
with a view to persuading them to arrive at some sort of settlement. It is an extension of collective bargaining with third party
assistance. It is the practice by which the services of the neutral third party as used in a dispute as a means of helping the
disputing parties to reduce the extent of their differences & to arrive at an amicable settlement or agreed solution. It is a
process of rational & orderly discussions of differences between the parties to a dispute under the guidance of a conciliator.
Conciliation machinery consists of a conciliation officer & board of conciliations. The conciliator induces the parties to a
course of action. He plays the role of an innovator, protector, discussion leader, stimulator, advisor, face saver. He acts as a
safety value & a communication link.
The task of conciliation is to offer advice & make suggestions to the dispute on controversial issues.
4. Voluntary Arbitration
If the two parties to the dispute fail to come to an agreement, either by themselves or with the help of a mediator or
conciliator, who agrees to submit the dispute to an impartial authority, whose decision, they are ready to accept. The
essential elements in voluntary arbitration are:
 The voluntary submission of dispute to an arbitration;
 The subsequent attendance of witness & investigations &
 The enforcement of an award may not be necessary.

5. Compulsory Arbitration / Adjudication

Where trade unions are week, the method of Compulsory Arbitration is used. Compulsory Arbitration is utilized generally
when the parties fail to arrive at a settlement though the voluntary methods.
In India, Compulsory Arbitration is enforced because collective bargaining was not used for regulating wages & other
conditions of employment.
It may be said that Compulsory Arbitration may be at times & under certain circumstances, necessary & desirable. The
nature, scale & timing of state intervention should be suited to the needs of different occasions. The objective of state
intervention in the field of industrial relations should be to do social justice & make the weaker party equally strong to enable
it ultimately to stand & survive on its own & settle its differences through negations & collective bargaining.
Compulsory Arbitration is one where the parties are required to arbitrate without any willingness on their part. Any one of the
parties may apply to the appropriate governments to refer the dispute to adjudication machinery.
promotion

When there are vacancies in an organization, they can be filled up by the internal or external candidates. Though the
organization prefers to fill up the vacancies by the external candidates through the selection procedure, the internal
candidates may also apply for post and may be tested and selected for higher level job in the organizational hierarchy at par
with external candidates. Is such upward movement of an employee a promotion? Or it is purely selection? It is purely a
selection. If the organization prefers to fill a vacancy only by the internal candidates, it assigns that higher level job to the
selected employee from within through promotion tests. Such upward movement can be said as promotion.

► Definition:-
“Promotion is advancement of an employee to a better job- better in terms of grater responsibility, more prestige or
status, greater skills and especially increased rate of pay or salary.”
- Paul Pigors and Charles A. Myers.

“The upward reassignment of an individual in an organizational hierarchy, accompanied by increased responsibilities,

enhanced status and usually with increased income though not always so.”
- Arun Monappa and Mirza S. Saiyadain.

Promotion is the reassignment of a higher level job to an internal employee with delegation of responsibilities and authority
required to perform that higher job and normally with higher pay. Thus, the main conditions of promotion are:-
1) Reassignment of higher level job to an employee than what he is presently performing.
2) The employee will naturally be delegated with greater responsibility and authority than what he has had earlier.
3) Promotion normally accompanies higher pay.
Promotion may be temporary or permanent depending upon the organizational needs and employee performance.
► Purpose of promotion:-
Organizations promote the employee with a view to achieve the following purposes:-
1) To utilize the employee’s skills, knowledge at the appropriate level in the organizational hierarchy resulting in
organizational effectiveness and employee satisfaction.
2) To develop competent spirit and inculcate the zeal in the employees to acquired the skills, knowledge etc. required by
higher level jobs.
3) To develop competent internal source of employees ready to take up jobs at higher level in the changing environment.
4) To promote employee’s self development and make them await their turn of promotions. It reduces labour turnover.
5) To promote a feeling of content with the existing conditions of the company and a sense of belongingness.
6) To promote interest in training, development programmers and in team development areas.
7) To build loyalty and to boost morale.
8) To reward committed and loyal employees.
9) To get rid of the problems created by the leader of workers’ unions by promoting them to the officer’ levels where they
are less effective in creating problems.

Merit as a basis of promotion:-

Merit is taken to denote an individual employee’s skills, knowledge, ability, efficiency and aptitude as measured from
educational, training and past employment record. The merits of merit system of promotion are:
1) The resources of higher order of an employee can be better utilized at a higher level. It result in maximum utilization of
human resources in an organization
2) Competent employees are motivated to exert all their resources and contribute them to the organizational efficiency and
effectiveness
3) It works as golden hand-cuffs regarding employee turnover,
4) Further it continuously encourages the employees to acquire new skill, knowledge etc. for all-round development.
Despite these advantages the merit systems suffer from some demerit. They are:
1) Measurement or judging of merit is highly difficult.
2) Many people, particularly trade union leaders, distrust the management’s integrity in judging merit.
3) The techniques of merit measurement are subjective.
4) Merit denotes mostly the past achievement, efficiency but not the future success. Hence, the purpose of promotion may
not be served if merit is taken as sole criteria for promotion.

Senior as a basis of promotion

Seniority refers to relative length of service in the same job and in the same organization. The logic behind considering
the seniority as a basis of promotion is that there is a positive correlation between the length of service in the same job and
the amount of knowledge and the level of skill acquired by an employee in an organization. This system is also based on the
custom that the first in should be given first chance in all benefit and privileges.

► Advantages of seniority as a basis of promotion are:

1) It is relatively easy to measure the length of service and judge the seniority.
2) There would be full support of the trade unions to this system.
3) Every party trust the management’s action as there is no scope for favoritism and discrimination and judgment.
4) It gives a sense of certainty of getting promotion to every employee and of their turn of promotion.
5) Senior employees will have a sense of satisfaction to this system as the older employees are respected and their
inefficiency cannot be pointed out.
6) It minimizes the scope for grievances and conflicts regarding promotion.
7) This system seems to reserve the purpose in the sense that employees may learn more with increase in the length of
service.

