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ICICI Bank is India's second-largest bank with total assets of

Rs. 3,446.58 billion (US$ 79 billion) at March 31, 2007 and profit after tax

of Rs. 31.10 billion for fiscal 2007. ICICI Bank is the most valuable bank in

India in terms of market capitalization and is ranked third amongst all the

companies listed on the Indian stock exchanges in terms of free float market


The Bank has a network of about 950 branches and 3,300 ATMs in

India and presence in 17 countries. ICICI Bank offers a wide range of

banking products and financial services to corporate and retail customers

through a variety of delivery channels and through its specialised

subsidiaries and affiliates in the areas of investment banking, life and non-

life insurance, venture capital and asset management.

The Bank currently has subsidiaries in the United Kingdom, Russia

and Canada, branches in Singapore, Bahrain, Hong Kong, Sri Lanka and

Dubai International Finance Centre and representative offices in the United

States, United Arab Emirates, China, South Africa, Bangladesh, Thailand,

Malaysia and Indonesia. Our UK subsidiary has established a branch in


ICICI Bank's equity shares are listed in India on Bombay Stock

Exchange and the National Stock Exchange of India Limited and its

American Depositary Receipts (ADRs) are listed on the New York Stock

Exchange (NYSE)


ICICI Bank was originally promoted in 1994 by ICICI Limited, an

Indian financial institution, and was its wholly-owned subsidiary. ICICI's

shareholding in ICICI Bank was reduced to 46% through a public offering of

shares in India in fiscal 1998, an equity offering in the form of ADRs listed

on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura

Limited in an all-stock amalgamation in fiscal 2001, and secondary market

sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI

was formed in 1955 at the initiative of the World Bank, the Government of

India and representatives of Indian industry.

The principal objective was to create a development financial

institution for providing medium-term and long-term project financing to

Indian businesses. In the 1990s, ICICI transformed its business from a

development financial institution offering only project finance to a

diversified financial services group offering a wide variety of products and

services, both directly and through a number of subsidiaries and affiliates

like ICICI Bank. In 1999, ICICI become the first Indian company and the

first bank or financial institution from non-Japan Asia to be listed on the


After consideration of various corporate structuring alternatives

in the context of the emerging competitive scenario in the Indian banking

industry, and the move towards universal banking, the managements of

ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI

Bank would be the optimal strategic alternative for both entities, and would

create the optimal legal structure for the ICICI group's universal banking


The merger would enhance value for ICICI shareholders through the

merged entity's access to low-cost deposits, greater opportunities for earning

fee-based income and the ability to participate in the payments system and

provide transaction-banking services.

The merger would enhance value for ICICI Bank shareholders

through a large capital base and scale of operations, seamless access to

ICICI's strong corporate relationships built up over five decades, entry into

new business segments, higher market share in various business segments,

particularly fee-based services, and access to the vast talent pool of ICICI

and its subsidiaries.

In October 2001, the Boards of Directors of ICICI and ICICI Bank

approved the merger of ICICI and two of its wholly-owned retail finance

subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital

Services Limited, with ICICI Bank.

The merger was approved by shareholders of ICICI and ICICI Bank

in January 2002, by the High Court of Gujarat at Ahmedabad in March

2002, and by the High Court of Judicature at Mumbai and the Reserve Bank

of India in April 2002. Consequent to the merger, the ICICI group's

financing and banking operations, both wholesale and retail, have been

integrated in a single entity.

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Board Members

Mr. N. Vaghul, Chairman

Mr. Sridar Iyengar
Mr. Lakshmi N. Mittal
Mr. Narendra Murkumbi
Mr. Anupam Puri
Mr. Vinod Rai
Mr. M.K. Sharma
Mr. P.M. Sinha
Prof. Marti G. Subrahmanyam
Mr. T.S. Vijayan
Mr. V. Prem Watsa
Mr. K.V. Kamath.
---- Managing Director and CEO
Ms. Chanda Kochhar
----Deputy Managing Director
Dr. Nachiket Mor
----Deputy Managing Director
Ms. Madhabi Puri-Buch
----Executive Director
Mr. V. Vaidyanathan
----Executive Director



HRM is concerned with the people dimension in management. Since

every organization is made of people, acquiring their services, developing

their skills, motivating them to higher to higher levels of performance and

ensuring that they continue to maintain their commitment to the

organization are essential to achieving organizational objectives. This is true

type of organization- government, business, health, recreation, or social



Human Resource Management is a management function that

helps manager to recruit, train, select and develop members for an

organization. Obviously, HRM is concerned with the dimension of people’s

in organization.

1 HRM involves the application of management function and

principle. The principles are applied to developing, acquisition, maintaining

and remunerating employees in organizations.

2 Decisions made by HRM must influence the effectiveness of

organization. Effectiveness of an organization must result in betterment of

services to customers in the form of high quality products supplied at

reasonable costs.



The primary objective of HRM is to ensure availability of a competent

and willing work force to an organization.

Societal Objectives

To be ethical and socially responsible to the needs and

challenges of the society while minimizing the negative impact of such

demands upon the organization.

Organizational Objectives

To recognize the role of HRM in bringing about organizational

effectiveness. HRM is department which exsists to serve the rest of


Functional Objectives

To maintain the department’s contribution at a level appropriate

to the organization’s needs. Resources are wasted when HRM is either more

or less sophistical to suit the organization’s demands. The department’s level

of services must be tailored to fit the organization it serves.

In order to realize the objectives stated above, HRM must perform

certain functions. These functions have been outlining the scope of HRM.

Generally, it may be stated there is a correlation between the objectives and

the functions.

In other words, some functions help realize specific objectives. For

example, the organizational objective is sought to be met by discharging

such functions such as HR planning, recruitment and selection, training and

development and performance appraisal. Similarly, the personal objective is

sought to be realized through such functions as remuneration, assessment

and the like.


The scope of HRM is indeed vast. All major activities in working life

of an employee that is from the time he or she, joins the organization till

they leave it.

This all comes under the purview of HRM. Specifically, the activities

included are- HR Planning, Job Analysis and Recruitment and Selection, and

Orientation and Placement, Training and Development, Performance

Appraisal and Job Evaluation, Employee and Executive Remuneration,

Motivation and Communication, Welfare, Safety and Health, Industrial

Relation and the like.

HRM is categorized under

1. Introduction to HRM

2. Employee Hiring

3. Employee and Executive Remuneration

4. Employee Motivation

5. Employee Maintenance

6. Industrial Relation and

7. Prospects of HRM


People consider it to be a personal trait – that is some have it some

don’t. In practice inexperienced managers often label people who lack

motivation as lazy. But it isn’t true. What we know is that motivation is the

result of the interaction of the individual and the situation. Individuals differ

in their motivational drive.

“Employee motivation has been gaining ground and taken its due place in

management theories and practices as we are progressing from industrial era

to an era of knowledge based services. In this transition phase and the time

to come, employees are the most important factor, even eclipsing monetary

capital in the process. Personnel hold the key to success and it is level of

motivation and employees’ endeavor which is going to be the decisive

factor, differentiating between average and great organizations. It is people,

who are working for their companies , who will be in instrumental in writing

the future of nations and will be responsible for their economic

achievement. Corporation are being nurtured and strengthened by quality of

their manpower and motivation is pivotal in that.”

For example:

A student may find reading a 2o pages note book very tiring, but the same

student may be able to read 150 pages of Harry Potter just in one day. For

the student the change in motivation is driven by the situation.

Thus we can say that the level of motivation varies both between

individuals and within individuals at different times.


Motivation is defined as the processes that account for an individual’s

intensity, direction, and persistence of effort towards attaining a goal.

General motivation is considered with efforts towards any goal, but we

narrow our focus on organizational goals.

Key elements are:

Intensity which is considered with how hard a person tries. This is the

element most of us focus on when we talk about motivation.

However, high-intensity is unlikely to lead to favorable job performance

outcomes unless the effort is channeled in a direction that benefits the

organization. Therefore, we have to consider the quality of efforts as well as

its intensity. Effort that is directed towards and consistent with the

organizations goals is the kind of effort that we should be seeking.

Finally, motivation has a persistence dimension. This is a measure of

how long a person can maintain their effort. Motivated individuals stay with

a task long enough to achieve their goal.

“People are inherently lazy”. This isn’t true. All people are not inherently

lazy; and ‘laziness’ is more a function of the situation than an inherent

individual character.

If this statement is meant to imply that all people are inherently lazy,

the evidence strongly indicates the contrary, many people today suffer from

the opposite affliction-they are overly busy, overworked, and suffer from

over exertion. Whether externally motivated or internally driven, a good

portion of the labour force is anything but lazy.

Managers frequently draw the conclusion that people are lazy from

watching some of their employees, who may be lazy at work. But these

employees are often quite industrious in one or more activities off the job.

People’s need structures differ. Unfortunately, for employers, works often

ranks low in its ability to satisfy individual needs. So the same employee

who shirks responsibility on the job may work obsessively on the

conditioning and antique car, maintaining an award-winning garden,

perfecting bowling skills.


