Business Economics

HUMAN RESOURCE MANAGEMENT

                                                                                                              BY

                                                                                                              Dr. K. Chitra Chellam

Human Resource Planning (HRP)

     Human Resource planning is the process of forecasting an organization’s future demand for, and supply of, the right type of people in right number.  It is also known as manpower planning.

     According to Colemen, “Human resources or manpower planning is the process of determining manpower requirement and the means for meeting those requirements in order to carry out the integrated plan of the organization”.

Need for Human Resource Planning:

·         To personnel with the necessary qualifications, skills, knowledge, work experience and aptitude for work.

·         To replace persons who have retired, resigned or become incapacitated due to physical or mental disorder.

·         Human Resource Planning is essential because of frequent labour turnover which is unavoidable.

·         Human Resource Planning is necessary to meet the needs of expansion programmes.

·         To face the challenges of new and changing technology and new techniques of production, employees must be trained or new employees must be employed.

·         Human resource planning is needed to identify areas of surplus  and areas of shortage.

Benefits (or) merits of HRP:

·         HRP helps to determine future personnel needs. It held to recruit the right number of people at each level in the organization hierarchy.

·         It helps to find out the area of high labour.

·         It helps to satisfy the needs of employees in respect years, promotions, better pay and benefits.

·         Human Resource Planning provides essential information for designing and implementing personnel functions, such a recruitment, selection training and development.

·         It helps the personnel manager to select the right type of tests and interview techniques.

·         It assists in planning for physical facilities working conditions and other facilities needed by human resources.

·         Human Resource Planning develops each person’s talents fully through training etc.

·         It helps to prepare the budgets of an organization by estimating the cost of human resources

·         Human Resource Planning leads to the maximum utilization of human resource, reduces excessive Labour Turn Over, improves productivity and helps in achieving the objectives of an organization.

Process of Human Resource Planning:

Human Resource Planning consists of the following steps:

1. Deciding the goods (or) objectives:

     The goal of Human Resource Planning is to relate future human resource to future needs of the organization so as to maximize the future return on investment on human resources. The goal may be short term or long term goal.  The short term goal covers a maximum period of one year.  For example, short term object may be to give training to 25 persons from backward classes.  The long term objective may be to start a new industry, expand the market or to produce a new product.  Thus, determining the goal is the 1^st step of Human Resource Planning.

2.  Human Resource forecasting:

      Human resource forecasting is the process of estimating the future human resource needs of the organization.  Some of the variables that are considered in human resource forecasting are total number of personnel available qualification, skills and experience desired, sales projections, technological changes and general economic conditions. Human resource forecasting may be done on the basis of intuition and with the help of mathematical and statistical techniques. Human resource forecasting is flexible. It can be modified, reviewed and adjusted according to the needs of the organization.

 3. Auditing human resource:

     After estimating the future human resource needs, the next step is to determine the present supply of manpower resources.  Present supply of human resources can be determined with the help of skills inventory, organization chart, manning table or manpower replacement charts.

 a) Skills Inventory:

     A skills inventory contains data about employees, personal details, abilities, work preference and other information which indicate his overall value to the chart.  By analyzing the skills inventory, the organization can assess the quantity and quality of present human resources.

Education and Training

School                                                                                     - - - - - - - - - - - - - -

Degrees / Diplomos                                                                - - - - - - - - - - - - - -

Training achieved                                                                 - - - - - - - - - - - - - -

Experience and Skills

Job areas                                                                                 - - - - - - - - -- - - - - -

Job titles                                                                                  ­­­- - - - - - - - - - - - - - -

Job dates                                                                                 - - - - - - - - - - - - - - -

Special Skills                                                                           - - - - - - - - - -- - - - - -

Additional information

Salary                                                                                     - - - - - - - - - - - - - - -

Grade                                                                                     - - - - - - - - - - - - - - -

Absenteeism record                                                               - - - - - - - - - - - - - - -

Disciplinary record                                                               - - - - - - - - - - - - - - -

Career plans                                                                          - - - - - - - - - - - - - - - -

Performance ratings                                                             - - - - - - - - - - - - - - - -

Appraisal data                                                                       - - - - - - - - - - - - - - - -

Location of relations                                                             - - - - - - - - - - - - - - - -

Any other information                                                          - - - - - - - - - - - - - - - -

b)  Organization Charts:

     Some organizations prepare organization charts instead of skills of inventory.  This chart is prepared to determine the number of people needed at each level and the kind of experience and training required to meet the objectives.

     This chart shows a person’s age, the number of years he has been in a particular position, and his fitness for promotion.  This organization chart also helps to evaluate the quantity and quality of present human resources of an organization.

c)   Manning Table  

Manning table is a list of all jobs in the organization and the number of workers holding each job,

d) Manpower Replacement charts:

     This chart shows the present performance of each employee and his promotional potential.  Once the present manpower resources are evaluated, the personnel department can estimate the change that well occur in present labour force in the next few years.

 4) Job Analysis:

     After estimating the human resources requirements, it is necessary to prepare a job analysis.  Job analysis is the process of determining skills, qualification, abilities, experience and responsibilities of which are needed to perform a job.  Job and included the preparation of job descriptions and job specifications.

 5) Developing a human resources plan:

     After preparing job analysis, the next step to find out the sources of labour supply.  Personnel can be hired from within the organization through promotion or they can obtain from the labour market.   The best policy which is followed by most organizations is to fill up the vacancies by promotion and lower level position by recruitment from the labour market. For example, employment exchange, training centre, colleges, universities management, consulting firms etc.  

JOB ANALYSIS

    Job analysis is the process of determining the nature of the task, skills, knowledge, education, training, duties and responsibilities required to perform a job successfully.  Job analysis includes the preparation of job performance and job analysis.

