HRM

UNIT-II

HUMAN RESOURCES MANAGEMENT

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PERSONNEL MANAGEMENT

Concept: It is the process of acquiring, developing, employing, appraising,

remunerating and retaining people, so that right type of people available at right
position and at right time in the organization.

Definition:

“The personnel function is concerned with the procurement, development,

compensation, integration and maintenance of the personnel of an organization
for the purpose of contributing towards the accomplishment of that organizations
major goals and objectives” – Edwin B. Flippo

“Staffing is the function by which managers build an organization through

the recruitment, selection and development of individuals as capable employees”
__ Mc. Farland
Features:
1. It is a specialized branch of general management and therefore act the
principles of general management apply to this branch of management
also.
2. It defines the relationships between employer & employee and employee
& employee.
3. It considers the development of people at work, as an individual and as a
member of the group.
4. It is goal oriented as its object is to contribute to the organizational goals.
5. It is not something to be used sparingly. Every manager is required to
perform the personnel function on a continuous basis.

Scope of Personnel management:

The scope of personnel management is extremely wide. The important job

of personnel manager is to get the things done through the people and thus he
stresses the aspect of management of people. Personnel management in its
widest sense is concerned with organizing human resources in such a way as to
get the maximum output to the enterprise and to develop the talent of the
people at work to the fullest individual capacity securing personnel satisfaction.

Functions:
1. Recruitment and maintenance of labour force:- This function includes
attracting, screening, testing, hiring and inducting men on the job.

2. Training: - Training is a must to prepare the worker to meet the

challenges of the new jobs or techniques and to maintain and to improve

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the quality of work so that the employees may earn more for themselves
and contribute more to the unit.

3. Job analysis and Job description: It involves the studies of job

requirements of the enterprise and assignment of well defined functions to
jobs so that qualified employees may be hired. It forms the basis of wage
determination

4. Compensation: It includes, determining wage rates, incentive systems,

rating of employees and performance standards.

5. Keeping personnel records: It includes collection of bio-data of all

employees pertaining to their work, i.e., training, job performance,
aptitude, payment records etc...

6. Welfare: - It includes health and safety program, sanitary facilities,

recreational facilities, educational activities etc...

The scope of personnel management is wide enough to cover all the

organizations, where work is done by men.

Objectives:

Objectives of an organization are guidelines of its policies procedures and

functions and the principles are the tools to accomplish these objectives. The
main objective of personnel management is to utilize the available human
resources. Objectives are divided in to two categories –

1. General Objectives
2. Specific Objectives

General Objectives: -
The statement of general objectives expresses the basic philosophy of top
management towards the labour force engaged on the work.

1. Maximum individual development

2. Desirable working relationship between employer and employees.
3. Effective moulding of human resources as contrasted with physical
resources.

Specific Objectives: -
It refers to the various activities of the personnel department.
1. Selection of right type and right number of persons
2. Proper orientation and introduction of new employees.
3. Organization of suitable training programmes for better performance.
4. Provision for better working conditions and other facilities.
5. Provision of sound, fair and effective wages and salary administration.
6. Exit interviews
7. Good relations with trade unions

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8. Management of grievances

MANPOWER PLANNING

Concept:

Manpower planning is also known as human resource planning (HRP). It

is the starting point in staffing function. HRP is basically deals with forecasting
personnel needs in future, assessing personnel supply and matching demand
supply factors through personnel related programmes. The planning process
influenced by overall organizational objectives and the environment of business.

Definition:

“HRP includes the estimation of how many qualified people are necessary
to carry out the assigned activities, how many people will be available, and what
, if anything , must be done to ensure that personnel supply equals personnel
demand at the appropriate point in the future” ___ Leap and Crino

Features:

1. HRP is a process which includes various aspects through which an

organization tries to ensure that right people, at right place, and at right
time are available.
2. It involves determination of future needs of manpower in the light of
organizational planning and structure.
3. It also takes into account the manpower availability at a future period in
the organization

HRP Process:

HR plans need to be based on organizational objectives. In practice it

implies that the objectives of the HR plan must be derived from organizational
objectives. Specific requirements in terms of number and characteristics of
employees should be derived from the organizational objectives.
Personnel function is a subsystem of organization. Various subsystems of
the organization define its own plans and programmes. Thus, each subsystem’s
plans and programmes are linked to organizational objectives.