► In spite of these merits, this system also suffers from certain limitations. They are:

1) The assumption that the employees learn more relatively with length of service is not valid as this assumption has
reverse effect. In other words employees learn up to a certain age and beyond that stage the learning ability of the
cognitive process diminishes.
2) It denominates the young and more competent employees and results in employee turnover particularly among the
dynamic force.
3) It kills the zeal and interest to develop as everybody will be promoted with or without improvement.
4) Organizational effectiveness may be diminishes through the deceleration of the human resource effectiveness as the
human resource consists of mostly undynamic and old blood.
5) Judging the seniority though it seems to be in the theoretical sense. it is highly difficult in practice as the problems like
job seniority, company seniority, zonal/regional seniority, service in different organizations, experience as apprentice
trainee, trainee, researcher, length of service not only by days but hours and minutes will crop up.

Thus the two main basic of promotion enjoy certain advantages and at the same time suffer from certain limitations. Hence,
a combination of both of them may be regarded as an effective basis of promotion.

Seniority-cum-merit
Management mostly prefers merit as the basis of promotion as they are interested in enriching its human resources. But
trade union favour seniority as the sole basis for promotion with a view to satisfy the interests of majority of their members.
Hence a combination of both seniority and merit can be considered as the basis for promotion satisfying the management
for organizational effectiveness and employees and trade union for respecting the length of service. A balance between
seniority and merit should be struck and a new basis is to be developed. There are several ways in striking the balance
between these two basis.viz:-
1) Minimum length of service and merit:-
Under this method all those employees who complete the minimum service, say five years, are made eligible for promotion
and then merit is taken as the sole criteria for selecting the employee for promotion from the eligible candidates. Most of the
commercial bank in India has been following this method for promoting the employees from clerk’s position to officer’s
position.

2) Measurements of seniority and merit through a common factor.

3) Minimum merit and seniority:-

In contrast to the earlier methods, minimum score of merit which is necessary for the acceptable performance on the future
job is determined and all the candidates who secure minimum score are declared as eligible candidates. Candidates are
selected for promotion based on their seniority only from the eligible candidates.

► Benefit of promotion:-
1) Promotion places the employees in a position where an employee’s skills and knowledge can be better utilized.
2) It creates and increases the interest of the other employees in the company as they believe that they will also get their
turn.
3) It creates among employees a feeling of content with the existing conditions of work and employment.
4) It increases interest in acquiring higher qualifications, in training and in self development with a view to meet the
requirement of promotion
5) Promotion improves employee morale and job satisfaction.
6) Ultimately it improves organizational health.

► Problems with promotion:-

Though promotions benefit the employee and the organization, it creates certain problems. They are disappointment of the
candidates, refusal of promotions etc.

Promotion disappointment some employees:-

Some employees who are not promoted will be disappointed when their colleagues with similar qualifications and
experience are promoted either due to favoritisms or due to lack of systematic promotion policy. Employee may develop
negative attitude and reduce their contributions to the organization and prevent organizational and individual advancement.

Some employee refuse promotion:-

There is a general tendency that employee accept promotion. But their are several incidents where employees refuse
promotions. These include promotion together with transfer to an upward place, promotion that level where the employee
feels that he will be quite incompetent to carry out the job, delegation of unwanted responsibilities, and when trade union
leader feel that promotion causes damage to their position in trade union.
The other problems associated with the promotion are: some superiors will not relieve their subordinates who are
promoted because of their indispensability in the present job and inequality in promotional in different departments, regions
and categories of jobs.
Promotion problems can be minimized though a career counseling by the superiors and by formulating a systematic
promotion policy.

► Promotion policy
Every organizational has to specify clearly its policy regarding promotion based on its corporate policy. The characteristics
of a systematic promotion policy are:
1) It should be considered the sense that policy should be applied uniformly to all employees irrespective of the
background of the persons,
2) It should be fair and impartial. In other words it should not give room for nepotism, favoritism etc.,
3) Systematic line of promotion channel should be incorporated
4) It should provide equal opportunities fro promotion in all categories of jobs, departments, and regions of an organization
5) It should insure open policy in the sense that every eligible employee should be considered for promotion rather than a
closed system which consider only a class of employees
6) It should contain clear cut norms and criteria for judging merit, length or service, potentiality etc.
7) Appropriate authority should be entrusted with the task of making final decision
8) Favoritism should not be taken as a basis for promotion
9) It should contain promotional counseling, encouragement, guidance and follow-up regarding promotional opportunity,
job requirement and acquiring the required skills, knowledge etc. it should also contain reinforcing the future chances in
the mind of rejected candidates and a provision for challenging the managements decision and action by employee or
union within the limits of promotion policy.

► Types of Promotion

As already noted, a promotion involves an increase in status, responsibilities and pay. But, in certain cases, only the pay increases, and
the other elements remain stagnant. In other cases, the status only increases without a corresponding increase in pay or responsibilities.
Depending on which elements increase and which remain stagnant, promotions may be classified into the following types:

1) Horizontal Promotion:-
This type of promotion involves an increase in responsibilities and pay, and a change in designation. But the employee concerned does not
transgress the job classification. For example, a lower division clerk is promoted as an upper division clerk. This type of promotion is referred to
as upgrading' the position of an employee.
2) Vertical Promotion:-
This type of promotion results in greater responsibility, prestige and pay, together with a change in the nature of the job. A promotion is
vertical when a canteen employee is promoted to an unskilled job. The concerned employee naturally transgresses the job classification.
3) Dry Promotions:-
Dry promotions are sometimes given in lieu of increases in remuneration. Designations are different but no change in responsibilities. The
promotee may be given one or two annual increments.