 Contents of job analysis:-

     A job analysis provides the following information.

·         Job title including its code numbers.

·         Its location, supervision, hazards and discomfort.

·         Specific operation and tasks, their liming and responsibility, confidence and trust.

·         Machines, tools and equipments used.

·         Nature of operation i.e., lifting, handling, cleaning, washing, drilling, driving etc.

·         Experience, training, physical strength, mental capabilities, aptitude and social skills required.

·         Opportunities for promotions, essential co-operation, direction or leadership required.

Purpose and uses of Job analysis:

 Organization and manpower planning:

     Job analysis helps in organization and manpower planning.  By indicating the duties and responsibilities, it coordinates the activities of the employees.

 Recruitment and selection:

     By indicating the specific requirement of each job, it provides a basis for recruitment, selection, placement, training, and promotion of personnel.

 Wage and Salary administration:

     Job analysis helps in wage and salary administration by the qualifications required for doing a specified job and the risks and hazards involved in a job.

 Employee training:

     Job analysis provides the necessary information to the management to design training and department programmes.

 Performance Appraisal:

     It helps to establish standards which may be compared with the actual job performance of each individual.

 Health and Safety:

     Job analysis helps in taking corrective measures for maintaining safety and health of employees at the workplace by providing information about hazardous and unhealthy environmental factors in various jobs.

 Employee counselling:

     Job analysis helps in providing counselling to employees in different areas employees who are unable to hear the stress of a particular job may be advised to option for other jobs or may be advised for voluntary retirement.

Procedure for Job analysis / Steps in Job analysis:

     There are 5 basic steps required for doing a job analysis.  They are

 Collection of information:

     Activities involved in the job, responsibilities associated with the job, the type of environment in which the job is performed, and the requirements from the person who will perform the job are the essential information needed for job evaluation.  This information can be obtained by reviewing available background information such as:

o   Organization charts which shows the relation between the jobs in the organization.

o   Job specification

o   Job description.

 Selection of jobs to be analyzed:

     Since the analysis of all jobs would be time consuming, the next step is to select the jobs for analysis.

 Collection of data and information:

     All the necessary and relevant data connected with each jobs trust be collected from the following sources:

a)      Questionnaires completed by job holders.

b)      Diaries maintained by job holders.

c)      Personal interviews with the present employees.

d)     Personal observation.

 Preparation of job description:

     After collecting the necessary data, the next step is to prepare a job description.  Job description  is a written statement showing job title, job features, duties and responsibilities

involved in a job.  It also describes the working conditions, hazards, stress and the relationship with other jobs.

 Developing job specification:

     The last step is to prepare job specification.  Job description specifies features of the job-holder.  It specifies personal characteristics (age, gender, education, experience, etc), Physical characteristics (height, weight, health, etc), mental characteristics (general intelligence, memory, ability to concentrate, etc) and social & psychological characteristics (flexibility, initiative, conversational ability, creativity etc).

Uses of Job description:

·         Job description helps to develop job specification.

·         It helps to develop performance job.

·         It can be used to orient new employees.

·         It can be used for job evaluation, wage and salary administration.

·         It helps the manager to frame suitable questions to be asked during an interview.

·         According to Zerga, who analyzed 401 articles  on job descriptions about 30 years ago, a job descriptions helps us in

a)       Job grading and classifications

b)      Jobs and promotions

c)      Redressal of grievances

d)     Establishment of good worker relationship between employers and employees

e)      Investigating accidents

f)       Indicating faulty work procedures

g)      Maintaining, operating and adjusting machinery

JOB SPECIFICATION

     Job specification also known as man or employee specification is a statement of minimum acceptable qualities required to perform a job properly.  It is prepared on the basis of Job description.

Contents of job specification:

    The basic contents of job specification are as follows:

 Physical characteristics:

     They include  health, strength, health, weight, vision, voice, eye, hand and foot, coordination.

 Psychological characteristics / Special aptitudes:

     They include qualities such as analytical ability, mental concentration, alertness, judgement, dexterity and mechanical aptitude.

Personal characteristics:

     Personal characteristics such as personal appearance, good and pleasing manners, emotional stability, extroversion or introversion, leadership, cooperativeness, initiative, skill in dealing with others, conversational ability etc.

 Responsibilities:

   Responsibilities include supervision of others, responsibility for person, process and equipments, response for the safety of others, response for preventing monetary loss etc.

    Other features of demographic nature are age, gender, experience, education, language and ability.

JOB EVALUATION

     Job Evaluation is the process of analyzing and assessing various jobs systematically to ascertain their relative worth in an organization.  Jobs are evaluated on the basis of certain factors like responsibility, qualification, experience, working conditions etc. and are placed in the order of their importance.

     The main purpose of job evaluation is to set satisfactory wages and salary on the basis of their relative worth in the organization.

Definition:

     John A. Shubin, “A systematic procedure for measuring the relative value and importance of occupations on the basis of their common factors (skills, training, effort) for the purpose of determining wage differentials”.

     According to Wendell French, “Job evaluation is a process of determining the relative worth of the various jobs within the organization so that differential wages may be paid to jobs of different worth”.

Principles of Job evaluation:

     There are certain broad principles which should be kept in mind before putting the job evaluation progress into practice.  According to Kress, these principles are

·         In a job evaluation process, jobs are rated and not the job holders.

·         Each job should be divided into small elements.

·         The job elements are then graded and the wage rates are fixed.

·         The elements should be fixed, definite and easily explainable.

·         Job rating plan should be clearly explained to foreman and employees.

·         Foreman should participate in the rating of jobs in their own depts.

·         The features of job ratings can be discussed with the employees to get their co-operation.

·         In talking to foreman employees, any discussion of money value should be avoided.  Only point values and degrees of each element should be discussed.

