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Unit I: Introduction to HRM

Concept of HRM

The phrase Human Resource Management is the composite of two words: Human
Resource and Management. Human resource is the people, working in an organization, with
required energy and skills. Management is concerned with ensuring optimum utilization of
available resources. Thus HRM is concerned with optimum utilization of peoples energy and
skills for the purpose of attaining organizational goals. According to DeCenzo and Robbins,
HRM is a process consisting of four functions acquisition, development, motivation and
maintenance of human resources. In less academic terms, we might describe these four
functions as getting people, preparing them for the required jobs, activating them and
keeping them in an organization to

accomplish the organizational goal in desired way and level. In a nutshell, HRM is concerned
with effective and efficient utilization of human knowledge, skills & energy by integrating
with other resources to accomplish the organizational goal in desired way and level. It is the
process essentially concerned with mobilization of mployees from pre-R (recruitment) to
post-R (retirement) in such a way that organizational growth is always ensured in dynamic

Characteristics of HRM
1. HRM is related to the people dimension.
2. It is dynamic and continuous process.
3. It is pervasive in nature.
4. It is a system consisting of input-process-output.
5. It is an open system and, thus, it is responsive to environment.
6. It is an integral function of management.

There an explicit link between HRM and corporate strategy.

Objectives of HRM
The main objectives of HRM include:

1. To attract, acquire, develop, utilize and retain qualified people in the organization
2. To achieve high productivity
3. To enhance the quality of work life
4. To promote workers morale, motivation and commitments
5. To maintain coordination and harmony among all people working in the organization
6. To develop team spirit and promote the environment of supportive culture
The scope of HRM is very vast. It deals with all aspects of managing people. The scope of
HRM in system framework includes HRM environment, HRM practices and HRM outcomes.

Internal Environment.

# Business Strategy HRM Outcomes

# HR Strategy # Quality of work life

# Org. Structure # Org. Productivity

HRM Pro./Fun./
# Org. Culture # Readiness for
# Comp./Practices
# Trade Unions
# Labor relations

# Commitment


External Environ.. #Maintenance

# Laws and Politics

# Economic factors

# Socio-cultural factors

# Technological factors

Figure: Scope of HRM in System Framework

1. HRM Functions (HRM Components)

HRM is a management function that helps managers recruit, select, train and develop
members for an organization. The major functions of HRM include:

A. Acquisition

B. Development

C. Utilization

D. Maintenance

A. Acquisition
i. Human Resource Planning : It is a process of determining manpower requirements of
the organization. It involves forecasting manpower needs, identifying the manpower gap
and finally formulating manpower program.

ii. Job analysis : It determines the tasks involved in the job and the qualification and skills
needed to accomplish the job.

iii. Recruitment : It is the process of identifying the appropriate sources of human

resources, encouraging them to apply for jobs and making necessary efforts to register
their applications. It may be from either internal sources or external sources or both.

iv. Selection : It is the process of choosing qualified and competent people from among
the applicants.

It generally involves scrutinization of bio-data and/or application forms, written test, group

discussion, interview, medical examination, etc.

v. Socialization : It is the process of making new employees familiar with the organization;
its culture and

providing complete description of his/her job, rules, policies, procedures, authority and
responsibilities. He/she is also informed or made familiar with his/her subordinates and

B. Development

i. Analyzing the Needs

It involves the analysis of current and future need of people skills and competences for the

ii. Employee Training : It is the organized effort of making employees more

knowledgeable and skilled for better performance of job.

iii. Management Development : It is the process by which managers and employees

acquire not only skill and competence in their present jobs, but also capacities for further

C. Utilization

i. Motivation : It is the process of stimulating people, through different techniques, to

perform the jobs best of their capabilities.

ii. Performance Appraisal : It is the systematic evaluation of employee performance. It is

done by immediate and other superiors mainly for the purpose of promotion, transfer,
identifying training needs, fixing wages, etc.

iii. Compensation Management : It deals with the designing, implementing and

maintaining pay systems such as salary, wages, fringe benefits which help to improve
organizational performance.

D. Maintenance
i. Labor Relations : it is a system concerned with managing the interrelationships among
3 major actors of industrialization, namely the employee, employer and the society
represented by the government.

ii. Employee Discipline and Grievance Handling : Employee discipline looks after and
confirms the obedience of rules and regulations by the employees of an organization where
as grievance handling is concerned with

handling of employees dissatisfaction or feeling of personal injustice relating to his/her

employment relationship that is brought to the attention of management.

iii. Employee Welfare : It consists of various activities that protect and promote employee
welfare, such as safely, health, recreation facilities etc.

2. HRM Environment

HRM environment refers to the set of factors that influence the HRM functions or practices
of an organization. There are basically two types of HRM environment. They are:

A. Internal Environment

B. External Environment

A. Internal Environment

i. Business Strategy : A business strategy refers to the competitive efforts and business
approaches that managers employ to please customers, compete successfully, and achieve
organizational objectives. Some typical business strategies include innovation strategy,
quality strategy, cost reduction strategy etc. Different strategy has different implications
on HRM practices. For instance, innovation strategy requires investing more on R&D and
creative and talented people.

ii. HR Strategy : Influenced by the external environmental forces and the business
strategy itself, HR strategy includes the components such as organizations HR mission,
objectives and policies. Obviously, HR mission, objectives and policies have direct impact
over HR practices.

iii. Organization Structure : Organization structure determines not only the authority-
responsibility relationship but also the number of people required, their skills and
competencies. The number of people required, their reporting relationship, skills and
competences ultimately influence HR practices such as recruitment, selection, training and
development etc.

iv. Organizational Culture : Every organization has its own culture, i.e., shared belief and
common way of doing things. Different cultures have different implications to HR practices.

v. Trade Union : Trade unions are voluntary organizations of generally the workers formed
to promote and protect their interests through collective actions. Trade unions also
influence different HRM practices such as administration of rules, wages and security
system etc.
B. External Environment

i. Political Environment : Political environment refers to the factors surrounding to power

equation, politics, and government laws, rules and regulations. Political environment
determines the degree of autonomy that organizations enjoy in the choice of HR practices.
This includes the economic policies, economic dimensions (such as productivity, per capita
income, labor costs etc.) and other economic situations. These factors also have impact
over the HRM policies and practices of an organization.

iii. Socio-cultural Environment : It comprises the social norms, values, beliefs, attitude
towards work hours & work shift, education status etc. All these have significant impact
over HR practices such as selection and rewards.

iv. Technological Environment : It comprises the level of technology, technological

innovation, technology transfer etc. These factors also influence the HR practices such as
training and development in the wake of new technology.

3. HRM Outcome : As a system approach of HRM, if the system is followed systematically

it yields certain outputs termed as outcome of HRM. Such outcomes are:

i. Quality of work life (QWL) :

ii. Organizational productivity

iii. Readiness for change

iv. Labor relations

i. Quality of work life (QWL) : QWL is the creation of environment where an employee can
feel that his job is secured, he is satisfied with jobs done, he will develop knowledge, skills
and he is capable of meeting at least the basic financial obligation through working. But
QWL cannot be achieved by chance, in fact this is the result of employee friendly &
rewarding policies and procedures, such as autonomy in work, recognition of the job done,
reward systems etc.

ii. Productivity : Productivity refers to the qualitative and quantitative output derived by
performing an action or process. One of the basic outcomes of HRM is always higher
productivity. There are evidences that the selection and execution of proper HR policies and
practices could lead to higher productivity.

iii. Readiness for change : One of the outcomes of HRM is to make employees ready to
face any sorts of current or future organizational change. It is because of change in
technology, change in working methods, change in competition, change in organizational
policies and practices. So everyone in the organization should be ready or prepared to cope
with such environmental changes.

iv. Labor Relations : Another important outcome of HRM is to achieve better labor
relations. It is concerned with developing healthy tripartite relations (i.e., between
employees, employers and the society represented by the government). Appropriate HRM
practices always lead to minimum industrial conflicts and disruptions. Likewise, the HRM
process or practices would produce either fully committed or less committed employees.
Fully committed workforce is, in fact, instrumental in achieving higher productivity, low
absenteeism, few employee turnover etc.

Human Resource Management Vs Personnel Management

At the decade of 1990, there was a big debate concerning the differences between HRM and
Personnel Management. Some people hold the view that HRM is merely a new name for
personnel management whilst some other scholars consider it to be a new & different view
of the way HR are managed by the enterprise. David Guest writes that there are probably 3
popular approaches to defining HRM. The first is merely a re-titling of personnel
Management, the second approach emphasizes the strategic aspects of managing human
resources and third approach suggests that HRM is distinctively different from personnel
management. In fact what we called Human Resource Management today is the new
version (i.e., modern approach to manage people) of what was popularly called Personnel
Management before 1970 (i.e., traditional approach to manage people). Emerged in the
decade of 1900, Personnel Management was used to refer the managerial wing to acquire,
develop and mobilize human resources in the organization. Though there are some
similarities, there are some differences too between these two concepts. Some of the main
differences are presented in the table below.