The 1950s were a fruitful period in the development of

concepts. Three specific theories were formulated during this period, which

although heavily attacked and now questionable in terms of validity, are probably

still the best-known explanations for employee motivation. These are the

hierarchy of needs theory, Theories X and Y, and the two-factor theory.

These theories represent a foundation from which contemporary

theories have grown, and practicing managers still regularly use these theories

and their terminology in explaining employee motivation.

Hierarchy of Needs Theory

It’s probably safe to say that the most well-known theory of motivation is

Abraham Maslow’s hierarchy of needs. He hypothesized that within every

human being there exists a hierarchy of five needs.

These needs are:

1. Physiological: - Includes hunger, thirst, shelter, sex, and other bodily needs

2. Safety: - Includes security and protection from physical and emotional


3. Social: - Includes affection, belongingness, acceptance and friendship

4. Esteem: - Includes internal esteem factors such as self-respect, autonomy


achievement; and external esteem factors such as status, recognition, and


5. Self-actualization: - The drive to become what one is capable of


includes growth, achieving one’s potential, and self-fulfillment


As each of these needs becomes substantially satisfied, the next need becomes

dominant. In terms of the figure, the individual moves up the steps of the


From the standpoint of motivation, the theory would say that although
no need is fully gratified, a substantially satisfied need no longer motivates.

So if you want to motivate someone, according to Maslow’s, you need to

understand what level of the hierarchy that person is currently on and focus on

satisfying the needs at or above that level.

Maslow separated the five needs into higher and lower orders. Physiological

and safety needs were described as lower-order and social, esteem, and self-

actualization as higher-order needs. The differentiation between the two orders

was made on the premise that higher-order needs are satisfied internally (within

the person), whereas lower-order needs are predominantly satisfied externally (by

things such as pay, union contracts, and tenure).

Maslow’s need theory has received wide recognition, particularly among

practicing managers.

This can be attributed to the theory’s intuitive logic and ease of understanding.

Unfortunately, however, research does not generally validate the theory.

Maslow provided no empirical substantiation, and several studies that sought

to validate the theory found no support for it.

Theory X and Theory Y

Douglas McGregor proposed two distinct views of human beings: one

basically negative, labeled Theory X, and the other basically positive, labeled

Theory Y. After viewing the way the managers dealt with employees, McGregor

concluded that a manager’s view of the nature of human beings is based on a

certain grouping of assumptions and that he/she tends to mold his/her behavior

toward employees according to these assumptions.

Under Theory X, the four assumptions held by managers are:

1. Employees inherently dislike work and, whenever possible,

will attempt to

avoid it.

2. Since employees dislike work, they must be coerced,

controlled or threatened

with punishment to achieve goals.

3. Employees will avoid responsibilities and seek formal

direction whenever


4. Most workers place security above all other factors associated

with work and

will display little ambition.

In contrast to these negative views about the nature of human beings,

McGregor listed the four positive assumptions that he called Theory Y:

1. Employees can view work as being as natural as rest or play.

2. People will exercise self-direction and self-control if they are committed to

the objectives.

3. The average person can learn to accept, even seek, responsibility.

4. The ability to make innovative decisions is widely dispersed throughout


population and is not necessarily the sole province of those in management


What are the motivational implications if you accept McGregor’s analysis?

The answer is best expressed in the framework presented by Maslow. Theory

X assumes the lower-order needs dominate individuals. Theory Y assumes

that higher-order needs assume dominate individuals.

McGregor himself held to the belief that Theory Y assumptions were more

valid than Theory X. Therefore, he proposed ideas such as participative

decision-making, responsible and challenging jobs, and good group relations

as approaches that would maximize an employee’s job motivation.

Two-Factor Theory
The two-factor theory (sometimes also called as motivation-hygiene theory)

was proposed by psychologist Frederick Hertzberg. In the belief that an

individual’s relation to work is basic and that one’s attitude toward work can

very well determine success or failure, Hertzberg investigated the question,

“What do people from their jobs?”

He asked people to describe, in detail, situations in which they felt extremely

good or bad about their jobs. These responses were then tabulated and


According to Hertzberg, the factors leading to job satisfaction are separate

and distinct from those that lead to job dissatisfaction. Therefore, managers

who seek to eliminate factors that can create job dissatisfaction may bring

about peace but not necessarily motivation.

They will be placating their workforce rather than motivating them. As a

result, conditions surrounding the job such as quality of supervision, pay,

company policies, physical working conditions, relations with others, and

job security were characterized by Hertzberg as hygiene factors.


ERG theory

Clayton Alderfer has reworked Maslow’s need hierarchy to align it more

closely with the empirical research. His revised need hierarchy is labeled ERG

theory. Alderfer argues that there are three groups of core needs-Existence,

Relatedness, and growth—hence, the label ERG theory.

The existence group is concerned with providing our basic material

existence requirements. They include the items that Maslow considered to be

physiological and safety needs. The second group of needs are those of

relatedness—the desire we have for maintaining important interpersonal


These social and status desires require interaction with others if they are to

be satisfied, and they align with Maslow’s social need and the external

component of Maslow’s esteem classification. Finally, Alderfer isolates growth

needs—an intrinsic component from Maslow’s esteem category and the

characteristics included under self-actualization.

In contrast to hierarchy of needs theory, the ERG theory demonstrates that

(1) More than one need may be operative at same time, and

(2) If the gratification of a higher-level need is stifled, the desire to satisfy a

lower-level need increases.

ERG theory also contains a frustration-regression dimension. ERG theory

counters by noting that when a higher-order need level is frustrated, the

individual’s desire to increase a lower-level need takes place.

McClelland’s Theory of needs

McClelland’s theory of needs was developed by David McClelland and his

associates. The theory focuses on three needs: achievements, power, and

affiliation. They are defined as follows:

Need for achievement:

The drive to excel, to achieve in relation to a set of standards, to strive to


Need for power:

The need to make others behave in a way that they would not have behaved


Need for affiliation:

The desire for friendly and close interpersonal relationships.

Some people drive to succeed.

They are striving for personal achievements rather than rewards of success
as per work done.

They have a desire to do something better or more efficiently than it has

been done before. This drive is the achievement need.

From research into the achievement need, McClelland found that high
achievers differentiate themselves from others by their desire to do things better.

Goal-Setting theory
Gene Broadwater coach of the Hamilton high school cross-country team

gave his squad these last words before they approached the line for the league

championship race: “each one of you is physically ready. Now, get out there and

do your best. No one can ever ask more of you than that.”

The research on goal setting theory addresses these issues, and the findings,

as you will see, are impressive in terms of the effect that goal specificity,

challenge, and feedback have no performance.

In late 1960s, Edwin Locke proposed that intentions to work toward a goal

are a major source of work motivation. That is, goal tells an employee what needs

to be done and how much effort need to be expended.

The evidence strongly supports the value of goals. More to the point, we can

say that specific goals increase performance; that difficult goals, when accepted,

result in higher performance than do easy goals; and that feedback leads to higher

performance than does no feedback.

Goal-setting theory presupposes that an individual is committed to the goal;

that is, is determined not to lower or abandon the goal. This is most likely to

occur when goals are made public, when the individual has an internal locus of

control, and when the goals are self-set rather than assigned.

Equity Theory

It means individuals compare their job inputs and outcome with those of

others and then respond to eliminate any inequities.

This theory is based on the example of Ms Jane Pearson who graduated from

the state university with a degree in accounting and working with 'G5' a public

accounting firm with a monthly salary of $4,550.

However Jane’s motivational level has dropped dramatically due to the

hiring of the fresh college graduate out of the state university who lacks the one

year experience which Jane has gained and was paid $4,800 which was more than

Jane’s salary.

In this case Jane’s situation illustrates the role that equity plays in

motivation. Employees make comparisons of their job inputs and outcomes relative

to those of others.

In other words if we perceive our ratio to be equal to that of the relevant

others with whom we compare ourselves, a state of equity is said to be exist. When

we see the ratio as unequal we experience equity tension and when over rewarded,

the tension creates guilt.

The referent that an employee selects adds to the complexity of equity

theory. There are 4 referent comparisons that an employee can use:

1. Self-inside.
2. Self-outside.

3. Other-inside.
4. Other-outside.

Which referent an employee chooses will be influenced by the information

the employee holds about referents as well as by the attractiveness of the

referent. Employees with short tenure in their current organization tend to

have little information about others and on the long tenure rely more heavily

on coworkers for comparison.

Equity theory is also related with the pay of the employees. Thus on these

grounds, the theory establishes the following 4 propositions related to

in equitable pay:

1. Given payment on time, over rewarded employees will produce more than

will equitably paid employees.

2. Given payment by quantity of production, over rewarded employees will

produce fewer, but higher-quality, units than equitably paid employees.

3. Given payment on time, under rewarded employees will produce poorer

quality of output.

5. Given payment by quality of production, under rewarded employees will

produce a large no of low-quality units in comparison with equitably paid


These propositions have generally been supported with few minor


Conclusion of equity theory:-

The equity theory demonstrates that, for most employees, motivation is

influenced significantly by relative rewards as well by absolute rewards. But

some key issues related to this theory are still unclear.