·         Too many occupational wages should not be established.

Objectives of Job evaluation:

·         To eliminate inequalities in wage rates by providing fair and proper wages according their worth in an organization. (i.e., paying same wages whose work is alike).

·         To provided a basis for resolving wage controversies.

·          To eliminate favouritism and personal prejudices in fixing wages (only jobs are rated).

·         To help the management to evaluate the performance of the employees in terms of the job.

·         To consider all employees for promotion and transfer.

·         To help in union-management negotiations on wages.

·         To simplify the wage structure by dividing each job into various elements.

·         To help the business enterprise to standardize wage levels in all its plants.

·         To improve working conditions.

·         To clarify the functions, authority and responsibility of employees.

·         To develop personnel statistics.

Steps in a job evaluation process / Job evaluation procedure / Job process:

     Job analyst conducts the job evaluation process.  There are 3 steps in job evaluation process.   They are:

1.      Selecting of common factors.

2.      Defining the factors

3.      Selection of a suitable method.

1. Selection of common factors:

     Jobs may vary in duties, operations equipments and materials.   But there are certain basic factors which are common to all jobs.  Such basic factors must be first selected to compare one job with the other.  There are 4 factors common to all jobs.  They are skill, effort, responsibility and job conditions.  These factors are classified into two, namely, major factors and minor factors.

2. Defining the factors:

     To ensure proper understanding of the job, factors should be clearly defined.  A clear-cut definition enables the worker to understand the worth of each factor.

3. Selection of a suitable method:

     Finally, the analyst should select a suitable method of job evaluation. There are 4 job evaluation methods.  They are

a)      Ranking method

b)     Job comparison method

c)      Point comparison method

d)     Factor comparison method

Advantages of Job evaluation:

·         Job evaluation removes inequalities in existing wage rates.

·         It helps in removing grievances arising out of relative wages.

·         It improves labour-management relations and employees morale.

·         It helps in union-management negotiations on wages.

·         It helps the management to control labour cost.

·         It helps in selecting the right man for the right job.

·         It provides a basis for designing training programme for the workers.

·         Favouritism and personal prejudices in fixing wages are avoided.

·         There are well-defined methods for measuring various jobs.

·         Employee’s participation and cooperation can be obtained by discussing broad features of job evaluation process with the employees.

Disadvantages / limitations of Job evaluation:

·         It is difficult to determine the relative worth of jobs with complete accuracy.

·         It is also difficult to select a suitable method of job evaluation.

·         Job evaluation methods may not be properly understood by workers.

·         There is also difference of opinion regarding the number of person to be appointed as job evaluation committee members.

·         Job evaluation process is time consuming and expensive.  So it is not suitable for small concerns.

·         Selection of number of factors creates confusion. So precise results cannot be obtained.

·         When job evaluations is applied for the 1st time in any organization, there is doubt and often fear in the minds of employees.

·         Since there is uniformity in wage rates of jobs of similar nature, above average employees do not support job evaluation process.

Methods of job evaluation:

     There are 4 basic methods of job evaluation.  They are ranking method, job classification method,  point method and factor comparison.

1. Ranking method:

     Under this system all jobs are ranked in the order of their importance from the most important job to the least importance. Job evaluation  determines the importance of each job.  Factors such as skills, experience, working condition etc. are considered to find out the importance of each job.

Merits of ranking method:

·         This method is simple, easily understandable and mostly accepted by labour unions.

·         It is suitable for small organization.

·         This method is less costly.

Demerits of ranking method:

·         This method is affected by personal preference of job evaluators.

·         This method ranks various jobs according to their relative work.  But it does not specify the real difference between 2 jobs.

2.  Job classification method / grading method:

     Job evaluation committees allocate each and every job to the appropriate class. 

For example, most important jobs are  put under class I and least important job is put under class IV.  This method is widely used in government jobs and is most suitable for small organizations.

Merits of grading method:

·         It is simple to operate and understand.

·         Wages and salaries can be fixed easily.

3. Point method:

     Point method of job evaluation is widely used in business organizations.   Under this method, common factors are first selected.  There are 4 factors common to all jobs. They are skill, effort, responsibility, job conditions.  These factors are again sub-divided  into 11 characteristics.  They are the following:

Skill:

1.      Education

2.      Experience

3.      Initiative & ingenuity

EFFORT:

                               4. Physical

                                5. Mental

RESPONSIBILTY:

                               6. Equipment or process

                              

        7. Materials or product

                               8. Safety of others

                              9. Work of others

JOB CONDITION:

                              10. Working conditions

                              11. Unavoidable hazards

         Under this method, points are allotted to each factor to determine the relative worth of a job.  The sum total of these points allotted to various factors is the worth of the job.  The total points are then used to fix the wage scale.  For e.g. if a job’s worth is 200 points and the value of each point is Rs.5, then the wage for that job is Rs. 1000 (200*5).

Merits:

·         This method helps to evaluate each job accurately.

·         This method is acceptable by trade unions.

Demerits:

·         This method is expensive since experts should be appointed for rating the job factors.

·         This method is also time consuming.

·         Selection of more number of factors may create confusion.

4. Factor comparison method:

      Under this method, 15 to 20 key jobs are first selected.  Points are assigned to each of the factors present in key jobs. Factors selected for comparison are mental requirements, physical requirements, responsibilities and working conditions.

     Each key is ranked by comparing the factors of a job with the factors of the key jobs.  After ranking the factors, points are assigned to each factor.  The worth of the job is determined by adding all like point values.

Merits:

·         This method is more accurate and systematic.

·         Only limited factors are compared.  So overlapping will be reduced.

·         This system is more reliable and valid.

·         This system can be easily explained to employees.

Demerits:

·         It is expensive and time consuming.