Transfer

► Meaning:-
Transfer is defined as “ a lateral shift causing movement of individuals from one position to another usually without involving
any marked change in duties, responsibility, skills needed or compensation”

Transfer is also defines as “the moving of an employee from one job to another. It may involve a promotion, demotion or no
change in job status other than moving from one job to another.”

However transfer is viewed as change in assignment in which the employee moves from one job to another in the same
level of hierarchy requiring similar skill involving approximately same level of responsibility, same status and same level of
pay. Thus promotion is upward reassignment of job; demotion is a downward job reassignment whereas transfer is a latter
or horizontal job reassignment.

► Purposes of transfer:-
 The transfer in an organization may be due to any one of the following reasons:
(1) Variation in the volume of work: Transfers are necessary due to variation in the volume of work in .different
departments/sections. Shortage of employees or increase in the work in one department due to different reasons leads to
transfer of employees from other departments to that department. Workers are transferred from surplus department to another
department where there is shortage of staff.
(2) Providing training to employees: Transfers are made for providing opportunities to employees for training and development.

(3) Rectification of poor placement: Transfers are necessary for the rectification of poor placement made in the initial period.
Similarly, transfers are necessary in order to utilize the services of an employee in the best possible manner.

(4) Satisfying personal needs of employees: Transfers are necessary in order to satisfy the personal needs (personal difficulties)
of the employees. They include family problems, sickness, and education of children and so on. Such transfers take place
especially among female employees. Female employees want transfer to join their husbands. This leads to transfers. Workers
demand transfers when the climate of the place of work is not suitable to them. Here, transfers are basically for the
convenience of employees.

(5) Meeting mutual needs of employees: Transfers are, sometimes, made in order to meet the mutual needs of two
employees. It is a type of mutual exchange and is usually accepted by the management.

(6) Meeting organizational needs: Transfers are necessary in order to meet the organizational needs developed out of
expansion programmers or fluctuations in work requirements or changes in the organizational structure or dropping of
existing product lines. For example, senior and experienced workers and
supervisors are transferred to new plants/factories in order to manage the work smoothly.

(7) Solution to poor performance: Transfers are, sometimes, made when the worker fails to perform his job efficiently. He is
transferred to a new place or post and is given an opportunity to improve his performance at a new place. Here, transfer is
treated as a better alternative to outright dismissal.

(8) Avoiding fatigue and monotony: Transfers are made for avoiding fatigue and monotony of work in the case of employees.
The productivity of an employee may decline due to monotony of his or her job. To break this monotony, the employee is
transferred.

(9) Giving punishment for negligence: Transfers are sometimes made as a punishment for negligence and indiscipline on the part of
an employee.

(10) Rectification of poor personal relations: The relations between the worker and his superior may not be smooth and cordial.
This may affect the work of the department. One method to solve this problem is to transfer the worker from that department
to some other suitable department. This transfer may be necessary for removal of the incompatibilities between the worker and
his/her boss or between one worker and the other.

(11) Providing convenience to employees: Transfers are made to help employees to work according to their convenience. Such
transfers are also called shift transfers.

(12) To provide relief and to punish employees: Transfers may be made in order to give relief to the employees who are
overburdened or are working under heavy risks or tension over a long period. Similarly, on certain occasions transfers are
made for indulging in undesirable activities. They may be made as a disciplinary action for serious mistakes on the part of
employees. This practice is widespread mainly in government offices and police department. Problem employees are
transferred to some other jobs or to remote places.

► Types of Transfers
Broadly speaking, transfers may be classified into three types:
1. Those designed to enhance training and development.
2. Those making possible adjustment to varying volumes of work within the firm.
3. Those designed to remedy the problem of poor placement.
Specifically, transfers may be production, replacement, versatility, shift and remedial.
1) Production Transfers:-
As mentioned earlier, a shortage or surplus of the labour force is common in different departments in a plant or several plants in an
organization. Surplus employees in a department have to be laid off, unless they are transferred to another department. Transfers
affected to avoid such imminent lay-offs are called production transfers.
2) Replacement Transfers:-
Replacement transfers, too, are intended to avoid imminent lay-offs, particularly, of senior employees. A junior employee may be replaced
by a senior employee to avoid laying off the latter. A replacement transfer programmed is used when all the operations are declining, and
is designed to retain long-service employees as long as possible.

3) Versatility Transfers:-
Versatility transfers are effected to make employees versatile and competent hi more than one skill. Clerical employees in banks, for
example, are transferred from one section to another over a period of time so that they may acquire the necessary skills to attend to the
various activities, at the bank. Versatile operations are valuable assets during rush periods and periods when work is dull. Versatile
transfers may be used as a preparation for production or replacement transfers

4) Shift Transfers:-
Generally speaking, industrial establishments operate more than one shift. Transfers between shifts are common, such transfers being
made mostly on a rotation basis. Transfers may also be affected on special requests from employees. Some request a transfer to the
second shift or the night shift in order to avail the free time during the day to take up part time jobs, although this is not permitted by law.

5) Remedial Transfers:-
Remedial transfers are affected at the request of employees and are, therefore, called personal transfers. Remedial transfers take
place because the initial placement of an employee may have been faulty or the worker may not get along with his or her supervisor
or with other workers in the department. He or she may be getting too old to continue in his or her regular job, or the type of job or working
conditions may not be well-adapted to his or her present health or accident record. If the job is repetitive, the worker may stagnate and
would benefit by transfer to a different kind of work.

► Reasons for transfer:

Transfers are of basically of three categories, viz, employee initiated transfer, and company initiated transfer and public
initiated transfers.