The following questions are important while deciding the personnel policies –

• Are vacancies to be filled by promotion from within or by hiring from

outside?
• What union constraints are encountered in manpower planning and what
policies are needed to handle these constraints?
• How to enrich employee’s job?

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• How to downsize the organization?

• How to ensure continuous availability of adaptive and flexible workforce?

Manpower planning process chart:

Organizational
Objectives & Plans

Manpower
Planning

Forecasting manpower Preparing

ManpowerRequirements Inventory

Identification of
Manpower gap

Surplus Shortage

Action plan for

bridging the gap

Forecasting manpower requirements:

Demand forecasting is the process of estimating the future quality and

quantity of people required. The forecasting must be based on annual budge and
long term corporate plan, translated into activity levels for each function and
department.

Forecasting of human resources requirement serves the following purposes—

• Quantity of jobs required to produce a given number of goods.
• To determine what staff-mix is desirable in the future.
• To assess appropriate staffing levels in different posts of the organization
so as to avoid unnecessary cost.
• To prevent shortages of people where and when they are needed most.
• To monitor compliance with legal requirements with regard to reservation
of jobs.

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Preparing manpower inventory:

After estimating the demand for HR requirement, the next step is to

determine whether it will be able to procure the required number of personnel
and the sources for such procurement.

Supply forecasting measures the number of people likely to available from

within and outside of an organization, after making allowance for absenteeism,
internal movements and promotions etc…

The supply analysis include –

• Existing human resources
• Internal sources of supply
• External sources of supply

Existing Resources: - Analysis of present employees is greatly facilitated by HR

audit. HR audit summarizes each employee’s skills and abilities. The audit of non
– managery called skill inventory and those of the management are
management inventory.

Internal supply: - Based on skills and management inventories, planners can

proceed with the analysis of internal supply. The following are the techniques to
identify internal supply-

• Inflow and outflow methods

• Turnover rate
• Conditions of work and absenteeism
• Productivity level
• Movement among jobs

External supply: - In addition to internal supply, the organization needs to

lookout for prospective employees from external sources. External sources vary
from company to company and industry to industry.

Identification of manpower gap: - It is difference between the demand and

supply of manpower. This gap may be of two types viz., surplus of manpower
and shortage of manpower.

Action plans: - Based on the analysis of this gap action plans must be
developed to overcome this gap. Surplus will be separated by various ways like
VRS, layoffs, reduced work hours etc…
shortage will be adjusted with promotions, recruitments, increased
working hours etc…

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JOB ANALYSIS
Concept: -

An organization needs personnel of different types so that different jobs

are performed effectively. HRP is related to match the personnel demand with
personnel supply. For achieving this matching, detailed knowledge of the nature
and the requirements of different jobs is essential. Job analysis provides this
knowledge.

Definition: -

“Job analysis is the process of studying and collecting information relating

to the operations and responsibilities of a specific job. The immediate products of
this analysis are job description and job specifications”

Job analysis involves the process of identifying the nature of a job and the
qualities of the likely job holder. Job analysis is the process of collecting job
related data. The data, thus collected, will be useful for preparing job
descriptions and job specifications.
Job description lists job title, duties, machine and equipment involved,
working conditions, etc… job specification list the qualities and qualifications
necessary to do a job.

Process of job analysis: -

Job analysis is a process involving different steps to be undertaken in a

sequential manner. In includes the following stages.

1. strategic choices (defining uses of job analysis)

2. gather information
3. information processing
4. job description
5. job specification

Strategic choices: -
It is the first step in total bon analysis process. An organization is required
to make at least four choices.

• The level of employee involvement in job analysis

• The level of details of the analysis
• Timing and frequency of analysis
• Past oriented vs. future oriented job analysis

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The first choice is related to decide what extent an employee to be

involved in job analysis. Job analysis means collection of information relating to
job not incumbent, employees has familiarity with jobs.
To what extent employee need to be involved is a debatable concept. Too
much involvement may result in bias in favor of jobs. On the other hand, if they
are not involved may lead to inaccurate and incomplete information. It depends
upon the needs of organization and employees.

Second choice related to level of details to be collected about the job.