S. Basis of Personnel Management Human Resource Management

n. difference
1. Nature Process oriented Result oriented
2. Emphasis Means (e.g. Ends (i.e., optimum utilization of
rules,regulations, human capital for attaining goals)
procedures etc.)
3. Outcomes Productivity, Labor Quality of Work Life (QWL),
relations etc. Productivity, Readiness for
change,Labor relations etc.
4. Assumption People as input in the People as valuable resource in
production process organizational system
5. Scope Limited Hiring, Broad Beyond hiring and
disciplining, regulatory disciplining; such as
watchdog etc. determining organization
architecture by
defining/redefining organization
structure, process, reward
systems etc.
6. Function Routine Strategic
7. Job design Division of labor Teamwork
8. Interest Organizations interest Harmony of organizational and
is superordinated individual interests
9. Managerial Task Monitoring and Nurturing
10. Key Relations Labor relations Internal as well as external
11. Pay and Job Evaluation (fixed Performance based
Benefits grades)
12. Communication Scalar chain (indirect) Free flow (direct)
13. Speed of Slow Fast
14. Approach Reactive and Short Proactive and Long term

HRM Environment in Nepalese Context

In Nepal, political-legal environment is seen as the strongest environmental factor
influencing HRM functions of enterprises. It has substantial impact over different HRM
functions such as recruitment and selection (due to reservation system in government or
public services), compensation management and labor relations (due to declaration of
minimum wage rate for workers). It has influenced the degree of autonomy in exercising
HRM functions. Likewise, some economic factors like lack of employment opportunities has
compelled many skilled and dynamic people to go abroad, which has influenced the supply
of labor and skilled people. Rapid technological change has also compelled Nepalese
organizations to spend more on training and development programs to update the
knowledge and skills of their employees and managers. However, social factors are
gradually going in favor of better HRM practices. Supply of women workers in the workplace
is increasing; people are getting better education; and the language (particularly the
English language) in, at least, modern organizations in no more a barrier. In order to
facilitate the HRM functions (particularly the personnel administration and labor relations),
government has enacted different acts at different times. Some of the important include
Labor Act 1992, Trade Union Act, 1993 and Child Labor Act 2000. Despite these provisions,
there are a number of internal as well as external barriers for better HRM practices in Nepal.
Some of the main barriers are:

Lack of mutual trust between employee, employer and the government

Politicization of trade unions
No strategic thinking
Materialistic attitudes of entrepreneurs
Line managers do not feel ownership for HRM
HRM is considered as regulatory watchdog rather than a change agent

Unit II: Human Resource Planning

Concept and Meaning of Human Resource Planning

HRP is the process of forecasting the future human resource needs and choosing the
courses of actions to satisfy those needs. It involves estimating the size and composition of
future workforce to ensure survival and organizational growth.It is, in fact, a part of the total
organizational lanning. It is a continuous process rather than a single shot attain. It tries to
keep the organization supplied with required and capable people when they are demanded.

According to Decenzo and Robbins, HRP is the process of determining an organizations

human resource needs. According to Torrington and Hall, HRP is fundamental in
developing and implementing the organizations human resource strategy, which in turn,
enables the organization to meet its goals.
According to C. F. Rulss, Human Resource Planning, also referred to as manpower
planning or personnel planning, can be defined as the process of getting the right number
of qualified people into the right jobs and the right time. HRP is variously called manpower
planning, personnel planning or employment planning. In a nutshell, HRP includes the
estimation of how many qualified people are needed to perform the various organizational
jobs, how many people will be available, and what must be done to ensure that HR supply
equals HR demand at the appropriate point in future. It is an integral part of corporate
planning that can be formulated at national, industry and unit levels.

Characteristic of HRP

The above discussion reveals the following key characteristics of HRP.

Goal oriented

Related to future HR needs

Concerned with quantity and quality of human resource needed

Part of total organizational planning

Part of Acquisition Function

It can be both short or long term

Objectives of HRP

The main objectives of HRP as follows:

To ensure optimum use of human resources currently employed.

To assess or forecast future skill requirements.

To provide control measures to ensure that necessary human resources are available as

when required.

To support the company management to minimize operational costs.

To gain a competitive advantage in the market.

Importance of Human Resources Planning

HR planning is very important to any type of organization since Human resources are those
resources who monitor the other resources. HR planning also determines the success of the

1) Helps to implement the business strategy: Without proper planning of human resources
business strategies cannot be implemented. They are the people who have to work to
implement the strategies of an organization.
2) Minimizes future risk and uncertainty : By forecasting the demand and supply of
technical and other manpower for the future, human resources planning minimize future
risk and uncertainty.

3) Helps to cope with changing situation : HRP enables an enterprise to cope with
changes in competitive forces, markets, technology, products, and government regulations.
It is important to cope with change associated with the external environment factors. It
helps to assess the current human resources through HR inventory and adapts it to
changing, socio cultural and economic forces.

4) It promotes awareness of human resources activities: Human resource planning

promotes awareness that human resource activities are equally important at every level of
the organization.

5 Personnel costs may be less : Personnel costs may be less because the management
can anticipate imbalances before they become unmanageable and expensive.

6) It ensures the Development of HR : HRP planning identifies the skills requirement for
various levels of jobs. Then it organizes various training and development campaigns to
impart the required skill and ability in employees to perform the task efficiently and

7) It ensures the Proper utilization of HR : HR planning measures that the organization

acquires and utilizes the manpower effectively to achieve organizational objectives. HR
planning helps in assessing and recruiting skilled human resources. Moreover, it focuses on
the optimum utilization of HR to minimize the overall cost of production.

Major Activities of HRP (HRP Process/ Components of HRP)

Human Resource Planning is an important function to meet the future organizational needs
and & environmental challenges. Indeed, HRP is the process of anticipating future human
resource needs & choosing course of action needed to satisfy those needs. The major
activities of HRP process can be discussed under the following five steps.

Step I Step II Step III Step IV

Step V

Assessi Forecasti Forecastin Formulatin

Environm ng ng HR g HR g Action
ental Current demand Supply Plan
Analysis HR
Evaluation and Feedback

Fig: HR Planning Process

Step I: Environmental Analysis : Before planning about future human resources, the
foremost step is to make analysis of environmental forces and possible impact on
organizational activities. Only after an analysis of internal & external environment, it is
possible for HR managers to find out the internal strength and weaknesses as well as
external opportunity & threats of an organization that have direct influence on performance.

Step II: Assessing Current Human Resources : With the help of line managers, HR
managers begin to prepare HRP by developing a profile of the current status of employees
working in organization. More specifically this phase includes the following steps.

i. HR inventory/ knowing existing HR details through HRIS or MIS

ii. Succession Planning (Assessing the succession potential)
iii. Analysis of existing jobs

Step III: Forecasting Human Resources Demand : Organizational objectives and the
activities involved to meet those objectives are the basis for estimating future human
resources needs. Once the activities are determined, forecasting of human resources is
done. Usually organization may adopt following two methods for this purpose.

a) Judgmental Techniques (Delphi technique, Group discussion technique and Managerial

judgmental technique)

b) Statistical techniques (Regression analysis and Time series analysis)

Step IV: Forecasting Human Resources Supply : Forecasting human resource demand
worth only when if it is systematically located the sources from where the perspective
candidates can be achieved. Therefore estimation of supply of human resources on the
basis of demand forecasting is another important function. The projection of human
resource supply can be based on following sources:

i. Internal source (job rotation, succession, optimum utilization of available resources)

ii. External source (educational institutions, T&D institutions, career counseling
institutions, open market etc.)

Step V: Preparing Action Plan : After forecasting human resource demand and supply, a
proper matching between demand and supply forecasting is desirable. The shortage and
surplus of forecasting employees is to be treated accordingly. If there is surplus, HRD
should focus on only needy manpower whereas if the case is shortage of manpower,
reassessment of existing resource and their potential, and even re-forecasting of HR supply
by identifying new sources is desirable. After this, action plan is prepared.

This is the phase of implementation where usually following plans are developed.

a) Recruitment, selection and socialization plan

b) Training & Development plan

c) Job Analysis & Evaluation

d) Transfer & Promotion plan

e) Career Development plan etc.

Since HRP is a continuous process, it also involves evaluation and feedback. If any changes

in the internal as well as external factors or the process did not produce desired results,

necessary adjustment is made in the next cycle of HRP.

Factors Affecting HRP

The HRP process is influenced by several considerations. The more important of them are
shown in the figure below:

Figure showing the factors affecting HRP ( self draw )

I) Type and strategy of organization : The type of organization is an important

consideration because it determines the production process involved, number and type of
staff needed, and the supervisory and managerial personnel required. The strategic plan of
the organization defines the organizations HR needs. Primarily, the organization decides
either to be proactive or reactive in HRP. It can either decide to carefully anticipate the
needs and systematically plan them to feel them far in advance, or it can simply react to
needs as they arise.
II) Organizational growth cycles and planning : The stage of an organizations
growth can have considerable influence on HRP. Small organizations in the embryonic stage
may not have personnel planning. Need foe planning is felt when the organization enters
the growth stage. A mature organization experiences less flexibility and variability. Issues
like retirement and possible retrenchment dominate planning. Finally, in the declining stage
planning is done for layoff, retrenchment and retirement.

III) Environmental uncertainties : HR managers rarely have the privilege of operating

in a stable and predictable environment. Political, social and economic changes affect all
organizations. Personnel planners deal with environmental uncertainties by carefully
formulating recruitment, selection, and training and development policies and programs.

IV) Time horizon :

Another major factor affecting HRP is time horizon. On one hand, there are short term plans
spanning six months to one year. On the other hand, there are long term plans which
spread overthree to twenty years. The exact time span, however, depends on the degree of
uncertainty prevailing in an organizations environment. The greater the uncertainty, the
shorter the plans time horizon and vice versa.

V ) Type and quality of information

The information used to forecast HR needs originates from a multitude of sources. A major
issue in HR planning is the type of information which should be used in making forecasts.
Closely related to the type of information is the quality of data used. The HR departments
must maintain well- developed job- analysis information and HR information system (HRIS)
that provide accurate and timely data.

VI) Nature of the jobs being filled : For HR planners must consider the nature of
jobs being filled in the organization. Job vacancies arise because of separations,
promotions and expansion strategies. It is easy to employ shop- floor workers, but a lot of
sourcing is necessary for hiring managerial personnel. It is, therefore, necessary for the HR
department to anticipate vacancies, as far in advance as possible, to provide sufficient
lead time to ensure that suitable candidates are recruited.

VII) Outsourcing

Several organizations outsource part of their work to outside parties either in the form of
sub- contracting or ancillarisation. Outsourcing is a regular feature both in the public sectors
as well as in private sectors. Most organizations have surplus labor and they do not want to
worsen the problem by hiring more people. Hence, the need for off-loading. However, these
all factors have to be properly considered while formulating the Human Resources planning
in the organization.

Barriers to Human Resource Planning (HRP)

The major barriers to HRP are listed below:

1. Conflicts between short-term and long-term HR needs There can be conflict between
short-term and long-term HR needs. While fulfilling the short-term needs it may be possible
that long-term needs can be ignored which will create lots of conflict. For example, there
arises a conflict between the pressure to get the work done on time and long-term needs,
such as preparing people for assuming greater responsibilities.
2. HR information incompatible with strategy formulation : HR information often is
incompatible with the information used in strategy formulation. Strategic planning efforts
have been long oriented towards financial forecasting often to the exclusion of other types
of information. Financial forecasting takes precedence over HRP.