Expectancy Theory:-
Currently, one of the most widely accepted explanations of motivation is

victor vroom's Expectancy Theory. Although it has its critics, most evidence is

supportive of the theory.

"The strength of a tendency to act in a certain way depends on the strength

of an expectation that the act will be followed by a given outcome and on the

attractiveness of that outcome to the individual".

In more practical terms, expectancy theory says that an employee will be

motivated to accept a high level of pressure when he or she believes that effort will

lead to a good performance appraisal; which will lead to good org rewards such as

bonus, a salary increase, or a promotion; and that the rewards will satisfy the

employee's personal goals.

The theory therefore focuses on three relationships:-

1. Effort performance relationship.

2. Performance-reward relationship.

3. Rewards-personal goals relationship.

Thus expectancy theory helps to explain why lot of workers aren't motivated
on their job and do only the minimum necessary to get by.

In summary, the key to expectancy theory is the understanding of an

individual's goals and the linkage b/w effort and performance, between

performance and rewards and, finally, between the rewards and individual goal


As a contingency model, expectancy theory recognizes that there is no

universal principle for explaining everyone's motivation.

In addition, just because we understand what needs a person seeks to satisfy

does not ensure that the individual perceives high performance as necessarily

leading to the satisfaction to these needs.

Because of complications like methodological, criterion, and measurement

problems, this theory is viewed with caution.

Myth or Science?

Everyone wants a challenging job?

This statement is false. In spite of all the attention focused by the media,

academics and social scientists on human potential and the needs of individuals,

there is no evidence to support the vast majority of workers want challenging jobs.

Some individuals prefer highly complex and challenging jobs; other prospers in

simple, reutilized work.

The individual-difference variable that seems to gain the greatest support for

explaining who prefers a challenging job and who doesn’t is the strength of an

individual’s higher-order needs.

Individuals with high growth needs are more responsive to challenging

work. But what percentage of rank-and-file workers actually desire higher-order

need satisfaction and will respond positively to challenging jobs? No current data

are available, but a study from the 1970s estimated the figure at about 15%. Even

after adjusting for changing work attitudes and the growth in white-collar jobs, it

seems unlikely that the number today exceeds 40%

The strongest voice advocating challenging jobs has not been workers-it’s

been professors, social-science researchers, and journalists. Professor’s researchers

and journalists undoubtedly made their career choices, to some degree, because

they wanted jobs that gave them their autonomy, identity, and challenge. That, of

course, is their choice. But for them to project their needs onto the workforce in

general is presumptuous.

Not every employee is looking for a challenging job. Many workers meet

their higher-order needs off the job. There are 168 hours in every individual’s

week. Work rarely consumes more than 30% of this time. That leaves considerable

opportunity, even for individuals with strong growth needs, to find higher-order

need satisfaction outside the workplace.

Professional Employees are more difficult to motivate..

Professional employees are different than your average employees. and

they’re more difficult to motivate. Why? Because professionals don’t respond to

the same stimuli that non-professionals do.

Professional like engineers, accountants, lawyers, nurses, and software

designers are different from nonprofessionals. They have strong and a long term

commitment to their field of expertise.

Their loyalty is more towards their profession than to their employer. And

typical rewards, like money and promotions, are rarely effective in encouraging

professionals to exert high levels of effort.

Usually they tend to be well paid already and they enjoy what they do. For

instance, professionals are not typically anxious to give up their work to take on

managerial responsibilities.

They’ve have invested a great deal of time and effort in developing their

professional skills. They’ve have typically gone to professional schools for years

and undergone specialized training to build their proficiencies.

They also invest regularly - in terms of reading, taking courses, attending

conferences, and the like - to keep their skills current. Moving into management

often means cutting off their ties to their profession, losing touch with the latest

advances in their field and having to let the skills that they’ve spent years

developing become obsolete.

This loyalty to the profession and less interest in typical organizational

rewards makes motivating professionals more challenging and complex.

So how do you motivate professionals?

Provide them with ongoing challenges projects. Give them autonomy to

follow their interests and allow them to structure their work in ways they find

productive. Provide them with lateral moves that allow them to broaden their


Reward them with educational opportunities – training, workshops, and

attending conferences – that allow them to keep current in their field. In addition

reward them with recognition. And consider creating alternative career paths that

allow them to earn more money and status, without assuming managerial


Why do we need motivated employees? The answer is survival (Smith,

1994). Motivated employees are needed in our rapidly changing workplaces.

Motivated employees help organizations survive. Motivated employees are more

productive. To be effective, managers need to understand what motivates

employees within the context of the roles they perform. Of all the functions a

manager performs, motivating employees is arguably the most complex. This is

due, in part, to the fact that what motivates employees changes constantly (Bowen

& Radhakrishna, 1991). For example, research suggests that as employees' income

increases, money becomes less of a motivator (Kovach, 1987). Also, as employees

get older, interesting work becomes more of a motivator.

The employees who work for your company are naturally motivated.
All you

need to do is to utilize their natural ability, which you can do without spending a

dime. That's right. No money. In fact, money can actually decrease an employee's

motivation and performance. The first step in utilizing your employees' natural

abilities is to eliminate your organization's negative practices that zap away their

natural motivation. The second step your organization can take is to develop true

motivators, which can spark all your employees into being motivated. By

decreasing negative zapping demotivators and by adding true motivators, you will

tap into your employees' natural motivation. Your employees' natural motivation

relies on the fact that all people have human desires for affiliation, achievement,

and for control and power over their work. In addition, they have desires for

ownership, competence, recognition, and meaning in their work.

But there are several ways that management unwittingly demotivates

employees and diminishes, if not outright destroys, their enthusiasm.
Many companies treat employees as disposable. At the first sign of business
difficulty, employees-who are usually routinely referred to as "our greatest
asset"-become expendable.
Employees generally receive inadequate recognition and reward: About half
of the workers in our surveys report receiving little or no credit, and almost
two-thirds say management is much more likely to criticize them for poor
performance than praise them for good work. Management inadvertently
makes it difficult for employees to do their jobs. Excessive levels of required
approvals, endless paperwork, insufficient training, failure to communicate,
infrequent delegation of authority, and a lack of a credible vision contribute
to employees' frustration. Some common myths about employee motivation
Myth Number One:
"I can motivate people"
Not really -- they have to motivate themselves. You can't motivate people
anymore than you can empower them.

Employees have to motivate and empower themselves. However, you
can set up an environment where they best motivate and empower
The key is knowing how to set up the environment for each of your

Myth Number Two:

"Money is a good motivator"
Not really. Certain things like money, a nice office and job security can help
people from becoming less motivated, but they usually don't help people to
become more motivated.
A key goal is to understand the motivations of each of your

Myth Number Three:

"Fear is a damn good motivator"
Fear is a great motivator -- for a very short time. That's why a lot of yelling
from the boss won't seem to "light a spark under employees" for a very long

Myth Number Four:

"I know what motivates me, so I know what motivates my employees"
Not really. Different people are motivated by different things. I may be
greatly motivated by earning time away from my job to spend more time my
family. You might be motivated much more by recognition of a job well
People are not motivated by the same things.

Again, a key goal is to understand what motivates each of your employees.

Myth Number Five:

"Increased job satisfaction means increased job performance"
Research shows this isn't necessarily true at all. Increased job satisfaction
does not necessarily mean increased job performance. If the goals of the
organization are not aligned with the goals of employees, then employees
aren't effectively working toward the mission of the organization.

Myth Number Six:

"I can't comprehend employee motivation -- it's a science"
Nah. Not true. There are some very basic steps you can take that will go a
long way toward supporting your employees to motivate themselves toward
increased performance in their
jobs. (More about these steps is provided later on in this article.)
Basic Principles to be kept in mind…while working on "Employee
Motivating employees starts with motivating yourself: It's amazing

how, if you hate your job, it seems like everyone else does, too. If you are

very stressed out, it seems like everyone else is, too. Enthusiasm is

contagious. If you're enthusiastic about your job, it's much easier for others

to be, too. Also, if you're doing a good job of taking care of yourself and

your own job, you'll have much clearer perspective on how others are doing

in theirs. A great place to start learning about motivation is to start
understanding your own motivations.
The key to helping to motivate your employees is to understand what
motivates them. So what motivates you? Consider, for example, time with
family, recognition, a job well done, service, learning, etc.
How is your job configured to support your own motivations?
What can you do to better motivate yourself? Always work to align goals of
the organization with goals of employees:
As mentioned above, employees can be all fired up about their work
and be working very hard. However, if the results of their work don't
contribute to the goals of the organization, then the organization is not any
better off than if the employees were sitting on their hands -- maybe worse
off! Therefore, it's critical that managers and supervisors know what they
want from their employees.
These preferences should be worded in terms of goals for the
organization. Identifying the goals for the organization is usually done
during strategic planning. Whatever steps you take to support the motivation
of your employees (various steps are suggested below), ensure that
employees have strong input to identifying their goals and that these goals
are aligned with goals of the organization.
(Goals should be worded to be "SMARTER". More about this later on
Key to supporting the motivation of your employees is understanding
what motivates each of them: Different things motivate each person.
Whatever steps you take to support the motivation of your employees, they
should first include finding out what it is that really motivates each of your

employees. You can find this out by asking them, listening to them and
observing them.
(More about this later on below.)
Recognize that supporting employee motivation is a process, not a task:
Organizations change all the time, as do people. Indeed, it is an ongoing
process to sustain an environment where employees can strongly motivate
themselves. If you look at sustaining employee motivation as an ongoing
process, then you'll be much more fulfilled and motivated yourself.
Support employee motivation by using organizational systems (for
example, policies and procedures) -- don't just count on good intentions:
Don't just count on cultivating strong interpersonal relationships with
employees to help motivate them. The nature of these relationships can
change greatly, for example, during times of stress.
Instead, use reliable and comprehensive systems in the workplace to
help motivate employees. For example, establish compensation systems,
employee performance systems, organizational policies and procedures, etc.,
to support employee motivation. Also, establishing various systems and
structures helps ensure clear understanding and equitable treatment of