1) Employee initiated transfer:-

These transfers are also known as personal transfers. These transfers are primarily in the interest of the employee and
according to his convenience and desire. Further, this transfer can be classified into temporary and permanent transfers.
a) Temporary transfers: -
The reasons for employee initiated temporary transfers are:
1) Due to ill health or involvement of employee in accidents,
2) Due to family problem like taking care of old parents,
3) Due to other adhoc problem like pursuing higher education,
b) Permanent transfers:-
There are several reasons for employee initiated permanent transfers. Employee prefers transfers:
1) Due to chronic ill health or permanent disablement caused by accident,
2) Due to family problems like taking care of domestic affairs in his native place,
3) With a view to correct his wrong placement. Employee may not be interested with the work or working condition or
environment of his present job and hence may require a transfer,
4) In order to relive him from the monotony or boredom caused due to doing the same job for year together,
5) To avoid conflict with his superior. If most of the employees working under the same superior request for a transfer, the
situation should be corrected by other means like developing that superior in interpersonal skills etc. rather than transferring
the subordinates,
6) With a view to search for challenging and creative job,
7) With a view to search for job with opportunities for advancement to a higher level job, opportunities for advancement to a
higher level job, opportunities for financial gains etc.

2) Company initiated transfer:-

Transfer is also at the initiative of the company. They can be classified into temporary and permanent.
a) Temporary transfers: reasons for the company initiated temporary transfers are:
1) Due to temporary absenteeism of employees,
2) Due to fluctuation in quality of production and thereby in work load,
3) Due to short vacations.
b) Permanent transfer: - reasons for the company initiated permanent transfer are:
1) Changes in the quality of production, lines of activity, technology, organizational structure as discussed earlier,
2) To improve the versatity of employees,
3) To improve the employee job satisfaction,
4) To minimize bribe order-processing corruption.

3) Public initiated transfers:-

Public also initiate the transfers generally through the politicians/ government for the following reasons:
1) If an employee’s behavior in the society is against the social norms order-processing if he indulges in any social evils.
2) If the function of an employee is against the public interest.
The majour drawback of public initiated transfer is the politicalisation of the issue. Some employees may be transferred
frequently because of political victimization and company initiated transfer of some employees may be stopped due to
political favoritism. This drawback is more severe in government departments and public sector unit.

Benefit of transfer:
Transfers benefit both the employees and the organization. Transfer reduce employee’s monotony, boredom etc. and
increase employees job satisfaction. Further they improves employee’s skills, knowledge etc. they correct erroneous
placement and interpersonal conflicts. Thus, they improve employee’s morale. Further they prepare the employee to meet
the organizational exigencies and meet the fluctuation in business and organizational requirements. Thus, they enhance
human resource contribution to organizational effectiveness.

Problems of transfer:
Despite these benefit some problems are associated with transfers. They are:
1) Adjustment problem to the employee to the new job, place, environment, superior and colleageoues,
2) Transfer from one place to another cause which inconvenience and cost to the employees and his family members
relating to housing, education to children etc.
3) transfer from one place to another result in loss of Mondays,
4) Company initiated transfer result in reduction in employee contribution
5) Discriminatory transfer affects employees’ morale, job satisfaction, commitment and contribution.

However, these problems can be minimized through formulating a systematic transfer policy.
Transfer policy: organization should specify their policy regarding transfers. Otherwise superiors may transfer their
subordinates arbitrarily if they do not like them. It causes frustration among employees. Similarly, subordinates may also
request fro transfer even for the petty issues. Most of the people may ask for transfer to risk less and easy job and places.
As such organization may find it difficult to manage the transfer policy. Systematic transfer policy should contain the
following items:
1) Specification of circumstances under which an employee will be transferred in the case of company initiated transfer.
2) Specification of superior who is authorized and responsible to initiate a transfer
3) Jobs from and to which transfers will be made based on the job specification, description and classification etc.
4) The region order-processing unit of the organization within which transfer will be administrated.
5) Reasons which will be considered for personal transfers their order of priority etc.
6) Reasons for mutual transfer of employees.
7) Norms to decide priority when two order-processing more employees request for transfer like priority of reasons,
seniority.
8) Specification of basis for transfer like job analysis. Merit, length of service.
9) Specification of pay, Allowances, benefit etc. that are to be allowed to the employee in the new job.
10) Other facility to be extended to the transferee like special leave during the period of transfer. Special allowance for
packaging luggage, transportation etc.
Generally, line managers administer the transfers and personnel managers assist the line managers in this respect.

Demotion

The remaining type of internal mobility is demotion. It is the opposite of promotion. Demotion is the reassignment of a lower
level job to an employee with delegation of responsibility and authority required to perform that lower level job and normally
with lower level pay. Organizations use demotion less frequently as it affects employee career prospects and morale.

► Need for demotions:

Demotions are necessary for following reasons:
1) Unsuitability of the employee to higher level jobs:
Employees are promoted based on the seniority and past performance. But, some of the employees promoted on those
bases may not meet the job requirements of the higher level job. In most cases employees are promoted to the level of the
incompetence. Some employees selected for higher level jobs may prove to be incompetent I doing that job. Such
employees may be demoted to the lower level jobs where their skill, knowledge and aptitude suit to the job requirements.

2) Adverse business conditions:

Generally adverse business conditions force the organization to reduce quality of production, withdrawal of some lines of
products, closure of certain department order-processing plants. In addition, organizations resort to economy drives.
Consequently organizations minimize the number of employees. Junior employees will be retrenched and senior employees
will be demoted under such conditions.

3) New technology and new methods of operation demand new and higher level skills. If the existing employees do not
develop themselves to meet those new requirements, organizations demote them to the lower level jobs where they are
suitable. For example, teacher handling 10TH class were demoted to the level of 8TH class teachers when the syllabus were
revised and the teachers were found misfit even after training in one school in Andhra Pradesh.

4) Employees are demoted on disciplinary grounds. This is one of the extreme steps and as such organizations rarely
use this measure.
Though the demotion seems to be simple it adversely affects the employee morale. Job satisfaction etc. as it reduces
employee status not only in the organization but also in the society in addition to reduction in responsibility authority and
pay. Hence, there should be a systematic demotion policy.