3. HR practitioners have expertise only in personnel matters : HR practitioners are only

experts in handling personnel matters, they cannot focus on the overall management. The
personnel plan conceived and formulated by the HR practitioners when enmeshed with
organizational plan, might make the overall strategic plan itself defective.

4. Conflicts between quantitative and qualitative approaches to HRP : The quantitative

approaches to HRP focus on how to get organization achievement and qualitative
approaches focus on individual employee concerns such as promotability and career
development. These two approaches can create a conflict while planning for HR.

5. No co-ordination among operating mangers and HR personnel. : There is no co-

ordination among the operating managers and HR personnel. HRP is not strictly an HR
department function. HR personnel only focus in the human resource management, where
as operating managers are responsible for the work relating to their departments.

HRP Practices in Nepal

Human Resource Planning (HRP) is one of the most important tasks in successful human
resources management program. Nepal is an underdeveloped country. Industrialization is
the key factor to develop the country, for development of industries and to make proper
management in organization the HRM practices should be sound and proper. So, it shows
that how important is Human Resources Planning for HRM or for whole organization. There
are the following features of Human Resources Planning in Nepal.

1. Poor tradition of Human Resource planning

Nepal has a poor tradition of human resource planning. The education system is not friendly
to need the needs of the labour market. The country lacks comprehensive human
resources surveys. Nepalese managers regard human resource planning as an area of low
priority. Nepalese organizations lack right number and kinds of people at the right places
and at right time. Most organizations lack human resources planning. HRP is not linked
with overall corporate plan.

2. Lack of Assessment of Current Human Resources :

Most Nepalese organization lack up-to-date human resource inventory which describes the
skills currently available. They also lack effective Human Resource Information System.
Effective job analysis is lacking in Nepalese organization to lay down proper job
descriptions and pecifications. This has constrained proper assessment of current human

3. Poor Demand Forecasts :

Nepalese organizations lack proper demand forecasting in term of number and skills of
people required. Business organizations lack reliable revenue forecasts which serve as the
basis for the forecast of human resource demand.

4. Poor Supply Forecasts

Nepalese organizations lack proper supply forecasts of human resources from inside and
outside sources. Promotion and transfer are not planned in advance. Supply outstrips
demand for human resources in Nepal. Nepalese labour market is supply-driven. Even the
professionals and skilled technicians are suffering from unemployment.

5.Mismatch of Demand and Supply

Nepalese organizations do not give proper attention to matching Demand and Supply
forecasts to determine future shortages and surplus. Succession planning is not done by
Nepalese managers. They seem to be afraid of this concept. They fear that the persons
being developed for succession may oust them from their jobs.

6. Short term horizon

Human Resources Planning in Nepal has generally a one year horizon. Strategic human
resource planning is lacking. Human resources planning are not regarded as a overall
strategic planning.

7. Overstaffing in Government and public Enterprises

Most government agencies and public enterprises in Nepal suffer from overstaffing. The
number one priority of Nepalese politicians is to provide employment to their political
worker. Human Resource Planning is utterly neglected by Politically appointed managers
of public enterprises. Overstaffing has made human resource planning irrelevant in
government and public enterprises. Such organization can function effectively by cutting
half of their employee strength.

8. Private Sector Neglect

The family owned and managed private sector organizations do not bother about human
resource planning. They prefer to hire their relatives, friends and near and dear. Even the
big houses in the private sector lack proper human resource planning.

9. Future Perspective :

The global organizations in banking, hospitality and manufacturing sectors in Nepal prepare
systematic human resource plan. They also implement them. This will definitely have a
positive impact for human resource planning in Nepalese organizations in coming years.
Therefore, the human resource planning function in Nepalese organizations needs

Unit III: Job Analysis and Job Design

Concept of Job Analysis

The study about job (on the basis of its type, nature & purpose) and determining the skills
required to perform this job is Job Analysis. DeCenzo and Robbins have defined job analysis
as: Job analysis provides information about jobs currently being done & the knowledge,
skills & abilities that individuals need to perform the job adequately. It helps to develop job
description, job specification & to conduct job evaluation. Likewise, according to Gary
Dessler, Job analysis is the procedure for determining the duties and skills requirements of
a job and the kind of person who should be hired for it.
The major components of job analysis are:

1. Job Description (states job title, duties, authority, responsibility, and job relationships)

2. Job Specification (identifies knowledge, skills and abilities needed to do the job)

3. Job performance standards (sets standards of jobs in terms of quantity and quality)

4. Job evaluation (states the relative value of job, i.e., rates the jobs not the employees)

Job analysis thus concerned with the analysis of job characteristics and employees
competencies in order to insure the perfect fit between the people and job.

Process of Job Analysis

Job analysis is a step-by-step process of gathering information related to various aspects of

the job. Following are the steps involved in job analysis.

1. Collection of information

It is the first step of job analysis under which required information related to various aspects
of the job are collected. Information is obtained through different methods such as
interview, observation, questionnaire, technical conference and diary. Moreover, it is
associated with the preparation of plans and programs and assignment of responsibilities
to the concerned person.

2. Review relevant background information

Job analysis is a process under which the previously collected information is reviewed to
design organizational chart, current position description and specification, procedures,
manual and process chart. This help in detail assessment of a job.

3. Select representative position to be analyzed

Analyzing all jobs at a time is complex and costly affair. Hence a sample of job is selected
for the purpose of detail analysis. Under it the job analyst investigates to determine which
organization managers or employees require job analysis. Also the purpose of job analysis
must be etermined.

4. Analysis of job by collecting data

Under this step a job analyst obtains the data and information related to the selected job
which is done previously. The information is collected on the job activities, required
employee behaviors, working conditions, human traits and qualities, abilities of performing
the job and other various dimension of the job.

5. Develop job description

Under this, a job description schedule is developed through the information collected from
above steps. It is a written statement or document that identifies, describes and defines a
jobs duties and responsibilities, working conditions, location and degree of risk involved in
each job. In other words, it is an overall summary of task requirement which explains the
constitute element of job in an organized way.
6. Develop job specification

A job specification is statement which spells out the minimum level of qualifications, skills,
physical and other abilities, experience, judgment and attributes required to perform the
job effectively and efficiently. It is prepared along with the job description statement and
specifies the physical, psychological, personal, social and behavioral characteristics of each
job-holder. The job specification is an important tool in selection process of job analysis
and knowledge of performing task.

Methods of Job Analysis

(Methods of collecting Job Analysis Information)

There are a number of job analysis methods. Of which, managers generally use a
combination of two or more methods. Some of the important methods include:

1. Observation Method

2. Interview Method

3. Questionnaire Method (Survey Method)

4. Diary Method

5. Technical Conference Method

1. Observation Method

Under this method, job analyst directly observes the jobs being done to get the first hand
information. Analyst receives the information about the activities, equipment, materials,
working conditions etc. from his/her observation. This may be supplemented by the review
of film of workers on the job. Generally, Time study, motion study and fatigue study is done
while observing the workers. Time study determines the time required to perform the job
efficiently, motion study determines the ideal speed and fatigue study determines the need
of introducing rest periods during the performance of jobs. These all are helpful particularly
in determining job specification and job performance standards.


This method is simple.

Data collections are accurate because of direct observation.

It provides feedback to employee immediately after the observation.


This method is time consuming.

workers may get influenced by the presence of the observer.

not all activities are observable.

not suitable for analyzing managerial jobs.

2. Interview Method

Under this method, job analyst interviews (face-to-face) job holders as well as their
supervisors to collect different job related information. This method is useful when
combined with observation method. It is better to use a standard format while interviewing
the workers so that there is no chance of leaving important information for the analysis of
the job. Although the process is slow and expensive, it allows the interviewer to explain
unclear questions and further inquiry into unclear answers. This method is also effective
for assessing what a job further requires.

3. Questionnaire Method

This is one of the widely used methods of job analysis. Under this method, structured
questionnaires are developed, distributed to the job holders and different information are
collected from them. The questionnaire uncovers the duties, responsibilities, abilities and
performance standards of the job investigated. It is easy and quick method. But,
responses bias/error and incomplete responses are its major drawbacks.

4. Checklist Method

A checklist is similar to a questionnaire, but the response sheet contains fewer subjective
judgments and tends to be either yes or no variety. Checklist can cover as many as 100
activities and job holders tick only those tasks that are included in their jobs. It is a
challenging job to prepare a checklist as information is obtained by asking supervisors,
industrial engineers, and other familiar with the work. Its main advantage is that it is used
in large organizations that have a large number of people assigned to one particular job.

5. Diary Method

Under this method, employees record their daily activities in a diary, which can later be
used for analyzing the job. This method is very easy to adopt and economical, but not
widely used. Employees may regard it as a burden and may not comply with it in the long

6. Technical Conference Method

This method uses the view and opinions of technicians and experts in the field to analyze
the job. Under this method, analysts or experts sit together and share opinions on each and
every aspect of the job to be analyzed. The major drawback of this method is that
sometimes employees opinions are overlooked.

Concept of Job Design

Job design involves the determination of content of job and the method of doing the job.
Thus, It is the process of determining specific tasks to be included in a job and the methods
of performing those tasks. According to Mathis and Jackson, Job design refers to
organizing tasks, duties and responsibilities into a productive unit of work. According to
Hackman: Any activity that involves the alteration of specific jobs with the intent of
increasing both the quality of the employee work experience & their on the job
productivity. The key to successful job design lies in balancing the needs of organization
and the employees. In designing the jobs, generally, only a few and similar jobs are
assigned to a position/ job holder in order to ensure specialization and speedy performance
of job. However, extreme specialization also leads to problems like boredom, monotony,
frustration etc. Thus, there should be appropriate balance between specialization and
variety of job in job design. In recent years, management attention has also been directed
to alternative way of designing jobs that focuses on teamwork rather than individual

Appropriate Job design is useful particularly in designing the organization structure, in

balancing the organizational and individual needs, in facilitating acquisition function, and in
both achieving higher productivity and QWL.