Process of Employee Motivation

Personalized Motivation.
As per, Sullivan, a professor of management at San Francisco State
University, The need to identify employees' critical motivators is important
because, simply put, most managers are terrible at motivating their
employees. When managers don't know what motivates an individual, they

mistakenly assume that all workers want the same thing, or they make
random guesses about what motivates an individual. Both are serious errors.
If we expect managers to successfully motivate their individual
employees, human resources professionals must accept the responsibility of
providing managers with a list of what motivates and frustrates a new or
recently transferred employee. I have found that even "bad" managers, when
they are educated about what excites and challenges an individual worker,
can become "good" managers in as short as a month.
Just ask your employees the following questions: What would you
like more of?
That is, what are the elements of any job that excite, challenge and motivate
you to be more productive?
What would you like less of?
That is, what are the elements of any job that frustrate you or inhibit your
How would you like to be managed?
Help me understand the best approach to get the most productivity out of
you. Why did you quit your last few jobs?
Help me understand why you quit, so that I can avoid repeating the same
mistakes that your previous managers made.
This will help a lot in motivating your employees towards the desired goal.

Admit to yourself (and to an appropriate someone else)

if you don't like an employee Managers and supervisors are people. It's not
unusual to just not like someone who works for you. That someone could,
for example, look like an uncle you don't like. In this case, admit to yourself

that you don't like the employee. Then talk to someone else who is
appropriate to hear about your distaste for the employee, for example, a peer,
your boss, your spouse, etc. Indicate to the appropriate person that you want
to explore what it is that you don't like about the employee and would like to
come to a clearer perception of how you can accomplish a positive working
relationship with the employee. It often helps a great deal just to talk out
loud about how you feel and get someone else's opinion about the situation.
As noted above, if you continue to focus on what you see about employee
performance, you'll go a long way toward ensuring that your treatment of
employees remains fair and equitable.
Have one-on-one meetings with each employee.
Employees are motivated more by your care and concern for them than by
your attention to them. Get to know your employees, their families, their
favorite foods, names of their children, etc. This can sound manipulative --
and it will be if not done sincerely. However, even if you sincerely want to
get to know each of your employees, it may not happen unless you
intentionally set aside time to be with each of them.
Instill an inspiring purpose.
A critical condition for employee enthusiasm is a clear, credible, and
inspiring organizational purpose: in effect, a "reason for being" that
translates for workers into a "reason for being there" that goes above and
beyond money.
Every manager should be able to expressly state a strong purpose for
his unit. What follows is one purpose statement we especially admire. It was
developed by a three-person benefits group in a midsize firm.

Benefits are about people. It's not whether you have the forms filled in or
whether the checks are written. It's whether the people are cared for when
they're sick, helped when they're in trouble.
Stating a mission is a powerful tool. But equally important is the
manager's ability to explain and communicate to subordinates the reason
behind the mission.
Can the manager of stockroom workers do better than telling her staff that
their mission is to keep the room stocked?
Can she communicate the importance of the job, the people who are relying
on the stockroom being properly maintained, both inside and outside the
The importance for even goods that might be considered prosaic to be where
they need to be when they need to be there?
That manager will go a long way towards providing a sense of purpose.




“Recruitment is the process of finding and attracting capable

applicants for a job to create a pool from which selection is to be made of

the most suitable candidates”.

The Process begins when new recruits are sought and ends when their

applications are submitted.

Though theoretically recruitment process is said to end with the

receipt of applications, in practice, the activity extends to the screening of

applications so as to eliminate those who are not qualified for the job.

The result is a pool of applicants from which selections for new

employees are made.”

HRM is one of the Primary Objectives. HRM is the creation of the

condition where by the talent potential of employee will be realized and their
commitment to the causes of the organization is secured.
The overall purpose of the Human Resource Management is to ensure
that the organization is able to achieve the success though people, rapid
changing circumstances are forcing to rethink on Human Resource
Management practices, such as employee’s development performance &
rewards management, industry relationship.
SHRM practices comprises the procedure & evaluation policies,
procedure & method relating to an individual of an organization which
should be linked with the business & cooperate strategy. The strategic
Human Resource frame work aims to leverage or align the human resource

practices to build critical capacities that enable an organization to achieve its
The human resources should be focusing on the improvement of
contribution of the workface to the business results & how it can be
pattern of planned HR development & activities intended to enable an
organization to achieve its goals. The effective implementations of Strategic
Human Resources Management can be done by integrating the HR activities
to be strategized with the long term business or cooperate strategy. The two
important function of HRM are Recruitment & Development.
The Strategic Human Resources Management depends on the detailed
understanding of HR policies & HR Practices, it is often useful for the HR
department & HR professional to be closely involved, actually working
partnership with line managers, who are closely directly involved in the firm
strategic formulation and implementation.
HR professional must be strategic partner both in running the business
as well as in running HR.
The rapid changes occurring in the business environment has resulted
in new organization form, new people management challenges such as need
to development high performance system, new development strategies and
careers schemes for individuals, new organization learning capabilities, new
core competencies and new physiological contract.


1. To broad base the applicant pool in order to get the right talent at the
affordable cost.
2. Increase the pool of job candidates at minimum cost

3. Help increase success rate of selection process by reducing number of
under-qualified or over-qualified applications.
4. Meet legal and social obligations
5. Identify and prepare potential job applicants


External Factors:
1. Demand and Supply status of specific skills set.
2. Unemployment Rate (Area-wise)
3. Labour Market Conditions
4. Political and Legal Environment (Reservations, Labour laws)
5. Company’s Image

Internal Factors:
1. Recruitment Policy (Internal Hiring or External Hiring?)
2. Human Resource Planning (Planning of resources required)
3. Size of the Organization (Bigger the size lesser the recruitment problems)
4. Cost
5. Growth and Expansion Plans


1. Recruitment Strategy Development

(a) Trained or untrained (to be trained at company’s expense)
(b) Internal or external sourcing

Internal Recruitment (Source 1)

(i) Present employees
(ii) Employee referrals
(iii) Transfers and Promotions
(iv) Former Employees
(v) Previous Applicants

External Recruitment (Source 2)

(i) Professionals or Trade Associations
(ii) Advertisements
(iii) Employment Exchanges
(iv) Campus Recruitment
(v) Walk-ins Interviews
(vi) Consultants
(vii) Contractors
(viii) Displaced Persons
(ix) Radio and Television
(x) Acquisitions and Mergers

(c) Competitors
(d) Technological tools to be used for advertising
(e) Where to look
(f) How to look

2. Recruitment Planning

(a) Number of applicants sought (Based on past experience)

(b) Types of applicants to be called (Qualification, category, area,

3. Searching

(a) Source activation

(b) Selling

4. Screening of Applications

5. Evaluation and Cost Control

(a) Salary Cost
(b) Management and Professional Time spent
(c) Advertisement Cost
(d) Producing Supporting literature
(e) Recruitment Overheads and Expenses
(f) Cost of Overtime and Outsourcing
(g) Consultant’s fees


1. Return rate of each source of recruitment

2. Selection rate from each source
3. Retention and Performance of selected candidates
4. Recruitment Cost
5. Time lapsed data
6. Image projection




Selection is the process of picking up individuals (out of the pool of

job applicants) with requisite qualifications and competence to fill jobs in

the organization. A formal definition of Selection is as under:

“Selection is the process of differentiating between applicants in order

to identify and hire those with a greater likelihood of success in a job.”


1. Preliminary Interview :

This is a short interview. The purpose of preliminary interviews

is to weed out the prima facie misfit applicants. It is also called

courtesy interview and is a good public relations exercise.

2. Selection Tests :

Jobseekers who pass the preliminary interviews are called for


There are various types of tests conducted depending upon

nature of job and the company.

These tests can be Aptitude Tests, Personality Tests and Ability

Tests and are conducted to judge how well an individual can perform

tasks related to the job. Besides this, there are some other tests also

like Interest Tests (activity preferences), Graphology Test

(Handwriting), Medical Tests, Psychometric Tests etc.

3. Employment Interview :

The next step in selection is employment interview. Here,

interview is a formal and in-depth conversation to assess applicant’s


It is considered to be an excellent selection device. Interview

type and pattern can vary greatly. Interviews can be One-to-One,

Panel Interview, or Sequential Interviews. Besides there can be

Structured and Unstructured interviews, Behavioural Interviews,

Stress Interviews.