·         Using the same factors may not always be appropriate.

·         Other factors which may be important for the performance of the job are ignored.

RECRUITMENT

     Recruitment is the process of searching for and obtaining applicants for jobs, from among whom the right people can be selected.  It also refers to the process of receipt of applications from job seekers and also screening of applications so as to eliminate those who are not qualified for the job.

Definition:

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

Sources of Recruitment:

     The sources of recruitment can be classified into the following 2 categories.

1.      Internal sources.

2.      External sources.

 Internal sources include the following:

·         Personnel already on the pay-roll of an organization (i.e., present workforce).

·         Present temporary employees

·         Retrenched  employees

·         Retired employees

·         Dependants of deceased, disabled and retired persons.

Merits of internal sources:

·         It improves the morale or employees.

·         It promotes loyally among the employees.

·         Own employees are fully on are of the policies and operating procedures of the organization. So they need only little training.

·         It is easy to evaluate won employees than outside candidates.

·         Own employees are more reliable.

·         It is less costly to recruit own employees than outside candidates.

Demerits:

·         It discourages efficient new candidates from joining the organization.

·         Promotion is based on seniority, so really capable persons may not be chosen.

·         There is also favoritism in the selection of personnel.

·         This method cannot be followed if eligible persons are not available in the organization.

 External sources / outside sources:

     These sources include the following;

a)      The college students

b)      The unemployed

c)      Retired experience persons

d)     Others such as married women and persons from minority groups.

Methods of recruitment from external sources:

 Advertisement:

     Advertisement is the most effective method to search potential employees from outside the organization.  The names of the post, education, qualification, experience, salary etc. are given in the advertisement.  This method is suitable to find out competent persons.

 Employment exchanges:

     Employment exchanges help the organizations to find out suitable personnel employer can also get the information about the prospective employees from the employment exchange.  In our country, there are 2 types of employment agencies.  They are  

            a         Public employment agencies

                       Private employment agencies.

 Public employment exchanges:

     These employment exchanges are run by the government in almost all districts.  The job sleekness registers their names in these exchanges.  These exchanges are very helpful to obtain semi-skilled and unskilled workers.

 Private employment agencies:

     There are many consultancy and employment agencies which help organizations to select higher level and middle level executives.  These private agencies also undertake total functions of recruiting and selecting personnel on behalf of the employer.  They also charge fees for this purpose.

 Educational institutions / Campus interview:

     Employers approach colleges, universities and various institutes to recruit students freshly passing out of these institutions.  The organizations conduct preliminary interviews on the campus on the predetermined date and suitable candidates are called for further interviews at specified places.

Recommendations:

     Employer of the organization may be encouraged to recommend their relatives and friends for employment in their organization.  This method improves the morale of present interviewees.  This method also ensures recruitment of competent and skilled persons.  This is because employees will recommend only efficient persons who are sincere and hardworking.

 Labour contractors:

     They provide the required of workers to any enterprise that approach them.  Labour contractors supply unskilled workers. Labour contractors have close contacts with towns and villages from where most unskilled workers come.   They bring such workers to the place of work.

 Unsolicited applicants:

     Unsolicited applicants visit the factory, office or worksite with the hope that jobs would be available.  If suitable jobs are available, they are interviewed.  If there is no vacancy, their applications are preserved and called for interview whenever vacancies arise in future.

SELECTION

     The selection process begins after receiving the applications from the candidates.  Selection is the process of discovering the most suitable and promising candidates to fill up the vacancies.

Selection process / Stages in selection:

 Application Blank:

     Generally, the candidates are asked to apply on company’s application form sent directly to applicants against a requisition or on application form, known, as application blank given the advertisement itself. Applications blank, contains a number of questions, when filled in, gives a clear idea about the candidate.  Necessary details of the applicants regarding their names, gender, qualification, age, experience, health, social activities, reference etc. can be obtained from these application blanks. 

 Screening:

    All applications will not be considered.  Screening is the process of rejecting the can applicants with insufficient qualifications or experience.

 Reference:

     It is a common practice is ask the applicant to mention the names of 2 references or referees, to whom the personnel manager can make enquires about the integrity, general character and ability of the concerned applicant.  If the referee gives favorite opinion about the candidate, the applications pass to the next stage.  Otherwise, the application is rejected at this stage.

                                                                                                                                           

 Personal interview:

    The applications of suitable candidate are considered and the firm sends out interview letters. By this interview, the personnel manager can understand the positive and negative qualities of the applicant, with reference to the job duties.

Tests:

Tests serve as an important device in the process of selection.  The main aim of tests is to measure the skills and abilities of candidates and to determine their suitability.  Tests may be of 2 types

                 1. Aptitude tests

                 2. Proficiency tests.

 Medical examination:

         The candidate must be physically fit for the job. Diseases and physical deficiencies of interviewees will affect the business.  So, selected applicants have to undergo medical examination.

  Final interview and appointment:

              After medical examinations, the selected applicant is called for a final interview.   In the final interview the jobs must be explained to him along with all relevant details.  If everything is in favour of the applicant, an agreement must be executed by him. Generally the agreement contains duties, authorities and responsibilities, salary, resignation conditions etc.  It is followed by an appointment order, which contains designation, jobs to be performed, salary and other financial benefits etc.

     

                                                TRAINING METHODS

On-the-Job Training (OJT)

            Under this method, a new employee is placed under the charge of a supervisor or a senior co-worker who trains him. The nature of the job, method of handling the machine and the method of performing the work are explained to him. Then the trainee is allowed to operate the machine in the course of actual production process and the supervisor observes the performance. If any short coming is found in the trainee, they discuss how to overcome the short comings. In this method, training and production go hand –in-hand.