Factors Affecting Job Design


Organizati Job
onal Design

al Factor

ntal Factor Productive & Satisfying Jobs

Fig: Factors affecting job design

Organizational Factors

Organizational factors include characteristics of task, work flow, ergonomics, and work
practices. Characteristics of task: An individual may carry out one main task which consists
of a number of interrelated elements or function. Task functions may be split between a
team working closely together or strung also an assembly. Where there are more complex
jobs, individuals may carry out a variety of connected tasks, each with a number of
functions, or these tasks may be allocated to a group of workers or may be divided between

Work Flow: The flow of work in an organization is strongly influenced by the nature of the
product or service. These can be specially seen in seasonal business, where work flow is

Ergonomics: Ergonomics is concerned with designing and shaping jobs to fit the physical
abilities and characteristics of individuals so that they can perform their jobs effectively.
Ergonomics helps employers to design jobs in such a way that workers physical abilities
and job demands are balanced.

Work practices: Work practices are set ways of performing work. These are raised from
traditional or the collective wishes of employees. Job design is also influenced by what has
been in the practice since years ago. This has been emerged as a new technique.

Environmental Factors

Environmental elements affect all activities of HRM, and job design is no exception. The

factors that have a bearing on job design are employee abilities and availability, and social

cultural expectations.

Employee Ability and Availability: Efficiency consideration must be balanced against the
abilities and availability of the people who are to do the work. So the jobs must be designed
in such a way that requires little training. Social and Cultural Expectation: In early years,
getting a job was the primary consideration. The worker was prepared to work on any job
and under any working conditions. Not anymore, because just getting the job is not enough,
it has to meet the social and cultural expectation. Hence the job must be designed

Behavioral Factors

Behavioral factors mainly deals with human needs and the necessity to satisfy them.
Individuals inspired by higher level needs find jobs challenging and satisfying which are high
on the following dimensions:

Feedback: An individual wants and must receive meaningful feedback about their
performance, preferably by evaluating their own performance and defining the feedback.

Autonomy: Autonomy is being responsible to what one does. Jobs that give workers
authority to make decisions will provide added responsibilities, which tend to increase the
employees sense of recognition and self-esteem.

Use of Abilities: The job must be perceived by individuals as requiring them to use
abilities the value in order to perform the job effectively.

Variety: Lack of variety may cause boredom. Boredom, in turn, leads to fatigue and
fatigue causes mistakes. Hence there must be variation on the jobs they perform.

Techniques of Job Design

There are mainly six techniques of properly designing the job, which are as follows:

1. Work Simplification
In this technique, the job is simplified or specialized. A given job is broken down into small
sub- parts. Work simplification is adopted when job designers feel that jobs are not
specializing enough. This technique can be defective when jobs are overspecialized results
in boredom which can lead to errors and resignation. To be more specific, work
simplification involves:

a) Mechanical pacing of work

b) Repetitive work processes

c) Working on only one part of a product

d) Predetermining tools and techniques

e) Restricted interaction among employees

f) Few skill requirements

2. Job Rotation

It refers to the movement of employees from job to job. The objective is to expose the
employees to different experiences and wider variety of skills to enhance job satisfaction. It
increase intrinsic reward potential of a job because of different skills and abilities needed to
perform it .Job otation may not have much impact on employees enthusiasm and

3. Job Enlargement :

Job enlargement involves expanding the number of tasks or duties assigned to a given job.
It is horizontal restructuring method in that the job is enlarged by adding related tasks. It
has motivational impact to employees. It is naturally opposite to work simplification.

4. Job Enrichment:

It is a variation on job enlargement concept. Job enrichment adds new sources of job
satisfaction by increasing the level of responsibility of the employee. It is a vertical
restructuring method in that it gives the employees additional authority, autonomy, and
control over the way the job is accomplished. It improves task efficiency and human
satisfaction by providing challenging and responsible work. People may not like to accept
new responsibilities.

5. Self- Directed Work Teams:

A self-directed team is an intact group of employees who are responsible for a whole work
process that delivers a product or service to an internal or external customer. Work- team
implementation is difficult without the active involvement of managers and supervisors.
The team members work together to improve their operations, handle day to day problems

6. High- performance work design:

It is a means of improving performance in an environment where positive and demanding
goals are set. It addresses issues like the methodology of doing the job, the person
responsible for doing the job, the place of accomplishing the job. It works in an
environment of high rate of innovation and operational freedom .It may not work in large
bureaucratic organization

Unit V: Training and Development

Concept of Human Resource Development

Human Resource Development (HRD) is concerned with enhancing the competencies of

people in organizations through appropriate policies and practices. It involves enhancing
the skills, knowledge, learning ability and enthusiasm at both operating and managerial
levels. According to DeCenzo and Robbins, "HRD is concerned with preparing employees to
work effectively and efficiently in the organization. Therefore, HRD is mainly concerned
with two things

a. Training
b. Management Development

a. Concept of Training : Training is an important part of HRD efforts in modern

organizations. It enhances capabilities of employees to perform basically the current jobs. It
involves positive changes in knowledge, skills, attitude or social behavior. According Casio,
"Training consists of planned programs designed to improve performance at the individual,
group and/or organizational levels.

Concept of Management Development

Management Development is a systematic process of improving managerial potential to

meet current and future needs and challenges. It focuses more on education aimed at
increasing conceptual, interpersonal and decision making skills rather than on technical
skills. According to Gary Dessler, Management Development is any attempt to improve
current or future management performance by imparting knowledge, changing attitudes or
increasing skills.

Importance of HRD (Training & Development)

Improves competencies
Fosters teamwork and better work culture
Provides career development opportunities
Increases morale, motivation and job satisfaction
Ensures employees' commitment on the job
Improves decision making ability and organizational effectiveness
Helps Manage change and conflicts
Helps in attracting and retaining talented people in the organization.

Process of Training and Development

The training and development program generally involves the following steps.
) Identify the training/development needs : Before offering actual training/development programs
to employees or managers, the needs for training should be properly assessed/identified. In
organizations, the difference between the job requirements and the employee capabilities
indicate the training/development need. Stated differently, management can determine training
needs by answering the following questions.
Organization's goals?
Deficiencies in knowledge, skills, and attitudes?
Performance gap?
Future challenges?

ii. Establish specific objectives : After identifying the training/development needs,

specific objectives of the program should be established. It is helpful in justifying the
program, in guiding the program and in assessing the program effectiveness. It should
primarily focus on performance gap.

iii. Select appropriate program/method : After this, the appropriate method to meet
the stated objectives should be selected. At the same time, the trainers, trainees, contents,
level, duration, venue etc. should also be decided. Besides, availability of resources should
also be considered. The method may be anyone under on-the-job or off-the-job.

iv. Implement the program : This is the stage of putting training/development program
into operation. In this stage, employees or managers attend the actual program and learn
new knowledge and skills.

v. Evaluate the program: This is the final stage in training and development program.
Under this, the effectiveness of

the program is evaluated. The evaluation may be based on reaction criteria or learning
criteria or behavior criteria or the performance criteria. The specific method to evaluate the
program may be one or more of the following:

Test-Retest Method
Pre-Post Performance Method
Experimental-Control Group Method
Trainee/Participant Survey Method
Cost Effective Analysis

Training Methods

A. On-the-job Training (OJT) Methods : This training method takes place on the job and
involves learning by doing under the supervision of an experienced employee or a
manager. Widely used methods under OJT are:

i. Apprenticeship Training
ii. Internship Training
iii. Job Instruction Training (JIT)

i. Apprenticeship Training : Training program in which trainee is put under the guidance
of a master worker (i.e., already skilled) in the job is known as apprenticeship training.
Examples of apprenticeship training include training for plumbers, electricians, accountants
etc. The duration for is generally 2 to 5 years. During the training period, the trainee is
paid less than a fully qualified worker.

ii. Internship Training : It is provided to the students of applied courses (e.g., technical
and management). It blends theory with practice.

iii. Job Instruction Training: It is a systematic step-by-step approach to teach new skills.
JIT consists of four basic steps:

1. Preparing the trainees by telling them about the job and making familiar with tools,
equipment and materials Motivation

2. Presenting the instruction by giving essential information Understanding

3. Providing trainees the opportunity to try out their understanding Participation

4. Placing the workers into the job, on their own, with the resource person for providing
needed assistance -- Application

Advantages of OJT

1. Firsthand experience on the equipment, materials and working procedure, that

is, training in real job situations.
2. Expensive training facilities are not needed.
3. Can contribute to the organization even during the training.

Disadvantages of OJT

1. Low quality and productivity of trainee.

2. The trainees make errors while they learn, and rejection rates and scrap can be high.
3. Equipments can be damaged.

B. Off-the-job Training

Under this, training takes place outside the job situation. Trainees are removed from the
stresses and the demands of the workplace. Some of the widely used methods under off-
the-job training are:

i. Classroom Lecture or Conference

ii. Simulation Exercises
iii. Programmed Instruction

i. Classroom Lecture or Conference: Under this, training is given by telling. It is a

teacher-centered approach. Theoretical aspects are focused rather than practical in this
method. Sometimes, audio-visual aids may be used.

ii. Simulation Exercises : Simulation is the abstraction of real working conditions in the lab
or classroom. Simulation exercises include:
a. Case exercise
b. Computer modeling; which is widely used by airlines in the training of pilots.
c. Vestibule training; in which employees learn their jobs on the equipment they will be using,
but away from the actual work floor. This minimizes the problem of transferring learning to
the job.

iii. Programmed Instruction : This is a training method to learn step-by-step by following

the instruction given in texts or manuals. It is useful for imparting specific skills such as
photocopying, making financial statements, learning to fill in sales report forms etc.

Management Development Methods

A. On-the-job development methods : According to DeCenzo and Robbins, the development

of a managers abilities that can take place on the job can be achieved through the
following four methods.

i. Coaching
ii. Understudy assignments
iii. Job rotation
iv. Committee assignments

i. Coaching : When a manager takes an active role in guiding another manager, we refer
to this activity as coaching. Whether it be a game or an organization, an effective coach
gives guidance through direction, criticism, and suggestions to aid to the growth of
individual under coaching.


1. Tendency to perpetuate the current managerial styles

2. Heavy reliance on the coachs own ability and ability to coach others

ii. Understudy Assignments : Understudy assignments involve assigning a potential

manager to work for a more experience manager on an assistant to basis. It is an
opportunity to assist higher level managers in completing their jobs. Its effectiveness
depends on the willingness and ability of the higher level manager to share experience
and to transfer knowledge to the understudy manager.