4. Reference and Background Checks :

Reference checks and background checks are conducted for

provisionally identified candidates to verify the information provided

by them. Reference checks can be through formal letters or

telephonic. However, it is more of a formality and selections decisions

are very seldom affected by it.

5. Selection Decision :

After obtaining all the information, selection decision is made.

a. The final decision has to be made out of applicants who have been

identified as suitable.

b. The views of line managers carry much weight at this stage

because it is they who are eventually responsible for the

performance of the new employee. Considering the job climate,

often more than required number is selected to cater for any

selected candidate withdrawing at the job offer stage.

6. Physical Examination :

After the selection decision is made, the candidate is required to

undergo a physical fitness test.

A job offer is often contingent upon the candidate passing the

physical examination.

7. Job Offer :

The next step in selection process is job offer to those

applicants who have successfully passed all tests. It is made by way of

letter of appointment.

8. Contract of Employment :

After the job offer is made and candidates accept the offer,

certain documents are needed to be executed by the employer and the


A formal contract of employment, containing written

contractual terms of employment etc are signed by both sides.


1. Detailed Job Descriptions and Job Specifications prepared in advance
and endorsed by personnel and line management should be available
with Selection Board.
2. Train the selectors to assess the right attributes in applicants.
3. Determine aids to be used for selection process.
4. Check competence of recruitment consultants before hiring their
5. Involve line managers at all stages
6. Attempt to validate the procedure regularly
7. Help the appointed candidate to succeed by training and management



1. Perception : We all perceive the world differently. Our limited

perceptual ability is obviously a stumbling block to the objective and
rational assessment of people.
2. Fairness : Barriers of fairness includes discrimination against
religion, region, caste, race or gender, etc.
3. Plethora of Human Traits : Success in any job is more a
function of attitude than aptitude. The tests are validated over a period
of time to differentiate between the employees who can perform well
and those who will not. Yet, no test can claim 100% success in
finding the right employee.
4. Pressure : Pressure brought on selectors by management, politicians,
bureaucrats, relatives, friends and peers to select particular candidate
are also barriers to effective selection.

5. Time and Cost : Often the time and funds available to undertake
selection process are limited forcing the selectors to forego certain



Training and development, though are spoken in the same breadth, are

quite different. Training generally refers to teaching of new skill in

professional field of the employee.

Like an employee being taught to operate another machine, or to

perform a new operation in the same machine.

Development refers to enhancement of personal qualities of the

employee which do not have a one to one relationship with his current job. It

may be to help an employee to grow. Like stress management techniques,

yoga lessons, meditation exercises, soft skills training, etc.

While training is expected to reward the company immediately in

terms of better productivity of employee, Development does not lead to any

immediate and tangible benefits to the company.

At the best, there might be some intangible benefits in the long run,

like improved motivation, loyalty, improved intra-departmental relations,

reduced absenteeism on medical ground, etc.

Dividing line between training and development is expectation of

immediate benefits.

Thus, in case a program, generally qualifying as development

program, is directly related to employee’s job skills, like Communication

Skills course for telephone attendant or receptionist, will qualify as training

and not as development. Same program for some one in back office would

be termed as Development program.


It is a theoretical learning in classrooms.

The purpose of education is to teach theoretical concepts and develop

a sense of reasoning and judgment.

Any training and development program must contain an element of


Human Resource Development is concerned with providing of

learning development opportunities in order to improve individual team and
organization performance.
Human Resource Development is concerned with providing learning
and development opportunities, making training inventions and planning
conducting training programs.
It is essential to a strategies process, which is concerned with meeting
both business and individual needs.

Human Resource Development involves the following activities:

Means a relatively permanent change in behaviors that occurs as a
result of practice or experience.

The development of the knowledge values understanding required in
all skill relating to particular areas of activity.
Growth of a person’s ability and potential through the provision of
hearing and education exp.
Planned and systematic modification of behaviors through learning
events, programs and instruction which enable individual to achieve the
levels of knowledge, skill and competence to carry out their work efficiency.

Human Resource Development should begin with HR plans of an

organization of HR plans deals with analyzing, forecasting and identification
the organization needs for human resources.

Human resources Plans

Abilities and capabilities necessary to carry out the plan

Succession Planning

Development needs assessments


Development Planning

↓ ↓
Organization Individual

Developmental Approaches

Evaluation of Development Success.

The Human Resource Development managers should assist the

union and promote the sprit of collaboration. Human Resource is most
valuable and dynamic resource of the organization. Human Resource
Developments strategy of an organization should be designed in such a way
that it helps to acquire competitive celege for the organization. Human
Resource Developments at enterprises level and national levels has become
utmost importment in the present globalization markets.

White-collar workers Blue-collar workers

A Interesting work Good pay

B Opportunities for development Enough help and resources

C Enough information Job security

D Enough authority Enough information
E Enough help and resources Interesting work
F Friendly, helpful coworkers Friendly, helpful co-workers

G See results of own efforts Clearly defined responsibilities

H Competent supervision See results of own work

I Clearly defined responsibilities Enough Authority
J Good pay Competent supervision

It is interesting that out of the job factors listed for the survey, yet
with the exception of two items (white-collar workers' choice (B) and blue-
collar workers' choice (C)) groups selected the same top ten factors,
although with different rankings. It is significant that good pay was
considered as the most important factor by the blue-collar workers, but it
ranked as the least important for white-collar workers.
In all, there are nine to twelve parameters that exist in an
organizational environment that shape employee perceptions, motivation and
productivity in an organization. Some of these are detailed below.
Interpersonal relationships: This depicts the pattern of interactions
employees have within the organization. This explains the relationship
between a manager and his/her subordinate, peer equation, interdepartmental
relationship etc. The correct handling of interpersonal relationships can
improve an organization’s attrition levels dramatically.

Communication within the company: In many cases, employees
believe that decisions that are taken at a “corporate” level are not to their
benefit. While this may be true in certain instances, it is also true that it is
the management’s fault for not keeping the employees involved to whatever
extent possible or permissible. While every individual in the organization
does not need to be involved at the board or management level discussions,
it’s imperative that the company’s vision, strategies and future growth plans
be shared regularly.
Brainstorming before major decisions could be a motivator that could
increase the sense of belonging for an organisation. Sharing of ideas through
common forums could be another method to foster good communication
across all levels of employees. Organizations that do not practice open
communication could end up being blamed for lacking transparency. A
blame that could represent itself through an active grapevine. This could
contribute to a negative morale thereby affecting productivity.
Company image: The company image is a composite of various
factors. And these are essentially perceptions. Perceptions about the personal
image of senior management, stability of top management, fiscal health of
the company etc. When the leadership of a company is questioned by the
employees and there are no satisfactory answers, one can be rest assured that
it will have an impact on the “Brand” that the employees work for.
Managing the company image is extremely critical, particularly when
the employees who have joined the organisation have a certain perception of
the organisation from outside. Interventions to keep up the image is critical
as attrition is believed to have a keen relationship with the “brand image”.

Work climate and organisation culture Am I being treated in the organisation
with fairness and respect?
Does the workplace encourage ethical practices and values?
Will I be awarded for good work?
Do I have the freedom to express views without fear of retribution?
These are the few basic questions that employees always carry in their
minds when it comes to judging work climate and organizational culture.
And there are many parameters that include leadership, integrity and
opportunities to contribute in strategic decisions.
It’s upon the organisation and its senior managers to benchmark
against what would be the expected standards from the employee
perspective. It creates a working environment that people thrive in — the
feel good factor of working. Usually seen as a unique identity of any
organisation, there are certain basic thoughts, which, if addressed on an on-
going basis, would add to the sense of security and motivation among
Job content and career development:
Opportunities for personal and professional growth are what makes
employees stay with their current organisation, or move on to the next best
one that comes along their way. However, these are not independent
parameters. Once an organisation tackles the issues of autonomy in decision-
making and implementation, relevance of role assigned as per an
individuals’ capability, fair assignment of work load, and assignments as per
interests and skills, one can see a largely motivated work force driving the
company’s bottomline and topline.