            There are a variety of OJT methods, such as, coaching or understudy, job rotation and special assignments. Under coaching or understudy method, the employee is trained on the job by his superior. In job rotation, training is given to employee on different jobs instead of one particular job. Under special or committee assignments, a group of trainees are given an actual organizational problem and are asked to solve the problem jointly.

Merits

·         The employee gets training in actual production conditions.

·         This method is very simple and economical.

·         The trainee learns the rules, regulations and procedures by observing the day-to-day operations.

·         No additional personnel or facilities are needed to train the employees.

·         Doubts of the employees can be easily clarified.

·         Any defects or shortcomings found in trainee can be easily solved.

Demerits

·         Sometimes, the supervisor may not have the ability to train the employees.

·         Longer time is taken to train the employees.

·         Lack of motivation on the part of the trainee

·         Trainee may be very slow in developing his skills.

·         Productivity will be very low.

·         Trainee may make more errors which may result in spoilage of materials or damage to machines and equipment.

·         Trainee may be distracted by the noisy environment.

Off-the Job training

            Off- the-job training can be provided through lectures, demonstrations, films, audio-visual aids and so on. Various government and private institution in India have established a number of institutes and centres to impart training in specific trades. An enterprise may also set up its own training centre to train its employees. 

Under this method, both theoretical and practical aspects of a job are taught to employees. Rules, procedures and methods of doing a work are taught through lectures with the help of audio-visual aids like power point presentation etc.

            Off-the-job training methods are as follows:

Vestibule training:

            It is a class room training which is imparted with the help of the machines and equipments which are identical with those used in work place. This training is given in a separate room located in the work place. An experienced employee gives training by demonstrating the machine. Methods such as lectures, conference, and group discussion are also used to impart training.

Merits

·         Distractions are minimized as training is given in a separate room.

·         Correct method can be taught without interrupting production.

·         A large number of persons can be trained simultaneously.

Demerits

·         Additional investment is necessary. So this method is expensive.

·         Training situation is artificial.

·         This method is not suitable to train few employees.

Role playing

            Under this method, the trainee explains the situations of the problems and trainees are asked to act a role assigned to them. Example, trainer may assign the role of salesman and customers of different characters to the trainees. Each trainee has to act the assigned role. The trainer watches the role played by each trainee and discusses their weakness and strong points. A few trainees may be selected to act, while others may watch their performance.

Lecture method

            The lecture is a traditional method of training. An expert or a lecturer speaks to trainees about the various aspect of the job. The instructor clarifies the doubts of the trainees. To make the lecture more interesting, visual aids, demonstration and suitable examples are given.

Merits

·         This method is more economical

·         Theoretical training can be easily imparted to large group of trainees.

·         This method can be used to provide new information or changes in the policies of the firm to present employees.

Demerits

·         It is difficult to evaluate the effectiveness of lecture method.

·         There is no feedback from the audience.

Conference and Discussion method

            Conference is a formal meeting conducted either weekly, fortnightly or monthly. This method is suitable for existing employees. Meetings or conferences have motivating effects as employees are given chances to express their views and think creatively. Topics like policies, facing competition, dealings with complaints etc are dealt with.

            Under discussion method, actual case or an imaginary case is given as a problem to be solved to different groups. Each group is asked to analyse the problem and draw a conclusion.

Programmed instruction

            Training is with the help of machines. Nature of the job, rules, regulations, policies and procedures are fed into the machine with the help of which employees perform the job. 

Apprenticeship training

            This is one of the oldest forms of training. Under this method, the worker is appointed as an apprentice under a qualified and experienced worker. In skilled jobs, apprenticeship training is the most commonly used training method. Electricians, plumber, carpenters, weavers, mechanic and tool makers usually learn their jobs through this training method.

            The period of apprenticeship differs from job to job. The training period may range from 2 years to 3 years for persons of superior ability and from 4 years to 5 years for other persons. During apprenticeship, the trainee receives stipend.

Advantages of apprenticeship training:

·         A skilled work force can be employed.

·         Trainees receive stipend during the training period.

·         This method is economical.

·         The workmanship (quality of work) is good.

·         Loyalty of employees increases.

Demerits:

·         This method of training is time consuming and rigid.

·         If the worker fails to learn the skills within the training period, then he shall not be appointed in the firm.

·         There is also no guarantee that the trainee shall be appointed in the same firm after training.

Internship training

            Under this method, students get practical training while they study. A few large organizations have their own training institutes, which impart both theoretical and practical training to trainees. This method is suitable to train skilled and technical personnel. This is also a time consuming method.

Refresher Training

            Under this method, present employees learn new methods, techniques and skills. This method enables the employees to refresh their memory of things they had learnt a long time ago.

Principles of training

            Principles to be considered while organizing a training programme are:

·         Training programme should consider the differences in ability, learning capacity and interests of employees.

·         Training programme must be related to the requirements of the job.

·         Needs of employees should be determined carefully and correct method of training must be chosen.

·         Suitable monetary and non-monetary incentives should be provided to trainees in order to motivate them.

·         In any training programme, both technical and practical knowledge must be imparted simultaneously.

·         Top level managers should actively support all training programmes.

·         Training should be conducted in the actual job environment to the maximum possible extent.

·         The trainee should be provided with feedback regarding his performance. The feedback should also be fast and frequent.

·         Training method should be made more meaningful by demonstrating the task to be performed.

·         After demonstration, the trainee must be asked to do the work.

·         A discussion and question period should follow the doing and to clarify the doubts of trainees.

PROMOTION

            Promotion means movement of an employee from his present job to a job which is better in terms of pay, status, prestige, responsibilities etc.

            Scott and Clothier – The term promotion means transfer of an employee to a job which pays more money or one that carries some preferred status.

Objectives of promotion

·         To put an employee in a position which may give him more satisfaction and income.