Advantage: motivation on understudy manager and facilitates managerial

Disadvantage: Others see it as an act of favoritism.

iii. Job Rotation : Job rotation can be either horizontal or vertical (promotion). But, it is
usually considered as horizontal or lateral transfer. It (horizontal) can be instituted either
on a planned or on a situational basis.

-Advantages: broadens the knowledge & skills, eliminates boredom & monotony,
develops generalists Disadvantages: productivity is reduced, demotivates trainees who
seek specific responsibility in their chosen specialty.
iv. Committee Assignments : A system in which manager/trainee is provided the
opportunity to work in a committee/team. Under this, one can share managerial decision
making, can learn by watching others, and develops skills to work with others etc. It is
relatively inexpensive, and considerable number of executives can be developed in short
span of time.

Disadvantage: may be used for dumping unwanted managers.

B. Off-the-job development methods :

There is a stock of techniques/methods for developing managers off the job. We will,
however, briefly discuss four of the more popular ones:

i. Sensitivity training
ii. Transactional analysis
iii. Lecture courses
iv. Simulation exercises (Case study, Decision games, Role playing)

i. Sensitivity Training : It is a method of changing behavior through unstructured group

interaction in a free and open environment. Under this, participants are encouraged to
discuss one another about themselves and each others behavior, which is loosely
facilitated by a professional behavioral scientist. It provides managers with increased
awareness of their own behavior and of how others perceive them. It also helps to
understand the group process and enhances listening and conflict resolution skills. But, for
some participants it can increase the anxiety levels.

ii. Transactional Analysis : This method focuses on the interactions between individuals
and between groups as transactions/dealings. It believes that an individuals behavior
consists of three ego states: parent, adult and child. The parent (authority and superiority)
and child (emotion) states feel and react directly. The adult state (objectivity and
rationality) thinks before acting, and thus managers are encouraged to engage in adult ego
state behavior. In general, TA can help improve the quality of communication between
individuals and groups.

iii. Lecture Courses : In lectures, the resource person presents in a classroom lecture
manner, and the participants/ managers tend to focus on getting theoretical knowledge
aimed at enhancing conceptual, analytical and decision making skills. It may use video
shows and multimedia presentations to make the lectures effective. It is direct, and involves
low cost and time. But, it lacks involvement from learners and often there is no feedback
from learners.

iv. Simulation Exercises : Simulation is the abstraction of the real situation in the lab or
classroom or anywhere outside the real workplace. Simulation exercises aimed at
management development include case study, decision games and role playing.

a. Case study : It is the study and analysis of created business situations. Under this,
managers are required to develop the alternative courses of actions and finally the best
solution. It is interesting but time consuming.

b. Decision games : it is also known as management games, in which participants are

given background information, instructions about the rules and the role to play or the
solutions to be found out.
c. Role play :Under this, the manager assumes a role and acts it out. Simulation exercises
are less costly but may be difficult to simulate the real life situations.

Unit VI: Performance Appraisal

Concept of Performance Appraisal

Appraisals are judgments of the characteristics, traits and performance of others. Therefore,
performance appraisal is a process of determining how well employees do their jobs
(degree of job effectiveness). According to W. F. Cascio, Performance evaluation is a
review of the job-relevant strengths and weakness of an individual or a team in an
organization. According to Dale S. Beach, Performance evaluation is the systematic
evaluation of individuals with respect to their performance on the job and their potential for
development. Performance Appraisal may be done by superiors, peers, subordinates,
rating committee and even by oneself.

Uses of Performance Appraisal

1. Performance feedback for removing performance deficiencies, if any.

2. Reward Management

3. Training and Development Decisions

4. Promotion, Transfer and Separation Decisions

5. Validation of Selection Tests

6. Supervisory Understanding

7. Career Planning and Succession Planning

8. Policy Formulation

9. Basis for Research

Process of Performance Appraisal

Performance appraisal process generally involves the following steps.

1. Set performance standards:

First of all, job performance for each employee and work group should be set. They serve as
the criteria of performance what is to be done and how well it is to be done. They can be in
terms of quality, quantity, time, costs etc.

2. Communicate standards to employees :

The performance standards should be, then, communicated to each employee. The main
objectives of standards should be made clear.

3. Measure actual performance :

The actual performance of the employee during o specified period is measured, the sources
of information for measuring actual performance can be:

i. Performance observation
ii. Internal reports
iii. Special reports: Specialists can be hired to provide special report about job
performance of employees.

4. Find deviation (performance deficiencies) :

In this stage, the actual performance is compared with performance standards set in
advance. Then the magnitude, nature, causes and incidence of deviations are analyzed.

5. Discuss appraisal with the employee

The result of performance appraisal is discussed with the employee. This provides
performance feedback to the employee. The discussion is based on comparing actual
results with agreed standards in a constructive manner.

6. Initiate corrective actions : This is the final stage in performance appraisal. Under this,
one or more of the following actions is/are initiated.

i. Change deviations: Such actions are intended to get things back on the track.
ii. Change standards: Performance standards may be revised to make them appropriate
and realistic for the next appraisal period.
iii. Training assignment: The employee is given a chance for skills up gradation through

Methods of Performance Appraisal

There are a number of methods for appraising the performance of employees and
managers in an organization. Some of the main are discussed as under.

1. Graphic Rating Scale Method

It is the most commonly used method of performance appraisal. Under this method, first of
all, a set of performance factors is identified and then the appraiser evaluates the
performance of an employee/manager on a scale (e.g., five point scale, seven point scale
etc.). In the rating scale, lowest number denotes poorest performance and the highest
number denotes the best performance.

Specimen Form for Performance Appraisal by Using Graphic Rating Scale method

S. N. Performance Indicators Rating Scale

1 2 3 4 5
1. Quantity of work
2. Quality of work
3. Cooperation
4. Dependability
6. Ability to learn
7. Initiative
8. Job knowledge and skills


a) Rating scales offer the advantages of relatively easy to use and low cost.
b) Nearly every type of job can be evaluated with the rating scale, the only
requirement being that the job performance criteria should be changed.
c) A large numbers of employees can be evaluated in a short time, and the rater doesn't
need any training to use the scale.


a) The rater's biases are likely to influence evaluation, and the biases are particularly
pronounced on subjective criteria such as; cooperation, attitude and initiative.

b) It doesn't provide in-depth information as compared with other techniques.

2. Checklist Method

Under this method, a checklist of statements on the traits of the employee and his or her
job is prepared in two columns, i.e., 'yes' column and 'no' column. All that rater
(immediate superior) should do is tick the 'yes' column if the answer to the statement is
positive and in column 'no' if the answer is negative. After ticking off against each item, the
rater forwards the list to the HR department where the actual assessment of the employee
takes place. In other words, the rater only does the reporting, while actual evaluation is
done by the HR department. The HR department assigns certain points to each 'yes' ticked.
Depending on the number of 'yes' the total score is arrived at. When points are allotted to
the checklist, the technique becomes weighed checklist.


a) It is economic, easy of administration, limited training of rater and



a) Use of personality criteria instead if performance criteria

b) Misinterpretations of checklist items, and the use of improper weights by the HR
c) It doesn't allow the rater to give up relative ratings

3. Ranking Method
In this method, the appraiser ranks all employees from the best to the poorest on the basis
of overall performance. For example, 20 employees can be ranked from 1 to 20 as 1, 20,
2, 19, 3, 18..and so on. This method is tedious if the number of employees is too
large. It is more subjective and emphasizes less on specific performance dimension.

4. Paired Comparison

Under this method, the evaluator compares each employee with every other. Usually only
one trait, the overall ability to perform the job, is considered. The overall ranked of the
employee is determined by the number of times chosen as better performer in total pairs.
The maximum number of pairs is indicated by the formula N(N -1)/2; where N = the total
number of employees to be evaluated. This method is useful only when there are very less
(say 20) number of employees.

5. MBO Approach to Appraisal

According to this approach, employees are evaluated by how well they accomplish the pre-
determined performance targets/objectives. The emphasis is not given on activities but on
results achieved. It consists of basically the five steps.

i. Collaborative goal setting

In this stage, departmental and individual goals or performance targets are set through free
and frank discussion between superiors and subordinates. However, such goals should be in
line with organizations overall objectives. ii. Action planning In action planning, the means
are determined for achieving the ends or goals. That is, realistic plans are developed to
attain the objectives. It includes identifying the activities necessary to accomplish the
objective and estimating time and resource requirements to complete each activity.

iii. Self-control

It involves systematic monitoring and measuring of own performance. MBO is based on the
assumption that employees can be responsible and can exercise self-control.

iv. Periodic progress reviews

In this stage, periodic meetings of superiors and subordinates are held to discuss the
progress towards the accomplishment of objectives. Such reviews provide feedback and
suggestions to subordinates to improve their performance.

v. Appraising overall performance

Finally, at the end of year or some specified period the final performance is evaluated
against the targets. Such appraisal helps to initiate corrective action and also forms a basis
for reward management.

Advantages of MBO

1. It is committed towards organization objectives.

2. It helps planning and controlling function and motivates employees for higher
3. It helps enhance productivity.
4. It identifies employee's contribution to the success of organization.
5. It provides insight about employee's behaviors.

Disadvantages of MBO

1. It is not effective in all types of organizations particularly in those organizations where

manager hardly trust their employees/subordinates.

2. Its successes depend upon training and supervision. Therefore this method cannot be
effective where employees are not trained and knowledgeable.

3. This method cannot be applied in an organization where traditional approach of

management does exist.

Unit VII

Job Evaluation

Concept of Job Evaluation

Job evaluation is the process of analyzing and assessing the various jobs systematically to
ascertain their relative worth in an organization. Job evaluation is the rating of job in an
organization which attempts to compare the relative intrinsic value of each job and forms a
job hierarchy. It is ranking of job but not the job holder as the job holder are rated through
performance appraisal. The basis procedure in job evaluation is to compare the contents of
jobs in relation to one another which form a job hierarchy. In the words of Gary Deshler
Job evaluation is a systematic comparison done in order to determine the worth of one job
relative to another.

Difference between Job Evaluation and Performance Appraisal

Job Evaluation Performance Appraisal

1 The job is rated, keeping in view Employee is related on the basis of his
such factors as responsibility, or
qualification, experiences, her performance.
working conditions etc, required
for performances of the job.
2 A job is rated before the Evaluation take place after the employee
employees are has been hired and placed on a job.
appointed to occupy it.