Compensation and HR services:
In the present day, with organizations stressing on EVA (Economic
Value Added) and employees as brand ambassadors, compensation and HR
services are increasing to come under microscopic scrutiny. Employees
today are not only concerned about the compensation and benefits they get
annually, they are also bothered about what their compensations are as per
industry standards, their being paid according to their roles and
responsibility, their performance linked reward systems and how progressive
HR policies are in their organization. Some call it talent management, some
emotional quotient, but with the employees, it’s not an independent body of
thought. It works in continuum with all the factors mentioned above.
Performance management systems:
This explains the yardstick on which employees are measured on their
performance and classified under good/average/poor performers. This helps
the management chalk out the improvement plan for all employees.
Performance management systems ensure that the employees’ goals are
linked directly to the business goals of the organisation.
Training and development:
This takes into consideration the fact that every employee of any
organisation needs to be constantly learning and improving. Training and
development normally balances the personal enrichment and professional
development of any employee within the organisation.
Facilities, support, tools & infrastructure
Gone are the days of industrial age when factories used to be on the outskirts
of big cities or towns. They have now been replaced by “Electronic City(s)”
and “Software Campuses” of various companies. What this has done is to

add a slew of parameters that affects performance levels. And these are
seemingly simple things, viz., physical location of office, appearance and
aesthetics of a workplace, availability of facilities for recreation and access
to high speed internet connections.
Employees today believe that these are a given. These have become
hygiene factors. But on the other hand, these are very subjective issues.
Who decided what’s the best aesthetics?
What constitutes a great ambience?
It’s critical to gauge how important these parameters are in an
employees’ mind and arrive at exactly what is required to keep them happy
with the workplace. Perhaps the money that a company saves from cutting
back on unnecessary frills may add its bit to the bottomline.
The motivational level of employees is a sum of many of these factors
and how these are perceived. While the perceptions are bound to vary among
individuals, data analysis can actually help one arrive at a conclusion on
what are the exact factors that need the company’s attention from the people
management perspective.
How does one do this?
Using research, an organisation can detail all of the factors mentioned
above and break them into 90 – 100 sub-factors, following which the
employees can rank each factor on an “Importance” and “Satisfaction
Scale”. Importance signifies how important the factor is at a workplace and
satisfaction signifies how satisfied they are on the given parameters with
respect to the company they work for. Analysing the gap between
importance and satisfaction, one can pinpoint the areas that require short and
long-term solutions. This can be used to propose HR interventions that

would address the concern areas and consequently, an actionable plan to
boost motivation and productivity can be implemented.
Individualize motivation policies
It is well known that individual behavior is intensely personal and
unique, yet companies seek to use the same policies to motivate everyone.
This is mainly for convenience and ease compared to catering for individual
oddities (Lindstone (1978)). 'Tailoring' the policy to the needs of each
individual is difficult but is far more effective and can pay handsome
As a brief review of terms, training involves an expert working with
learners to transfer to them certain areas of knowledge or skills to improve in
their current jobs. Development is a broad, ongoing multi-faceted set of
activities (training activities among them) to bring someone or an
organization up to another threshold of performance, often to perform some
job or new role in the future.

Fairness, decisiveness, giving praise and constructive criticism can be

more effective than money in the matter of motivation.
Leadership is considered synonymous (Tack (1979)) with motivation,
and the best form of leadership is designated as SAL, situation adaptable
leadership. In this style of leadership, one is never surprised or shocked,
leadership must begin with the chief executive and it is more a matter of
adaptation than of imparting knowledge. Ultimately, it is the leadership
quality which leads to the success of a company through team building and
motivating its people.
Typical Reasons for Employee Training and Development

Training and development can be initiated for a variety of reasons for an
employee or group of employees, e.g.,:
a.) When a performance appraisal indicates performance improvement is
b.) To "benchmark" the status of improvement so far in a performance
improvement effort
c.) As part of an overall professional development program
d.) As part of succession planning to help an employee be eligible for a
planned change in role in the organization
e.) To "pilot", or test, the operation of a new performance management
f.) To train about a specific topic (see below)
Typical Topics of Employee Training
1. Communications: The increasing diversity of today's workforce brings a
wide variety of languages and customs.
2. Computer skills: Computer skills are becoming a necessity for conducting
administrative and office tasks.
3. Customer service: Increased competition in today's global marketplace
makes it critical that employees understand and meet the needs of customers.
4. Diversity: Diversity training usually includes explanation about how
people have different perspectives and views, and includes techniques to
value diversity
5. Ethics: Today's society has increasing expectations about corporate social
responsibility. Also, today's diverse workforce brings a wide variety of
values and morals to the workplace.

6. Human relations: The increased stresses of today's workplace can
include misunderstandings and conflict. Training can people to get along in
the workplace.
7. Quality initiatives: Initiatives such as Total Quality Management, Quality
Circles, benchmarking, etc., require basic training about quality concepts,
guidelines and standards for quality, etc.
8. Safety: Safety training is critical where working with heavy equipment ,
hazardous chemicals, repetitive activities, etc., but can also be useful with
practical advice for avoiding assaults, etc.
9. Sexual harassment: Sexual harassment training usually includes careful
description of the organization's policies about sexual harassment, especially
about what are inappropriate behaviors.
General Benefits from Employee Training and Development
There are numerous sources of on-line information about training and
development. Several of these sites (they're listed later on in this library)
suggest reasons for supervisors to conduct training among employees. These
reasons include:
1. Increased job satisfaction and morale among employees
2. Increased employee motivation
3. Increased efficiencies in processes, resulting in financial gain
4. Increased capacity to adopt new technologies and methods
5. Increased innovation in strategies and products
6. Reduced employee turnover
7. Enhanced company image, e.g., conducting ethics training (not a good
reason for ethics training!)

8. Risk management, e.g., training about sexual harassment, diversity

Definition of Training and Development

“Training and Development is any attempt to improve current or future employee

performance by improving his performance capabilities and potential through

learning, usually by changing the employee’s attitude or increasing his or her

skills and knowledge.”

The need for Training and Development is determined by the employee’s

performance deficiency, computed as follows.

Training and Development Need = Standard Performance – Actual Performance


1. To make the managers

• Self-starters
• Committed
• Motivated
• Result oriented

• Sensitive to environment
• Understand use of power

2. Creating self awareness

3. Develop inspiring leadership styles
4. Instil zest for excellence
5. Teach them about effective communication
6. To subordinate their functional loyalties to the interests of the organization



1. Helps remove performance deficiencies in employees

2. Greater stability, flexibility and capacity for growth in an organization
3. Accidents, scraps and damages to machinery can be avoided
4. Serves as effective source of recruitment
5. It is an investment in HR with a promise of better returns in future
6. Reduces dissatisfaction, absenteeism, complaints and turnover of


Individual Training Needs Identification

1. Performance Appraisals
2. Interviews
3. Questionnaires
4. Attitude Surveys
5. Training Progress Feedback
6. Work Sampling
7. Rating Scales

Group Level Training Needs Identification
1. Organizational Goals and Objectives
2. Personnel / Skills Inventories
3. Organizational Climate Indices
4. Efficiency Indices
5. Exit Interviews
6. MBO / Work Planning Systems
7. Quality Circles
8. Customer Satisfaction Survey
9. Analysis of Current and Anticipated Changes

Benefits of Training Needs Identification

1. Trainers can be informed about the broader needs in advance
2. Trainers Perception Gaps can be reduced between employees and their
3. Trainers can design course inputs closer to the specific needs of the
4. Diagnosis of causes of performance deficiencies can be done


On the Job Trainings (OJT):

When an employee learns the job in actual working site in real life

situation, and not simulated environment, it is called OJT. Employee learns while

working. Take the instance of roadside mechanics. Small boys working there as

helpers learn while helping the head mechanic. They do not learn the defect

analysis and engine repairing skills in any classroom on engine models.

Advantages of On-the-Job Training:

1. It is directly in the context of job
2. It is often informal
3. It is most effective because it is learning by experience
4. It is least expensive
5. Trainees are highly motivated
6. It is free from artificial classroom situations

Disadvantages of On-the-Job Training:

1. Trainer may not be experienced enough to train or he may not be so
2. It is not systematically organized
3. Poorly conducted programs may create safety hazards

“On the Job Training” Methods

1. Job Rotation: Refer page 29.

2. Job Coaching: An experienced employee can give a verbal
presentation to explain the nitty-gritty’s of the job.
3. Job Instruction: It may consist of an instruction or directions to
perform a particular task or a function. It may be in the form of
orders or steps to perform a task.
4. Apprenticeships: Generally fresh graduates are put under the
experienced employee to learn the functions of job.
5. Internships and Assistantships: Interns or assistants are recruited
to perform specific time-bound jobs or projects during their

Off the Job Training: Trainings conducted in simulated environments,

classrooms, seminars, etc are called Off the Job Training.

Advantages of Off-the-Job Training

1. Trainers are usually experienced enough to train
2. It is systematically organized
3. Efficiently created programs may add lot of value

Disadvantages of Off-the-Job Training:

1. It is not directly in the context of job
2. It is often formal
3. It may not be based on experience.
4. It is expensive.
5. Trainees may not be much motivated
6. It is artificial in nature

“Off the Job Training” Methods

1. Classroom Lectures: Advantage – It can be used for large
groups. Cost per trainee is low. Disadvantages – Low interest of
employees. It is not learning by practice. It is One-way
communication. No authentic feedback mechanism. Likely to lead to
boredom for employees.
2. Audio-Visual: It can be done using Films, Televisions, Video, and
Presentations etc. Advantages – Wide range of realistic examples,
quality control possible. Disadvantages – One-way communication,
No feedback mechanism. No flexibility for different audience.
3. Simulation: Creating a real life situation for decision-making and
understanding the actual job conditions give it. Ensures active

participation of all trainees. Can be very effective but needs good
4. Case Studies: It is a written description of an actual situation in the
past in same organisation or some where else and trainees are
supposed to analyze and give their conclusions in writing.
i. This is another excellent method to ensure full and whole
hearted participation of employees and generates good
interest among them.
ii. Case is later discussed by instructor with all the pros and
cons of each option. It is an ideal method to promote
decision-making abilities within the constraints of limited
5. Role Plays: Here trainees assume the part of the specific
personalities in a case study and enact it in front of the audience. It is
more emotional orientation and improves interpersonal relationships.
Attitudinal change is another result. These are generally used in
6. Sensitivity Trainings: This is more from the point of view of
behavioural assessment as to how an individual will conduct himself
and behave towards others under different circumstances. There is
no pre-planned agenda and it is instant. Advantages – increased
ability to empathize, listening skills, openness, tolerance, and
conflict resolution skills. Disadvantage – Participants may resort to
their old habits after the training.
7. Programmed Instructions: Provided in the form of blocks either
in book or a teaching machine using questions and feedbacks
without the intervention of trainer. Advantages – Self paced, trainees
can progress at their own speed, strong motivation for repeat
learning, material is structured and self-contained. Disadvantages –
Scope for learning is less; cost of books, manuals or machinery is

8. Computer Aided Instructions: It is extension of PI method, by
using computers. Advantages – Provides accountabilities, modifiable
to technological innovations, flexible to time. Disadvantages – High
9. Laboratory Training.