► Demotion policy:
Organization should clearly specify the demotion policy. Otherwise the superiors demote the employees according to their
whims and fancies. Systematic demotion policy should contain following items:
1) Specification of circumstances under which an employee will be demoted, like reduction in operations, indisciplinary
cases.
2) Specification of a superior who is authorized and responsible to initiated a demotion
3) Jobs from and to which, demotions will be made and specification of lines order-processing ladders of demotion.
4) Specification of basis for demotion like length of service, merit order-processing both.
5) It should provide for open policy rather than a closed policy.
6) It should contain clear cut norms for judging merit and length of service.
7) Specification of nature of demotion i.e., whether it is permanent order-processing temporary if it as a disciplinary action it
should also specify the guidelines for determining the seniority of such demoted employee.

PARTICIPATIVE MANAGEMENT

Meaning of Participative Management

The concept of participative management is closely related with the concept of industrial democracy. Employee’s
participation in management means associating workers with the decision-making process. It is a type of mental &
emotional involvement of workers in industrial management. In industrial democracy, the opinion & suggestions of workers
are taken into account while framing policies particularly those, which are directly connected with them or affect them
directly.
The concept of participative management developed in Western countries & has proved to be successful. As a result, it
acquired world-wide recognition & popularity. Participation in an emotional involvement of employees in the working of their
company. It is a process of giving & sharing views, ideas & information in between the employer & employees through
certain channels / mechanism.

Features of Participative Management

1. Higher status to employees: In participative management, employees are given higher status with power of
participate in the decision-making & running of their business enterprise.
2. Provides psychological satisfaction to employees: Participation is an emotional involvement of employees in
the working of their company. As a result, some management decisions are as per the expectations of employees.
This gives psychological satisfaction to employees. They feel that they are given better status & treatment & not
treated merely as wage earners.
3. Special attention to view of employees: The views of employees are given special attention in regard to following
matters:
• Social Matters: Hours of work, work rules, welfare facilities, safety, sanitation, health, etc.
• Personnel: Recruitment, promotions & transfers, settlement of grievances, work distribution, holidays, etc.
• Economic: Automation, lay-offs, production schedule, production methods, etc.
4. Universally recognized concept: It is introduced in different countries in different forms.
5. Participation is indirect: Employees participation in the management is indirect i.e. through the representatives of
employees. E.g. Works comities, etc.
6. Brings employees & management closure: It facilitates meaningful communication between management &
employees, which ensures cordial industrial relations.
7. Beneficial to both parties: The participative management will be beneficial to both parties only when company’s
management is professional or progressive.
8. Revolutionary concept: It is a powerful tool, which can make industrial democracy a reality.
9. Concept has limitations: Employees will not be allowed to participate in financial & other decisions of the
management. It is restricted to those aspects of management where employees are directly involved.

Objectives or Purposes of Participative Management:

⇒ To create uniform approach of employer & workers.

⇒ To establish cordial industrial relation.
⇒ To raise industrial productivity.
⇒ To workers in confidence.
⇒ To introduce industrial democracy.
Needs of Participative Management:

1) Giving higher status & psychological satisfaction to workers: Employees are important & that their views are
being taken into account while taking decisions on the matters relating to them. Such participation satisfies the urge
of self-expressions. Even for maturity & personality development of workers.
2) Cordial labour-management relations: The participation of the workers in management can act as an effective
means for preventing industrial disputes. So there needs to establish cordial labour-management relations through
mutual understanding.
3) Creating uniform approach of employer & workers: This avoids possible disputes.
4) Raising industrial production: As workers generally take interest in their work when they are given due
importance, respect & opportunity of self-expression.
5) Creating platform for direct negotiations: It is needed in order to create a platform for direct negotiations &
collective decisions.
6) Creating responsible approach among workers: To make workers more responsible, disciplined & constructive
in their approach in relation to the activities of the company.
7) Encouraging communication between employer & workers: It enables management to understand the workers
point of view at the time of decision-making. It removes suspicion among workers.
8) Raising employee’s morale: For raising the morale of employees & in order to use their knowledge, skills & talents
for the benefit of the company.
9) Introducing industrial democracy: Workers participation acts as a means for achieving the dream of industrial
democracy. They are consulted as equal partners in the production process. This leads to industrial democracy,
which is one useful supplement of political democracy.

Methods of participative management

Participative management is possible by creating suitable agencies, forums or platforms through which effective
communication between workers and management will be possible and joint decision will be arrived at the methods of
Participative management are different alternative. Employees and workers can select any one of the method popular and
also purposeful. This is the nature as the method selected is not important but the result oriented Participative is important.
The method used is means while effective participation is the end.

1. Works committees:
The industrial disputes act 1947 provided for the setting up of a work committees consisting of representative of
management and employees in every undertaking employee 100 or more employees. The committees are for the removing
the causes of friction between employers and the workers in the day to day working in factory level. This joint consultative
committee meets frequently for discussion on common problem before workers and the company. After discussion, joint
decisions are taken and such decisions are binding on both the parties. Matters like wage payment, bonus, training,
discipline, welfare facility, working conditions etc. are discussed in such meetings.

Workers committees are extremely popular and effective in France and England. In India, there is statutory provision for the
establishment of worker committees under the industrial disputes act, 1947. Such committees are constituted in large
number of industrial unit. Meeting of such committees are also arranged. However, they are neither effective nor popular in
India. As a result, participative management through this mechanism is not effective or purposeful in India. Many managers
feel that such committees have only a nuisance value. In addition to works committee, many other committees are formed.
However, they are not effective as agencies of participative management.

2. Joint management councils (JMCs):

These council are similar to works committees with equal representation to employer and employees. Workers express their
views, problems such as welfare facility; discipline, training, removal of workers, common grievances, holidays,
rationalization, expansion programmes, etc. are discussed in the meetings of JMCs. Such joint consultative committees
exist in UK and Sweden. In India, participative management is mainly through joint management councils.
JMCs are in addition to works committees which are statutory in nature. Unfortunately, the JMCs are not operation
effectively in India due to limited interest and initiative in their functioning by managements and workers. They are not used
for exchange of information, views, suggestions, etc. but for quarrels and heated exchanges between the representatives of
management and workers. Absence of cordial industrial relations in spite of JMCs indicates their overall failure. JMCs are
mostly consultative bodies and this type of workers participation is of loose type. The suggestions put forward by
representatives are not binding on the management. Such councils serve no useful purpose. They only provide platform for
discussions.