·         To recognize an individual’s performance.

·         To increase employee’s organizational effectiveness.

·         To increase loyalty and morale of employees.

·         To increase job satisfaction among employees.

·         To attract suitable and competent employees.

·         To reward existing employees.

·         To reduce labour turnover.

Types of promotions:

Vertical promotion

            Under this promotion, employee is moved to the next higher job, which has greater responsibility, authority, pay and status.

Upgradation

            It is promotion within grades. This is a minor promotion and the job is upgraded in the organizational hierarchy. In this type of promotion, the employee gets more salary, higher authority and responsibility.

Dry promotion

            Under this type of promotion, the employee is moved from his present level to the next higher level in the organizational hierarchy with greater responsibility, authority and status but without any increase in salary. Since the employee does not get any monetary benefit, it is called dry promotion.

Basis of promotion

Promotion on merit basis

            Merit means the qualification and competence possessed by an employee. If promotion is given as an incentive, then the best performing employee must be promoted. To ensure efficiency in the organization, management usually take merit as the basis of promotion.

Merits

·         Promotion on merit basis is an yardstick to measure the competence of employees.

·         Since efficient staff are promoted, promotion on merit basis encourages employees to increase their knowledge and skills.

·         When meritorious employees are rewarded by granting promotions, labour productivity will also increase.

·         If promotions are based on merit, only competent, capable and efficient persons are appointed in senior posts.

Demerits

·         Chances for partiality, nepotism, favourtism, casteism etc. are more.

·         This method will not be accepted as fair by senior employees and they may involve in strikes, lockouts etc.

·         Trade unions do not support this method

·         There is no standard method for assessment of merit or performance appraisal.

Promotion on seniority basis

            Seniority refers to the period of service put in by an employee in the organization. Trade unions and workers favour promotions given on seniority basis.

Advantages

·         It is simple to understand and operate.

·         It satisfies the personal aspirations of the employees and improves their morale.

·         It helps in better labour management relations.

·         It is more economical than external sources of recruitment.

·         It limits the chances for favouritism, nepotism, casteism etc.

·         It develops a sense of loyalty among the employees and encourages them to work hard and efficiently.

Disadvantages

·         Since the employees are sure of getting promotion, they become lethargic in performing their duties.

·         This system may reduce the efficiency of talented employees.

·         This method leads to greater labour turnover which results in lower production.

·         Since merit is not rewarded, efficient employees may not be able to get job satisfaction.

·         More training must be given to senior employees to update their knowledge and skills.

DEMOTION

            Demotion refers to the lowering down of the status, salary and responsibilities of an employee. It is the downward movement of an employee in the organizational hierarchy. Demotion is given when an employee is unable to perform his duties satisfactorily.

            Dale Yoder – Demotion means a shift to a position in which responsibilities are decreased. Promotion is in a sense, an increase in rank and demotion is decrease in rank. 

Causes of demotion

·         When departments are combined and jobs eliminated, employees are often required to accept lower level position. This type of demotion is not a black mark against an employee.

·         When a person is promoted wrongly.

·         When an employee is not performing well on the job.

·         When an employee does not have the capacity to do his existing work.

·         When an employee, because of ill- health or personal reasons cannot do his job properly.

·         When an employee is unable to adjust to any changes to technology, methods and practices.

·         Demotion is also used as a disciplinary measure.

Demotion policy ( Essentials of demotion policy )

·         The cause of demotion should be clearly defined.

·         The causes should be communicated to the concerned employee.

·         In case of alleged violation, it should be investigated by a competent authority before giving demotion.

·         If violations are discovered, penalties for such violations should be awarded.

·         There should be provision for review.

·         Demotion should not be given to persons with a long and meritorious service. But, some of their duties and responsibilities may be taken from them and assigned to others.

·         Demotion should not be given for violating the rules of conduct, poor attendance record or insubordination because such action will not improve the performance of the individual. Only discipline and training can improve their performance and behavior.

TRANSFER

            A transfer is a horizontal movement of an employee from one job, section, department, shift, plant or position to another at the same or another place where his salary, status and responsibility are the same. It is just a movement of an employee from one job to another.

Objectives of transfer

·         Employees may be transferred due to changes in the quantity of production, changes in the organizational structure, introduction of new lines of production, dropping of existing product lines etc.

·         Transfers are also given to satisfy the needs of employees. This type of transfer which is known as personal transfer is given when an employee feels uncomfortable to work with his fellow workers, or when an employee likes to work in his own native place.

·         Employees may be transferred to those jobs where they are suitable and their capacities can be better utilized. This type of transfer is called remedial transfer.

·         Employees may be transferred from one job to another to increase their versatility. This type of transfer is known as versatility transfer.

·         Surplus staff in a particular department may be transferred to another department where there is shortage. This type of transfer is known as productive transfer.

·         Transfers are also given to help employees to work according to their convenience. Example, an employee may be transferred from night shift to morning shift. This type of transfer is known as shift transfer.

·         To penalize the employees transfers are also done under which an employee may be transferred to a remote branch or office.

·         Transfers are also given to solve inter-personal conflicts.

Essentials of a good transfer policy

·         Organisation should have a just and impartial transfer policy.

·         The types of transfers must be clearly stated.

·         Authority and responsibility for effecting transfers must be entrusted to an executive who may initiate and implement transfers.

·         Organisation must indicate whether transfers are made within a department or between departments and plants.

·         The rate of pay to be given to the transferee must be decided.

·         The fact of transfer must be intimated to the concerned person in advance.

·         The intimation must be in writing and communicated to all the employees.

·         Transfers should not be made frequently.

Procedure for transfer

Intra-departmental transfers

            These transfers take place within the same department. Such transfers are decided by the foremen or plant manager. These transfers are effected without the issue of any transfer order to the employee. He may be given only oral instructions. The personnel manager may be informed of such transfer.