Induction and Orientation are the procedure that a new employee has to go
through in the organisation. Every employee starting from the lower most, say,
from peon to CEO, need orientation course when they join the organisation.
A new employee carries with him a lot of apprehension about place, job,
colleagues, organisational culture, and so on. On the day of reporting, he needs to
know his office/work place, routine, amenities, functional and reporting channels,


“It is a Planned Introduction of employees to their jobs, their co-workers and the

organization per se.”

Difference Between Induction and Orientation

Induction refers to formal training programs that an employee has to

complete before he is put on job. Like in Military, before a new recruit is sent to

border, he is trained for a few months in Drill/Parade, physical fitness, weapon

handling, etc. This is called Induction.

Orientation is the information given to the new employees to make him

aware of the comfort issues - where the facilities are, what time lunch is, who are

the people he would be working with and so forth.

Orientation conveys following information:

1. Organisation’s geography/layout
2. Organisational set up (Structure)
3. Daily Work Routine
4. Organization Profile, History, Objectives, Products and Services, etc
5. Introduction to colleagues/immediate superiors and subordinates.
6. Importance of Jobs to the organization
7. Detailed Orientation Presentation covering policies, work rules and
employee benefits.

The idea of Orientation programme is to make the new employees feel “at
home” in new environment. Any employee while joining a new organisation is
anxious about the new set-up, new colleagues, his own performance vise a visa
other more experienced employees in the organisation, his work place, his exact
responsibilities, etc.
A structured information and introduction system will make his transitory
period short and reduce his anxiety quickly.
He will begin to perform to his potential quickly.


1. Formal or Informal:
In informal orientation, new employees are put on
the jobs and they are expected to acclimatise themselves with the work and the
In contrast, in formal orientation, an employee goes through a structured
introduction programme.

2. Individual or Collective:
Another choice is to be made whether new
employees are to be inducted in group or individually.
3. Serial or Disjunctive:
Orientation becomes serial when the person relinquishing the post
hands over the position to the new incumbent.
It becomes disjunctive when the new employee occupies a vacant
position with no one to hand him over the position. He learns the prevalent
practices and history slowly from his subordinates and superiors on gradual
4. Investiture or Divestiture:
This is the final strategic choice which relates to decision regarding
allowing the new employees to affect the organisation
with his identity/ideas/functional methods or asking him to modify his
identity to merge with existing culture of the organisation.
This is more applicable to high positions who may have been hired
with a view to bring in their experiences and methods of management to the




Performance Appraisals is the assessment of individual’s performance in a
systematic way.
It is a developmental tool used for all round development of the employee
and the organization.
The performance is measured against a number of factors.
These factors can be divided into two groups.
(a) General personality such as initiative, leadership qualities,
dependability, team spirit, etc.
(b) Professional qualities like job knowledge, quality and quantity of
output, versatility and so on.
Factors vary from organization to organization and job to job. For a soldier,

courage and endurance are more important factors. But for the Army General, his

tactical abilities are more important.

On the other side, a foreman in a factory would never be assessed for his

courage. Assessment is often not confined to past performance but checks for

potential performance also.

The second definition brings in focus behaviour because behaviour affects

not only employee’s performance but even his peers’ and subordinates’.

Definition 1: “It is a systematic evaluation of an individual with respect to present

performance on the job and his potential.”

Definition 2: “It is formal, structured system of measuring/evaluating job related

behaviours and outcomes to discover how an employee has performed on the job

and how he can perform more effectively in future so that employee, organization

and society, all benefits.”



Job Analysis  Performance Performance

Standard  Appraisal
Describes the Translate job Describe the
work and requirements into individual’s
personnel levels of acceptable past
requirement of or unacceptable performance,
a particular performance suitability
job and

Objectives: Performance appraisals are used as a basis for following activities: -

1. Promotions
2. Confirmations
3. Training and Development program planning
4. Compensation reviews
5. Competency building
6. Evaluation of HR Programs
7. Feedback and Grievances


1. Setting Objectives and Standards of performance

2. Design an appropriate appraisal program – Appraisal program for different
levels of employees would be different.
3. Performance Interviews
4. Appraise and record the performance
5. Use and store data for appropriate purposes
6. Identify opportunities variables

Numerous methods have been devised to measure the quantity and quality of
performance appraisals. Each of the methods is effective for a particular class of
employees in certain types of organization only.

Broadly all methods of appraisals can be divided into two different categories.

• Past Oriented Methods

• Future Oriented Methods


1. Rating Scales:

This is simplest and most popular method. Rating scales consist of grading

an employee’s past performance on a scale of say 1 -10. Each of the selected

performance attribute is numerically marked and then totalled to arrive at the final

Advantages – Adaptability, easy to use, low cost, every type of job can be

evaluated, large number of employees covered, no formal training required.

Disadvantages – Rater’s biases.

2. Checklist:

Under this method, checklist of “Statements of Traits” of employee in the

form of Yes or No based questions is prepared. Here, the rater only does the

reporting or checking and HR department does the actual evaluation.

Advantages – economy, ease of administration, limited training required,


Disadvantages – Rater’s biases, use of improper weights by HR Deptt, does

not allow rater to give relative ratings.

3. Forced Choice Method:

A series of statements arranged in the blocks of two or more are given and

the rater indicates which statement is true or false. The rater is forced to make a

choice. HR department does actual assessment.

Advantages – Absence of personal biases because of forced choice.

Disadvantages – Statements may not be correctly framed.

4. Forced Distribution Method:

One of the problems faced in large organizations is relative assessment

tendencies of raters. Some are too lenient and others too severe. This method \

overcomes that problem.

It forces every one to do a comparative rating of all the employees on a

predetermined distribution pattern of good to bad. Say 10% employees in

Excellent Grade, 20% in Good Grade, 40% in Average Grade, 20% in Below

Average Grade and 10% in Unsat grade.

The real problem of this method occurs in organizations where there is a

tendency to pack certain key departments with all good employees and some other

departments with discards and laggards.

Relatively good employees of key departments get poor rating and

relatively poor employees of laggards’ departments get good rating.

10% 20% 40% 20% 10%

Unsat Below Avg Average Good

5. Critical Incidents Method:

It takes cognisance of abnormal incidences only, good or bad. Supervisors

record such incidents as and when they occur.

Advantages – Evaluations are based on actual job behaviours. Ratings are

supported by descriptions, thus favouritism is beaten. Feedback is easy and

reduces recency biases.

Disadvantages – Negative incidents may get priority or incidences could be


6. Field Review Method:

This method is useful only for senior positions in a large organisation

spread over cities and countries. Appraisal is done by someone outside employees’

own department usually from corporate or HR department.

Advantages – Useful for managerial level promotions, when comparable

information is needed, on employees working at distant locations in different set

of conditions.

Disadvantages – Outsider is generally not familiar with employees’ work

environment, Observation of actual behaviours not possible.

7. Performance Tests and Observations:

This is based on the test of knowledge or skills. The tests may be written or

an actual presentation of skills. Tests must be reliable and validated to be useful.

Advantage – Tests only measure potential and not attitude. Actual

performance is more a function of attitude of person than potential.

Disadvantages – Some times costs of test development or administration

are high.

8. Confidential Reports:

Though popular with government departments, its application in industry is

not ruled out. Here the report is given in the form of Annual Confidentiality

Report (ACR). The system is highly secretive and confidential. Feedback to the

assessee is given only in case of an adverse entry.

Disadvantage is that it is highly prone to biases and recency effect and

ratings can be manipulated because the evaluations are linked to future rewards

like promotions, good postings, etc.

9. Essay Method:

In this method the rater writes down the employee description in the form

of an essay.

Advantage – It is extremely useful in filing information gaps about the

employees that often occur in a better-structured checklist.

Disadvantages – It its highly dependent upon the writing skills of rater and

most of them are not good writers. Moreover, it is also time consuming and

therefore affects full assessment. Also, comparative or relative performance

among employees is not clearly demarcated.