3 The purpose is to establish The purpose is to affect promotions after

satisfactory reward, punishment, assess training
wage differentials. needs, resort to lay offs, transfers, etc.
4 It is not compulsory. Many Compulsory. It is done regularly for all
organization jobs.
carry on without it where it is
followed, it
is mainly for lower level jobs.
5 Job evaluation committee Appraisal is done by employees
(comparison themselves, peers, superiors, group of
internal and external experts) is people, or combinations of these.
constituted for the purpose of

Hence, for our purpose, job evaluation is the process of determining the value of each job in
relation to all jobs within the organization.

Purpose of Job Evaluation

It determines the relative importance of job in an organization.

It helps to determine the hierarchy of a particular job on the basis of its relative
It provides information for developing a compensation package.
It provides an objective standard from which modifications can be made in the existing
compensation package.
It provides an important input to recruitment and selection process.

Methods of Job Evaluation

1. Non-analytical Methods

a) Ranking method : It is the most straight forward method of work evaluation. Jobs,
people, or even teams can be ranked from the ones adding most value to least value to the
organization. The criteria for the ranking are not made explicit. The evaluation committee
assesses the worth of each job on the basis of its title or on its contents. Each job is
compared with others and its place is determined. Teams can be ranked in a team-based
environment as a substitute for or addition to the ranking of jobs and people.


- Simple to use when there is small number of jobs to evaluate.

- It requires little time.
- Minimal administrative is required.


- Possibility of evaluator bias.

- Difficult to use when there is large number of jobs.
- May invite perception of inequity.

b) Job-grading method : It is also known as job-classification method. In this method the

number of grades is first decided upon and the factors corresponding to these grades are
then determined. The difference between the two is that in the ranking method, there is no
yardstick for evaluation while in grading method there is such a yardstick in the form of job
classes or grades.


Level of grade Definition

1. Very simple task of a largely physical nature.

2. Simple task with small number of defined rules, task. The work is checked
and closely supervised.

3. Straight forward task, involving more complicated routines and requiring

some knowledge.

4. Task calling for independent arrangement of work those require little


5. Routine work those involving and individual degree of responsibility for

answering non - routine and

queries and exercising some measure of control over a small group of


6. Non-routine work, involving the coordination of several lower- grade


7. Work necessitating responsibility for sections involved in routine tasks and

where individual tasks are

undertaken calling for a specialists knowledge.


- It is Simple and inexpensive.

- This method yield satisfactory results where number of jobs is small.


- Job grades are vague and are not quantified.

- More job classifications need to be prepared because the same schedule cannot be used
for all types of jobs.

2. Analytical Methods : These include the point ranking method and the factor comparison

a) Point ranking method : The system starts with selection of job factors construction of
degrees for each factor, an

assignment of points to each degree. Different factors are selected for different jobs, with
accompanying differences in degrees and points. The point method is widely used. A
different number of points are usually assigned for each degrees of each factor so once you
determined the degrees to which each factor is present in the job, you need only add up the
corresponding number of points for each factor and arrive at an overall point value for the

- A job is split into a number of factors. The worth of each job is determined on the basis of
its factors.

- The procedure adopted its systematic and can easily be explained to the employees.

- The method is simple to understand and easy to administer.


- Employees may disagree with the points allotted and to factors and their degrees

- Serious doubts are expressed about the range of points allotted and matching them with
the job grades.

b) Factor comparison method

The factor comparison method is at another approach for job evaluation in the analytical
group. Under this method one begins with the selection of factors, usually five of them-
mental requirements, skill requirements, and physical exertion, responsibility, and job
conditions. With the factor comparison method you rank each job for several times once
for each compensable factor you choose. For example: jobs might be ranked first in terms of
factor for skill. Then they are ranked according to their mental requirements. Next they
are ranked according to the responsibility and so forth. Then these ranking are combined for
each job in to and overall numerical rating for the job. Factor comparison method is one of
the most widely used, the most accurate and most complex job evaluation method.

An advantage of the factor method is that jobs of unlike nature for example: manual,
clerical and supervisory may be evaluated with the same set of factors but the method is
complicated and expensive.


Compensation Management

Concept of Compensation Management

All forms of financial rewards received by employees can be referred as compensation. It is

not exactly the refund of the loss as in insurance. It arises from employment and occupies
an important place in the life of the employee. Compensation management consists of
designing a cost effective pay structure that will attract, retain, and motivate the competent
employees. Thus, it should be perceived as fair by the employees. Compensation
dissatisfaction can lead to absenteeism, turnover, job dissatisfaction, low performance and
many other grievances. Majority of labor-management disputes are related to
compensation. Compensation management is essentially above designing, implementing,
and maintaining pay system which help to improve organizational performance.
-Michael Armstrong

Components of Compensation

Compensation can be either direct or indirect which are further sub-divided as follows:



I Services
n P
c a
e y
B tM
a i e
s Benefit
e ei

Fig: Components of compensation

A. Direct Compensation

Direct compensation is composed mainly of two types: Pay and Incentives.

1. Pay: Pay consists of wages & salaries received for performing work. It can be base pay
or merit pay

Base pay is periodic pay to employment, such as; hourly, weekly or monthly pay
employees receive in exchange for their work.

Merit pay is performance based and they are an addition to the base pay. Employee
performing better receives more merit pay.

2. Incentives: It is generally provided for higher performance. They can be piece wage,
commission, bonus, profit sharing, etc. They are directly related to the performance of an

B. Indirect Compensation

Indirect compensation consists of following types:

1. Benefits: They are payment in addition to pay. They are membership based and non-
financial rewards. Employees receive them as a result of their employment and position in
the organization. They can be as:

Pay for time not worked: Paid holidays, leaves, vacation, etc Protection programs: Pension,
gratuity, insurance, provident fund, etc Executive benefits: Free newspaper, telephone
rental, etc.

2. Services: They are not paid in cash. They increase employee well-being at no cost or at
significantly reduced cost. They are also known as Perks. They can be: Transport, food
service, furnished housing Childrens education expenses Legal advice and counseling,
etc. In most organizations, compensation is given as a package which consists of pay plus
a wide range of benefits and services. These are getting popular in organizations where
employees pick benefits that meet their requirement.

Determinants of Compensation

There are two factors that influence the compensation in an organization. They are internal
and external.

Factors Affecting

External Factors
Internal Factors
Legal Considerations
Objectives of Labor Market Rates
compensation Equity Considerations
Policies of Cost of Living
Job Evaluation

Fig: Factors Influencing Compensation

Internal Factors or Determinants

The internal factors influencing compensation are:

1. Objectives of Compensation: Among various objectives of compensation management,

some major could be;

a. Establish fair & equitable pay system

b. Attract and retain competent human resources
c. Improve motivation and morale of employees
d. Designing the lowest cost pay structure
e. Improve labor relations
f. Improve image of the organization as a fair pay employer.

2. Policies of Compensation: Organizational policies serve as guidelines for formulating

compensation plan. So the policies of the organization influence compensation.
Compensation may also be tied to the cost of living for the worker.

3. Job Evaluation: Job evaluation is actually determining the relative worth of a job to the
organization. Thus, compensation system should be designed around jobs. Job description
and worker requirements also affect pay level and structure.

4. Employee Productivity: This is a new trend which link pay with performance. According to
this, productivity affects pay structure and level. Employee competencies, experience and
motivation affects the productivity of both; employee and organization.

External Factors or Determinants

1. Legal Considerations: Compensation management is also affected by the government

laws and regulations. They stipulate minimum wages, overtime rates, and benefits that
employers must pay. Tax implications also influence compensation. Thus, organization must
go hand on hand with legal requirements.

2. Market Rates: The compensation system should also match market rates because the
market is not always stable. They should account for inflationary pressures. The rates
should be very competitive.

3. Equity Considerations: In terms of equity the compensation should be fair enough. The
rates should be same for similar type of jobs within the organization. They should compare
favorably with going pay rates in other organizations. Everyone must perceive it as fair.

4. Cost of Living: This factor is important during periods of rising process. It adversely
affects purchasing power. It should be considered for compensation management.

5. Union Pressures: Union pressure towards compensation decisions affect compensation as

it is one of the major motivational factor for the employees. Unions are engaged in
collective bargaining with employers.
Methods of Establishing Employee Compensation :

The main objective of establishing compensation is to price each job in the organization.
So, various methods are used for establishing employee compensation. They are:

1. Job Analysis
2. Job Evaluation
3. Compensation Surveys
4. Pricing Jobs

1. Job Analysis : Job analysis collects information about jobs and workers. These
information are collected through surveys, observations, and discussions among workers
and supervisors.

a) Job Description: It is a profile of the job. It explains job requirements in terms of duties,
responsibilities, authority, accountability, working conditions, etc.

b) Job Specification: It is a profile of characteristics needed by the employee performing

the job, it describes worker requirements. It specifies experience, training, education, skills
and physical and mental characteristics.

c) Job Performance Standards: They serve as performance targets for employee efforts.
They also serve as criteria for evaluating job performance.

2. Job Evaluation

Job evaluation system puts job in a hierarchy according to their relative worth. It ensures
internal equity. Job evaluation determines the relative worth of one job in relation to
another. The value of each job in relation to other jobs within the organization is decided.
The basic compensable factors considered for job evaluation are:

a) Duties and responsibilities of the job: Obligation for carrying out job. (Job Description)
b) Skills required for the job: Know-how needed for the job. (Job Specification)
c) Efforts needed for the job: Complexity of the tasks in the job
d) Working condition of the job

Job Evaluating Methods

There are four job evaluating methods as follows:

i. Job Ranking Method: it ranks jobs in order of their difficulty form simplest to the most
complex. They appraise each job and rank its worth to the organization from highest to
lowest. Each job is compared with other to determine the overall rank.

ii. Job Grading Method: It categorizes jobs into grades. Grade is a group of different jobs
requiring similar skills, efforts and responsibility. Each job is assigned a grade and common
factors used are: skills, efforts responsibility and difficulty.

iii. Factor Comparison Method: It is monetary scale for evaluating jobs on a factor by factor
basis. Job evaluation is based on comparison of compensable job component. Compensable
component are factor common to all jobs being evaluated, such as: responsibility, skills,
working conditions, etc.
iv. Point Method: A quantitative point scale is used to evaluate jobs on a factor by factor
basis. It evaluates the compensable factors of each job. It uses points instead of pay rates.
Separate factors are scored to produce an overall point score for the job.