Inter-departmental transfers

            These transfers are made from one department to another department. Such transfers are decided by departmental heads or plant managers. Written orders, signed by the personnel manager are issued to the employee.

                                    ABSENTEEISM

            Absenteeism means absence of an employee from work. For calculating the rate of absenteeism, two facts are taken into consideration. They are the number of persons scheduled to work and the number actually present.

Features of absenteeism

·         The rate of absenteeism is the lowest on pay day.

·         Absenteeism is high among workers below 20 years of age and above 40 years of age.

·         The rate of absenteeism varies from department to department.

·         The rate of absenteeism is low in departments which have better physical conditions.

·         The percentage of absenteeism is higher in the night shifts than in the day shifts.

·         The percentage of absenteeism is more in coal and mining industries.

·         Absenteeism is also seasonal in character. Rate of absenteeism is the highest during March, April and May, when land has to be prepared for sowing and also in the harvest season of September and October.

Causes of absenteeism

·         Social and religious functions divert workers from work to social activities.

·         Unsatisfactory housing conditions increase the rate absenteeism. 95% of the houses occupied by industrial workers in India are unsatisfactory. Slopes along the railway lines, banks of open drainages, open space for dumping the town wastage are chosen

by them for erecting their huts. Unsatisfactory hosing conditions affect the health of workers causing him to remain absent for a long period of time.

·         Low wages may cause fatigue to workers which makes him to remain absent for sometimes.

·         Unhealthy working conditions like excessive heat, noise, vibrations in factory, bad lighting, dust, fumes and over-crowding affect the health of workers causing them to remain absent  for a long time.

·         Absenteeism is also due to inadequate welfare facilities provided to workers.

·         The habit of alcoholism among workers is an important cause of absenteeism.

·         Highly indebted workers absent themselves or even resign the jobs to escape from the money lenders.

·         Improper and unrealistic personnel policies, favouritism and nepotism create frustration in the minds of workers which results in low efficiency, low productivity and unfavourable employee-employer relationships which  in turn lead to long period of absenteeism.

Measures for control of absenteeism

Adoption of a well defined recruitment procedure:

            The management must consider only the aptitude and ability in the perspective employees and not their caste, language, religion etc.

Provision of healthy and hygienic working conditions:

            Workers should be provided with proper and healthy working conditions. The facilities of drinking water, canteens, rest rooms, lighting ventilation should be provided.

Provision of reasonable wages, allowances and job security for workers:

           

Management should provide reasonable wages and allowances to workers. Allowances may include old age allowance, good attendance allowance, transportation allowance and house allowance.

Provision of welfare and social measures:

            Management should satisfy the needs of workers and  provide them adequate housing facilities, free or subsidized food, free medical aid, free education facilities for their children, monetary and non-monetary benefits. Social security measures such as provision of provident fund, E.S.I. facilities, gratuity and pension must be provided to workers.

Improved communication:

            Since majority of the workers are less educated, written notices, journals and booklets can’t be easily understood by them. Written communication becomes meaningful only when workers can read and understand. Therefore, meetings should be conducted  to give instructions to workers.

            Too many notices should not be put on the notice board. Notice board should be placed near the entrance, inside the canteen and in areas which are frequently visited. Grievances of employees must be redressed promptly. Training should be given to superiors to handle the grievances in informal and humane manner.

Provision of safety measures:

            To maintain safety at work place and to prevent accidents, management must eliminate factors such as over-confidence, carelessness, defective equipment, tools etc. Workers should be taught safe methods of operation and  safety instructions.

Cordial relations between supervisors and workers:

            There should be cordial relations between supervisors and workers to maintain discipline among the workers and to increase the productivity.

Other measures:

·         The rules and regulations relating to attendance must be explained to workers.

·         Supervisor should be given authority to take action in all cases of absenteeism.

·         Proper attendance record of each worker should be maintained.

LABOUR TURNOVER

            Labour turnover has been defined as “the rate of change in the working staff of an concern during a definite period”. It is a measure of the extent to which new employees enter into an organization in a given period.

Impact of labour turnover

·         Labour turnover reduces the skill and efficiency on the part of the workers.

·         It reduces the output.

·         Human and material resources cannot be utilized to the maximum extent.

·         Cost and time involved in recruitment and interviewing are more.

·         It increases the training costs of new employees.

·         Accident rates of new employees are higher.

·         The production equipment is not fully utilized during the recruitment and training period.

·         Scrap and waste rate increases.

·         Overtime pay increases.

Causes of labour turnover

            Labour turnover is the outcome of resignations and dismissals. Resignations may be due to the following causes:

·         Unsatisfactory working conditions

·         Insufficient wages

·         Bad health

·         Sickness

·         Old age

·         Family circumstances

·         Exodus ( going in groups ) to the village for agricultural operations.

Dismissals may occur due to the following reasons:

·         Misconduct

·         Insubordination

·         Inefficiency

·         Participation in strikes or union activities

Measures to control labour turnover

·         Improvement in working conditions

·         Good management policies regarding wages, transfers, promotions, leave and holidays.

·         Provision of facilities for education and training.

·         Provision of welfare facilities.

·         Introduction of sickness insurance, gratuity and pension scheme.

·         Provision of adequate lighting, ventilation and safety measures.

·         Redressal of grievances of workers promptly.

·         Effective two way communication between management and employees.

·         Effective supervision.

·         Scientific system of recruitment, selection and placement.

.

            PERFORMANCE APPRAISAL/ MERIT RATING

            Robert Owen, a Scottish mill owner evolved the system of merit rating in the early 19^th century. Performance appraisal is the systematic evaluation of the performance and personality of personnel by superior. The basic purpose of performance appraisal is to ascertain the eligibility of employees for promotion, transfer, salary increase, training and development etc.