Generally it is based on the duties performed by the selected job. In other words
the nature of job being analysed determines the level of details in job analysis.
Ex: crane operator ---------- personnel manager
The level of details required in job analysis also depends on the purpose
for which job-related details are being collected.
Ex. Mass training ----------- to add a clarification

Another strategic choice relates to the timing and frequency of

conducting job analysis. It is conducted generally –

• An organization is newly established and the job analysis initiated for the
first time.
• A new job is created in a established company.
• A job is changed due to environment, technology, taste, process etc…
• The organization is contemplating a new remuneration plan.
• Managers feel that there exist certain inequalities between job demands
and remuneration it carries.

Finally, if an organization is changing rapidly due to fast growth or

technological change, a more future oriented approach to job analysis may
desire. It enables the organization to hire and train the future job prior to actual
change.

Information Gathering: -
This step involves decision on three issues.

• What type data is to be collected

• What methods are to be employed for data collection
• Who should collect the data

The type of data to be collected is concerned with what type of details about
jobs, need to be gathered. It depends upon the end use of information, as also
on the time and budget constraints.
Ex: work activities, tools, machinery etc…

For second question there are different methods are available. Some
methods are as follows ---

• Observation
• Interview
• Questionnaire

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• Checklists
• Diary method
• Technical conference.
The selection of a particular method of collecting job analysis information
and the persons to be involved depend upon two factors:
• What is the purpose of job analysis
• What is the status of current job analysis programme?

For third question, we may use three different types of individuals. They
are ---
• Supervisors
• Employees / Job incumbents
• Trained analyst

Information processing: -
Once the job information has been collected, it needs to be processed.
So that it would be useful in various personnel functions specifically, job related
issues of job description and job specification.

Job Description: -
It is an important document, which is basically descriptive in nature and
contains a statement of job analysis. It provides both functional information and
organizational information.

Job description includes job title, job summary, job duties and
responsibilities, relation with other jobs, the no. of persons to be supervised,
machine, tools to be used and working conditions.

Job Specifications: -
Job specifications translate the job description into terms of the human
qualifications which are required for a successful programme of a job. They are
intended to serve as a guide in hiring and job evaluation.

It includes physical characteristics, psychological characteristics, traits of

temperament, responsibilities and other features

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PERFORMANCE APPRAISAL

INTRODUCTION:

Performance appraisal means the assessment of an individual’s

performance in a systematic way, the performance being measured against such
factors such as job knowledge, quality and quantity of output , initiative ,
leadership abilities, dependability, supervision, go-operation, versatility,
judgment, health and the like.

Definition:

“ Performance appraisal is a formal, structured system of measuring and

evaluating an employee’s job, related behaviour5s and outcomes to discover how
and why the employee is presently performing on the job and how the employee
can perform more effectively in the future so that the employee, organization
and society all benefit”

“Performance appraisal is the systematic evaluation of the individual with

regard to his or her performance on the job and his potential for development”
-- Beach

Objectives:

1. To effect promotions based on competence and performance

2. To confirm the services of probationary employees
3. To assess training and development needs of the employees
4. To decide upon a pry raise when regular pay scales have not been fixed.
5. To let the employees know where they stand in so far as their
performance is concerned and to assist them with constructive criticism
and guidance for the purpose of their development.
6. To improve communication between rater and ratee.
7. Finally, Performance appraisal can be used to determine whether human
resource programmes such as selection, training & development, and
transfers have been effective or not.

Process of performance appraisal:

Objectives of Appraisal: - Objectives of appraisal, includes effective promotions,

transfers, assessing training needs, awarding pay increases etc… In other words,
it is a process of deciding for what purpose the programme is initiated.

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Establish Job Expectations: - It includes informing the employee what is

expected of him on the job. Normally a discussion is held with his superior to
review the major duties contained in the job description. Individuals should not
be expected to begin the job until they understand, what is expected of them.

Objectives of Performance Appraisal

Establish Job Expectations

Design an Appraisal Programme

Appraise Performance

Performance Interview

Use appraisal data

Design an appraisal programme:- It is the major and very important step in total
performance appraisal process. It poses several questions which need answers---
• Formal Vs Informal appraisal?
• Whose performance to be assessed?
• Who are the raters?
• What problems are encountered?
• How to solve the problem?
• What should be evaluated?
• When to evaluate?
• What methods of appraisal are to be used?