3. Compensation Surveys : They provide information on prevailing market rates. They

discover what other employers in the markets are paying for specific jobs. The data
obtained form such surveys serve as the benchmarks for comparing compensation levels.
They ensure external equity for the organization.

The sources of data for compensation surveys can be:

a. Published Surveys: Labor Department, Bureau of Statistics and employer association

publish surveys relating to wage and salary. Internet can also be a good source.

b. Consultants and Agencies: they can be hired to conduct surveys based on primary data.
However, survey methodology should be properly designed.

c. Advertisements and Applicants: Job advertisements indicate pay rates for various jobs

d. Informal Communication: it is with other employers and employee about compensation


4. Pricing Job

It involves grouping of different pay levels together into grades. It shows pay ranges within
each grade. Each grade has a defined maximum and minimum pricing. The pay structure
for a job is determined by:

Ranking through job evaluation process

Going market rates for similar jobs indicated through compensation surveys.
Legal factors and union pressures.
Creation of job grades.
It groups similar job for pay purpose

4. Pricing Job

Pay level




2. Job

Job ranking

Job grading


1. Job Analysis



Fig: Steps in establishing employee compensation

Compensation Management Practices in Nepal

1. Compensation management in Nepal is largely concerned with pay, benefits and services.
But most of the organizations lack pay policy.
2. The goal of compensation management is mainly legal compliance. Civil servants are paid
according to the provision of civil Act and regulation. Minimum wages and bonus are paid
to the workers according to Labor Act.
3. Till the advent of democracy in 1951 employers unilaterally decided wages rate. There
was no uniformity in wage structure.
4. Since 1996, Wages Committee formed by Government has been fixing minimum wages for
various categories of workers.
5. The pay level for job in Nepal is largely determined by market rates or legal provisions.
Ranking through job evaluation process is generally not done.
6. Legally gender discrimination is not allowed. But employers avoid hiring female workers.
7. Civil service Act has provided following compensation system for civil servants:
Pay and allowances as prescribed from time to time.
Pension or gratuity on retirement of the employee.
Disability allowances as prescribed.
One month extra salary for Dashain festival.
Life insurance.
Pension or gratuity for family in case of employees death.
10% of salary as provident fund.
Health insurance, travel insurance.

8. The Labor Act, 1992 has prescribed the following compensation system for workers and

Pay and allowances, minimum wages have been prescribed.

Welfare fund as prescribed.
Compensation for disability.
Gratuity, provident fund, medical expenses as prescribed.
Housing facilities by allocating 5% of gross profit.
Day care centers for the children of woman worker as prescribed.

9. Compensation management in Nepal has remained ineffective. The lack of professional

management in family oriented has contributed to this state of affair. It is hope that the

advent of global companies will have a positive demonstration effect on compensation

management in Nepalese organization in future years.

Unit IX: Discipline

Concept of Discipline

Discipline means a condition of obedience of norms of behavior by individuals. Therefore,

employee discipline is a condition of obedience of rules and regulations by the employees
of an organization. According to DeCenzo and Robbins, Discipline is a condition in the
organization when employees conduct themselves in accordance with the organizations
rules and standards of acceptable behavior. Discipline contributes to both working
efficiency and industrial peace. Some of the examples of employee indiscipline include:
remaining absent in the job without any information/justification, drinking on the job,
insubordination, stealing company property, fighting etc.

Types of Disciplinary Problems

There are dozens of disciplinary problems that may arise In an organization. However, for
simplicitys sake, it may be classified into four headings.

1. Attendance related problems

Late for work

Abuse of leave
Leaving work without permission
Habitual tardiness

The main causes for attendance related problems are goal conflicts, changing attitudes
towards employment ( e.g., flex-time concept), organization culture etc.

2. Job behavior related problems

Failure to obey safety rules
Carrying weapons on the job etc.

The main cause for job behavior related problems is the ambiguity surrounding the violation
of rules (e.g., taking an unnecessary sick-day leave).

3. Dishonesty related problems

Unauthorized selling of company property
Falsification of information
Destruction of company property etc.

Whatever the cause of such problems is, it is regarded as most serious disciplinary
problem, and may lead to even dismissal of the job. In the USA, a survey found that about
90 percent organizations dismiss their employees for theft and falsified information on the
job application.

Outside activities related problems

Involvement in unauthorized strikes

Criminal activities outside the job
Working for a competing organization
Criticizing management in public

Even if they are noticed outside the job they affect organizational performance and

deteriorate organizations goodwill and image.

Causes of Indiscipline (Disciplinary Problems)

Causes of indiscipline particularly in Nepalese context can be attributed to causes like

politicized trade union leadership, intra-union and inter-union rivalry and also management
tactics like deliberate delay in disciplinary procedure, imposition of penalties such as
transfer to an inconvenient place at a short notice, withholding of pay, maintenance of
confidential reports, insincerity and dishonesty of superiors, etc.

In most cases, the reasons could range anything from poor wages to, poor management
and the communication gaps between the union and management. The common causes of
indiscipline are as follows:

(i) Unfair Management Practices: Management sometimes indulges in unfair practices like:
Wage discrimination
Non-compliance with promotional policies and transfer policies
Discrimination in allotment of work
Defective handling of grievances
Payment of low wages
Delay in payment of wages
Creating low quality work life etc.

These unfair management practices gradually result in indiscipline.

(ii) Absence of Effective Leadership: Absence of effective leadership results in poor

management in the areas of direction, guidance, instructions etc. This in turn, results in

(iii) Communication Barriers: Communication barriers and absence of humane approach

on the part of superiors result in frustration and indiscipline among the workers. The
management should clearly formulate the policies regarding discipline. These policies
should be communicated and the policies should be consistently followed in the
organizations. The management should also be empathetic towards the employees.

(iv) Inadequate attention to personnel Problems: Delay in solving personnel problems

develops frustration among individual workers. The management should be proactive so
that there is no discontent among the workers. It should adopt a parental attitude towards
its employees.

However it should be noted that no relationship can continue for long if it is one sided.
What I am implying here is that the workers should also live up to their commitments. They
should be reasonable in their demands.

(v) Victimization: Victimization of subordinate also results in indiscipline. The management

should not exploit the workers. It is also in the long-term interest of the management to
take care of its internal customers or the employees.

(vi) Absence of Code of Conduct. This creates confusion and also provides chance for
discrimination while taking disciplinary action.

Process of Administering Discipline

Before starting the process of discipline, it is essential to hold a preliminary inquiry to know
whether or not there is sufficient evidence for indiscipline or misconduct. After this, the
following steps should be followed:

1. Issue of charge sheet. Once the evidence for indiscipline is identified, the management
should proceed to issue a charge sheet to the employee. Charge sheet is merely a notice of
the charge and provides the employee an opportunity to explain his conduct. Therefore,
charge sheet is generally known as a slow cause notice. In the charge sheet, each charge
should be clearly specified. There should be a separate charge for each allegation and
charge should not relate to any matter, which has already been decided upon.

2. Consideration of explanation. On getting the answer for the charge sheet served, the
explanation furnished should be considered and if it is satisfactory, no disciplinary action
needs to be taken. On the contrary when the management is not satisfied with the
employees explanation, it can proceed with full-fledged enquiry. (However, if the worker
admits the charge, the employer can warn him or award him punishment without further
3. Suspension pending enquiry. In case the charge is serious, a suspension order may be
served on the employee along with the charge sheet. In Nepal, the suspended worker is to
be paid a subsistence allowance equal to one-half of his wages for the first ninety days of
suspension and three-fourths of wages for the remaining period of suspension if the delay in
the completion of disciplinary proceedings is not due to the workers conduct.

4. Holding of enquiry. An enquiry officer should be appointed to hold the enquiry and a
notice to this effect should be given to the concerned worker. Principle of natural justice
must be followed. The worker should not be denied the chance of explaining himself. The
enquiry officer should give sufficient notice to the worker so that he may prepare to
represent his case and make submission in his defense. The enquiry officer should proceed
in a proper manner and examine witnesses. Fair opportunity should be given to the worker
to cross-examine the management witnesses.

The principles of natural justice can be summarized as follows:

Tell the person what he has done

Hear Him
Give Him a Chance to defend himself

On the conclusion of the enquiry, the enquiry officer should record his findings and the
reasons thereof. He should refrain from recommending punishment and leave it to the
decision of the appropriate authority. After all he is just an enquiry officer!!

5. Order of punishment. Disciplinary action can be taken when the misconduct of the
employee is proved. While deciding the nature of disciplinary action, the employees
previous record, precedents, effects of the action on other employees, etc, have to be

When the employee feels that the enquiry conducted was not proper and the action taken
unjustified, he must be given a chance to make appeal.

Disciplinary Actions

Disciplinary actions generally follow a typical sequence of four steps: oral warning, written
warning, suspension, and dismissal. However, suspension may be followed by two
additional steps, viz. demotion and pay cut, before the dismissal.

1. Oral warning

Informal oral warning is given for minor offences

Manager provides feedback and asks to correct the behavior
Employee is also given opportunity to explain

2. Written warning

Formal type of warning, which is given in writing

Though a chance is given for an employee to explain, a copy of written warning is sent to
HR department and becomes a part of employees personal file
Generally, the manager writes up the warning stating the problem, the rule that has
been violated, any acceptance by the employee to correct his/her behavior, and the
consequences from a recurrence of the undesirable behavior.
3. Suspension

It is a short lay off without pay. Sometimes partial payment can also be made for the
suspension period.
It generally follows written warning or given for serious violations
May be for one day to several weeks

4. Pay cut

Either cutting the existing pay or denying the annual increments/ grades.
It demoralizes the employees, not widely used in practice.
Pay cuts may be withdrawn if an employee alters his/her behavior.

5. Demotion

Reduction in both employment status and pay.

If suspension has not been effective and management strongly wants to avoid dismissing.