            John A. Shubin – Merit rating is a systematic appraisal of the employee’s personality and performance on the job and is designed to determine his contribution and relative worth to the firm.

            Performance factors considered for performance appraisal are quality of work, capacity to learn, cooperation and initiative. Performance appraisal is also known as employee appraisal and personnel appraisal.

Objectives of performance appraisal

·         To appraise the performance of employees.

·         To determine the eligibility of employees for transfer and promotion.

·         To take decision about salary increase.

·         To identify the strengths and weaknesses of an employee in his present job.

·         To design appropriate training and development programmes and to overcome the weaknesses of employees.

·         To provide feedback to employees about their performance. 

·         To induce the employees to improve their performance.

·         To dismiss inefficient employees.

Factors to be considered in a merit rating system ( performance appraisal )

·         Employee’s knowledge of the job.

·         Quality of output, workmanship and consistency.

·         Cooperativeness

·         Adaptability to changes

·         Readiness to follow instructions

·         Helping tendency

·         Length of service

·         Attendance record

·         Punctuality

·         Integrity

·         Persistence

·         Confidence

·         Courage

·         Reliability

Methods of performance appraisal (or) merit rating

            The most important basic methods of performance appraisal are:

Ranking Method

            Ranking method is the simplest and oldest method of appraisal. In this method, various persons are given ranks on the basis of their overall performance. The rater ranks his employees and arranges them in the order of merit from the most efficient to the least efficient.

Merits

·         This is the cheapest method.

·         This method is simple and easy to understand.

Demerits

·         This system is not suitable to large organization where the number of workers is more.

·         It does not reveal the degree of differences between two employees.

·         Personal bias of the rater may affect the rating procedure.

Paired Comparison method

            Under this method, each employee is compared for each trait with all the other persons in pairs. Example, if there are 5 persons, namely, A, B, C, D, and E to be compared, then A’s performance is compared with B, and a decision is arrived as to whose performance is better. Then A’s performance is compared  with C, D, and E. Next B’s performance  is compared only with C, D, and E. A similar comparison is made in respect of other personnel. Thus, by this method, we can arrive at 10 decisions and only two persons are involved in each decision. The number of decisions is determine the following formula:

                                    N( N-1 ) / 2

                      N= Number of employees to be compared

                                   5 (5-1 )/2 = 10

  

The results of these comparisons are tabulated, and a rank is assigned to each individual. This method is not suitable when the number of employees and personal traits to be evaluated are more.

Grading method

            Under this method, performance is divided into different categories or grades. Such categories may be termed and defined as follows:

·         A – Outstanding

·         B – Very Good

·         C -  Good

·         D -  Fair

·         E -  Poor

·         -B – Very Poor

Persons are put in particular category on the basis of certain factors selected for evaluation. The selected factors may be analytical ability, cooperativeness, job knowledge, leadership, organizing ability etc.

            The actual performance of an employee is then compared with these grades and he is allotted a particular grade according to his performance.

Forced –distribution method

            This method is follower to minimize rater’s bias. In this method, the rater is forced to appraise the employees according to the pattern of a normal curve ( bell-shaped curve). A rater is forced to follow a pre-determined distribution in rating. Thus, if the workers are to be graded as A, B, C, D and E, then at least 10% of the employees must be given A grade, 20% B grade, 40% C grade, D 20% and E 10%.

Forced – Choice method

            The forced-choice method contains two statements both of which may be positive or negative. Both these statements will describe the traits of an employee to be evaluated, But, the rater is forced to tick only one statement which is more relevant to employee’s behavior. Thus, out of the two statements, only one statement is considered for final analysis and rating.

            Example, a rater may be given the following two statements:

·         The employee is hard working

·         The employee gives clear instructions to his subordinates.

Both these statements are positive but the rater is asked to rate only one which is more descriptive of his subordinate’s behavior. Several sets of such statements, both positive and negative are given for rating. The final rating is done on the basis of all sets of statements. Examples of such statements are:

·         The employee is punctual

·         Organizes the work well

·         Dishonest

·         Disinterested in work

Check – list method

            In this method, the rater provides appraisal report by answering a series of questions related to the employee. The questions are prepared by personnel department and are related to the behavior of the concerned employee. Each question has two alternatives – yes or no.

Examples:

·         Is the employee interested in the job?  Yes / No

·         Is the employee punctual?                    Yes / No

·         Does he follow instructions properly?   Yes / No

The rater has to tick appropriate answers relevant to the employee. When the check list is completed, it is sent to personnel department for further processing and for calculating the final scores of employee.

Graphic scale method

            Graphic scale is also known as linear rating scale, is the most commonly used method of performance appraisal. In this method, a printed application form is used for each appraise. The form contains various characteristics of employees such as job knowledge, quality of work, leadership, cooperation, enthusiasm, creativity etc. The scales used for this purpose may be descriptive. Examples,  A, B, C, D, E or Excellent, Good, Average, Poor, Very poor.

            Name of the employee: ………………………….

            Designation: ……………………………………..

Particulars of qualities	Excellent	Very Good	Good	Average	Poor
Knowledge of job
Quality of work
Leadership qualities

           

Essay Method

            Under this method, the rater assesses the employee’s performance in his own words and writes his impressions about the employee. Factors considered for appraisal are:

·         Job knowledge

·         Quality and quantity of output

·         Strengths and weaknesses

·         Overall suitability of the employee

·         Organisational ability

·         Planning ability

Field Review Method

            In the field review method, an employee is not appraised by his direct superior but by another person, usually, from personnel department. The rater, appraises the employee based on his record of output, attendance etc. The rater also interviews the employee and his superior. This method is more suitable for promotion purpose.