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SELECTION

Selection may be defined as , choosing the fit candidates, or rejecting the

unfit candidates or a combination of both. Selection involves both, because it
picks up fit and rejects unfit

A selection process involves a no. of steps. The basic idea is to solicit

maximum information about the candidates to ascertain their suitability for
employment. Since the type of information vary from position to position, it is
possible that selection process may have different steps for various positions.

The selection procedures must take in to consideration the public policy and
operate within the frame work of the provision of the state or central statutory
controls.

Public policy may prohibit any kind of discrimination against any person on
grounds such as age, color, race , sex , creed or caste. Within the framework of
public policy and company policy, proper selection standards must be prescribed
with a view to placing the right person on the right job. Selection procedure
includes the following steps.

Receipt of Applications

Scrutiny of applications

Preliminary Interview
R
E
Reference letters J
E
C
Group Discussions T
I
O
Selection Test N

Employment Interview

Placement and Orientation

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1. Receipt of applications: -
Application forms are widely used everywhere and constitute one of the
fundamental media through information is gathered about the applicant and
assists the interviewer in formulating the questions to obtain more information
about the candidate.
Most of the companies design different types of applications for different
positions – managers, supervisors, workers etc.. And while some application
forms are simple, general and easily answerable, some other may require
elaborate, complex and detailed information about the applicant.

2. Scrutiny of applications:
All those who have applied for the job in an organization may not be suitable
for it. So we should reject those applicants who do not possess the required
qualifications and experience.
While scrutinizing the applications one should take care about good, loyal
and enduring applications.

3. Preliminary Interview: -
It provides first opportunity for the candidate to know about the company
and the job and whether he is suitable or not, the personnel executive must
create a good impression of the company about the candidate. It should be
precise, courteous, kind and informal. Rudeness and discourtesy will make you
to lose not only a potential employee, but a potential customer too.

4. Reference Letter: -
Generally the applicant will be asked for two or three references – from
former employees, friends or professors or famous persons those who may
speak well of him
5. Group Discussion: -
The group discussion is a method where group of the job applicants are
brought around a conference table and they are given either a case study or
a subject for discussion. The group members are to be observed by a
selection panel. Generally the following activities will be observed by the
selection panel.
• Initiating the discussion
• Explaining the problem
• Providing information
• Clarifying issues
• Influencing others
• Summarizing
• Speaking effectively
• Mediating arguments among the participant.

6. Selection Test: -

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Selection test helps to measure the abilities and skills of a candidate in terms
of job specifications. Selection tests are broadly classified into proficiency
tests and aptitude tests. Proficiency tests are conducted to measure skills and
abilities of the candidate. Aptitude tests are conducted to measure the
potential skills and abilities of a candidate.
7. Employment Interview: -
Interviewing is the most universally used tool in any selection procedure and
interviews are designed to serve in the most important areas of employment,
training, human relations and labour relations. In many companies interview
may be the only tool used. Interview may be for a period of five minutes or
for sixty minutes. They may be informal and oral or they may be highly
planned and carefully conducted.

8. Medical Examination: -
Medical examination is given to the selected candidates to find their fitness
for the job. Although medical examination is an essential criterion for final
selection, it should not be used as a tool for rejecting the candidate.

9. Placement and Orientation: -

When the formalities are over, the candidate will be hired and posted in the
position. Orientation involves making the new employee acquainted with the
new organization. During the period of orientation, the employee is educated
about the company and its products.

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TRAINING AND DEVELOPMENT

Training and development are essential for achieving
organisational goals. Training and development always go hand in
hand. Training leads to human development, that is, better skills,
motivation, and personality development.
Training is a short-term process of utilizing systematic and
organized procedures by which the staff acquires specific technical
knowledge and functional skills for a definite purpose. The focus of
training is the job or task.
The role of training in the organisation is governed by the overall
purpose of the organisation. In a fast moving consumer goods
company, training will be geared strongly to achieve larger sales than
of competitors. In a high technology manufacturing company, training
will be geared to product quality and innovation. In a hospital, training
will be geared to provide a reliable standard of health care.

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