3. Co-partnership ( Participation through ownership) :

In co-partnership, workers are converted into shareholders of the company (by offering equity shares to them) and are
allowed to participate in the management like other shareholders. The company may give financial assistance to workers to
purchase equity shares. They can elect their representatives on the Board of Directors. Workers are also allowed to attend
meetings of the company and participate in the discussions. Voting rights are also given to employees.

In this method, employees participate in the management as co-owners i.e. shareholders. This gives them an opportunity to
participate in the decision making and policy framing of their company at the highest level. Co-partnership is also a method
for introducing industrial democracy. Here, workers are given higher status. They work in two different capacities as workers
and as co-owners.

In India, the experiment of co-partnership is not popular. Workers show limited interest in purchasing shares of their
company as and when offered. Very few workers purchase the shares and join the company as members. Naturally, the
participation of workers in the management is weak and ineffective.

Many companies in India offer their shares to employees but the response of the employees is not encouraging. This
suggests that co-partnership as a method of participative management is not effective / popular in India.

4. Employee Directors:
Here, two or three representatives of workers are taken on the Board of Directors of the company. The employee directors /
workers directors are elected by workers and they express the views of workers in the meetings of the Board. Here,
employee directors act as connecting link between workers and top level management. Such participation ensures cordial
industrial relations. The representative of workers can put the views of workers before the directors and can also safeguard
the interests of workers. As a result, the personnel policies will be fair and favourable to workers. Unfavourable decisions to
workers will be avoided and better treatment will be ensured to them.

This mechanism of workers participation is now used extensively in the public sector undertaking in India as per the initiative
taken by the government. Workers directors are now appointed in companies like Hindustan Antibiotics Ltd., and HMT Ltd.
This scheme also exists in the case of nationalized banks, co-operative banks. DCM, Tatas and some more companies from
the private sector.

This method of participative management has many limitations. Representation on the Board does not substantially
enhance the participation of workers in the management of the company. In addition, the worker director may not be able to
play a constructive role due to limited knowledge and experience. The worker director may enjoy the status on par with
other directors but will feel inferior to others due to his shortcomings. His contribution may not be satisfactory for the workers
and also for the management. Finally, Workers representatives on the Board are minority. They may not be able to protect
the interests of workers as decisions are taken on the basis of majority vote.

5. Suggestion Programme / Scheme:

Under suggestion programme, workers are asked to give their suggestion to the management on various administrative and
other matters such as machine utilization, waste management, energy conservation and safety measures. Their
suggestions are considered by a joint committee representing workers, heads of departments and technical experts. The
suggestions which are suitable are accepted. Such suggestions are for improvement in the existing organizational setup.
Suitable suggestions relating to production activities, cost control, quality improvement, working conditions, etc. are promptly
accepted and executed. In addition, rewards are also given to those who make constructive suggestions. For collecting
suggestions, suggestion boxes are kept in all departments.

Suggestion scheme of participative management encourages workers to think (individually or collectively) and participate in
raising the efficiency of the organization. In India, Tatas, DCM and other industrial groups have introduced suggestion
scheme. On May occasions, workers directly connected with work give creative and practical suggestions which are useful
to the management in different ways. They may raise productivity or reduce the cost of production. Suggestion scheme will
give good results if workers are encouraged to think and make concrete suggestions. This idea of participative management
is now put into operation through quality circles which are popular in Japan and now function in may Indian Companies.
 6. Workers co-partnership / Auto Management:
In this extreme form of labour participation, workers take over the industrial unit and manage it completely on co operative
basis. Naturally, the entire management is by the workers themselves. This method is called “Auto-management”. One
example in India under this category is that of Kamani Tubes Limited. This leading unit was closed down in 1985 due to
sickness. Workers suffered heavy loss. Now, workers have contributed to its capital and have become its owners. The
Kamani Employees’ Union took initiative in starting this unit with the co-operation of financial institution form 6th April, 1989.
The Supreme Court also allowed the workers to run the unit. This is the first example of participative management in the
manufacturing sector in India. It is one significant constructive development in the field of trade unionism in India. The
Government of Maharashtra has taken a decision to hand over sick industrial units to workers for regular functioning on co-
operative basis.

7. Quality Circle:
Quality circle consist of a small number of employees who comes together on voluntary basis with one item on the agenda
i.e. to improve quality or to raise productivity or to avoid wastages, etc. this form of participation is voluntary. As a practice,
meetings are held once in the week lasting for about as hour. Member of quality circle is given free hand to solve problem
related to the quality, if they fail they can request to management to depute an expert to sort out the problem. This circle
highly proved to be highly successful because the problem is solved by member themselves through two way
communication and brainstorming seriously and studies them effectively and promptly. The suggestion should be
implemented, if found suitable.

8. Collective Bargaining:
Collective bargaining is the process in which the representative of the employer and employer and employees meet
together to negotiate a contract government both the parties. It results into signing an agreement thereby restricting each
party that it cannot take unilateral decision harming the interest of the other party. This sort of joint meeting can bring fruits
proved barraging is done in the right spirit with positive attitude. Participation brings both the parties together and improves
the understanding thus making the way for the two way dialogue to sort out the problems.
Collective bargaining is a better alternative to strike and industrial disputes. It is peaceful and democratic method for solving
the problem and demands for workers through direct negotiation between the representative of workers and management. A
strong trade union can protect the interest of worker can more effectively through direct negotiation and consultation rather
than through disputes and strike which are normally harmful to workers, employer and society at large.