10. Cost Accounting Method:

Here performance is evaluated from the monetary returns yield to his or her

organization. Cost to keep employee, and benefit the organization derives is

ascertained. Hence, it is more dependent upon cost and benefit analysis.

11. Comparative Evaluation Method (Ranking and Paired Comparisons):

These are collection of different methods that compare performance with

that of other co-workers.

The usual techniques used may be ranking methods and paired comparison

• Ranking Method:
Superior ranks his worker based on merit, from best to worst.

However how best and why best are not elaborated in this method. It is

easy to administer.

• Paired Comparison Method:

In this method each employee is paired with every other employee in

the same cadre and then comparative rating done in pairs so formed. The

number of comparisons may be calculated with the help of a formula – N x

(N-1) / 2. The method is too tedious for large departments and often such

exact details are not available with rater.


12. Management By Objectives (MBO):

Performance is rated against the achievement of objectives mutually agreed

by the employee and the management.

Advantage – It is direct and accurate and transparent.

Disadvantages – Applicable only to quantifiable jobs. Short-term goals

given preference at the cost of long-term goals etc.

13. Psychological Appraisals:

These appraisals are more directed to assess employees potential for future

performance rather than the past one. It is done in the form of in-depth interviews,

psychological tests, and discussion with supervisors and review of other


It is more focused on employees emotional, intellectual, and motivational

and other personal characteristics affecting his performance. This approach is slow

and costly and may be useful for bright young members who may have

considerable potential.

However quality of these appraisals largely depends upon the skills of

psychologists who perform the evaluation.

14. Assessment Centres:

This technique was first developed in USA and UK in 1943. An assessment

centre is a central location where managers may come together to have their

participation in job related exercises evaluated by trained observers.

It is more focused on observation of behaviours across a series of select

exercises or work samples.

Assesses are requested to participate in in-basket exercises, work groups,

computer simulations, role playing and other similar activities which require same

attributes for successful performance in actual job.

Disadvantages – Concentrates on future performance potential. No

assessment of past performance. Costs of employees travelling and lodging,

psychologists. Ratings strongly influenced by assessee’s inter-personal skills.

Solid performers may feel suffocated in simulated situations.

Advantages – Well-conducted assessment centre can achieve better

forecasts of future performance and progress than other methods of appraisals.

Also reliability, content validity and predictive ability are said to be high in

Assessment Centres.

The tests also make sure that the wrong people are not hired or promoted.

Finally, it clearly defines the criteria for selection and promotion.

15. 360-Degree Feedback:

It is a technique in which performance data/feedback/rating is collected

from all sections of people employee interacts in the course of his job like

immediate supervisors, team members, customers, peers, subordinates and self

with different weightage to each group of raters.

This technique has been found to be extremely useful and effective. It is

especially useful to measure inter-personal skills, customer satisfaction and team

building skills.

One of the biggest advantage of this system is that assesssees can not afford

to neglect any constituency and has to show all-round performance.

However, on the negative side, receiving feedback from multiple sources

can be intimidating, threatening, expensive and time consuming.

Purpose of performance evaluation is to make sure that employee’s goals,

employees behaviour and feedback about performance are all linked to the

corporate strategy.

1. Standardized Performance Appraisal System
2. Defined performance standards – Bench Marks
3. Uniformity of appraisals
4. Trained Raters
5. Use of relevant rating tools or methods
6. Should be based on job analysis
7. Use of objectively verifiable data
8. Avoid rating problems like halo effect, central tendency, leniency,
severity etc.
9. Consistent Documentations maintained
10. No room for discrimination based on cast, creed, race, religion, region etc.



1. Board Level
2. Ownership (share allocation)
3. Complete Control
4. Staff Councils
5. Joint Councils
6. Collective Bargaining
7. Job Enlargement and Enrichment
8. Suggestion Schemes
9. Quality Circles
10. Empowered Teams
11. Total Quality Management
12. Financial Participation


1. Gives identity to an employee

2. Motivates employee
3. Self-esteem, job satisfaction and cooperation improves
4. Reduced conflicts and stress between Management and workers
5. More commitment to goals
6. Less resistance to change
7. Less labour problems
8. Better quality suggestions expected

A critical lesson for new managers and supervisors is to learn to focus

on employee behaviors, not on employee personalities. Performance in the
workplace should be based on behaviors toward goals, not on popularity of
You can get in a great deal of trouble (legally, morally and
interpersonally) for focusing only on how you feel about your employees
rather than on what you're seeing with your eyeballs.
Reward it soon after you see it
This helps to reinforce the notion that you highly prefer the behaviors
that you're currently seeing from your employees. Often, the shorter the time
between an employee's action and your reward for the action, the clearer it is
to the employee that you highly prefer that action.
Cultivate strong skills in delegation:
Delegation includes conveying responsibility and authority to your
employees so they can carry out certain tasks. However, you leave it up to

your employees to decide how they will carry out the tasks. Skills in
delegation can free up a great deal of time for managers and supervisors. It
also allows employees to take a stronger role in their jobs, which usually
means more fulfillment and motivation in their jobs, as well.

Celebrate achievements:
This critical step is often forgotten. New managers and supervisors are
often focused on a getting "a lot done". This usually means identifying and
solving problems. Experienced managers come to understand that
acknowledging and celebrating a solution to a problem can be every bit as
important as the solution itself. Without ongoing acknowledgement of
success, employees become frustrated, skeptical and even cynical about
efforts in the organization.
Promote teamwork.
Most work requires a team effort in order to be done effectively.
Research shows repeatedly that the quality of a group's efforts in areas such
as problem solving is usually superior to that of individuals working on their
own. In addition, most workers get a motivation boost from working in

Whenever possible, managers should organize employees into self-

managed teams, with the teams having authority over matters such as quality
control, scheduling, and many work methods. Such teams require less
management and normally result in a healthy reduction in management
layers and costs.

Creating teams has as much to do with camaraderie as core
competences. A manager needs to carefully assess who works best with
whom. At the same time, it is important to create the opportunity for cross-
learning and diversity of ideas, methods, and approaches. Be clear with the
new team about its role, how it will operate, and your expectations for its

Let employees hear from their customers (internal or external)

Let employees hear customers proclaim the benefits of the efforts of
the employee. For example, if the employee is working to keep internal
computer systems running for other employees (internal customers) in the
organization, then have other employees express their gratitude to the
employee. If an employee is providing a product or service to external
customers, then bring in a customer to express their appreciation to the

Implement at least the basic principles of performance management.

Good performance management includes identifying goals, measures to
indicate if the goals are being met or not, ongoing attention and feedback
about measures toward the goals, and corrective actions to redirect activities
back toward achieving the goals when necessary. Performance management
can focus on organizations, groups, processes in the organization and

Be an expediter for your employees.

Incorporating a command-and-control style is a sure-fire path to
demotivation. Instead, redefine your primary role as serving as your

employees' expediter: It is your job to facilitate getting their jobs done. Your
reports are, in this sense, your "customers." Your role as an expediter
involves a range of activities, including serving as a linchpin to other
business units and managerial levels to represent their best interests and
ensure your people get what they need to succeed.
How do you know, beyond what's obvious, what is most important to
your employees for getting their jobs done? Ask them! "Lunch and
schmooze" sessions with employees are particularly helpful for doing this.
And if, for whatever reason, you can't immediately address a particular need
or request, be open about it and then let your workers know how you're
progressing at resolving their problems. This is a great way to build trust..



From the observation we can know that the company follows both
internal and external source of recruitment.
The external source, which the company follows, is advertisement and
the method followed to recruit the people in the company is direct method
that is by conducting face to face in depth interviews in the company
premises to know the people skills, knowledge and their ability to do the job.
The factor which attracts people both internally and externally is
growth prospects, Brand image and working atmosphere in the company.
Next step is selection, and the method which is used, for selection in the
company is through written and oral test. Criteria on which selection of the
candidate is selected, is based on communication skills, attitude of the
candidate, experience, aggregate marks, and knowledge.
There is no simple answer to the question of how to motivate people.
Can money motivate? Yes, but money alone is not enough, though it does
help. We have discussed some of the pertinent theories bearing on human
motivation and this is balanced by some of the practical factors which can
lead to excellence.
Human resource remains the focal point and leadership the critical
component, and motivation has to be 'tailored' to each individual. The next
section deals with an important mode of motivation, namely financial
aspects of rewarding employees.

The most important thing is to provide employees with a sense of security,
one in which they do not fear that their jobs will be in jeopardy if their
performance is not perfect and one in which layoffs are considered an extreme last
resort, not just another option for dealing with hard times.
But security is just the beginning. When handled properly, each of the
above mentioned practices will play a key role in supporting your employees'
goals for achievement, equity, and camaraderie, and will enable them to retain the
enthusiasm they brought to their roles in the first place. Candidates with high
energy levels and can win attitude are preferred.
Many rounds of Interviews are held which tries to bring best out of a
candidate. The over all process of the hiring in ICICI is satisfactory.
No changes are required in the actual process and the tools used, but
changes in using those tools would be helpful.



Books referred:
Human Resource Management
By Shashi. K. Gupta
Rosy Joshi
Human Resource Management
By V.S.P.Rao

Human Resource Management

By Fisher Schoenfeldt Shaw