6. Dismissal :

Dismiss an employee permanently from a job

Ultimate disciplinary action for the most serious offences (like theft, drug abuse,
falsification of information in employment application etc.) or if all other disciplinary
actions fail
Dismissal may be costly, and even an employee may take a legal action

Examples of Progressive Disciplinary Actions

Nature of offence

1. Chronic absenteeism 1 2 3 4
2. Habitual tardiness 1 2 3 4
3. Leaving work without 2 3 4
4. Misconduct/insubordi 3 4
5. Drunk on the job 3 4
6. Possession of drug at 4
7. Gambling on the job 3 4
8. Safety rules violations 1 2 3 4
9 Stealing 4
1 Falsification of 4
0 information
1 Acts intending to harm 4
1 persons
1 Threats to management 4
1 Possession of guns at 4
3 work
1 Loafing (being 2 3 4
4 unoccupied) at work
Note: 1= Oral warning, 2=Written warning, 3= Suspension, 4= Dismissal

Unit X: Motivation

Concept of Motivation

The tem 'motivation' is derived from the word 'motive' which means the urge to do or not to
do something. Motives give direction to human behavior because they are
directed to satisfy particular needs or goals. According to Dale S. Beach, "Motivation can
be defined as a willingness to expend energy to achieve a goal or reward." Likewise,
according to M.D. Jucious, "Motivation, simply defined, is the act of stimulating
someone to take a desired course of action." To sum up, motivation is a psychological
process of stimulating people to work hard so as to attain the desired goals or objectives. It
is that intangible factor which inspires people to do something in the best possible way.

Simple Model of Motivation

The simple model or framework of motivation comprises of six steps as shown in the figure
given below. Motivation process as shown in figure begins with the individual
needs or deficiency. These needs may be psychological or physiological or
social etc. These deficiencies create tension and an individual searches for ways
to satisfy them. Then, a person engages on goal directed behavior and
performs accordingly. For instance, if an employee has strong desire to get
promotion (i.e., need), he or she engages in such behaviors as working for long
hours, meet deadlines, and perform the jobs best of his/her capabilities. Finally, an
individual receives either rewards or punishment (e.g., either gets promotion or not). After
that, he/she reassess the needs (e. g., what after promotion?), and follows the next cycle of
Figure: Simple model of motivation

Types of Motivation

Motivation can be classified in many ways. However, some of the main

typologies of motivation can be stated as under.

1. Positive motivation and Negative motivation

2. Extrinsic motivation and Intrinsic motivation
1. Positive motivation and Negative motivation :
Positive motivation concerns with influencing the workers in positive way. It is also
known as 'carrot approach'. Under this, manager provides various financial
and non financial incentives in order to effectively direct the subordinates
towards the accomplishment of organizational goals. Increment in salary and wages,
promotion, rewards, bonus, gratuity, personal and group insurance, medical facilities,
vehicle and accommodation facilities are the examples of financial incentives. Non
financial incentives include praise or appreciation of work done, workers'
participation in management, opportunity for growth, justice, recognition,
delegation of authority, job stability etc.

Negative motivation concerns with influencing the behavior of workers through

negative approach. It is also known as 'stick approach'. Negative motivation may
involve both monetary and non-monetary punishments such as fine, penalties,
reduction of remuneration, devotion, group rejection, disciplinary action etc.
It is, generally, not advisable in organizations as it may lead to high employee
turnover and poor industrial relations. However, negative motivational approach cannot
always be avoided.

2. Extrinsic motivation and Intrinsic motivation

Motivation caused due to extrinsic reward is known as extrinsic motivation.
An extrinsic reward is anything received from another person. Extrinsic
rewards include pay rises, bonuses, praise or some other form of recognition. On the
other hand, intrinsic motivation is a motivation caused due to self-generated
or intrinsic rewards. Intrinsic rewards include the enjoyment of learning a new task, a
feeling of accomplishment from performing a job well, a sense of personal
usefulness, a sense of pride for being a part of a team or an organization etc.

Importance of Motivation

Motivation is such an intangible factor which stimulates people to perform their jobs best of
their capabilities. The importance of motivation can further be highlighted from the
following points.

1. High morale and job satisfaction of employees

2. Stability of workforce or low employee turnover
3. Best remedy for resistance to change
4. Goodwill of organization
5. Minimizes supervision cost
6. Minimizes disputes, strikes and other disciplinary problems
7. Optimum utilization of human potential
8. Promotes quality of work
9. Enhance productivity and profitability

Thus motivation is important for both the individuals and the organization. In fact, talented
and motivated people are only the true competitive advantage for modern organizations.

Tools/ Techniques of Motivation

There are a number of financial and non-financial tool or techniques of motivating people at
work. However, the important techniques can be given as:

1. Motivation through rewards

2. Motivation through QWL
3. Motivation through appropriate job design

1. Motivation through rewards : Reward can broadly be defined as the material and/or
psychological payoffs for performing tasks in the workplace. It may be financial or non-
financial. From another perspective, it can be extrinsic or intrinsic. The rewards or payoffs
granted to the individuals by their organization are extrinsic rewards where as the rewards
which are self-generated or experienced or felt internally are the intrinsic
rewards. Money, fringe benefits, promotion, status, praise etc. are the examples of
extrinsic rewards, and a sense of accomplishment, self-esteem, self-actualization etc are the
examples of intrinsic rewards. Note that, whether the reward is intrinsic or
extrinsic it leads to high motivation and the motivation leads to better performance
of jobs. Though there are a variety of rewards to motivate people at the workplace,
some of the most commonly employed organizational rewards can be explained
under the following heads.

i. Pay rises
ii. Promotions
iii. Profit sharing plan (e.g. bonus)
iv. Benefits (e. g. pension, insurance coverage, medical.)
v. Special awards and certificates. (e.g. long service award,
outstanding performance award etc.)

2. Motivation through QWL : Quality of work life (QWL) is an integrated approach to

employee needs, well being, participation and better performance of jobs. It is
a mechanism by which employees get opportunity to actively participate in decision
making, contribute to organizational goals, and obtain recognition and rewards. QWL
programs/mechanisms create a workplace that enhances quality of employees
work life. QWL mechanisms generally have the following essential elements.

1. Adequate and fair compensation

2. Safe and healthy working environment
3. Opportunity for personal growth and security
4. Social relevance of work
5. A work that provides personal freedom, identity, rights and dignity etc.

Following are the important mechanisms of QWL.

i. Quality circle (QC)

Quality Circles are small groups of employees or workers (7 to 12) who meet
regularly (weekly in most cases) to solve their work-related problems (e.g.
quality, quantity, cost).QCs give the employee opportunity for involvement,
social need satisfaction, participation in work improvement and opportunity for
growth. QC members assume responsibility to identify and analyze problems
on their work areas. Therefore, circle activities are often carried out on breaks and
lunch times too. Members continue to think about the points raised in the meetings.

QCs are instrumental mainly to those organizations who are more concerned with quality.
For example, the American Aerospace industry has used QCs successfully. This industry is
more concerned with quality because one small error can have a devastating
effect on human lives. Likewise, Toyo Kogyo, maker of Mazda, alone has 1,800 QCs.

An important advantage of QC is the sense of autonomy experienced by its members. This

gives them a sense of pride and satisfaction when some of these
solutions are implemented and publicized. It fulfills the higher order needs, e.g., social
and esteem needs, and provides a quality of work life. And the management also gets
valuable suggestions for the improvements in process and products. However,
management has to provide commitment and active support for its effectiveness.

ii. Employees share on ownership

The participation of employees in decision making can be increased by making them a part
of organizations management. Many organizations today have planned to distribute their
shares among employees. Firstly, the ownership feeling motivates them to work harder and
smarter. Secondly, they can participate in crucial decision making of organization through
shareholders AGM.

iii. Flexible work schedules

The fix work schedule (for example, 9:00 am to 5:00pm) makes it difficult for employees to
do their personal work like going to bank, visiting childrens school, paying the utility bills
and so on. The emerging concept is that employees should be given freedom to choose
their own work time. It increases job satisfaction, motivation and their commitment to the
organization. So, under this mechanism, an employee can come early and
leave early, come late and leave late, and can come early, take a break in between
working hours, and leave late.

iv. Self-managed work teams

This concept is guided by the idea that self-management is the best management. Self-
management promotes creativity, motivation and productivity. Self-managed work
teams are work groups in which members perform many of the functions
usually reserved to management, such as planning, scheduling, budgeting,
directing, and evaluating. such teams have clearly defined inputs and outputs. Each
employee is trained to do many of the groups tasks in order to provide flexibility and
increase productivity. Self-managed work teams measure their own performance by such
standards as service quality, meeting scheduled deliveries, productivity, and cost control.
Thus, each member has the increasing level responsibility at each stage. These days
such teams are considered to be the best mechanism for empowering
employees and to encourage their participation in work-related activities.

3. Motivation through appropriate job design

Different techniques of job design also cause intrinsic motivation to employees. Sometimes,
it is more powerful than the extrinsic motivation techniques. Some of the main techniques
of motivating people through appropriate job design include:

i. Job enlargement

Jon enlargement means increasing the scope of a job through extending the range of its job
duties and responsibilities. This contradicts the principles of specialization and the division
of labor whereby work is divided into small units, each of which is performed repetitively by
an individual worker. Some motivational theories suggest that the boredom and alienation
caused by the division of labor can actually cause efficiency to fall. Thus, job enlargement
seeks to motivate workers through reversing the process of specialization. A
typical approach might be to replace assembly lines with modular work; instead of an
employee repeating the same step on each product, they perform several tasks on a single

ii. Job enrichment

Job enrichment is an attempt to motivate employees by giving them the opportunity to use
the range of their abilities. It is an idea that was developed by the American psychologist
Frederick Herzberg in the 1950s. It can be contrasted to job enlargement
which simply increases the number of tasks without changing the challenge. As such job
enrichment has been described as 'vertical loading' of a job, while job enlargement is
'horizontal loading'. An enriched job should ideally contain:

A range of tasks and challenges of varying difficulties (Physical or Mental)

A complete unit of work - a meaningful task

Feedback, encouragement and communication

iii. Job rotation

Job rotation is another tool of motivating people at work. It can also be regarded as
an approach to management development where an individual is moved through a
schedule of assignments designed to give him or her a breadth of exposure to the entire
operation. Job rotation is also practiced to allow qualified employees to gain
more insights into the processes of a company, and to reduce boredom and increase
job satisfaction through job variation.