9. Empowered Team:
When the authority is delegated to the employees its called empowering. In this sense, employment takes place when
employees enjoy power and they experience a sense of ownership and control over the jobs. Employees when empowered,
understanding that the job belong to them. As they are competent to speak on the job, they feel responsible. This happens
to motivate them and they go out of the way to work. Employees become quality conscious and contribute to quality
improvement in product and services. Information is shared at every level leading to improved performance.

10. Job enlargement and job evaluation:

Job enlargement is the process of increasing the scope of the job by adding more tasks to it. As tasks are related,
employees to get the opportunity to make grater use of their mental and physical skills.

Job enrichment is designing a job in such a way that it provide the employee grater autonomy for planning and control his
own performance. Job enrichment makes the jobs more interesting and challenging.

The main objective of job enrichment and job enlargement is to force the worker from boredom which occurs because of
excessive specialization. Both the job enrichment and job enlargement are considering method of participative management
as they provide freedom to each employee to use his judgment. This freedom is course limited and restricted.
The basis purpose of above noted scheme of participative management is to associate the worker with the decision-making
process. Difference methods are use in the different countries as per the situation available. The method used for workers
participation is not impotent. Workers participation in management may be voluntary or statutory. Voluntary participation is
always better and more effective. Statutory labour participation is not effective as it is mechanical and also imposed on both
the parties by force.

PRE-REQUISITES OF PARTICIPATIVE MANAGEMENT

1. Strong trade unions:

Existing of strong trade with creative and enlightened leadership is necessary for participative management. Workers and
their union must have genuine desire and interest in such participation. They also need information, proper training and
ability to participate in the discussions in an effective manner. Workers participation will be ineffective if these pre-request
are absent. Politicisation and multiplicity of trade union defeat the very purpose of participative management

2. Favourable attitude of management:

The attitude of the management should be progressive and democratic. He must be mentally willing to associate with his
workers on equal level and discus the problem freely and frankly with them. The conservative and autocratic outlook of
management will defeat participative management in practice. Management have to accept due importance of employees
and their status as their partners and not merely as wage earners. Management should not feel that its position it’s
threatened by such participation.

3. Mutual trust and confidence:

Existence of atmosphere of mutual trust and confidence is the sine quo non of participative management. Fair participation
is not possible when the mutual confidence is absent. Both parties are agree to stay together in an atmosphere of
understanding. This facilitates participative management in practice.

4. Genuine urge for co-operation:

Genuine desire on the part of employer and worker to discuss, understand the views and come to certain acceptable
decision is necessary for success of participative management. This must be supplemented by desire to genuine desire to
share authority and responsibility in mutually agreed to sphere. The outlook of employer and worker must change and
become favourable for mutual trust and understanding.

5. Peaceful atmosphere:
Labour management relation should be a cardinal or at least there should be a no tension in the relation. Active participation
of workers in management is possible under such peaceful atmosphere. It is just not possible when there are disputes and
strike in the industrial unit.

6. Clear understanding of objective:

Employers and workers must understand clear the objective of such participation. The objective must be clearly define and
complementary in characters. Employer should not take such participation as an imposed liability and worker should not use
it merely for expressing there grievances and demands. Participation should be for achieve the objective which are
accepted by both the parties and also beneficial for both the parties.

7. Meaningful sharing of information:

Worker representative should have adequate technical, financial and managerial knowledge and information. This will
make labour participation effectively. For this, a suitable training needs to be given to the workers representatives.
Management should also provide all relevant information to employees for their consideration. There must be a free flow of
information and communication between management and worker. This avoids suspicion and distrust and ensures
purposeful participative management.

8. Participation of supervisory staff:

Supervisory staff should be given a place on the join management council. Similarly, subject earmarked for collective
bargaining must be kept outside for the joint consultation. Participative management will be effective if the entire labour
force covered by such participation. In addition, the representative of the worker must be drawn from themselves. The
participation of trade union leaders should be discourage as the approach of such leaders may not be positive or fair. Real
representative of workers can put forward the views of all workers with confidence.

9. Education and training of workers:

Workers education and training should be make significant contribution to meaningful participative management. Trade
union and government should provide such education and training to the workers. This will make the concept of participative
management among popular among the workers and will ensure its success.

10. Voluntary character desirable:

Participative management should not be made compulsory but should be kept voluntary in character. It should not be
government sponsored. It will not work fruitfully if it is imposed on the both the parties. Thus voluntary condition character is
one pre-condition for the success of participative management. The need of such participation must be felt by both the
parties and they should introduce the scheme of participation on voluntary basis.
Importance of participative management:

The importance of participative management is universally accepted and efforts are being made for introducing such
participation through suitable agencies and methods. Participative management has wider socio-economic importance as it
given various advantages to workers, employers and society at large. Such participation gives higher status to workers and
enable them to think and express their view on the working of their company. Industrial peace and cordial industrial relation
are also established through participative management. In addition, workers’ participation brings industrial democracy in
reality. Participative management is important it satisfies the psychological needs of self expression of workers. Even the
process of decision making is made democratic through the workers participation. It bring human element in industrial
management.

Participative management introduces a new set of volume for the workers and employers in which power is to be replaced
by persuasion and compulsion by co-operation. Employee participation is useful for raising industrial production and
productivity. It helps consumer in an indirect manner. The national economy also gets certain benefits when industrial peace
and harmony exits over a long period. In brief, the concept of participative management is important because of economics,
social and human values connected with it.

The ILO has given morale support to employee’s participation and has advocated its adoption in all countries. Efforts are
being made in all countries in this regards. In the countries of west, this experiment is reasonable successful while in
developing countries including India, the progress is not satisfactory even when consultative machinery exists in many
countries.

Reward Management

Reward management is about the design, implementation, maintenance, communication and evolution of reward
processes which help organizations to improve performance and achieve their objectives.

Reward processes are based on reward philosophies and strategies and contain arrangements in the shape of
policies and strategies and contain arrangements in the shape of policies, guiding principles, practices, structures
and procedures which are devised and managed to provide and maintain appropriate types and levels of pay,
benefits and other forms of reward. This constitutes the financial reward aspect of the process which incorporates
processes and procedures for tracking market rates, measuring job values, designing and maintaining pay
structures, paying for performance, competence and skill, and providing employee benefits. However, reward
management is not just about money. It is also concerned with those non-financial rewards which provide
intrinsic or extrinsic motivation.

The key issues facing reward management are:

• How to ensure that reward management strategies support the achievement of the organization’s business
strategies and satisfy the needs and aspirations of employees for security, stability and career
development?
• How to achieve internal equity and external competitiveness?
• How to respond to a fragmenting pay market and maintain a reasonably coherent pay structure?
• How to concentrate on rewarding for output and maintain, indeed enhance quality standards?
• How can we reward individual performance and contribution and promote teamwork?
• How to introduce sophisticated performance management process and ensure that
• managers are committed and have the skills required to get the best out of them?
• How can we give high rewards to high achievers and motivate the core of the employees upon whom we
ultimately have to rely?
 • How to achieve consistency in managing reward processes and provide for the flexibility needed in ever-
changing circumstances?
• How can we devolve power to the line managers to manage their own reward processes and retain
sufficient control to ensure that corporate policies are implemented?
• How to continue to provide motivation for those who have reached the top of their pay range and maintain
the integrity of the grading system and contain costs?
• How to introduce more powerful pay-for-performance schemes and ensure to get value of money from
them?
• How to deliver the message that improved performance brings increased reward and cap bonus earnings to
cater for windfall situations or a particularly loose incentive scheme?
• How to operate enterprise-wide bonus scheme and ensure that they increase motivation and commitment?
• How to reward people for their outputs and their inputs?
• How to operate job evaluation schemes as a means of allocating and controlling gradings in a formal
hierarchy and cater for the role flexibility which is increasingly required in the organization?

Key Reward Management Trends

Following are the key reward management trend in today’s scenario.

• Greater sensitivity to sector and functional market practice to enable more effective market positioning to
help with attracting and retaining high caliber employees.
• The implementation of increasingly focused performance awards starting at the top and working down
through organizations as performance orientation increases.
• Pay increases linked to market worth and individual or team performance-not service and/or cost of living.
• More attention given to achievement or success-oriented individual bonuses rather than payment increases
in base pay.
• A move towards team pay as the importance of teamwork increases.
• More flexible pay structures based on job families and using broader pay bands or pay curves.
• More integrated pay structures covering all categories of employees.
• A growing linkage between pay practice and training and development initiatives through the design and
implementation of skills and competency based pay processes which reward the acquisition and use of
new skills and behaviors.
• The development of integrated performance management systems with the emphasis on coaching
development, motivation and recognition through the identification of opportunities to succeed.
• A search for simpler and more flexible approaches to job evaluation which enable a move away from the
control of uniformity to the management of diversity. This will make use of techniques such as job family
modeling and computer assisted job evaluation.
• Increased awareness of the need to treat job measurement as a process for managing relativities which, as
necessary, has to adapt to new organizational environments and much greater role flexibility and can no
longer be applied rigidly as a system for preserving existing hierarchies.
• More emphasis on the choice of benefits and ‘clean cash’ rather than a multiplicity of perquisites.
• Greater creativity and sensitivity in benefit practice.

Purpose and Aim

The purpose of a pay structure is to provide a fair and consistent basis for motivating and rewarding employees.

The aim is to further the objectives of the organization by having a logically designed framework within which
internally equitable and extremely competitive reward policies can be implemented, although the difficulty of
reconciling often conflicting requirements for equity and competitiveness has to be recognized.
The structure should help in the management of relativities and enable the organization to recognize and reward
people appropriately according to their job role size, performance, contribution, skill and competence. It should
be possible to communicate with the aid of the structure the pay opportunities available to all employees.

The pay structure should also help the organization to control the implementation of pay policies and budgets.

Criteria for Pay Structures

Pay structure should:

• Be appropriate to the characteristic and needs of the organization: its culture, size and complexity, the
degree to which it is subjected to change and the type and level of the people employed.

• Be flexible in response to internal and external pressures, especially those related to market rates and skills
shortages.

• Facilitate operational and role flexibility so that employees can be moved around the organization between
jobs of slightly different sizes without the need to reflect that size variation by changing rates of pay.

• Give scope for rewarding high level performance and significant contributions while still providing
appropriate rewards and recognition for the effective and reliable core employees who form majority in
most organizations.

• Facilitate rewards for performance and achievement.

• Help to ensure that consistent decisions are made on pay in relation to job size, contribution, skill and
competence.

• Clarify pay opportunities, development pathways and career ladders.

• Be constructed logically and clearly so that the basis upon which they operate can readily be
communicated to employees.

• Enable the organization to exercise control over the implementation of pay policies and budgets.

Reward management has an important part to play in the development of cultures in which individuals and teams
take responsibility for continuous improvement. It affects organizational performance because of the impact it has
on people’s expectations as to how they will be rewarded

Organization must reward employees because in return, they are looking for certain kind of behavior; they need
competent individuals who agree to work with a high level of performance and loyalty. Individual employees, in
return for their commitment, expect certain extrinsic rewards in the form of salary, promotion, fringe benefits,
perquisites, bonuses or stock options. Individuals also seek intrinsic rewards such as feelings of competence,
achievement, responsibility, significance, influence, personal growth, and meaningful contribution. Employees
judge the adequacy of their exchange with the organization by assessing both set of rewards.

Reward Management Process

Reward management is a central activity to regulate the employer-employee relationships. Employers use a wide
variety of rewards to attract and motivate the employees and retain their interest in the job.
The design of the reward system for employees is subject to internal and external factors affecting an
organizations performance. Also, the organizational objectives are kept in mind before designing the reward
structures.

The reward management process is illustrated as follows: